Poverty is not “complex”

imgres

Poverty is a social issue that usually attracts the label ‘tough problem’. Sometimes, when a bit of flair is in order, it is labelled ‘complex’ or ‘multi-dimensional’. This strikes me as a major cop out.

Reducing or eliminating poverty is not ‘tough’ in any technical sense. The ‘tough’ part is our moral baggage – the distorted moral lens through which we see the problem – which provides an excuse not to make the necessary sacrifices required for change.

For example, it is simple enough to imagine a developed country without poverty. Even using a purely relative metric of poverty that is a direct function of the median income (such as 30% of median income), poverty can be eliminated through appropriate redistribution of wealth. Through either welfare payments, transfers of assets, a national job guarantee, minimum wages, or any other sets of institutions, we can get the resulting distribution of income that means poverty is all but eliminated.

It really is that simple from a technical point of view.

In case you are still skeptical of the simplicity of the solution, imagine for a minute that you are the head of a wealthy household. One of your adult children has, for some reason, flittered away their life savings, been kicked out of their apartment, and has no where to turn.

What do you do?

You invite them home. House them. Feed them. Clothe them. Give them money to help them start rebuilding their life. You probably even call in favours to help them find work.

This investment by the head of the family immediately solves that family’s poverty and homelessness problem.

Maybe this solution is temporary. Maybe this child of yours never seems to grow up. They get caught up with the wrong crowd again, and two years later you are back to square one. You invite them home. Feed them. Clothe them. Give them money.

If it makes sense to do this for your family, why doesn’t it make sense to do it more generally for fellow human beings?

It wasn’t hard. It just required a little sacrifice from the wealthy.

If we think about our country, or dare I say our world, as our extended family, our tribe, then it also makes perfect sense for the wealthiest members of the tribe to support the needy.

What makes these social problems ‘tough’ is our moral baggage. When we see a family member in need we we assume the best – that underneath they are good people, and that their situation is a product on a series of unfortunate circumstances. But when those in need are ‘outsiders’, we seem to assume the worst – that their poverty is a choice, and their poor choices reflect some innate ‘bad’ personality trait, and hence they are undeserving of support.

Poverty wouldn’t be such a ‘tough’ social problem if there were only deserving poor.

Unfortunately the most wealthy in our tribe are also politically active and socially influential, and they fear losing their ‘deserved’ wealth to these ‘underserving’ poor. The media is their weapon, and they reinforce the moral message of the undeserving poor at every opportunity.

Removing our morality goggles makes it clear that ‘tough’ social problems are technically not so tough at all, and that much of society is pretending that is the case in order to protect their own interests, and using warped morality to justify their position

Comments

  1. Even famillies rebel at providing resources to drug addicts eventually. But most families recognise that some of their members will not have the IQ and education of other members and work to ensure that the less endowed are supported.

    I’m for a youth job guarantee with training days rather than dole or other benefit.

  2. Addressing the wrong problem. Give poor people money and they’ll have more kids….

    Big disaster made worse (as usual) by dogooders. Why do we think Geldoff gave up?

    Address the real problem…Too many people.

    • Rumplestatskin

      “Give poor people money and they’ll have more kids….”

      So? They won’t be poor if you’ve given them money.

      • The biggest problem we have is too many people. That needs to be addressed before any redistribution of wealth (that BTW, I’d be all for if it weren’t for the pop explosion it would cause).

    • Rich42: I’m not sure what your whole point is. Are you somehow advocating some sort of population control?

      How, pray tell? Nuclear strike from orbit? Mandatory sterilizations? One child policies?

      I’d ask you to spell “ethical” but I’m sure it’s going to become a long day soon after.

      • @Ino

        Yes that’s correct. If people such as yourself want to use my money to give away, I’d appreciate it if it went with conditions of fewer kids.

        Why is that so hard or unethical?

    • There are not “too many people” in the world.

      This utter BS meme has been kept alive by self-centred, greedy, brainwashed human haters (“everyone else but me and mine is the problem”) since Malthus trotted out his idiotic self-interested quasi-religious garbage.

      The facts are that none of the neo-Malthusian, racist, elitist, fear-mongering BS has ever looked like actually coming to pass.

      There is FAR more than enough agricultural produce, fertile unutilised land mass, and natural resources — even ignoring any future technological advances — to feed, water, clothe, and shelter a vastly higher global population than presently exists.

      The problem is massively inequitable distribution.

      When “stable population” ideologues succeed in stopping all agricultural dumping practices — millions of tonnes of FOOD poured into the sea every year, simply in order to maintain “competitive advantage” — and, also succeed in eliminating fat white f*ckers in the West, gorging themselves to death daily on enough food to feed some poor black, brown, or yellow family for a whole month, and, also succeed in eliminating the predatory practices of Western international banksters deliberately and willfully impoverishing black, brown and yellow nations — remembering the fact that increasing wealth leads to LOWER birth rates — then, IF there is still any remaining perception of a “problem” re the world’s population of human beings, maybe I’ll begin to listen. With a view to solving any remaining predatory inequalities. NOT with a view to thinly-veiled implications of killing off other people, or forcibly restricting their ability to have a family.

