Monday, 18 April 2016

Why Poverty Is Everybody's Problem

Usually when we think of poverty we think of skeletal foreigners queuing up at feeding stations while an earnest reporter walks back and forth, the camera picking out the kids with the biggest bellies, the skinniest limbs, and the saddest eyes. Or we think of homeless people and foodbanks. What we don't consider is how it is actually our problem, not just theirs. Allow me to explain why.

The causes of poverty

Poverty is not simply a matter of not having enough money. If that were the case we could simply disburse money to the masses via some kind of unconditional handout system and trust the people involved to create a new economic structure that freed them from the need for a regular artificial cash injection. But poverty is not merely "lack of ready cash."

The structure of poverty

Poverty isn't just want of wonga, it's structural, so merely throwing money at it won't make it go away. Let's take a closer look.

We need food, shelter, healthcare, and education in a safe, secure environment. And by "safe" I mean "as unpolluted as possible." In many of the countries where poverty is endemic, there is little in the way of law and order. What enforcement there is gets carried out by village elders or the local warlord, depending on where you live. Where war has marred the landscape, landmines lie in wait for the unwary; it's hard to farm when you're missing a leg or two. Refugees piling into areas safer than the ones they fled can and do affect conditions. As global climate change takes hold, extreme weather events and droughts, etc., can and do drive people from their homes.

Compounded poverty

In Western countries the governing authorities tend to be centralised but distant and often unaccountable. The widening gap between the rich and the poor isn't helping much; justice is currently in the purse of the beholder in the US and UK. In a land where the police can take your money or your stuff away without pressing charges or securing a conviction on suspicion alone of being from the proceeds of crime, you can become poor very easily if you're not careful. If you are unlucky enough to become ill and unable to work, you can quickly find that your health is indeed your wealth; when that goes, you lose everything. Even if you eventually recover and are able to work again, you may find, as I did, that it's a struggle to get back on your feet. Chucking money at me in the situation I was in definitely helped but a proper diagnosis and effective treatment would have done more to help me than anything else; I was an experienced administrator ready and willing to work, I just wasn't able to at the time. When I finally did get the treatment I required, one of the first things I did was start applying for jobs. There's a great little article on The Atlantic that explains this:

The Brookings researchers note that anti-poverty solutions often focus on solving only one problem at a time—usually income, because it’s the most pervasive and, perhaps, the easiest to quantify. They argue that in order to address the compounding effects of the various types of poverty, it would actually be useful to de-emphasize the matter of income. That may sound counterproductive, but it would just mean working to offer things like better quality public education, low-cost, comprehensive health care, and safer, higher-quality affordable housing, things that could improve the lives of all Americans, regardless of income limitations. - Poverty, Compounded by Gillian B. White for The Atlantic

This seems reasonable to me, but then it plays to my love of Middle-out economic theories and utter contempt for neoliberalism. Okay, so I'm biased. But am I right?

Basic Income is coming to Kenya

There's actually a plan in place to implement a Basic Income project over ten years in the most poverty-stricken parts of Kenya.

The idea of universal basic income (UBI) has been around for a while, and numerous studies have found that giving cash directly to the poor can be more effective than traditional welfare. But so far no one has actually implemented a program that meets all the requirements of full-fledged UBI. They either didn’t cover everyone in a community, didn’t give enough to meet basic needs, or didn’t last very long. That changed last week, with the announcement of the first full-fledged test of universal basic income by an NGO called GiveDirectly.
The New York City-based charity will be giving 6,000 people in randomly selected Kenyan villages a steady flow of cash for the next 10 years. The amount will be similar to past GiveDirectly projects, between $255 and $400 per person, per year. That’s based on the average annual income and meant to cover basic needs like food, shelter, and healthcare. Unlike its earlier projects, these grants are universal, meaning every member of the local population will get the same amount, regardless of their employment status or financial health. - Tech's favorite policy, universal basic income, is about to get its first big test by Ben Popper for The Verge

Flip, yeah! Poor people gonna get...

