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"There are no causes of poverty. It is the rest state..."

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Re: "There are no causes of poverty. It is the rest state..."

#21

Post by asdflkj »

mattmaroon wrote: post #12
noonespecial wrote: post #6

Earlier quoted context omitted.

You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it. People who start out with wealth seldom create wealth. In the best cases, they usually just administer it. Its the people who start out with the bricks that seem to end up creating the wealth. Slavery and poverty are different economic relationships altogether…

>>You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it. Outlying cases are irrelevant. Of course people overcome the odds in both directions. But given equal driving ability, the Ferrari will always win the race, take the prize money, and buy their children a Ferrari. >>People who start out with wealth seldom cre…

Only the real world is not a race and there is no prize money. If you own a big factory, you get richer not because God gives you a prize for having a bigger factory than everyone else, but because your factory creates wealth, out of nothing.

Wealth does tend to perpetuate itself, as in the above example, but this is hardly lamentable. And "poverty perpetuates itself" is basically a bombastic way of saying "lack of wealth doesn't, in and of itself, create more wealth", which is natural and could never be otherwise.

Of course, that's if we ignore the psychological component of it. But what can you do about that? Go into people's homes and tell them to stop being such feckless idiots?

Re: "There are no causes of poverty. It is the rest state..."

#22

Post by TrevorJ »

This is insightful. One should point out however, the inverse does not hold true. Poverty is not a universal sign of laziness or inaction. You can become poor in spite of working very hard. It is important to keep this in mind lest we become completely unsympathetic to those less fortunate, who, in some cases work very hard and yet have nothing.

Also, as an aside I'd like ot point out that material wealth is something that isn't universally pursued. Some people a happy investing in other things instead once their very basic needs are met.

Re: "There are no causes of poverty. It is the rest state..."

#23

Post by greendestiny »

DanielBMarkham wrote: post #19
greendestiny wrote: post #18

Earlier quoted context omitted.

The murder suicide analogy is perfect, both end in death (poverty) but you can get their either by youself (suicide) or by the actions of others (murder). Calling poverty a rest state is to ignore all the outside forces that can be impairing a persons ability to create wealth. You can indeed make other people poor, and its not always a crime to do so, nor require them to be complicit in it. I think most people here f…

I would suggest we be careful with definitions here. Certainly certain policies impact certain jobs. My grandfather was a farmer. That is, until the economy changed. Then he wasn't a farmer any more.The policy may have had negative impacts on farmers, but it could only have a very limited impact on my grandfather. I would also distinguish between "making somebody poor" and "poverty", which is a state of existence. Li…

I'm really just replying to the idea that 'murder' doesn't count, or that outside influences cant cause poverty. I'm not interested in internal vs external poverty. To me poverty is an extreme lack of resources such that it impacts on the basics of life. So while you might not rate external poverty as very important, that's all I'm talking about here.

Re: "There are no causes of poverty. It is the rest state..."

#24

Post by Retric »

DanielBMarkham wrote: post #19
greendestiny wrote: post #18

Earlier quoted context omitted.

The murder suicide analogy is perfect, both end in death (poverty) but you can get their either by youself (suicide) or by the actions of others (murder). Calling poverty a rest state is to ignore all the outside forces that can be impairing a persons ability to create wealth. You can indeed make other people poor, and its not always a crime to do so, nor require them to be complicit in it. I think most people here f…

I would suggest we be careful with definitions here. Certainly certain policies impact certain jobs. My grandfather was a farmer. That is, until the economy changed. Then he wasn't a farmer any more.The policy may have had negative impacts on farmers, but it could only have a very limited impact on my grandfather. I would also distinguish between "making somebody poor" and "poverty", which is a state of existence. Li…

I create wealth by increasing efficiency and destroying jobs. I have made many people redundant and gotten them laid off. It's the name of the game hop from one useful skill to the next or become obsolete.

I don't really care about these lost jobs but saying it's their fault that they become redundant is missing the point. Luck is a large factor in both the generation and retention of wealth. The risk of true poverty limits society’s just as excessive crime by reducing people’s willingness to take risks. Young people are more likely to do a startup because they have lower risk of failure. Losing everything at 25 is vary different than losing everything at 55.

Note: I am not saying we need to do anything with the 3rd world but I feel limited job training and basic welfare help many people bounce back. Spending a small percentage of GDP on such things is an investment that may or may not pay off but saying it's useless as an ideological stance is missing the point. However, the numbers I have seen on wikipedia (http://en.wikipedia.org/wiki/Welfare_state) suggest that we spend 14% of GDP on welfare which seems insane. Are they looking at SS as welfare?

Re: "There are no causes of poverty. It is the rest state..."

#25

Post by sethg »

DanielBMarkham wrote: post #19
greendestiny wrote: post #18

Earlier quoted context omitted.

The murder suicide analogy is perfect, both end in death (poverty) but you can get their either by youself (suicide) or by the actions of others (murder). Calling poverty a rest state is to ignore all the outside forces that can be impairing a persons ability to create wealth. You can indeed make other people poor, and its not always a crime to do so, nor require them to be complicit in it. I think most people here f…

I would suggest we be careful with definitions here. Certainly certain policies impact certain jobs. My grandfather was a farmer. That is, until the economy changed. Then he wasn't a farmer any more.The policy may have had negative impacts on farmers, but it could only have a very limited impact on my grandfather. I would also distinguish between "making somebody poor" and "poverty", which is a state of existence. Li…

If a man from a wealthy family background spends six years in college with a trivial income (from a part-time job at the college bookstore, or whatever) and then lands a well-paid professional job, he has jumped from a low quintile to a high quintile, but is not the sort of "income mobility" that most people hope their children will have access to.

