Poverty

[Chris]

Two insights on the nature of poverty.

Donald J. Boudreaux, Globalization (on trade not politics):

A far more interesting question is what causes this wealth.

Before we explore the answer to this question, it’s interesting to notice that Smith did not ask “what causes poverty.” Smith would have found such a question to be odd, if not downright meaningless. In Smith’s time, even in relatively prosperous western Europe, poverty was widespread. Poverty was the norm. Smith understood that poverty has no causes; it is (to use a modern term) humankind’s default mode. If each of us does nothing, if each of us exerts no creativity and no effort, we will all be miserably poor. It is no challenge to “create” poverty.

The real challenge, Smith realized, is to create wealth, especially enough wealth so that it is regularly available to ordinary people.

Henry Hazlitt, Why Some People Are Poorer than Others

Throughout history, until about the middle of the 18th century, mass poverty was nearly everywhere the normal condition of man. Then capital accumulation and a series of major inventions ushered in the Industrial Revolution. In spite of occasional setbacks, economic progress became accelerative. Today, in the United States, in Canada, in nearly all of Europe, in Australia, New Zealand, and Japan, mass poverty has been practically eliminated. It has either been conquered or is in process of being conquered by a progressive capitalism. Mass poverty is still found in most of Latin America, most of Asia, and most of Africa.

...This problem is nearly always referred to by socialists as "the paradox of poverty in the midst of plenty." The implication of the phrase is not only that such poverty is inexcusable, but that its existence must be the fault of those who have the "plenty." We are most likely to see the problem clearly, however, if we stop blaming "society" in advance and seek an unemotional analysis.

Poverty is the norm. One rises out of it by creating wealth, in production and/or trade.

[Shady Slim]

The democratic wheel is set up to keep those down, down forever.

Welfare and other entitlements paying uneducated mothers a bounty on how many kids they can muster. Then this generation of conglomerate kids mimic their jobless, no father figure, home life.

I was shoved out the door at age 12 to get some kind of job which was cutting lawns in the neighborhood. My yearly social security statement shows my income since age 14 when I was sent to Connecticut to pick tobacco. Age 14 !

How many democratic family kids are out working at age 12 to 14?

There was just a short documentary on TV a little while ago about a welfare mother with 5 kids at age 34! She NEVER worked a day on her life. Just a baby making factory. As soon as the "John" has had his "fill" of her, he is no where to be found again in the child's life. Yep, 5 kids with 4 different fathers.

Chances are, that 34 yr old mother will never work a day in her life. I mean "work" as a paying job. So you fem nazi's out there don't give me any business about how raising 5 kids is a "J-O-B".

Be a fountain in life, not a drain.

[Common Sense]

Regardless of the real failures of progressive politics, the progressive movement is responsible for the huge reduction in poverty in the US and other nations.

There certainly are drawbacks and horrible mistakes due to flawed good intentions, but the overall trend has been positive.

[Dr. Who]

If the solution for poverty is wealth, doesn't that demand a definition of wealth? The truest one that I have seen is the following:

Wealth has been defined as a collection of things limited in supply, transferable, and useful in satisfying human desires. Scarcity is a fundamental factor for wealth. When a desirable or valuable commodity (transferable good or skill) is abundantly available to everyone, the owner of the commodity will possess no potential for wealth. When a valuable or desirable commodity is in scarce supply, the owner of the commodity will possess great potential for wealth.

If scarcity is fundamental to wealth, then so is poverty, because if everyone can have the scarce, it is no longer scarce. Conversely, an abundance of everything obviates both wealth and poverty.

[Chris]

Regardless of the real failures of progressive politics, the progressive movement is responsible for the huge reduction in poverty in the US and other nations.

There certainly are drawbacks and horrible mistakes due to flawed good intentions, but the overall trend has been positive.

Oh, how did the progressive movement do that?

[Chris]

If the solution for poverty is wealth, doesn't that demand a definition of wealth? The truest one that I have seen is the following:

Wealth has been defined as a collection of things limited in supply, transferable, and useful in satisfying human desires. Scarcity is a fundamental factor for wealth. When a desirable or valuable commodity (transferable good or skill) is abundantly available to everyone, the owner of the commodity will possess no potential for wealth. When a valuable or desirable commodity is in scarce supply, the owner of the commodity will possess great potential for wealth.

If scarcity is fundamental to wealth, then so is poverty, because if everyone can have the scarce, it is no longer scarce. Conversely, an abundance of everything obviates both wealth and poverty.

Scarcity there just means that resources are limited in the face of unlimited wants. Has nothing to do with poverty.

Simple definition of wealth: If you and I exchange what we value less for what we value more, why then we have generated wealth.

[Chris]

You both miss the point of the OP, however, namely, that poverty is the natural, default state. You don't create poverty, you don't force people into poverty, that is the default state. And wealth is not a pie to be sliced up and redistributed, it keeps people in poverty, no wealth is generated. Wealth is generated, by trade, by production. Generating wealth is what rises people out of the default state of poverty.

[Newpublius]

Regardless of the real failures of progressive politics, the progressive movement is responsible for the huge reduction in poverty in the US and other nations.

No, it isn't. The progressive movement exacerbates poverty. The social market economy's good intentions backfire, creating a situation where the incentives to produce are dampened and the result are societies that are fundamentally poorer than they should be without those policies. The social market economy produces poorer societies. EU poverty as defined by the EU is a function of the median. However, by US standards > 30% of the EU is living in poverty. Likewise the government that actually has far greater liberalization than the United States, Switzerland, has far greater income and far, far less poverty. And what's telling is how Switzerland shouldn't compare to Canada at all. Canada has no business being anything less than the single wealthiest country on the planet. And its not, and your government is to blame.

[Common Sense]

You both miss the point of the OP, however, namely, that poverty is the natural, default state. You don't create poverty, you don't force people into poverty, that is the default state. And wealth is not a pie to be sliced up and redistributed, it keeps people in poverty, no wealth is generated. Wealth is generated, by trade, by production. Generating wealth is what rises people out of the default state of poverty.

That doesn't really jibe with history. The 20's saw unprecedented wealth in the US. Robber barons had vast sums of money and the country became very wealthy. There was little if no trickle down to the very poor. That model has never been shown to work. It may look good on paper, but in reality the very poor get left out. Throughout history, hugely wealthy societies have always had large swaths of poor. I do concede that some middle class do see an increase in wealth when the very rich get richer.

In the end I think that it has to be a mix. Certainly wealth generated by trade and production is crucial to adding more capital and opportunity, but without some structure and a social safety net, the very poor would be a larger portion of society.

[Newpublius]

That doesn't really jibe with history. The 20's saw unprecedented wealth in the US. Robber barons had vast sums of money and the country became very wealthy. There was little if no trickle down to the very poor. That model has never been shown to work. It may look good on paper, but in reality the very poor get left out. Throughout history, hugely wealthy societies have always had large swaths of poor. I do concede that some middle class do see an increase in wealth when the very rich get richer.

In the end I think that it has to be a mix. Certainly wealth generated by trade and production is crucial to adding more capital and opportunity, but without some structure and a social safety net, the very poor would be a larger portion of society.

In the 1920s median income more than doubled. In 1914 median US income was $627, in 1924 it was $1,303 as the price of a Model T went from $490 to $290. It trickles up, it trickles down, it trickles all around, that's how economies work.

From 1900 on we observe the course of their prices in terms of the hours of labor that will buy them steadily decrease.

Carnegie, Ford and Rockefeller actually got their fortunes from making steel cheaper and transporting oil cheaper than their competitors.