      Wake the fuck up to yourselves. Greedy selfish arseholes.

      EDIT: Get some Nikola Tesla wisdom, and humanitarian insight into you, FFS —

      The Problem of Increasing Human Energy

      http://www.tfcbooks.com/tesla/1900-06-00.htm

      • @Opinion8red….I agree there’s some of that but come on. You’re suggesting there’s no over population issue? Ever considered the environment? Your good nature (I’ve got one too) is completely eclipsing your common sense.

        I couldn’t care where people come from or what colour they are, there’s too fking many of us. Ecological, environmental, sustainable FACT.

      • I’m not “suggesting” it. I’m stating it as fact. And I will not resile from that position until I see the issues raised above addressed first.

        What “environment” problem, precisely, are you concerned about?

        My view is that every single environment problem that anyone cares to name, can be easily addressed, if first we fix the monetary system.

        The only reason there is any argument over “costs” of technology associated with renewable energy, for example, is because of the artificially-contrived shortage of “money” caused by usury.

        EDIT: Watch this 12min vid

        http://sacred-economics.com/

        ..and, read the damn book. THINK about it.

      • @ Opinion8red……”millions of tonnes of FOOD poured into the sea every year”…..

        How many starving people do you think that would feed? Say 1 billion kg of food. That’s 1 billion people 5 meals each. Then they have another 100 million kids as a result. Problem made worse. Humanity has to be taken out of the problem solving sorry. It always has and always will lead to a bigger problem.

      • Don’t oversimplify. Don’t rely on Straw Man arguments.

        It is not JUST about food, you dimwit.

        Consider the OTHER issues I raised.

        There is NO overpopulation problem.

        Only a GREEDY ARSEHOLE problem.

      • …….”EDIT: Watch this 12min vid http://sacred-economics.com/ .and, read the damn book. THINK about it.”…..

        I will. The last thing I am or want to be is ignorant.

        …..”What “environment” problem, precisely, are you concerned about?”….

        Acid sulfate soils, desertification, depleted fish stocks, erosion, falling farm yield, global warming, rain forest depletion, estuary destruction. The list goes on. We are fking the planet and as a result it can cope with fewer and fewer people and we’re getting more. An exponential problem.

      • Yep, and every one of those environment problems is caused by THE root problem, of competition for “money”.

        Which is caused by usury.

      • ……”12min vid http://sacred-economics.com/ .and, read”…….

        WTF? You want people to forgo their stuff and give it to other people? Do you understand the very first thing about humans? We are greedy fkers. Every single one of us, you and me included. Hey James Packer, you’ve got a lot of stuff, I reckon you should share it.

        Fantasy land BS. Stop population growth, it is the ONLY solution. Humanity? Who are you kidding? Academics have a unique way of looking at the world with special reality blinkers. There’s too many people.

        and…the irony of discussing oil that’s made it all possible…http://ericmclamb.site.aplus.net/features/industrial_revolution/worldpopulationgrowth2.gif

      • @Opinion8red

        …….”It is not JUST about food, you dimwit.”…..I didn’t say it was. Far from it (insert derogatory name during a sensible discussion).

        ……”Consider the OTHER issues I raised.”…..Yes indeed.

      • @Opinion8red….Let’s get to the crux….Are you saying if we all shared, there’d be enough for everyone; all 9 billion of us? We all toil our own bit of land? The west occupies a fragment of the entire global population. Most people (numbers growing) live on less than a cup of rice a day. If resources were more available to these people boom goes the population, problem even worse. Every global problem is miraculously fixed by reducing population EVERYWHERE.

      • I’m with Opinion8Red.

        Colin Clark, a distinguished colleague of J M Keynes, calculated in his 1967 book “Population Growth and Land Use” that the world could feed 47 billion people – and technology has improved since.

        Furthermore, Clark was arguing that some Soviet economists who said it was 80 billion, were too optimistic.

        Contrary to the bowl of rice a day theory, approximately 6 billion out of our 7 billion today eat better than 1 billion out of the 2 billion in 1900 did. The bottom billion in both cases, was a problem of culture and institutions and politics.

      • “Stop population growth, it is the ONLY solution.”

        Ok. Fine. Let’s start with you, sunshine.

        A considered progression:

        1. Policies introduced designed to “discourage” you from breeding.

        2. Oh, you have kids already? Policies introduced designed to “discourage” your offspring from breeding.

        3. Eugenic policies introduced, in your city/town/suburb first, to test the efficacy of … oh, let’s say … weakening yours and your loved ones’ immune systems.

        4. More eugenic policies introduced, in your city/town/suburb first — under the mantle of “preventing the mentally deficient from polluting the gene pool” — to sterilise you, and/or your offspring.

        5. Start a war, in your city/town/suburb first, with the unstated intent to deplete the native population.

        Oh! What’s that you say?

