Capitalism and Poverty

By historical standards, the notion that poverty can be ended is novel. Until the most recent times, life was lived at or near subsistence levels, with individuals and communities struggling to get by and often failing. Coupled with the belief that poverty was natural was the belief that it was society’s responsibility to care for those most severely stricken. Religious institutions, public authorities, and private charities all generally contributed something.

This treatment of the poor changed with the Industrial Revolution, since which there was a swing between extemes of regression and progression of punitive policies anbd generous, remedial ones. There is a view today, that with the vast material wealth of the advanced industrial world, relatively small grants to the LCDs could make huge differences. This hopeful view is taken by liberals or social democratic thinkers and questioned by more realistic or pragmatic authorities of the right, who remind readers how optimistic plans and pleas have proliferated over the past two centuries and how little has come of them.

The principle of charity as part of the moral economy, began, as mentioned, to fall apart with the industrial revolution in 18th and 19th centuries. Many have argued that it was a prerequisite for capitalism, since the new, more fully marketized economic system required the commodification of labor: the creation of a large, floating, and relatively desperate labor force.

As much as it may be an overwhelming, maybe daunting, task, the optimistic view that poverty can be ended should guide the
west’s best planners. We should recognize both the power and limits of markets. The way to alleviate poverty is not to abolish or transcend capitalism, but to bring the poor fully into the system.

Notice should be taken that markets do not always work as intended, and political intervention is sometimes necessay to overcome intractable problems. Although introductory economics textbooks preach individualism and decentralized markets, or safety and prosperty depends equally of collective decisions. Where the preconditions of basic infrastructure (roads, power, ports) and human capital (health and education) are in place, markets are powerful engines of development. Without these preconditions, markets bypass large parts of the world, leaving them impoverished with no respite in sight. In such situations, preaching the virtues free markets and self reliance is at best fatuous naive and more likely cruelly indifferent.

During the capitalist era it has never been the means to eliminate poverty that has been lacking; it has been the will to do so. This will depends more on the general social, political and intellectual conditions of the daythan on argument on the amount of resources we need to get the job done.

Perhaps one day, breakthroughs in technology could allow everyone to live in luxury to a degree. No more gas prices, better ways of powering our homes, medacines, and cheaper broducts that last longer- this could change the idea of poverty if everyone allready pretty much had everything allready, with the prusuit of money not such a big deal.

Of course there would still be ‘poverty’ to an extant, but it would be perhaps the equivilant of middle class by today’s standards.

To what extent is poverty relative to the society in which you are living, and to what extent is it an absolute?

If most everyone in my community drives a car and I cannot afford one, does that make me impoverished? Where it is assumed that everyone will have a car and it becomes very difficult to function without one, then to a certain extent not having one is poverty. The same could be said for access to the internet, TV, a certain size house, even the ability to go out for a meal or to the movies.

Once you consider relative poverty, then eliminating poverty has more to do with building public goods which all have access to.

The concept of poverty, as you point out, has two meanings. The first is the absolute standard of living, reflected in satisfying the minimun basic needs required for survival. The second is relative poverty, that is, the gap in incomes between the rich and the poor.

Even measures of absolute poverty need to be read in a relative context. The use of a monetary measure of income runs up against the differential purchasing power of money in different countries. As a solution economists have devised an artificial form of currency called the “purchasing power parity dollars (PPP$)”.

The most common measure defines absolute poverty in terms of wjhat a single dollar would have bought in 198 5 , which was considered to reflect “absoluted necessities” in the USA in that year. This was then translated into local currencies converted into PPP$, and the figures used to calculate the numbers living in absolute poverty in each country in the world.

There is a distinct difference between having a car, which gives a person greater job and housing opportunity, and owning a TV which has nothing to do with employment. This does not mean everyone needs a car, but it does mean that transportation is essential to employment, or there needs to be housing and shopping near places of employment. Considering oil is finite and the whole world can not consume oil at the rate of the US for many years, and our consumption of oil is improvishing the rest of the world, and that we do not have an good alternative to gasoline at this time, we might consider city planning and public transportation as a way to reduce the conditions of poverty. In years past housing was within walking distance of industry, and stores were close by.

