University of Kentucky College of Arts & Sciences

The Road To Poverty

Difficult and challenging economic situations have spread all over the country during the current recession, but in Eastern Kentucky tough economic times are a part of the societal fabric, not a new crisis.

Department of Sociology professor Dwight Billings and co-author Kathleen M. Blee delve into the history of the area and unravel the economic history in "The Road to Poverty: The Making of Wealth and Hardship in Appalachia." Read the accolades from others for this essential piece of writing that not only helps one understand Eastern Kentucky's battles with poverty, but also serves as a tool to understand the struggle in a global sense.    

“Billings and Blee support their often fascinating and at times incredible report with a wealth of archival and contemporary data, grounded in a theoretically comprehensive and thoughtful analysis. Their book is a real eye opener for anyone who has ever wondered why Appalachia is, and has long been, so poor.”

-Herbert Gans, Columbia University
Author of "The War Against the Poor"

“Through an in-depth study of a rural community in one of the poorest regions of the United States, this study provides extraordinary insight into how poverty is created and sustained over time. By examining the historical interaction of capitalist markets, the local state and cultural forces, the authors show why and how dominant market-driven approaches to development have failed. Using this historical understanding, they call upon policy makers for a new approach to poverty alleviation – one that takes a long-term view, that supports cultural strategies, and that recognizes the importance of the local state. The lessons and insights from this book will be of interest and relevance to those concerned with poverty, inequality and development, not only in rural America, but across the globe.”

-John Gaventa
Institute of Development Studies, Sussex, England

"The Road to Poverty is a carefully researched and thoughtful analysis of social relations in Clay Country, Kentucky over the past century. The result is a clear and convincing revelation of how ‘capitalist markets, state coercion and cultural strategies’ combined to set and keep central Appalachia on a road to persistent poverty. The book delivers a powerful message. Persistent poverty of a region is rooted in the history of its social (especially economic and political) institutions. Efforts to reduce poverty by focusing on individuals and families without attending to the social origins of persistent poverty are doomed to failure.”

-Gene F. Summers
University of Wisconsin-Madison

Inquiry into Appalachian poverty has too long been held captive to cultural stereotypes and untested assumptions. In their illuminating study, Billings and Blee dispel many of these falsehoods and document how Appalachia’s tragic past continues to haunt its tortured present. Poverty is not a natural condition either of individuals or regions, and by situating the early history of Appalachian in the dynamics of global capitalism, Billings and Blee demonstrate how Appalachia was made poor. This is an important book for social scientist and historians and essential for all students of Appalachia and regional development more generally.

-Larry Griffin
Vanderbilt University

Photo: (From p. 152 of The War on Poverty) - The War on Poverty was launched in Appalachia. Public support for federal antipoverty programs were garnered in part by widely disseminated photographs of impoverished mountain children. Pictured, children gather in Clay County, near Manchester. Courtesy of Louisville Courrier-Journal and Lousville Times.

The Importance of Social Theory For Understanding the Economy

by Michael Samers

Social theory may not be immediately associated with understanding "the economy", and conventional wisdom might hold that "the economy" is best left to the work of economists who have by and large neglected long-brewing debates in social theory. Adhering to such conventional wisdom would be unfortunate. Social theory (which by and large is the domain of the critical social sciences) is in fact vital for understanding "the economy".

Economic anthropologists, economic geographers, economic sociologists, and a related troop of heterodox political economists have all mobilized social theory to explain economic activity and practices. What sets apart the contribution of a social theory approach from economics is that the former explores economies through a combination of individuals, groups, structures, networks, discourses, spaces, institutions, states and firms.

Unlike economics then, central to the project of social theory is to understand individuals as complex human beings operating within "messy" socially variegated contexts over time and space. Individuals are not simply conceived as "consumers," and when they are, social theory tends to work with the idea that individuals are part of societal groups (a demographic if you will) as much capable of emotional, irrational, racist, sexist, group-oriented, and unpredictable economic behavior as they are by the isolated, rational, utility-maximizing behavior that one might associate with the homo economicus character found in an economics textbook. 