        Not so enthusiastic about “Stopping population growth” now, when it is YOU and those you love who are to be impacted (targeted) first, are you?

        “Stable Population” adherents = despicable, ignorant, vile hypocrites.

      • @Opinion8red…Eugenic control was never mentioned and I wouldn’t condone that anywhere….

        Yeah sure, reduce everyone that wants kids to replacement. Stop anyone that doesn’t want kids from having them (70%?). Simple.

      • So, you are volunteering yourself, and your loved ones, to be first to the chopping block?

        Sure you are.

        So very easy to say, in the hypothetical, over the internet, from the comfort of your Western lifestyle.

        Please go and do some learning. Lots and lots of material provided.

        EDIT: If nothing else, rich42, please consider the fact pointed out earlier; the richer people become, the lower the birth rate falls. Helping the poor to NOT be poor, will lower their birth rate. That means removing the barriers (imposed by predatory, racist Western banksters) to their development, education, and economic self-sufficiency.

      • Stop anyone that doesn’t want kids from having them (70%?)

        Erhh, you need government intervention for that?

      • @Opinion8red

        …”So, you are volunteering yourself, and your loved ones, to be first to the chopping block? Sure you are.”….That’s what I said. Why is it such a surprise? Why would I want to more than replace myself?

        …..”Please go and do some learning. Lots and lots of material provided.”…..Don’t be so condescending. I have two degrees, one of them is science and ecology and I know how this world ticks.

        You are in gaga land thinking anything matters if we leave population growth unchallenged.

        It’s you that misses the fundamentals about how populations work and how they will eventually crash with horrific consequences (for us too) because, again, the uneducated dogooders have tried to help. Too scared to impose on anyone (mainly people that didn’t want kids in the first place). I suggest you do a lot of reading, you’re missing a very big chunk of information.

        @Rusty Penny…That’s correct. There is no alternative. It doesn’t have to be a big stick, more persuasive.

      • rich42,

        That’s enough for me today.

        Alas, you are, presently, in your abject woeful ignorance and blinkered, narrow-minded, brainwashed, SELF-CENTRED stupidity, quite simply everything I described above.

        A despicable hypocrite.

      • @bk and Rust Penny…

        You both realise there’s a whole lot more to it than simply fitting people right?

      • drsmithyMEMBER

        Stop population growth, it is the ONLY solution.

        Population _growth_ has already peaked, and is declining.

        Absolute population is supposedly going to peak at something like 9 billion around mid-century, after which it will begin a slow decline.

        You could comfortably fit 9 billion people into North America, which leaves the whole rest of the planet for food and energy production.

    • drsmithyMEMBER

      Addressing the wrong problem. Give poor people money and they’ll have more kids….

      Give women comprehensive sex education, strong legal protection and easy access to contraception (including abortion) and they have less kids.

      • drsmithyMEMBER

        No one I’ve discussed this with today sees it as a problem….

        That’s because we’ve put a bit of thought into it.

        Bizarre, just fking bizarre…Despite this

        http://en.wikipedia.org/wiki/File:World_population_(UN).svg

        When women have choices in life other than being breeding sows, birth rates drop off dramatically. Most (all?) of the first world has been under replacement rate for decades. You want to reduce world population, give them money and easy access to birth control.

      • ………”That’s because we’ve put a bit of thought into it.”……

        I think the contrary. Like I said, it’s not just about where you can fit people. We are horrifically over populated by every measure.

      • ….”That’s because we’ve put a bit of thought into it.”…….

        With what backing your views? Just because you think world pop can fit in some state? What BS. Every state of every country is in environmental chaos with the pop they already have..

      • drsmithyMEMBER

        With what backing your views?

        Common sense.

        Just because you think world pop can fit in some state?

        No, because of the amount of space and resources that exist and the technology we already have.

        Every state of every country is in environmental chaos with the pop they already have..

        Please tell me about the “environmental chaos” engulfing Switzerland. Or New Zealand.

      • “Please tell me about the “environmental chaos” engulfing Switzerland. Or New Zealand.”

        That you are posing that as a rhetorical question is unbelievable. Both have the problems of everywhere else. Too many people, waste everything, too much energy use, land clearing, extinct species (or are we ignoring the other sopecies we share with? is this just about humans? and I’m called names today)…fckkkk….

      • FFS rich42.

        You really are an ignorant, stupid cretin.

        “You both realise there’s a whole lot more to it than simply fitting people right?”

        Yes. We do.

        It is you, the dribbling imbecile Chicken(brain) Little, who has spent this entire thread running about frantically waving your metaphorical hands in the air, pointing at The Big Number and shrieking “OMG! OMG! OMG!”.

        You have offered nothing of any substance other than pissing down your own legs alarmism. An alarmism that has been clearly evidenced as having ZERO substance since the time of Malthus.

        I pointed you to a book to read. What did you do? The timeline of posts above makes it very clear.

