Distribution has to be at the core of any serious strategy to eliminate poverty in Europe.
Olivier De Schutter was appointed as the United Nations Special Rapporteur on extreme poverty and human rights by the UN Human Rights Council in March 2020. An academic specialised in economic and social rights, he is also currently a member of the Council of Europe’s European Committee of Social Rights and co-chair of IPES-Food.
Cross-posted from Green European Journal
This month, members of the European Parliament, high-level EU policymakers, trade unions, civil society leaders, academic experts, and activists came together in Brussels for a follow-up event to the 2023 landmark Beyond Growth Conference. On the agenda: how to integrate post-growth policies into the EU’s poverty reduction strategies – from the upcoming EU Anti-Poverty Strategy and Intergenerational Fairness Strategy, to the new Action Plan to implement the European Pillar of Social Rights, and the 2028-2034 Multiannual Financial Framework.
At the very least, the event demonstrated that a one-time fringe opinion – that economic growth is not a magic wand for eradicating poverty – is now moving firmly up the agenda.
The European Environment Agency has been calling for “growth without economic growth”, recognising that the obsessive quest for increasing economic output has been damaging for the environment and human health. A UN-backed Roadmap for Eradicating Poverty Beyond Growth is being developed to encourage a human rights-based model of social investment that reduces dependency on growth. The new challenge facing the EU is therefore whether its socio-economic governance can reinvent itself, and bring about improved wellbeing without increasing the GDP.
Social exclusion is relational
There is much work to be done. Most people have been led to believe that economic growth equals human progress, and GDP growth is still very much perceived as a precondition for combating poverty. This assumption, however, is simply wrong: since the 1990s, progress in the eradication of poverty has largely stalled, even as global GDP has nearly tripled. Yet traditional poverty eradication strategies continue to rely on growth as the foundation for job creation, fiscal resources, and social spending.
At the heart of this paradox is the assumption that poverty is primarily a question of insufficient income. Income is, of course, essential – but the dominant model remains incomplete because it overlooks the structural and relational drivers of social exclusion. Income-threshold definitions of poverty – still used by global institutions and embedded in indicators such as the UN’s Sustainable Development Goal 1 – offer only a partial view. They capture the minimum resources needed to meet basic needs but fail to account for the evolving social expectations of increasingly affluent societies.
As sociologist Peter Townsend argued decades ago, poverty is inseparable from people’s ability to participate in the living standards considered “normal” within their society. Social exclusion is a relational concept, linked to how one is ranked in comparison to others, and not just the result of deprivation in absolute terms. The EU’s AROPE indicator reflects this by incorporating a measure of relative income (one is “monetarily poor” if their income is below 60 per cent of the median), and it goes even further by capturing multidimensional poverty. Yet it too falls short of addressing the deeper structural and relational forces that perpetuate exclusion.
Race to the bottom
Boosting income is therefore not enough, especially since it has been less and less equally distributed in recent years. Far from focusing on GDP growth, policymakers should instead consider the climate crisis it has brought upon us, the inequalities it creates, and the poverty it exacerbates.
Firstly, and despite decades of attempts, there is no empirical evidence that high-income countries have achieved the degree of absolute, permanent, economy-wide decoupling of economic growth from environmental impacts needed for growth to be compatible with planetary boundaries. It is time to “bid farewell to green growth”. And, as I outlined in my most recent report to the UN Human Rights Council, while the increased metabolism of the economy (closely correlated with GDP increase) gravely destabilises the biosphere, its impacts are most heavily felt by those living in low-income countries. Far from eradicating poverty, persistent GDP expansion is becoming a driver of future climate-induced poverty.
Secondly, growth produces a burnout economy and worsens inequalities. In France, although median living standards have increased over recent decades, the income of the poorest deciles has either stagnated or improved only minimally: the living standard of the poorest 10 per cent of households has barely changed in real terms over the past two decades. At the same time, the share of income held by the top 10 per cent has increased considerably. The widening income gap exacerbates relative poverty, social exclusion, and feelings of abandonment.
With the growing globalisation of the economy and the multiplication of free trade agreements, economists such as Bob Jessop note that the state has changed its strategy to achieve GDP growth. The Keynesian paradigm in which growth comes from rising consumption supported by a strong welfare state has been replaced by the Schumpeterian idea that innovation is the key recipe for growth – an idea recently crowned with the Nobel Prize in Economic Sciences.
