Why does it not pay to exploit the poor?

Sir Arthur Lewis, Nobel Laureate, 1979

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At a glance

Born: 1915, Castries, St. Lucia

Died: 1991, Bridgetown, Barbados

Field: Development economics

Awarded: The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (shared), 1979

Prize-winning work: Pioneering work in economic development research, with a focus on the causes of poverty in developing countries

  

Growing up in St. Lucia during First World War, Arthur Lewis witnessed firsthand a territory that was very poor and was still dealing with the aftermath of slavery.

He described a model of the economy where two sectors exist – a modern capitalist sector and an underdeveloped sector – which led to inequality and lower wages for longer.

His work on economic development, and why some countries get stuck in cycles of poverty, challenged the thinking of the time. And he reasoned that instead of depriving the poor, investing in them actually pays and aids a country’s economy.

What does Lewis's work mean for us?

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"Lewis was ahead of his time, in showing that development didn’t need to come from a big push from the state, it could be led by entrepreneurs.”

Tim Harford
Financial Times columnist and author of
The Undercover Economist

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"He asserted that emerging market growth was driven by developed economy growth – this was the world of the late 1970s but, of course, also describes the world today.”

Paul Donovan
Global Chief Economist UBS Wealth Management

Arthur Lewis on…

...a life of historic firsts.

...the benefits of knighthood.

"I’ve never won an argument by saying ‘look, I’m a knight and you’re not’. Never."

From Lewis’s personal collection

Main image: The Bicentennial Silver Medallion from Columbia University

Top: Presentation poem from the Ethiopian World Federation on behalf of the Rastafarian Movement in Jamaica

Bottom: Invitation to the Kenneth David Kaunda Awards for Humanism at the United Nations

A closer look at the theory

Why does it not pay to exploit the poor?

Does economic development lead to unemployment?

What does development mean to the United Nations?

Should we worry about an international debt crisis?

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