        Like a typical ADD can’t-think-for-myself-dont-like-to-read-so-show-me-the-pictures-please knuckle-dragger, you watched the video — something that is obviously, by necessity, a mere precis of the comprehensive content of the book — and came straight back to the thread, clearly none the wiser, still just as uneducated, narrow-minded and thick as two short planks, and attempted to riposte by way of nothing except more Straw Men, and, in a stunning hypocrisy, yet more rank oversimplification of the many issues raised by others.

        Idiots like you can’t be helped, because you don’t even want to LEARN.

        You are a greedy, selfish, willfully ignorant, hypocritical 1st World arsehole.

        It is dumb fucks like you, who never think about anything except your own pig-ignorant self-interest, whose moronic complacency, and eagerness to go along with any superficially plausible scare campaign, is in and of itself the action that aids and abets the real evil fuckers, who take advantage of the mass stupidity of just your kind of selfish complacent moron to advance the cause of genocides and war.

        You’ve been offered enough reading material to last someone of your obvious learning deficiencies for a few decades.

        I suggest you get to it.

        You are way out of your depth.

      • @ Opinion8red…

        Just hilarious you pompous fucking asshole…Who the fuck do you think you are?

        Where’s the hypocrisy you dumb fucking idiot? You give me some BS video with some academic sooth talker and expect me to change everything I’ve learned? You tell me to read a book and expect me to what, buy it read it and then reply? You are a fucking moron mate. Every ecologist knows we are hopelessly over populated but you know better? What credentials do you have? It is the pro population that is fueling all the evil you describe. We are exactly like any other species, we’ll populate and exploit our environment to the full, excluding each other and all other species. I really regret getting into an argument with a fucking clown like you who doesn’t know the line of a civil debate I thought I was having. Rot in fucking hell wanker.

      • If you have “learned” anything, you certainly have not demonstrated it here.

        I’ve given you a bunch of links, piles of books to read. You have not read any of them, clearly. Just charged back into the fray, armed with Straw Men, misunderstandings, misinterpretations, cherry-picks, and stupidity.

        Others have chimed in with pertinent links, CONTRA your position, as well.

        What have you presented, to back your position?

        FA.

        A link to a chart of The Big Number.

        Your actions, your words, sir, warrant every one of the epithets directed your way.

        EDIT: “You tell me to read a book and expect me to what, buy it read it and then reply?”

        Oh yes, more proof that those epithets are warranted. The book I linked to you, the one that got your pathetic little dander up — not because you read it, but because you are too dense to have carefully and thoughtfully reviewed the video — that book, IT’S FREE, right there, at the same fucking link, you blind, unobservant dickhead!! It’s SHARED … a GIFT. Concepts that you made a point of ridiculing earlier in the thread.

      • Yep I get it Opinion8red. Your thinking and that of the sooth talker is far superior than science itself. Your brain is far superior to theories of physics, chemistry and ecology. You do have quite an opinion of yourself don’t you. I’m out of my league could perhaps be the most pompous thing I’ve ever been told.

        Let’s for the sake of your argument, ignore the damage too many people have done, not only in the west but everywhere. It doesn’t exist. You’re right. Tomorrow, I’ll review what’s been said and relisten to the sooth talker and will have more to say re how wrong you are. To be honest, I’ve forgotten how you’ve come to such a preposterous view of the world and how you can possibly ignore and deny the most glaring problem humans have ever faced.

        Over population, It’s all a scam designed to fill evil peoples’ pockets, to facilitate war and genocide. Yep, I think I’ve got it.

      • drsmithyMEMBER

        That you are posing that as a rhetorical question is unbelievable. Both have the problems of everywhere else. Too many people, waste everything, too much energy use, land clearing, extinct species (or are we ignoring the other sopecies we share with? is this just about humans? and I’m called names today)

        Do you have an argument that isn’t circular ?

      • @Dr Smithy….Yeah fair point…Delete “Too many people”

        @Opinionwanker says I’m out of my depth…Don’t give him more fuel. Are you agreeing with his non-argument?

      • @ Opinion8red

        I’ve re watched the video and not one thing he says is lost on me or a new thought for me. Does that make me “one of the deepest integrative thinkers active today”?

        BUT…WTF has this got to do with horrific over population? There are not enough resources to go around whether we share equally or not. WTF is your point?

      • “Your thinking and that of the sooth talker is far superior than science itself. Your brain is far superior to theories of physics, chemistry and ecology.”

        Another Straw Man. Do you know what a Straw Man fallacy is?

        http://en.wikipedia.org/wiki/Straw_man

        Mate, please, pause for a moment … and think.

        Where is this “science” itself, that purportedly supports your contention that the world is overpopulated, and, that population growth MUST be stopped?

        Where are these “theories of physics, chemistry, and ecology, that unequivocally support your strident contention?

        This is one of the points made above — you have not provided any proof, of anything.

        In my first post, I introduced you to a number of issues that have a clear bearing on the subject.