...a dollar and ten-ish cents a day, max?! And this is based on the average annual income, right? Well they are poor people and it's better than a smack in the face. Hold on, though, is that assuming that "food" means "whatever the land will give," that "shelter" means "build your own, there's mud everywhere, damn it!" and that "healthcare" means "whatever you can make out of the herbs you find growing nearby?" I'm opposed to Basic Income because it's no more a solution to poverty than it is a wealth redistribution program; people keep forgetting that having tons of money doesn't necessarily mean being wealthy. And in case you haven't noticed yet, recipients don't get a lot.

The role of neoliberalism

One of the main reasons many people, particularly those in tech, are so mad keen on Basic Income as a solution to poverty is that they really do believe in the magic of the market. It's like Santa Claus, but there are two parts: supply and demand. The idea, then, of giving people money, then walking away and leaving them to it is that they will find a way to access and address the market, thereby adding variety and competitivity to it. Erm, that's not the way it works in real life, people.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning. 

...Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve. - Neoliberalism – the ideology at the root of all our problems, by George Monbiot for The Guardian

This is why Basic Income enthusiasts are so intent on rolling out the program wherever they can. What can solve your housing problem? The marketplace can. What can fill your empty tum? The marketplace can. What can educate your kids? The marketplace can. What can get you drugs for AIDS? The marketplace can. "But monopolies," I hear you say? What monopolies?

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency. - Neoliberalism – the ideology at the root of all our problems, by George Monbiot for The Guardian

Oh, those monopolies. Right. Well there's such a thing as natural monopolies but you may well find that regulatory capture has created the majority of them. And where such monopolies exist, so does the rent extraction system that makes them so damn lucrative. And that, dear readers, is a cause of poverty; when it costs a good chunk of your wage just to get to work. And what is the market almighty doing about this, eh? The answer is usually "Take it or leave it" if you dare to complain.

This is everybody's problem

What may seem like a bit of a headache, not to mention a need to go cap in hand to the boss and beg for overtime, is actually symptomatic of a bigger problem: poverty costs more money to maintain than it does to resolve. Think about it; in a sea of rising poverty, the wealthy don't want to be confronted with the struggle of the hoi polloi so they hide themselves away in gated communities surrounded by the latest security gadgets as advised by their wealth managers. Beset by feelings of guilt, paranoia, and self-doubt, they begin to cut themselves off from all but their wealthiest peers, afraid that someone else might try to make off with their money. However, when offered the opportunity to resolve these problems at the root and branch, they turn, snarling at us, and sling words like "Communist" around with gleeful abandon. They don't like the problems but they hate the solutions; they're afraid that implementing them might mean being separated from their privilege. Well they might get the chance to run away from the problems created by implementing a system designed to benefit themselves at our expense but we're the ones who have to live with the consequences from day to day while they whine about prejudice.

We pay for market failures

When regulatory capture creates a monopoly over essential services such as basic utilities, mass transit, or telecom services, the prices go up and we lose out. The hard-working ingenious darlings we apparently ought to be emulating get a bonus, we get boned. Should we attempt to escape the trap by doing for ourselves, we may well find that we fall foul of other people's property rights.

Guess what: That water isn’t yours. You can’t have it. And you most certainly cannot set out a tank to catch what falls from the sky, you thief.

...The principle at stake is called prior appropriation, which is legalese for “first come, first served.” This doctrine forms the bedrock of water law in the Western states, where long ago settlers raced to gobble up all the water rights.

...In Colorado, other people’s water rights even extend to the raindrops that fall onto your  roof.

Why? Because those raindrops might tumble into the gutter; they might seep into the ground; might, in some other eventual, serpentine fashion, find their way to a river where somebody’s great-great-grandfather once established a claim. - It is actually illegal in Colorado to collect the rain that falls on your home​, by Jeff Guo for The Washington Post.

