The three country case studies below all suggest that although neoliberal policies might promote economic development in the long run, in the case of Chile at least, there are some significant negative consequences of this pathway to development.
Chile in the 1970s
Boliva in the the 1990s
India – Contemporary
NB – If you’re here for a blog post about Neoliberalism in India – please click here (I moved it!)
Chile
The following clip from ‘The Shock Doctrine’ outlines the ‘neoliberal experiment in Chile from 1973 onwards, the very first neoliberal experiment in development.
Following the overthrow Salvador Allende, the democratically elected but Socialist President, the American backed Dicator Augusto Pinochet implemented neoliberal economic reforms.
These were written for him by by a group of American economists known as ‘The Chicago school’, headed by Milton Freedman.
Examples of neoliberal policies reforms included the cutting of taxes on imports to 10% (previously Chile had the second most protected economy in the world) and the privatisation of state owned companies.
In the short term – the policies increased unemployment and inflation and inequality and human misery which led to massive social unrest which Pinochet oppressed violently killing tens of thousands of people.
However, 40 years later… Chile is one of Latin America’s leading economies.
Neoliberals might argue tens of thousands of lives is a price worth paying for rapid wealth creation
Neoliberalism in Bolivia
This video clip from ‘The Corporation’ summarizes the case study of water privatization in Bolivia in the 1990s.
In the early 1990s, one local administrative area within Bolivia was forced to privatise the previously state owned water supply as part of a ‘Structural Adjustment Programme’
A Multinational took over running the water supply for a profit
The poorest people couldn’t afford to pay for water.
This led to massive protests which the government violently suppressed.
In this case the government eventually renationalised the water supply due to popular demand.
Did neoliberalism help development?
If you define progress as the right to clean water then no.
If you define it as increasing profit for European Transnationals then yes.
Neoliberalism in India
Arundhati Roy notes that ‘Trickle down hasn’t worked in India, but gush up certainly has’
She notes the following three ways in which the Elite in India Benefit from Neoliberal Policies
Corrupt government officials sign a ‘Memorandum of Understanding’ (MoU) with a Corporation which privatises a chunk of publicly owned land, giving that corporation the right to use that land to establish a business – this either takes the form of mining the raw materials from under the land, or establishing a range of other projects such as Agribusinesses, Special Economic Zones, Dams, and even Formula One racing circuits.
Taxes are typically kept very low in these deals – often sow low in that local people see little of the financial benefit of the new business. This is especially true were mining is concerned. In 2005, for example, the state governments of Chhattisgarh, Orissa, and Jharkhand signed hundreds of memorandums of understanding with private corporations, turning over trillions of dollars of bauxite, iron ore and other minerals for a pittance – royalties (effectively taxes) ranged from 0.5% to 7%, with the companies allowed to keep up to 99% of the revenue gained from these resources. (Allowing people like Ambanni to build their 27 story houses, rather than the money being used for food for the majority of the Indian population.)
In a third strand of Neoliberal policy, companies are subjected to very little regulation. It seems that they are allowed to develop their projects without protecting the environment or paying any compensation to people who are negatively affected by these projects.
One of the things you need to look at for the AS Education module is the extent to which material deprivation is responsible for educational underachievement. While statistics give you an overview of the extent of poverty, and a little bit of information of the kind of things poor people can’t afford, they don’t give you much a feeling of what it’s like to actually live in poverty.
To get a feeling for day to day challenges of living in poverty you need more qualitative sources, and ‘thankfully’ we are blessed with a number of recent documentaries which look at the experience of living with material deprivation in the UK.
Watch the documentary sources below and then answer the questions/ contribute to the discussions below. The videos have all been selected because they focus on material deprivation and education in some way.
Poor Kids
This 2011 documentary from the BBC focuses mainly on the experience of younger children in the U.K.
Britain’s Hungry Children
(A Channel 4 Report, 2013)
Cites research drawn from 2500 food diaries kept by children in the UK – Some of whom live on less than half of the recommended calories. Also highlights the importance of lunch clubs to feed hungry children.
Finally watch this video – This shows you a case study of one girl from a poor background who actually made it into the best school in the area, against the odds. It’s a bit slow, but later on it gives an insight into the struggle her mum faces to raise enough cash to meet the ‘hidden costs’ of education (she has to resort to a ‘pay day loan’).
Questions/ tasks for discussion:
Q1: Draw an ‘ageline’ (like a timeline, I may have just invented the word) showing how material deprivation affects 3 year olds to 18 year olds in different ways.
Q2: From a broadly Marxist Perspective, the effects of material deprivation on children are structural, or objective if you like. Being brought up in poverty and having a poorer diet, and living in lower quality housing effectively cause poor children to do less well in education. This means that, all other (non material) things being equal (same school, same intelligence, same motivation etc) a poor kid will always do worse than a rich kid. Do you agree? Be prepared to explain your answer.
material deprivation means poor kids are more likely go hungry and get sick from living in cold houses which harms their education.
Material deprivation can be defined as the inability to afford basic resources and services such as sufficient food and heating. Material deprivation generally has a negative effect on educational achievement.
Material deprivation is very strongly correlated with low income and poverty. The lower the wealth and income of a household the more likely that household is to suffer from material deprivation.
Material Deprivation and Education
Gibson and Asthana (1999) pointed out that there is a correlation between low household income and poor educational performance. There are a number of ways in which poverty can negatively affect the educational performance of children. For example –
Children in poor homes are more likely to live in cold and even damp conditions which results in higher levels which in turn will mean more absence from school and falling behind with lessons. This is especially the case since the cost of living crisis and soaring energy bills.
Worse diets. They are more likely to skip meals, for example, which means they will be unable to concentrate in school.