        In subsequent posts, I made it abundantly clear that my position is that there is no global overpopulation problem, that all the concerns raised by population alarmists can be resolved by first addressing the core driver of inequality, environmental pollution and degradation, rampant resource consumption, etc … the monetary system.

        I gave you a number of links related to this, and pointed you to a thread yesterday in which I provided many more links, almost all to freely available books and articles on the internet.

        Please do go and begin reading at least some of these. Please do go and give thought to … well, how about just the ideas presented to you by others above. I am confident that if you take the time to properly consider the evidence that is out there, the alternate views to those of the population catastrophists, there is every chance that your dogmatic panic will be attenuated, if not eliminated.

        I apologise for losing my temper with you. Really, I do.

        I am sorry. There is no excuse, so I won’t insult you further by trying to pass one off.

        Cheers and good evening.

      • drsmithyMEMBER

        Don’t give him more fuel. Are you agreeing with his non-argument?

        His arguments are that Malthus was wrong and that our problems today are primarily distributional rather than technological or ecological – ie: the world could sustain a lot more people than it currently does.

        On the former I do disagree because I disagree with the implicit premise that infinite growth is possible. Malthus was right, he just got his timing wrong.

        On the latter, however, it’s hard to see any evidence to the contrary. By the numbers, a family of four can be largely self sufficient on an acre of land – and that’s using old-school farming, animal husbandry, and the like.

        There are a lot of acres of land in the world.

        The single biggest problem with the “we have catastrophic overpopulation” argument is that the people presenting it inevitably use the phenomenally (and almost unbelievably) wasteful lifestyle of Americans as a benchmark. We can attain equivalent (if not higher) quality of life to contemporary America with vastly less waste, less energy usage, cleaner and more efficient forms of energy production, etc, etc.

        We can do this with technology we have today. The issue here is not one of capability, but will.

        The second biggest problem with the “we have catastrophic overpopulation” argument is that “solving it” requires an immediate and massive decrease in both population and birth rates. The only way to achieve the former is war or mass suicide. The only way to achieve the latter is war, mass suicide, or a massive program of forced sterilisation in third world countries.

        None of these should be considered ethically or morally acceptable, especially when there is a vast body of evidence showing that as women have higher levels of education, easy and cheap access to contraception (including – indeed, particularly – abortion) and strong legal protection then birth rates fairly quickly drop to, if not well below, replacement.

        Finally, you haven’t actually provided any evidence about why the world is massively overpopulated. Just rhetoric and assertions.

    • @rich42 Whether or not you believe in “too many people”, it is well on it’s way to being solved. As per dr smithy comment, the population is expected to peak at 9 billion and apart from africa, some parts of SE asia and south america, the pops are expected to go into reverse.

  3. You must live in a world completely devoid of “rent-seeking” behavior if you honestly believe poverty can be solved by simple wealth redistribution.

    All your wealth redistribution will succeed in doing is making the landlord rich and dramatically raising the cost of living for those that earn about the median income.

    Fixing poverty requires that we create opportunity for those less capable AND provide (provision) shelter that is affordable given the opportunities that their skill set permits them to pursue.

    • Rumplestatskin

      “You must live in a world completely devoid of “rent-seeking” behavior if you honestly believe poverty can be solved by simple wealth redistribution.”

      I don’t know what rent-seeking has to do with it.

      “All your wealth redistribution will succeed in doing is making the landlord rich and dramatically raising the cost of living for those that earn about the median income.”

      No it won’t.

      “Fixing poverty requires that we create opportunity for those less capable AND provide (provision) shelter that is affordable given the opportunities that their skill set permits them to pursue”

      Sure. But it we just gave them money, you could ignore everything else and directly get the outcome we want.

      • oh please!

        I’ll only ask you one question:
        What percentage of those living in poverty RENT?

        Unless you take steps to dramatically increase the availability of low cost housing, all increased wealth distributions to this “poverty” class will be absorbed by rent-seekers. The ONLY exception to this is when the poor are allowed to self-provision housing. i.e. create their own affordable housing, however even then slum landlords are there to collect a rent, look no further then the favelas in Brazil if you need an example.

        Opportunity is the only gift that permanently erases poverty, unfortunately opportunities can only be fully explored when the necessities of food and shelter are provided for. This suggests that poverty is best eradicated by deliberately creating an over-supply of shelter. (not quite Aussie policy….)

      • Rumplestatskin

        “Unless you take steps to dramatically increase the availability of low cost housing, all increased wealth distributions to this “poverty” class will be absorbed by rent-seekers. ”

        I see your point now. That’s true enough. But it won’t matter because it will get taken from the hands of the rent-seekers and into the hands of the renting poor immediately.

        I actually an drafting a simple idea about redistributing assets soon to avoid this continual process of the concentration of rents in the hands of the few.

        I also agree that creating a deliberate ‘over-supply’ (whatever that is) of shelters is also a simple an effective solution. The government could contract to build a certain obscenely high volume of new homes each year in particular areas, then tenant them on a heavily subsidised rent-to-buy scheme, or some similar scheme, that means these assets fall into the hands of the needy over time.