That's right, people, in America someone owns the water that falls from the flippin' sky and that is why you're not allowed to catch whatever falls on your own damn roof. And when you're being absolutely milked for water and sanitation bills, you can see why the status quo is going to stay as it is until enough people get annoyed about it and demand change.

We pay for social failures

Whoever's responsibility it is to control the fertility of poor women, we as a society foot the bill if we deny them birth control care because they can't afford to pay for it themselves. We also have to pay the price for permitting a laissez-faire attitude to reign on housing since homelessness is more expensive to manage when we treat it as a crime or a blight on our society instead of as a problem to be managed and resolved. That's right, it's much cheaper to house the homeless than to punish them for vagrancy. Don't get me started on the War on Drugs. It's cheaper and more efficient to treat it as a health issue than to continue our authoritarian approach. Needless to say, it's easier to get a job — and insurance for a vehicle — if you haven't been to prison. Meanwhile, companies with a care for their reputation are refusing to operate in states that actively discriminate against gay people, etc., on the grounds that what's bad for employees is bad for business. So yeah, we're paying for public moral failures, in which competing moralities make us choose between our faith and our livelihoods. Sodding off and minding their own business where other people's sexualities are concerned doesn't seem to have occurred to the authoritarians, who apparently aren't affected by the consequences of their actions.

We pay for economic failures

That there's such a thing as the working poor is a damning indictment of neoliberal policies; they created them by insisting that low wages and low taxes would increase consumption by punters buying cheaper goods. But punters need jobs that pay well enough for them to buy things in the first place. Fear not, dear reader, for the private city is at hand! This is the basic idea: a private enterprise creates a city in which people volunteer to join after paying a fee. They might even pay "modest taxes." They can do whatever they like as long as they don't say things the operator doesn't like, e.g. "Shouldn't our taxes be funding services?" That's expropriation, that is. There wouldn't be regulation, except in the public interest or to accelerate urban development. And in a Voluntaryist society, we don't need no steenking democracy:

Consistently, there is also no need for representative bodies such as parliaments. Rather, these are a danger to liberty, since they are ultimately always hijacked by interest groups and mutate into a self-service store of the political class. Unfortunately, the rule of law does not give adequate protection in current societies: if law or constitution are standing in the way, they will be quickly modified by politics or interpreted “in a contemporary way”. Competition has been proven as the only effective method in human history for limitation of power. - Private Cities – a disruptive technology for the state market, by Titus Gebel for CapX

Of course, near the end the realisation dawns like the sun struggling upwards through a thick fog that you actually need a government to provide the services required, and that (gasp!) this will, of course, mean taxation. But in a Voluntaryist community if you don't like the dictatorship you willingly signed up to, off you trot, you Socialist!

However, finally it is competition and the possibility to easily exit this small place, which would guarantee that the Private City operator stays a service provider who sticks to his own rules, instead of becoming a dictator who ignores arbitration or otherwise misuses his power. - Private Cities – a disruptive technology for the state market, by Titus Gebel for CapX

Yeah... about that... once you're either in hock to the various entities running the services in the city, or to the operator thereof, good luck with that easy exit you were hoping to make. Debt slavery is already a thing. Now imagine it in a dystopian nightmare where your only chance to change anything is to sod off if you're able to. Forming a pressure group to confront the operator would simply get you kicked out for breaking the rules, and remember they've already got your money. Good luck with getting it back.

The way forward

The excellent George Monbiot has correctly identified neoliberalism and the fact that it is based on a pack of lies as the source of our economic woes; the love of money is the root of all evil, after all. He has also called for a rethink on the way we approach economics, and I believe he is right.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century. - Neoliberalism – the ideology at the root of all our problems, by George Monbiot for The Guardian

Well, yeah. That's why I've been pushing Middle-out. It's a grown-up solution.

A genuine living wage

I honestly believe that while there is such a thing as the market, we can only try to influence it, not control it at either end. That simply doesn't work. But, in practice, Middle-out definitely does. And it reduces the wealth gap not by "redistributing" wealth via expropriation but by giving workers a fair share of the wealth they themselves created.