Individuals are therefore viewed as creatures of emotion who shop where their friends shop because their friends (who may share a common identity) are part of their network. Price and quality are not unimportant, but existing networks of knowledge about places and products might matter equally. Thus, social theory tells us that consumers are not blessed with "perfect" or even "asymmetric" information, since information cannot and has never been "symmetric" according to economic sociologists’ conception of how social networks operate. 

In sum, critical social theory tells us that individuals are social beings. Like consumers, social theory depicts firms ("producers") as operating within complicated social contexts, or as economic sociologists are fond of saying; they are "embedded" within political and institutional structures. Thus, "the economy" is not simply a collection of free floating consumers and producers, and there is no "free market" or "hidden hand of the market", but a cast of supporting and regulating institutions central to the functioning of markets. 

To provide a short example, one of the most productive contributions of social theory to understanding economic practices is to be found in discussions of global "neo-liberalism". Economically-minded social theorists and some social theory-minded economists (such as Regulation theorists) have spoken of the decline of social liberalism in the wealthy countries, and the rise of global "neo-liberalism" since at least the 1980s. They have analyzed the agenda and policies of such institutions as the World Bank, the International Monetary Fund, and the World Trade Organization. Based on diverse empirical work at different scales, they have concluded that the neo-liberal policies of these institutions (such as the demands for trade liberalization, public budget reductions, and the "flexibilisation" of labor practices, to mention just a few), have either not been beneficial to the poor or have increased social inequalities, environmental degradation, and resource depletion in already severely disadvantaged countries.

Why then have neo-liberal policies been so widely accepted? Social theorists might point to the ways in which neo-liberal discourses provide compelling accounts of wealth-creation, or simply to the unequal power relations between richer and poorer countries. In short, the study of economies would benefit from more, rather than less social theory.

Photo of Michael Samers by Tim Collins

Mathematical Models in Economics

by Robert Molzon

The use of mathematical models in economics has a long history, although the more formal use of mathematics in economics began only in the mid-19th century. In 1838 the French mathematician, Augustin Cournot, developed a mathematical model of duopoly or market competition between two sellers. The economist Léon Walras generalized Cournot's work some years later to a mathematical theory of competitive equilibrium of economic markets.

Approximately 25 years later, another French mathematician, Louis Bachelier, used much more sophisticated mathematics to value contractual options to buy stocks, and with this work founded modern financial economics. Although formal mathematics has now been used extensively in economics for more than 170 years, a number of prominent economists have questioned the broad use mathematical models as a tool to explain social behavior.

The current nightmare in the world's financial markets might naturally lead one to question the depth of our knowledge of these extremely complicated systems and the value of the mathematical models that have been used to try to understand them. There is not space here for a serious discussion of the role mathematical models can play in understanding economic behavior of large economies, and therefore I shall consider only a very modest idealized example from a new field of research relevant to the current crisis.

Evolutionary game theory was first proposed by the biologist Maynard Smith as a model for the evolution of biological organisms. Economists soon discovered that his ideas and methods offered an alternative to the rationale behavior hypothesis behind game theory as proposed by John von Neumann, Oskar Morgenstern, and John Nash. The evolution of very simple organisms such as viruses does not require thinking on the part of the organism. It turns out that humans are no great shakes when it comes to thinking either, and mathematical economists began to apply Maynard Smith's ideas to the classical problems of game theory in a dynamic setting.

Economics is fundamentally a story of individual agents pursuing economic gain by utilizing individual strategies in an interactive dynamic environment. Agents interact, realize a gain or loss, modify strategy, and then interact again. My current research is focused on understanding how the strategy modification process influences long term strategy selection. Fundamentally different results are realized if agents modify strategies based on aggregate outcomes of interaction rather than individual outcomes.

