ANALYSING THE ASSERTION THAT POVERTY IS IN THE MIND NOT IN THE POCKET

Ramphoma (2014) defines poverty as the inability of individuals or households to attain

sufficient resources to satisfy a socially acceptable minimum standard of living. Thus, poverty is
a deprivation from needs, want and lack (Adekunle, 2018). In other words, poverty is a condition
in which poor people lack the necessary financial resources to afford a basic standard of living.
Poverty denotes a lack of money and restriction on everyday human life (Ramphoma, 2014).
Poverty can be seen in poor people’s inability to pay their hospital, educational, and housing bills
without money. At its advanced stage, poverty can prevent full personal and family development
and participation in social life and deprives society of people’s full potential to contribute to it
and undermines social cohesion and vibrant inclusive, sustainable development. Some scholars
like Adekunle (2018) have argued that poverty is in the mind than in the pocket. That is to say,
poverty begins from the mind and not in the pocket, and the ability to conquer poverty is based
on how one thinks. In other words, poverty is a psychological issue than economical.

This paper therefore, aims to critically examine this assertion. The paper will start off by
discussing this claim in detail before wrapping up the discussion with a personal analysis
supported by evidences from different scholars.

According to this assertion, poverty is a mindset or worldview problem more than an economic
problem. That is, poverty is not only lack of finance but lack of ideas that can better one’s life. It
is a lack of hope, dignity, decent work, compassion, charity and hope (Adekunle, 2018).
Adekunle (2018) further observed that, when people are poor, they don’t have a full sense of
their human dignity. In the end, these poor people let themselves be exploited by the rich and
powerful. For instance, the poor accept that the rich have the right to be their leaders, and that it
is fine for a rich country to take the resources of a poor country (Adekunle, 2018). To further
justify this claim, a new branch called behaviour economics has proved that psychological
factors end up determining more choices than pure rationality (Burt, 2019). This branch claim
that people’s thoughts are based on dual thinking. Firstly, it observes that people tend to think
automatically, not deliberately and make decisions based on what comes into our mind quickly.
Secondly, the branch notes that there is deliberative thinking performed to do complex
calculations, reflections or self-control tasks that are instead effortful. The poor according to this
theory falls into the first category and try to compensate things and reallocate some income to

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some activities that give them immediate pleasure and that is an important coping strategy to
deal with their chronicle deprivation

Despite this assertion receiving criticism from many scholars, I strongly believe that poverty is
not just a shortage of money, it is a state of mind as the following evidence illustrate.

Firstly, poor people tend to be scared of taking risks. Poor people are afraid of failure hence are
afraid to take risks or pursue opportunities because they are afraid of making mistakes or facing
rejection. According to Burt (2019), the poor display low willingness to take risks and to forgo
current income in favor of higher future incomes. Thus, poor people especially in developing
countries, have repeatedly been found to be more risk averse and more likely to discount future
payoffs than wealthier individuals. According to Haushofer and Fehr (2014), poor people are
often under the impression of saving their reputation, and worry about what other people would
think. This fear keeps them stuck in their current financial situation and prevent them from
exploring new possibility for growth and success. This limits the poor’s attention and favoring
habitual behaviors at the expense of goal-directed ones perpetuating poverty (Burt, 2019). This
may manifest itself in a low willingness to adopt new technologies and in low investments in
long-term outcomes such as education and health, all of which may decrease future incomes.

Again, poor people tend to have a fixed mindset than the rich. Poor people have poor mindset.
According to Banerjee and Duflo (2007), a poor mindset is a limited perspective on wealth and
belief that your situation is unchangeable. People with poor mindset often live paycheck to
paycheck and struggle to make ends meet. In fact, poor people lack financial literacy and hence
have a negative relationship with money (Burt, 2019). Burt (2019) further observed that the main
characteristics of poor mindset is the belief that one’s circumstances cannot be changed. Thus,
poor people often think that they are destined to be poor and that they are destined to be poor and
that there is no way out of their current financial situation. This fixed mindset in the end limit
poor people’s ability to take action and make positive changes in their lives even if the odds are
in their favour. The rich people have the habit of believing they create their own life while poor
people have the habit of believing life happens to them. For instance, Haushofer and Fehr (2014)
observed that rich people habitually learn and grow while poor people think they already know
everything. This kind of limited thinking keeps poor people in the poverty trap which makes it

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hard for them to escape their fate. This shows that poverty begins in the mind and translate into
the pocket.

Lastly, poor people tend to have a dependency mentality. Poor have a dependency syndrome.
According to Numberger (1996), dependence syndrome is when people look to others to be their
source, avoiding personal responsibility by putting the responsibility for their life on other
people. Dependency syndrome is a big issue in many places around the world, particularly in
poorer areas due increasing levels of the poor on the rich. Poor people always depend on others
to survive and thinks without the help of another person they can never succeed in life
(Numberger, 1996). Because of this dependence syndrome, poor people don’t set goals and have
the habit of letting circumstances control them. For instance, since they don’t want to control
their economic fate, poor people tend to save too little than rich people (Shurtleff, 2009) and
borrow repeatedly at high-interest rates (Banerjee and Duflo 2007). But most of the time, the
poor tend to spend relatively large parts of money on tobacco, alcohol, and lotteries (Banerjee
and Duflo 2007). Dependency thinking is also viewed to be contrary to the Bible. According to
Proverbs (12:11), whoever works his land will have plenty of bread, but he who follows
worthless pursuits lacks sense. The poor do not work on producing anything of value, but they
keep on seeking and searching for money. In fact, the poor are looking for someone to provide
for them without doing anything to earn the value they desire. This simply proves that poverty is
more of a psychological issue than it is economical.

To sum up, this paper has argued in support of the claim that poverty is in the mind not in the
pocket. Using different scholastic references, the paper has proved that poverty begins in the
mind and migrate into the pocket. This is because our minds are the hub of our consciousness
and sub-consciousness and what fills it determines what it produces. The constant, day-to-day
hard choices associated with poverty erode individual’s psychological and social resources for
economic decisions that by chronically trapping poor in a short-term vision perpetuate poverty.
In this sense poverty is not simply a shortfall of money, but a condition that blocks the potential
and capacity to make good decisions.

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 REFERENCES
Adekunle. (2018). Poverty Begins in the Mind.

Banerjee, A. V. (2007). The economic lives of the poor. Journal of Economic Perspective, , 141–
167.

Burt, M. (2019). Is Poverty In the Mind? On the Path of Hope: Towards Prosperity, 1- 5.

Ernst-Jan de Bruijn, G. A. (2022). Poverty and economic decision making: a review of scarcity.
Theories and Deciscons, 5 -37.

Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Sciences, 1-37.

Numberger, k. (1996). The dependency Dyndromr In Marginalised cultures and the Liberative
potential of the christian Community. Scottsville: University of Natal Press.

Ramphoma, S. (2014). Understanding Poverty: Causes, Effects. Interim: Interdisciplinary

Journal, 59 - 72.

Shurtleff, S. (2009). Improving savings incentives for the poor. National Center for Policy
Analysis.