Wealth is never created in a social vacuum. You may have the genius to design a better mousetrap, but you will inevitably depend on the work of others to implement and distribute your produce and the income of others to enable them to buy your product. - What Ayn Rand Got Wrong About Human Nature and Free Markets, by Denise Cummins for Evonomics

So yeah, giving workers a decent wage is a great start, mostly because it would mean they won't have to rely on food banks or other forms of welfare to supplement their income. And we won't be subsidizing the fat bonuses of the successful CEOs of those companies by saving them the cost of raising their employees' wages. They've been living off us for long enough. It's time for them to pay their share.

Essential services available to all

Those of us with basic intelligence realise sooner or later that we're not either in a state of dependence or independence. We're interdependent. Even Grizzly Adams had that old prospector and that native chap Nakoma to help him out. Remember that time Nakoma broke his leg and Adams helped him? He returned the favour by watching out for his friend. Everyone who hates "government" on principle condemns us to lonely neglect or to exploitation by those who have more money or more privilege than we do because dictatorship is the only alternative to democracy; Voluntaryism is a sham, people.

It isn’t the amount of money that a society has in circulation, whether dollars, euros, beads, or wampum. Rather, it is the availability of the things that create well-being—like antibiotics, air conditioning, safe food, the ability to travel, and even frivolous things like video games. It is the availability of these “solutions” to human problems—things that make life better on a relative basis—that makes us prosperous.

This is why prosperity in human societies can’t be properly understood by just looking at monetary measures of income or wealth. Prosperity in a society is the accumulation of solutions to human problems. - We Desperately Need a Twenty-First Century View of the Economy, by Nick Hanauer and Eric Beinhocker for Evonomics

These solutions exist and are plentiful, but some people have expropriated and are hoarding them for the purpose of rent extraction. I'm not saying that we ought to ban property ownership, that is absurd. I am, however, saying that it ought to be proportionate: no one's claim on property rights of any kind should be allowed to impoverish others. The only effective way to prevent this is to create competition for essential services where there is none. Social housing, municipality-run infrastructure, and tax-funded healthcare and education help to keep the basic costs of living down. This results in the availability of disposable income which can then be spent in the economy, which in turn results in taxes staying pretty much the way they are for the majority; the tax take from the increased incomes would preclude the need to raise them.

Promote a new kind of aspiration

As a rule, when we think of aspiration it means getting on some kind of ladder; career, housing, etc. However, there's more to the world we live in than the parts of it that immediately and visibly affect us. It's time to promote a new kind of aspiration.

Complexity and evolutionary theory doesn’t give you mastery over the systems we inhabit; it simply informs us about their inherent unpredictability and instability.

...In a sense, the latest wave of scientific understanding merely confirms what we, in our bones, know to be true: that no one is an island; and that someone who thinks he can take for himself, everyone else be damned, causes a society to become too sick to sustain anyone. ...True self-interest is mutual interest.

The contract between the new and old stories of self-interest —like any paradigmatic shift in the public imagination—is not just a philosophical curiosity. ...And it will transform the way we think about three basic elements of a democratic society: citizenship, economy, government. - Traditional Economics Failed. Here’s a New Blueprint, by Eric Liu and Nick Hanauer for Evonomics

Encouraging the development of a more community-centric society doesn't mean you can't have nice things. It does mean that more of us can also have nice things, and not necessarily at the expense of others. For the very rich it means being willing to accept a higher tax rate and to pay workers more. This might mean a few less million in the bank but they'd hardly be short of a crate of champagne or ten. This would benefit them by turning the Them V Us situation they're defending themselves from now into a "You can achieve this too" situation in a future as distant as they're willing to make it.


Poverty is everybody's problem whether it is visible or not. We all end up paying for it one way or another and the cost to our society is immeasurable. The sooner the people who could actually do something about this remember that only the hungry gather at the gates to gaze longingly at the groaning table, the sooner there will be enough bread on everyone's table that nobody feels inclined to press their grimy nose against a tinted window to drop a hint.

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