A major contributor to the current financial freeze is individual reaction to aggregate outcome. In other words, individuals are reacting to the average behavior of the markets as well as the outcome of their own interactions with other individuals. My research has shown that even in very simple cases, strategy modification based on aggregate outcome can lead to dramatic swings in economic outcome and the selection of less than optimal strategies. This somewhat surprising result also tells us when the use of a Law of Large Numbers to argue that things will balance out will fail.

Most mathematical models are extremely simple in comparison with the complexity of the social interaction of even a small group of friends or a group of buyers and sellers of a single commodity. Therefore, it is fair to ask if the models can really tell us anything useful about social interaction or economics.

A good mathematical model should capture some important feature of a complex system, and explain, at least qualitatively, how the complex system will react to stimuli to the feature in question. In some cases the model will be able to provide useful quantitative information as well. A good example is in the design of auctions. Auctions require strategic decision making on the part of buyers as well as a strategic decision on the part of the seller. Mathematical models have been very successful in designing auctions that optimize income for sellers. These models are extensively used, for example, by governments to auction public goods such as telecommunications band-with, and by search engine providers to auction advertisement placement on Web pages. Although there are certainly aspects of economics that do not readily lend themselves to quantization, in other cases one can obtain useful, surprising, and non-trivial results through the correct mathematical model.

Economics of the Human Condition

by Sara Cunningham

Examining economic systems means looking at more than numbers, it means studying people, according to Lisa Cliggett, an associate professor and the Director of Graduate Studies for the Department of Anthropology at the University of Kentucky.

Cliggett says that studying the economy means studying how individuals make decisions in relation to their own lives and in relation to their community groups.

Cliggett knows what she’s talking about.

She has been studying household economy and how domestic groups organize in villages and cities in central Africa since the early 1990s. Before that, Cliggett spent time in Haiti among people living in extreme poverty and economic hardship.

“I am fascinated with living in that kind of poverty and seeing people thrive or struggle depending on how they’ve developed coping strategies,” Cliggett said. “The dynamics of family and survival in the midst of great challenges ultimately shows you what it means to make decisions and has all kinds of implications for looking at our own lives and choices.”

The area of anthropological research that looks at these types of environments and relationships is called economic anthropology, Cliggett said. 

In 2007, Cliggett co-authored a book about the field, “Economies and Cultures: Foundations of Economic Anthropology.” 

“We try to look holistically at social systems and the economy is one part of those systems,” she said. “This shows up in different ways. An economic anthropologist tries to look holistically at how production, exchange and consumption occur, in a very broad minded way.”

This area of study encompasses an enormous variety of subjects and directions. 

It could mean studying peasant farmers in Ecuador or taking a look at gift giving in Japan, Cliggett said. It could also mean looking at how an American struggling in poverty must decide between feeding their children and taking care of their grandparents.

For Cliggett, the field of economic anthropology has meant spending a great deal of time in Zambia in central Africa.

She has traveled to Africa almost every year since 1992 on a total of 13 trips. Added together, her field research time equals about five years.

Cliggett spent a year and a half from 1994 to 1995 living with one particular family in a village in Zambia and interviewing about 60 other families, and participating in daily village life.

That level of time commitment is necessary in her field, she said.

“The hallmark of anthropology is really good qualitative research,” Cliggett said. “It means extensive interviews and participatory observation. That also means spending a great amount of time with the people you are studying because you need to establish trust.”

Cliggett’s current research takes her to a different part of Zambia in the border zones of  the Kafue National Park – one of Africa’s largest national parks located in central Zambia.

The National Science Foundation has funded a proposal that is allowing Cliggett and two geographers who specialize in environmental change to examine migrant farmers in a frontier region bordering Kafue National Park. Jon Unruh from McGill University and Rod Hay from Cal State Dominguez Hills have been collaborating with Cliggett. She also collaborates with another anthropology faculty member from UK, Deborah Crooks, on a complementary research project, also funded by NSF, looking at food security in a migrant context, in the same Zambian field site.  Cliggett and Crooks also ran three years of NSF funded field schools for graduate students in anthropology from around the U.S. The field schools supported training activities in the Zambian field site. 