Working parents are responsible of the children’s care and education, meaning more driving, unless we plan to meet these needs in community development. This could mean more day care where people work and day care on school grounds.

We have been discussing relative poverty. That is a person’s poverty is relative to the standard of living that others have.

On Easter Island, before ships sailed around the world, the people enjoyed a paradise. Everything they needed was provided the island and seas. But in time their population grew larger than the ability of nature of nature to meet their needs, and they experienced such a degree of poverty, cannabolism became the way of the people, and there was a mass die off with loss of memory of the previous culture.

Oil is not our only limited resouce, so is water and good farm soil. If the world does not recognize limits to growth and practice birth control, the people will destroy the ability of their regions to sustain their lives.

A particular problem that is easier to correct is using wood for fire wood, and stripping the land of burnable vegetation. This is a serious ecological problem in many places, and we could reduce this problem with solar stoves. There is some effort being made to provide the people in these areas with solar stoves.

Taking ground water can become a serious problem when people take more than is replaced. This problem threatens argiculture in the US. In other areas, the problem has been in lack of ability to safely access this supply of water. It is not as simple as digging wells, because simple wells are easily contaminated and become deadly. However, there is a successful project of building sealed wells, operated by children playing on a merry go round in school yards. This will rapidly increase populations as more children will live, and then the problem will become over population stressing the water supply, unless the first effort is followed by birth control. Israel and China are countries experiencing water crisis, because of excess populations.

I don’t know if you want to address communism here, but capitalism works better for rich countries than poor ones.

I have know poor families where those who got to the dinner table first ate much better than those who got to the dinner table last, simply because there was not enough food. Some cultures have handled this problem by making it custom for men to eat first and then allowing the women and children to eat. Another option is to wait until everyone gets to the table, and then portioning out the food, so everyone gets a fair share based on individual needs.

Things like subsidized housing and food assistance, child care, medical care, and public transportion are better as collective efforts, rather than for profit capitalism. Especially considering housing cost more to build than the poor can afford to pay, we must subsidize this housing or we will not have adequate housing for the poor. And medicine for profit can be immoral when that is the only consideration.

“During the capitalist era it has never been the means to eliminate poverty that has been lacking; it has been the will to do so. This will depends more on the general social, political and intellectual conditions of the day than on argument on the amount of resources we need to get the job done.”

There is no alternative to capitalism for ending poverty. Since its inception poverty rates around the world have declined. However, I don’t think poverty will ever be total eradicated. Poverty itself is a culture.

I agree with you that the world would be a better place if the poor contributed to society. But how do you get them to go for it besides giving them something for free which was earned by others?

Poverty is not a culture. It is the state of exclusion from the prevailing culture. When one cannot afford the basic necessities, life consists of contrinuous state of suffering. It may be fraught with illness or hunger. People in such penury require assistance to satisfy their basic necessities, and, that done, the training to enter the market with skills to avoid the state of absolute poverty on their own.

My original post addressed global poverty, but this pertains to domestic ills.

Exactly, poverty is the state of involuntary exclusion from the prevailing culture. As Athena points out there is a difference between being excluded in a way that effects your ability to get and hold a job and something like TV which may be a part of how our culture operates, but does not directly influence your employment potential.

It is in our financial interests to make sure that as many people as possible have the infrastructure and tools to be able to enter the workforce. It is not a matter of giving people something which others have earned (what have most of done to earn the roads) but of simply making sure that people have the basics so they have the opertunity to earn something.

Explain to me how you are going to get someone to work for milk when they are given milk for free without working? I mean do you say; You either work or don’t eat? Or do you give them a time table? Which we all know, always gets extended. We have here in the USA and other countries gov’t assisted people that are like third or fourth generation on gov’t assistance. Do you honestly think mindsets can change easily?

Have you not noticed that a person raised in an apartment will generally stick with apartment living for most of their life? People raised in mobile homes or regular homes will do the same. Mind set plays a big role for humans.

Some people are set in a poverty existence, its what they know and are familiar with, its not risky and does not require work. You want them to risk and work? How are you feaseably going to do that? you are asking them to take a chance on an unnatural course of living.

