The Impact of Financial Inclusion on Poverty from the Classical Theory of Poverty in the Fourth Industrial Revolution

This chapter seeks to discuss the impact of financial inclusion on poverty in the context of the Fourth Industrial Revolution from the classical views of poverty. The chapter assesses what it means to be poor from a classical economics point of view. It is shown in the chapter that the Classical approach to poverty is centred around the works of prominent scholars like Adam Smith and David Ricardo. In Classical economics, poverty is regarded as an outcome of poor choices by individuals and individual households. For example, poor people are regarded as people who lack self-control which will harm their productivity. The wrong choices made by individuals are viewed as the leading factors that drive individuals into poverty or the welfare trap. However, Classical economists also agree that different genetic abilities can be a potential cause of poverty among individuals. Therefore, according to classical economists, there is a minimal threshold at which government assistance is necessary to assist the poor and prevent destitution. The chapter is primarily constructed using justifications from classical economics. The impact of the advances of the fourth industrial revolution and financial inclusion on poverty are discussed to wrap up the chapter.