Governments have thus sought to use any means to attract wealthy individuals and large corporations to maximise investment, R&D and growth. Inter-jurisdictional competition has become a reality in the current policy environment to spur foreign investment. States now rush to lower taxation rates and deregulate the economy. While stable and full-time employment contracts were the norm up until the 1980s, they are increasingly replaced by more “flexible” – i.e. less protective – forms of contract. In a 2023 report to the UN, I showed that fewer long-term employment contracts, lower wages, and reduced protections are leading to the emergence of what the British economist Guy Standing has coined the “precariat”.
In low- and middle-income economies, export-led development has also resulted in higher inequalities. Large companies have benefitted from a structural advantage to enter globalised markets: they are the ones who gain the most from free trade and export-led extractive activities. A minority of export-oriented firms grow by consuming the natural capital of low- and middle-income countries, while small-scale farmers who are unable to enter global supply chains are left behind.
Thirdly, GDP growth has sometimes also been achieved through the extension of the market logic to goods and services which were before not monetised, by privatising the commons or public services, leading to the growing “commodification” of life. As Karl Polanyi underlined in The Great Transformation, capitalism seeks to extend the realm of the market as much as possible. What was previously allocated on the basis of reciprocity or redistribution is now granted on the basis of the sole ability to pay. For instance, people could once ask their neighbour to fix their car; now they hire someone to do it. Those who can’t afford such payments are pushed further into economic insecurity.
An urgent shift
For all these reasons and many more, in July 2024 I presented a report to the UN on Eradicating Poverty Beyond Growth. In it, I warned that economic growth cannot be pursued at all costs, even in the name of reducing poverty.
In my report, I argued that an urgent shift in the fight against poverty is needed. Traditional approaches to poverty eradication have had their day. The question now is not how to keep growth alive, but how to end poverty without holding people and the planet hostage to it.
Rather than pursuing endless GDP growth, governments and institutions should turn instead toward focusing on what really matters: social wellbeing within planetary boundaries. In presenting the report to the UN, I committed to developing a Roadmap for Eradicating Poverty Beyond Growth – a comprehensive toolbox of policy measures, built together with UN agencies, governments, civil society organisations, academics, trade unions and others, to guide our economies away from profit maximisation and towards fulfilling human rights.
At the heart of the Roadmap – which will be presented to the UN in 2026 – are policies that deliver universal basic services. Food and housing are currently mostly allocated to individuals based on their ability to pay, but should be taken out of the realm of the market and allocated on the basis of need, consistent with their status as human rights. Free healthcare and education for all are existing examples of decommodified goods and services, and expanding this approach is a cornerstone of the Roadmap.
Complementary measures such as a basic income for all or a job guarantee – whereby the government guarantees a job to anyone willing and able to work – can further ensure that everyone has a stable foundation from which to meet their needs. Reduced working time could encourage people to adopt less energy-intensive lifestyles, while also helping to distribute domestic work more evenly. Implementing reforms to increase the progressivity of fiscal systems, including wealth and inheritance taxes, coupled with decisive action to tackle tax evasion, are just some of the paths proposed in the Roadmap to finance this shift.
However, providing free access to basic services would not, on its own, overcome social exclusion; only reducing inequalities can. Tackling inequality is essential to eliminating poverty beyond growth. When disparities are reduced, social expectations become more realistic for those with the least, easing the social pressures that exacerbate poverty and the sense of social exclusion.
Lower inequality can also curb harmful consumption trends. High-end luxury habits, such as the use of SUVs in cities or the building of large mansions, create status pressures in the general population. Citizens tend to mimic these unsustainable consumption patterns, in what is often referred to as the Veblen effect. Policies to curb consumerism and harmful advertising could help shift societies towards sustainable forms of wellbeing. By limiting extremely costly and unsustainable status consumption – what has been termed “conspicuous” consumption – societies can practically advance towards tackling poverty within the safe operating space of planetary boundaries.
A new era
These are the bold yet achievable measures that must shape the next generation of anti-poverty efforts – including, in Europe, the new Action Plan to implement the European Pillar of Social Rights, the Quality Jobs Roadmap, the EU Intergenerational Fairness Strategy, and the first-ever EU Anti-Poverty Strategy. This is especially important in an environment in which competing priorities – notably defence, security, and competitiveness – along with a green backlash, risk overshadowing social objectives and crowding out fiscal space for social investment, already hindered by the recent reform of EU fiscal rules.
By embracing the policies set out in the Roadmap for Eradicating Poverty Beyond Growth, the EU can lead a new global era of poverty eradication – one that transcends growth dependence and puts human rights and planetary stability at its core.
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