“The poor have much more complicated lives than us”

An interview with Abhijit Banerjee and Esther Duflo in the Mint highlights some of the thinking behind their work and their recent book “Poor Economics”.

As the economist [Abhijit Banerjee] dug into the street food, his colleague asked the woman in Telugu, the local language, whether she [the vendor] would be serving dosas for the rest of the day. She shook her head. She would pack up at 10am. Then she would go home to cook lunch for the family. It was only after her daughter came back from school at around noon that the woman would shift to a second job, making and selling saris that she embroidered by hand. All the other dosamakers on the street that morning had similar schedules. They would move to second jobs later in the day—collecting trash, making pickles or working as labourers.

This is similar to what happens in rural areas also.  Those involved in farming take up other income generating activities.

Family producing wooden beads for sale

Family producing wooden beads for sale

I visited a village near Bangalore, where entire families take up making of wooden beads when not occupied with farming activities.  People who didn’t know how to produce beads were involved in assembling them into car seat covers.  If this was some other village, they might have undertaken weaving or collection of forest products… whatever will bring income during lean months.

Family assembling beads for car seat covers

Family assembling beads for car seat covers

The same Mint article [ “What Really Drives the Poor”] quotes Duflo as saying: “What spending time with the poor taught me is that the poor have much more complicated lives than us, and they have to manage their lives like hedge fund managers.”

And if you talk to leaders of NGOs that work with rural communities, they will tell you the same thing.

From a financial perspective, the authors of the book “Portfolios of the Poor” who studied the financial lives of the poor reach exactly the same conclusion as well.  The book  highlights the financial jugglery needed to manage cash flow and squeeze out “large” lumpsums for one-time spends.   

All this made me think of Muhammad Yunus and his book “Banker to the Poor”. In the book he states emphatically that the poor “know how to survive”.  The only thing they need help with is a bit of credit to make the juggling easier.

But I  wonder:  Among us “knowledge workers” some of us are worse than others in multi-tasking, advance planning, or simply managing our finances.  Wouldn’t the same hold true among the poor? People are people, after all.

All poor people may need to be financial jugglers but all of them can’t be good at it.  So only those who either have the knack for it or figure it out somehow, manage.  The rest would fall deeper and deeper into poverty, wouldn’t they?

So what does Yunus mean when he claims that the poor know how to survive?

This entry was posted in Financial lives of the poor, Research studies and surveys and tagged , , . Bookmark the permalink.

2 Responses to “The poor have much more complicated lives than us”

  1. Babu Rahman says:

    Point taken, Richa, except that for the poor, I believe that the stakes are much higher. So, the need to actually be good at ‘juggling’ is so much more important. If we screw up here, there’s a safety net for almost any situation. Not so for the poor. Just my 2 tacas…

  2. Richa says:

    I agree. So doesn’t this increase the importance of hand-holding or training, contrary to what Yunus says?

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