  4. Do you accept that redistributing wealth is a disincentive to the creation of it, more or less so at particular stages of economic development?

    For example, in a wholly subsistence economy, what will be the effect of taking everything off the first person to start a wealth creating business, to hand out to everyone else in the economy who is still in subsistence conditions?

    Your theory is fine provided the economy is already over the hump of wealth creation and capital accumulation and the people are sufficiently saintly in their culture to not maximise their tax avoidance tactics – plus that the redistribution itself is not too much of a disincentive to people to bother to work at all. The Scandinavian countries, for example.

    • drsmithyMEMBER

      For example, in a wholly subsistence economy, what will be the effect of taking everything off the first person to start a wealth creating business, to hand out to everyone else in the economy who is still in subsistence conditions?

      Now that you’ve gotten your false dichotomy fallacy out of the way, can you give an example more relevant to what’s actually being suggested ?

  5. If we accept that poor people are not poor, because of their choice, e.g. most of them actually don’t deserve to be poor, the next step is to accept that not all rich people deserve their wealth and to be rich, because just like one getting poor is by chance, one getting rich is also by chance, not always by merit. And this reality will never be accepted by the ruling class, e.g. the richest.

    In our world there is rarely substantial wealth created without the help of privileges, monopoly, power, corruption, asymmetric market information, market failures, massive theft, or just a war. So, it is obvious that not every rich person deserves his wealth, that is why it is politically very sensitive to acknowledge that not every poor person deserves his misfortune and destiny.

  6. Eliminating poverty would be as simple as you suggest if redistribtion were costless.
    Unfortunately it isn’t. Offer an unemployment benefit and some will decide to make do with that and not seek work. Try to tax those that do work to pay for the UB and some will decide work is not worth the effort. Suddenly fewer are working and we are all worse off.
    The behavioral responses to redistributive mechanisms make eliminating poverty a difficult problem.

    • What if you give unemployment support combined with work done for the public (there is so much work to be done)? This will save much of the cost and will bring more benefits for the whole society/community and the person itself.

      • Maybe. Governments have tried many schemes to assist those that have difficulty finding work. Some have been more successful than others. It is difficult working out which provides the greatest benefit at least cost. Personally I would favour something like an earned income tax credit, which seems to have been successful on the US.

    • Rumplestatskin

      a) It is not costless to get the current distribution either. Lot’s of laws protecting wealth must be enforced at great expense.

      b) I’ve never heard a rich family deny their children anything more than token rewards because it will distort their incentives to work hard. If that were truly the case in general, rich kids would be the ones wagging school, and the poor kids would be top students.

      c) Who cares if some people don’t work. No one whinges because rich people don’t work hard enough. Do you really think James Packer’s productive contribution to society justifies his wealth?

      The greatest sign of success is that people don’t HAVE to work. If that’s true of the individual, then it should be true for society too.

      • You’re right, property rights are costly to administer and enforce. Sometimes they are administered poorly and opportunities for rent seeking arise. But we would all be poorer if govts did not provide this public good.

        I suspect most parents worry about the incentive effects of meeting their children’s wants (over and above their basic needs). Pocket money often has some obligations attached.

        People’s preferences for work or leisure are their own business. However, where a tax or regulation distorts that choice and gives rise to a welfare loss, society is worse off.

        Mr Packer’s wealth seems to have come mainly from rent seeking. We should make more use of rent taxes as low cost means of funding redistribution.

      • There is a considerable difference between a society in which some people don’t work, and pay heaps of tax – and one in which a lot of people don’t work, and are net recipients of public spending.

    • drsmithyMEMBER

      Offer an unemployment benefit and some will decide to make do with that and not seek work. Try to tax those that do work to pay for the UB and some will decide work is not worth the effort. Suddenly fewer are working and we are all worse off.

      Please provide evidence to support this claim.

      • It was an attempt at a jargon free description of how deadweight costs arise from tax/transfers. Empirical estimates of these costs have been made. UE often refers to the estimates reported in the Henry Review.

      • drsmithyMEMBER

        It was an attempt at a jargon free description of how deadweight costs arise from tax/transfers. Empirical estimates of these costs have been made. UE often refers to the estimates reported in the Henry Review.

        I’m aware of what it was.

        I’m questioning the premise that there are people not working productively today, who would be if we only treated them a bit worse.

        It seems a long bow to draw with un- and under-employment as high as they are.

      • The estimates are based on observed behavioral responses to incentives. If you pay people not to work or tax people who do work, at the margin there is a behavioral response.

  7. Rumple is right. It’s not hard to eliminate poverty if all that’s required is mathematics.

    Implicitly, if incomes and wealth were more equitably distributed there would be less poverty. There would be just as much wealth – maybe there would be more – but it would be allocated differently.

