The Institutional Fundamentals of Poverty from Veblen's Viewpoint

Doubtlessly, poverty is one of the greatest concerns of human societies and economic systems. Obviously, if economics and economists can not produce a proper analysis of such a bitter phenomenon and provide a solution to fight against it, their knowledge will be in vain. In Fact if productivity-oriented economists are merely able to attribute poverty to low productivity of individuals, they have to admit that their economic theory is no more than a tale for half of human beings. This is one of the critical and emphatic points, explained in this paper that makes it distinguished from other works in this area. Indeed the subject of this study is that diametrically different from the opinion of the mainstream economists, poverty does not have an origin related to individuals; on the contrary, it comes from institutional shortcomings and it is not just the outcome of individual inefficiency. This article tries to explain that mainstream economics has not well introduced the rots of poverty while institutions such as well-to-do class, heritage, manners and traditions could rather be regarded the major causes of individual poverty. Moreover, deductive logics as well as mathematical methodology, which are widely used in mainstream economics, have deprived such economists from the research methods emphasized by institutional economists such as participant-observer method. Yet, some recent institutional researches, conducted with the same method, have well revealed that most previous studies on poverty had neglected crucial points pertaining to the subject.