Adam Smith’s Linen Shirt

Sep 5 2011 @ 10:33am

GT_SOMALIA_110901
by Zoë Pollock

In his Inquiry into the Nature And Causes of the Wealth of Nations, Smith wrote:

A linen shirt … is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.

Martin Ravallion applies the concept to aid today:

This passage has often been used to justify the view that poverty is not absolute but relative—that certain socially-specific expenditures are essential for social inclusion, on top of basic needs for nutrition and physical survival. The way this idea is implemented in practice is to set a “relative poverty line” that is a constant proportion of average income for the country and date in question. That is how poverty is measured in most of Western Europe. By contrast, poverty measures in developing countries have almost invariably used absolute lines, which aim to have a fixed real value over time.

(Photo: Somalis displaced from their home villages by famine and drought receive food at a feeding center on August 16, 2011 in Mogadishu, Somalia. By John Moore/Getty Images)