    We have seen income and wealth distribution become less equal over the last 25 years, but not in the way we might first expect. Widening income inequality is most noticeable in the relationship between the second, third and fourth household income quintiles in relation to the fifth (the highest). The first quintile (the poorest income households) have actually done a bit better than those in the middle. This reflects the effectiveness of means-tested transfers by government and the force of arithmetic: because the incomes of the poorest households are so low, even small nominal allocations make large % differences in their welfare. So even though the highest paid households have enjoyed income growth that has been faster than the mean, their incomes have grown less quickly than the poorest. This is mostly due to the nature of the tax and transfer mechanisms.

    Likewise, even nominal-looking reductions in income support or service provision (things like charging for visits to the doctor) will make out-sized differences to the relative welfare of households in the lower income quintiles.

    Changes in the labour market over the last 30 years have also proven a truism – access to work, including part-time and casual work, has made a huge contribution to equalising household incomes, most notably for the poorest households.

    This being so, we should ask what factors sustain the connection to work of the poor. The answers are very familiar – support for and access to education and training, access to child-care, access to transport, access to health care, the elimination of poverty traps, and a healthy labour market per se .

    Rumple is right in another very profound way. None of this is complicated. It is so damn straightforward that we should be doing more of it, not less.

    Intuitively, an economy with a more equal distribution of income, wealth, opportunity and reward – one where economic welfare is clustered towards and not away from the median – will be a more resilient one and one that generates higher aggregate welfare.

    Relative income equalisation should be an explicit goal of economic and social policy because it will lead to higher total welfare and, necessarily, to higher individual welfare in the median ranges.

    Unfortunately, any number of excuses and rationalisations will be advanced to oppose this. These arguments are most often simply a way of authorising inequality to the detriment of the disadvantaged.

      • Rumple…thank you for getting us all to think about this issue in such clear terms.

    • The balance between rent-seeking and creation of consumer surplus in the economy will itself influence equality levels as well as overall wealth.

      Rent-seeking makes “the rich richer and the poor poorer”. Creation of consumer surplus “lifts all boats”.

      • “Rent-seeking makes “the rich richer and the poor poorer”.”

        Correct.

        “Creation of consumer surplus ‘lifts all boats’.”

        Nonsense. A dangerous fallacy.

        The creation of a consumer surplus only evidences the fact that the most foundational rent-seeking — that which lies at the very root of making the rich richer and the poor poorer — is occurring.

        Because the “money” by which said consumer surplus is measured / “priced”, is debt-at-usury.

        If a general condition is seen whereby consumers in a given economy are willing to pay more for a given product than the present market price — the definition of “consumer surplus” — then this only suggests the very dynamics at play that drive increasing inequality, (ie), an excess availability of “credit” (owing usury), an excess that is certain to be unequally “distributed”.

  8. PhilBest
    May 6, 2014 at 9:43 am

    Do you accept that redistributing wealth is a disincentive to the creation of it, more or less so at particular stages of economic development?

    There is no evidence at all for this proposition. None. It is a myth.

    • So in my hypothetical example, you claim there would be no effect?

      The proposition is NOT a myth. It is merely true under SOME conditions. You will NEVER turn Afghanistan into Sweden just by introducing Sweden’s welfare system.

      • If your proposition was correct, we could increase economic welfare and accelerate economic growth by deliberately intensifying inequality. There is absolutely no evidence that this works. In fact, the contrary is the case – more egalitarian structures in income, wealth, opportunity and reward generate greater welfare.

        The justification of inequality relies on a double-standard. This standard holds that the poor must work harder for less while the rich work less for ever greater emoluments.

        It is a con in economic, social and ethical terms.

      • drsmithyMEMBER

        So in my hypothetical example, you claim there would be no effect?

        Your hypothetical example is a textbook example of an excluded middle fallacy.

        You will NEVER turn Afghanistan into Sweden just by introducing Sweden’s welfare system.

        And that one is a straw man fallacy.

      • I say that growth in overall wealth, and growth in inequality, obviously can be both endogenous to the same process. I say that the extent to which this is harmful or beneficial, will depend on the balance between rent-seeking and genuine wealth creation/consumer surplus.

        I don’t care how much “less” “the rich” are “working” providing they are making their money by creating wealth, not transferring it. It might appear to you that someone isn’t working, and IF they are gainers from economic rent, I agree with you. Otherwise I don’t. I am opposed to economic rent per se. Mum and dad property flippers are part of this; so are the Rockefellers.

        I also hold it impossible for an economy to progress from subsistence to something more advanced without inequality, and that enforcing equality via income redistribution right from the outset of economic development, will result in either no economic development, or far less economic development.

        Of course I believe that an economy will grow faster with less forced wealth redistribution, provided that rent-seeking is proscribed and work, thrift, enterprise, ingenuity etc are rewarded more that they otherwise would be. This is self-evident. That doesn’t mean I support the abolition of all wealth redistribution on moral grounds; I am just stating a self-evident point that being kind, or practising the politics of envy, comes at a cost to growth.

        Otherwise Cuba and North Korea would be wealthy nations, wouldn’t they? That is a con if anything is.

