The EU and OECD’s use of poverty lines set at a percentage of national average income is testimony to the widespread acceptance of Peter Townsend’s purely relative poverty definition. It has often been defended, including by Townsend, as a development of Adam Smith’s reference to ‘necessaries’ differing across social contexts. This article contends that Townsend’s definition is clearly inconsistent with Smith’s work but entirely consistent with a passage by Wilhelm Schulz which established the term ‘relative poverty’ and asserted that people’s material needs are proportionate to their nation’s economic output per head; Karl Marx quoted that passage in a short piece that criticised Smith. A recent defence of Townsend’s definition is its supposed international public endorsement in empirical studies of socially perceived necessities. A review of this evidence finds that publics, like Smith and British poverty researchers before Townsend – most notably Seebohm Rowntree – see the extent of material need as affected by social context but not proportionate to national average income. Publishing purely relative and absolute purchasing power poverty statistics together offers a way of portraying hardship levels that is balanced to reflect publics’ more narrowly relative understanding of material needs.