Re: "There are no causes of poverty. It is the rest state..."

#26

Post by 1gor »

The question is not what creates wealth but what keeps it unevenly distributed.

There have been experiments (computer simulations) that tried to explain 'Pareto distribution' -- a power law distribution of wealth leading to 20 percent of population having 80% of the wealth. I refer to 1996 Axtell and Epstein book (google for Sugarcape).

Basically, they created a number of software 'agents' and placed them on a landscape full of resources. Each agent possessed a 'fitness function' that controlled its further survival. Having access to resources improved the fitness function since the agent could replenish its energy and could go on hunting for resources having some surplus for the rainy day.

What transpired from the simulation is that 'the Rich get Richer' axiom is basically true. First generation agent might have stumbled on a resource nearby by accident. It has improved its fitness function and he was able to successfully compete on the next round.

Meanwhile similarly fit agent who had bad luck in the first round (no resource nearby) was left chronically under-fit and his chances of 'making it to the top' diminished with every round.

This piece of empirical knowledge makes two important points about the society and the wealth.

Firstly, even in the free market society people always have unequal opportunities because this is an emergent quality of the system, not the result of some corruption, inability, personal passivity etc. The best and the brightest will stay poor unless they stumble on a resource which is not taken. (A new internet business idea for example).

Secondly, revolutions have their merits. They re-shuffle fitness landscape. Even when people do not directly 'expropriate' somebody's wealth by simply levelling the playing field revolutions create competing chances for the talented and the hard-working who would otherwise be forever destined to be relatively unfit comparing to those who already have access to resources.

Looks like extreme pro-market views are as primitive as extreme 'left' views. Social science really becomes fascinating when aided by computer science, doesn't it?

Re: "There are no causes of poverty. It is the rest state..."

#28

Post by Hexstream »

mattmaroon wrote: post #12
noonespecial wrote: post #6

Earlier quoted context omitted.

You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it. People who start out with wealth seldom create wealth. In the best cases, they usually just administer it. Its the people who start out with the bricks that seem to end up creating the wealth. Slavery and poverty are different economic relationships altogether…

>>You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it. Outlying cases are irrelevant. Of course people overcome the odds in both directions. But given equal driving ability, the Ferrari will always win the race, take the prize money, and buy their children a Ferrari. >>People who start out with wealth seldom cre…

">>People who start out with wealth seldom create wealth.What is the basis of that statement? Bill Gates was born to a very wealthy family."

I'm pretty sure Bill Gates made more cash than he created wealth. Those are orthogonal concepts. It's possible to make cash without creating wealth or indeed, destroying it (ex: "successful" spammer that destroys the value of email). It's also possible to create lots of wealth without making money (the example is left as an exercise for the reader).

Re: "There are no causes of poverty. It is the rest state..."

#29

Post by walterk »

noonespecial wrote: post #6
walterk wrote: post #3

Earlier quoted context omitted.

Nod. If I start life tied to a load of bricks, and you start in a Ferrari, I can do a helluva lot more than you and still get nowhere. The history of slavery should be ample proof of that. It's one thing to say that "We should ask what are the causes of wealth and try to recreate and reproduce them." It's another thing entirely to deny that there are no structural, sociological barriers to escaping poverty.

You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it. People who start out with wealth seldom create wealth. In the best cases, they usually just administer it. Its the people who start out with the bricks that seem to end up creating the wealth. Slavery and poverty are different economic relationships altogether…

>>You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it.

I had a general idea of how many belong to the former and latter categories, so I'm not astonished. The statistical data supports my point.

http://www.economicmobility.org/

>>People who start out with wealth seldom create wealth. In the best cases, they usually just administer it. Its the people who start out with the bricks that seem to end up creating the wealth.

This isn't just about starting off with wealth. My Ferrari metaphor is more about having the repertoire of values and skills needed to become wealthy in a place like the U.S. rather than simply being endowed with money. You're vastly more likely to do well in life if you have parents who spend time with you teaching you to read, making sure you do your homework, provide emotional support, and instill values of hard work and success than you are if you have parents, a parent, or no parents who do none of those things.

The late John Ogbu studied why the children of affluent African American parents who went to excellent schools were much more likely to underperform academically relative to their peers, and discovered that parental disengagement was a major factor.

http://www.hepg.org/her/abstract/38

Sometimes people manage to acquire the necessary values and thus the skills necessary to do well, despite starting off in adverse conditions. But they're the exceptions, and were psychologically and sociologically positioned to be that way. So unfortunately they can't be used as examples demonstrating that "anybody" can overcome adversity.

>>Slavery and poverty are different economic relationships altogether. Equating them is usually rhetorical hyperbole and if taken seriously, leads to some very wrong conclusions.

It's not exactly a stretch to say that the enslaved have typically been poor on account of their being slaves, is it? And I never equated slavery and poverty[1]: I used slavery as an obvious example of how you can have the deck overwhelmingly stacked against you.

1. I'm resisting the urge to say, "Anyone who says or implies that I equated them is themselves engaging in rhetorical hyperbole." :)

Re: "There are no causes of poverty. It is the rest state..."

#30

Post by meat-eater »

In some situations and places, wealth can be harder to create. On the individual level, it would be hard to refute the fact that somebody with an Ivy League college education has more wealth creation opportunities than a farmer from a 3rd world country. Same thing also applies to poor countries and rich countries. So even though poverty is the rest state, it really doesn't help that some people are taking advantage of other people to create it.
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