        I say we need to focus on rent versus consumer surplus/wealth creation, not “equality”. End the zero sum wealth transfer rackets in property and finance alone, and we would reduce inequality substantially as well as increasing economic growth substantially. This is a win-win; penalising genuine wealth creators for “increasing inequality” is a spite policy.

        In the early 1970’s there was an Inquiry in NZ headed by a Sir Henry Beeby that “found no evidence that welfare payments equivalent to a decent wage would act as a perverse incentive”. Three years later the government had to hastily wind back the lavish welfare provisions that the Kirk government had introduced BECAUSE the Beeby Commission had got the “incentives” thing so obviously wrong.

        The explosion in solo mothers within the 3 years was phenomenal; interestingly nothing like it had happened in Sweden when similar provisions had been introduced, which is what led Beeby to assuming that NZ would be the same. Culture matters. You are an idiot if you ignore or deny this.

        Another factor to consider is that well upstream from incomes and net worth of individuals, every individual gets a similar amount of government spending on their health, education, roads, infrastructure, law and order, defence, etc etc. It is nonsense to claim that “the rich are not paying their way because the poor don’t get cash transferred to them”. Over 2 or three decades the rich are paying for millions of dollars worth of government services in kind, for those poor people.

        Sir Roger Douglas suggested as far back as the 1970’s that governments COULD focus entirely on wealth redistribution and get OUT of health, education, and non-core government responsibilities and leave these to the free market. Then at least the poor would understand that, hey, “the rich” ARE paying for this $100,000 per year I am getting transferred to me to pay my own way for health, education, housing, etc etc. As it is, no-one, NO-ONE is grateful for all the spending by government on services “in kind”, that the rich ARE PAYING FOR ALREADY.

      • PhilBest,

        “I say that growth in overall wealth, and growth in inequality, obviously can be both endogenous to the same process. I say that the extent to which this is harmful or beneficial, will depend on the balance between rent-seeking and genuine wealth creation/consumer surplus.”

        Respectfully, I suggest there is a critical oversight in your analysis there. I commented on it where you mentioned the same thing, higher up in the thread —

        http://www.macrobusiness.com.au/2014/05/poverty-is-not-complex/#comment-357871

        What you call “genuine” consumer surplus, is a fraught area.

        My view is per the earlier comment.

        Something to think about?

  9. IMO people get this arse about. Poverty will always exist. Don’t even try to ‘eradicate poverty’. Better to design a system (society) where it is ‘safe’ to be in poverty.

    The sad thing about the government bashing the poor/unemployed is that they are effectively refugees in their own country. Make society safe for the poor, and that starts with affordable shelter… oops, those in Canberra won’t touch that one!

    • Better to design a system (society) where it is ‘safe’ to be in poverty.

      The sad thing about the government bashing the poor/unemployed is that they are effectively refugees in their own country

      The ‘safety’ is the net, which harking back to Keating’s days, was both generous and affordable.

      The latter, well IMO there isn’t so much wrong with that if certain people aren’t economically viable.. so to speak, the net offers them dignity.

      I do have problems with how many try to recalibrate minimum wages, a ‘living wage’ for ones exertion is the cornerstone of civilised mutuality.

      Progressive taxes exist for this reason, the high paid get paid too much, the low paid get paid too little. From an MMT frame, of how taxes calibrate price stability, not fund government spending, this assertion then makes sense.

      But back to ‘refugees in their own country’, what is paramount is opportunities for their children. Some people are write offs for sure, but you at least offer avenues for subsequent generations to escape.

      Remember, if we were a meritocracy, people of Joe Hockey’s calibre would slip into poverty.

      • I often like to say that in the historically “most equal” communist economies, “not working” was not an option, was it?

    • Rumplestatskin

      Yep, that’s the basic gist of poverty. If we accept the basics of capitalism, then we accept some degree on inequality. How we deal with that so the worst off are comfortable, secure, and are able to a live a modern existence that we deem ‘safe’ of satisfactory is the question.

      Housing is a big part of it, and I was close to making the post much longer to talk about it. But it will be a key element of my next post. Stay tuned.

      • I hope “freedom to build” – anywhere anyone likes – provided they buy the land and don’t impose nuisances – forms a major part of your thesis.

  10. What do you mean by “poverty”? Are you equating the term with “inequality”?

    I am quite certain that people are better off today than they were yesterday. In other words, poverty is decreasing with time.

    How many of us are having better and more comfortable lives than an ancient Roman emperor, with modern medicine, air conditioning, automobiles, aircraft, access to temperature controlled water by simply opening a tap, etc? 10million, 100 million, 1 billion?

    • drsmithyMEMBER

      How many of us are having better and more comfortable lives than an ancient Roman emperor, with modern medicine, air conditioning, automobiles, aircraft, access to temperature controlled water by simply opening a tap, etc? 10million, 100 million, 1 billion?

      So your logic is we shouldn’t do anything to help the poor because, simply by being born into a modern society, they’re better off than cavemen ?