Less able to afford ‘hidden costs’ of free state education: books and toys are not bought, and computers are not available in the home.
Children from poorer backgrounds are more likely to be living in smaller homes and having to share a bedroom with a brother or sister. This means they will lack a private study space and not to be able to homework free from distractions.
Tuition fees and loans would be a greater source of anxiety to those from poorer backgrounds.
Poorer parents are less likely to have access to pre-school or nursery facilities.
Young people from poorer families are more likely to have part-time jobs, such as paper rounds, baby sitting or shop work, creating a conflict between the competing demands of study and paid work.
Poorer parents will only be able to afford houses in poorer areas which tend to have higher rates of crime and other social problems. Schools in those areas will have to devote more of their resources to tackling these social problems rather than teaching children, so results will suffer.
Analysis
Those households suffering from material deprivation in the United Kingdom today are likely to be in relative poverty rather than absolute poverty, but nonetheless some of the above factors can work together and combine to make the experience poverty worse.
For example low income can lead to debt which leads to lower income because of the interest payment on those debts.
Low income can lead to poor diet, which can lead to illness, which means time off work, which means lower income.
The flow chart below shows how multiple factors related to poverty can lead to reduced educational opportunities for children:
Material deprivation is not the only form of deprivation. In A-level sociology the term material deprivation refers to tangible, material things which can usually be bought with money, and is usually contrasted to cultural deprivation which refers to lack of appropriate norms and values. The two often work together.
Evidence for material deprivation
There are three classic pieces of sociological research which explored this issue:
Stephen Ball (2005) points out how the introduction of marketisation means that those who have more money have a greater choice of state schools because of selection by mortgage
Conner et al (2001) and Forsyth and Furlong (2003) both found that the introduction of tuition fees in HE puts working class children off going to university because of fear of debt
Leon Fenstein (2003) found that low income is related to low cognitive reasoning skills amongst children as young as two years old
There is also a lot of contemporary evidence from organizations such as the Sutton Trust which documents the continued impact of material deprivation on education….
Poor kids going hungry…
In 2019 the National Education Union conducted a survey of 8000 teachers and school leaders focusing on how poverty was affecting their children’s learning and achievement.
Among the findings were:
Over 75% reported their students had experienced hunger of fatigue and difficulty to concentrate on schoolwork due to poverty
Over 50% reported students had been ill and missed schoolwork due to poverty.
Over 30% reported their students had been bullied because of poverty.
Nearly all schools reported that the Pandemic harmed poor students more and that poor parents and parents relied on schools for support more during that time.
In general poverty has a negative affect on the mental health, well being and educational achievement of poor pupils.
There were 1.9 million pupils eligible for Free School Meals in 2022, but the Child Poverty Action Group estimates that there are an additional 800 000 pupils from working poor households who are going hungry but do not qualify for Free School Meals because their parents fall just above the threshold line and so do not qualify for them (1) . This situation has been accelerated with the Cost of Living Crisis.
Poor kids in cold houses
The Institute of Health Inequalities (3) estimated in 2022 that one in five households with children under five are in fuel poverty (see * below for a note on the definition), but projected that the numbers could easily treble into the winter of 2023.
Whatever way you look at it, there are increasing numbers of children living in households which are struggling to pay their gas and electric bills and thus struggling to keep their housing warm, which means more children living in cold and possibly damp houses.
The institute notes that 1.7 Million school days are lost in the EU due to illnesses related to damp and mold, and the UK has the highest rate of all member states, with a rate 80% above the average.
Living in a fuel poverty household can also mean it is more difficult for children to do homework as everyone is more likely to cram into one or two heated rooms (the ‘heat one room’ strategy).
Poverty and university students
The impacts of material deprivation are also felt by university students. According to a survey of 1000 students in January 2023 conducted by the Sutton Trust 33% of students from working class backgrounds reported skipping meals compared to only 24% of students from middle class backgrounds, and 10% (working class) compared to 4% (middle class) of students reported having moved back home with their parents to save money (5)
The Cost of Living Crisis
The recent rise in gas and electricity prices mean that many more households have been pushed into relative poverty in 2022 and 2023.
As a result hundreds of thousands, if not millions more children are experiencing some form of material deprivation, as families choose between heating or eating.
Evaluations of the role of material deprivation
To say that poverty causes poor educational performance is too deterministic as some students from poor backgrounds do well. Because of this, one must be cautious and rather than say there is a causal relationship between these two variables as the question suggests, it would be more accurate to say that poverty disadvantages working class students and makes it more difficult for them to succeed.
There are other differences between classes that may lead to working class underachievement. For example, those from working class backgrounds are not just materially deprived, they are also culturally deprived.
The Cultural Capital of the middle classes also advantages them in education.
In practise it is difficult to separate out material deprivation from these other factors.
Possible policy solutions
There are plenty of things governments can do to help those in poverty at the school level.
Most schools provide text books and basic education resources for free to students, and all schools have access to computers and schools staying open for longer in the evenings and homework clubs can help combat lack of computers at home and cold houses.
One thing being trialed in London now is Universal Free School Meals – the idea behind making them universal is that this removes the stigma behind claiming them.
Schools have also increasingly taken it upon themselves to combat child poverty through setting up foodbanks and breakfast clubs, for example, recognizing that hungry children don’t learn effectively.
The problem with all of the above is that these initiatives require money from central government, and funding has been cut in real terms by 14% since 2010 under the neoliberal Tories.
It is also unlikely that policies at the school level can do anything to combat the wider structural inequalities that ultimately result in poor kids doing worse than rich kids in state education. The government is not going to legislate to prevent ‘selection by mortgage’ for example, which gives a huge advantage to rich kids.
