The New York Times’s Fixes Blog goes to Brazil at the end of Lula’s term of office. The whole concept of the Fixes Blog is slightly amusing - it seems to mean something like “repackaging moderate social democracy as a shiny new thing to pass the editorial filter”, but then you’ve got to work with the constraints you’re given. But the piece is sensible.
Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent....Contrast this with the United States, where from 1980 to 2005, more than four-fifths of the increase in Americans’ income went to the top 1 percent of earners. (see this great series in Slate by Timothy Noah on American inequality) Productivity among low and middle-income American workers increased, but their incomes did not. If current trends continue, the United States may soon be more unequal than Brazil....Several factors contribute to Brazil’s astounding feat. But a major part of Brazil’s achievement is due to a single social program that is now transforming how countries all over the world help their poor.
That turns out to be, basically, child benefit as Barbara Castle designed it. There are some differences - some soft conditionality, and the Brazilian program is more generous in relative terms, because the recipients are that much poorer. But in principle, the idea is as the NYT describes it - if you want to reduce poverty, give the poor some money.
Actually, it’s a bit more complicated than that. It works like a combination of child benefit and, of all things, Education Maintenance Allowance. That is, your kids have to keep turning up at school after a given age if you want the money.
Of course, Nick Clegg would remind us that “poverty plus a pound” isn’t “progressive”.
*We are indebted for the title to the great John Birmingham