In addition to those research activities, Cliggett is one of three new members of the longitudinal Gwembe Tonga Research Project. The original project was started in 1956 and is currently developing proposals to computerize 50 years of ethnographic data on the Gwembe Tonga people, which can then be linked to other demographic databases, creating an invaluable resource for other researchers and future projects.

This type of research is key when it comes to solving problems and planning interventions, Cliggett said. 

“We watch something about poverty in someplace like Africa from a comfortable couch in the United States and we get sad and think that we can help by throwing money at it,” she said. “But problems can’t be solved with money unless you truly understand the systems and social institutions you are dealing with. Even in very poor communities there’s a social hierarchy. The trick is to make sure resources get to those in need – not those in power or at the top. You have to be able to see the variations. Most people look at poor communities in other countries or even in our own and they don’t see the variations.”

Examining how we make decisions in our own economic system is also important – especially in times of challenge, she said.

“Despite the bad luck and bad circumstances of our own economy right now, it has spurred lots of intellectual discussion,” Cliggett said. “I’ve seen some exciting and dynamic conversation on listservs since all this started and there’s so much relevant literature out there right now.”

Can that lead to solutions in our own economy?

“Yes, absolutely,” Cliggett said. “Anthropology is the study of the human condition, after all. Studying how anybody makes decisions and why can lead to baby steps in the right direction. The key is to not make judgments about situations or cultures before you understand them. That’s what anthropology is all about.”

Photos courtesy of Lisa Cliggett

Do You Have a Plan B?

Students usually have enough to worry about when it comes to decision making:

“What is my major going to be?”
“When can I take that class?”
“You want this paper by when? Really?”

But in the midst of the country’s current economic downturn, there are plenty of new questions for students concerning careers and planning for the future.

Nicole Keenan, the College of Arts & Sciences’ Career Counselor has advice for students as they enter a job market that is suffering in numerous areas.  

“Students are concerned that they will not find a job after graduation,” Keenan began. “They are concerned about the competition that they will be up against regarding employment and admission to graduate programs.”

While these are common concerns for students, they are certainly magnified now as they watch the unemployment rate soar and massive layoffs continue.

“I highly encourage students to seek out internship experiences prior to graduation if they do not have a great deal of experience relating to the career field they are pursuing. Networking is one of the best strategies for seniors to utilize,” Keenan said.

“For the most part, students are more anxious about finding a job. We educate students that it takes three-to-six months to find a full-time job, but that statistic was prior to the unstable market,” commented Keenan. “Students need to start early and not wait until April or May to seek employment.”

Keenan also reminds students that it is important for them to keep their options open. “We advise students to think of a plan B and to evaluate their current skills and how they can be transferable in other professions.”

Has plan B already filtered down to students considering different majors or different career paths?

“Given the recent downturn I have not witnessed upperclassmen changing their focus for more secure jobs and it is too early to observe this in our underclassmen students. I personally have not witnessed a student reconsidering their major due to the economy but I am certain it is happening. “

“It will be interesting to see what departments have an increase and decrease in enrollment in the fall due to our current circumstances.  In general, areas that tend to be more secure during an economic downturn are government related jobs – specifically law enforcement, health care, higher education and jobs that are linked to our utility services,” Keenan said.

Time Magazine reports that “The best recession-proof jobs are those that are least sensitive to economic downturn, and which have the highest combined scores for pay, projected workforce growth, and number of openings.”

The top 10 jobs with the highest combined scores for pay, projected workforce growth, and number of openings are:

1. Computer systems analysts
2. Network systems and data communications analysts
3. Network and computer systems administrators
4. Registered nurses
5. Post-secondary teachers
6. Physical therapists
7. Physicians and surgeons
8. Dental hygienists
9. Pharmacists
10. Medical and health services managers.

Time Magazine’s 150 Best Recession-Proof Jobs

Nicole Keenan can be located in the Stuckert Career Center on Tuesdays and Fridays; and in Patterson Office Tower room 220 on Mondays, Wednesdays, and Thursdays.