It will take a few generations to change things, but, it has to be persistant and brainwashing/mind control…

You are assuming people are lazy. Most people I talk to actually like working, and they take pride in their work. Interestingly, those who don’t aren’t on welfare, they just flirt from low-paying job to low-paying job. I think that people mythologize the “lazy poor” to justify their opposition to social programs.

Nice posting, Lex. Again, it’s refreshing - and novel - to see a post that displays some actual knowledge of economics. I have a feeling that I am going to be saying “what Lex said” a lot here. Hope you stick around. Will save me some time, at least.

No its not really lazy, lazy is basically procrastinating 5 fold or doing something right away so that you don’t have to worry about it later. Lazy is used when it probably should not be. What occurs is a mind set a way of life. not a culture, but, a way to survive.

I have no problems with Gov’t subsidies to assist those that cannot work. I do have problems with those that misuse them. And there is a great misuse of subsidies from the top on down. The wealthy as well as the poor abuse gov’t fundings. I have no pity for any of them.

We no longer have a labor intense industrial economy. The work is done with energy from fossil fuels and electric generators, and machines. Those who say people living at the poverty level would not jump on decent paying jobs, don’t know reality very well. There are not enough good paying jobs for all who want them.

Look it, no one moved into the cities to live on welfare. People flocked to the cities because of the new industry and new neighborhoods. They moved to the city for a better way of life, and then the industry moved out, leaving economic ghettos behind. What the people need to do is riot, and burn down their areas, so it becomes “cost effective” for government to start governing for them and get them back the industry they need for decents lives. And before you respond, I studied Public Policy and Public Administration at the U of O, and my opinion comes from that education.

end poverty now!!! yeah!!! civil war!!! it will be peace and love… coming to a city near you… the aftermath of katrina without the waves! (ain’t walkin on sunshine either)

sweetness.

-Imp

We should recognize both the power and limits of markets. The way to alleviate poverty is not to abolish or transcend capitalism, but to bring the poor fully into the system.

Such as retirement investment…

But you come to a big and devastating problem with markets. Let me give it to you in terms a ‘real’ person can understand and not an PhD economist who will have another PhD economist coutering his every point. Economists don’t know much in other words!!

Here goes-

In the year 2000 I worked with a guy who had retired from a large fortune 10 company. At the time he had paid his dues over 30 years and was working because he wanted out of the house. He probably was making 85 or so in an area with median income of 45k. Upper middle class I suppose.

So, we stopped in for lunch. CNBC was on and we began talking about the market. At that time the dow was high( much like it is now) and he remarked that after retiring he’d invested most of his money, some several hundred thousand. Of course, he had done well over the last couple of years and had made some money. We finished lunch and I didn’t think too much else about his story. 3 months later the dow dove. Actually a lot of things dove (which has setup some of th current trends still in place today). Within the span of 6 months he had not only erased his gain, but lost half his retirement. In th years after 2000, many people all across the US that were middle class lost billions collectively.

For the poor and even the rich, markets usually are gambles. And for the poor at least they may understand why they lost at the dog-track vs finance.

Well, I am glad to see you are getting a higher education. Now try applying it.

You want people to riot and burn their homes down to end poverty… What is your GPA? Don’t discount what Imp posted. He is right on the money.

I live in Katrina land it ain’t pretty. New Orleans got drowned abit, Mississippi lost whole towns, homes do not exist in any way shape or form exept as debris… and this is two years later. Thousands of Miss. people are homeless still. Thousands are living in homes that are wrecked, Thousands are jobless. Two years later we are not even half way recovered. New Orleans might be since they get the lion’s share of help and attention, but, we are not.

You want people to do what katrina did? why do you hate the people? Do you honestly think things will change quickly? ROFL The gov’t is reeling from the natural destructive forces that have occured across this nation over the past few years and you want to add more, make more people homeless and jobless. Whats your GPA at school?

I am not sure if you are being disrepectful, or if I just misunderstand you.
The truth is, when black people have rioted they have gotten very necessary government attention, and they should stop being so submissive to an establishment that does not have their best interest in mind.