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Posts Tagged ‘poverty’

The New Antieconomics | Mises Wire

Posted by M. C. on February 17, 2022

Economics is about human action and choice within the context of scarcity. The problem facing economists is how to understand and explain human betterment, which is another way of saying production. The critical question, posed correctly by economist Per Bylund, starts with scarcity as the default point for understanding purposive human behavior.

https://mises.org/wire/new-antieconomics

Jeff Deist

What causes poverty? Nothing. It is the original state, the default and starting point. The real question is what causes prosperity.

Antieconomics, by contrast, starts with abundance and works backward. It emphasizes redistribution, not production, as its central focus. At the heart of any antieconomics is a positivist worldview, the assumption that individuals and economies can be commanded by legislative fiat. Markets, which happen without centralized organization, give way to planning in the same way common law gives way to statutory law. This view is especially prevalent among left intellectuals, who view economics not as a science at all, but rather a pseudointellectual exercise to justify capital and wealthy business interests.

Antieconomics is not new; even alchemy might be considered a medieval version of the endless quest to achieve something for nothing. It holds enduring appeal in modern politics and academia, where communism, chartalism, Keynesianism, and monetarism all represent twentieth-century variations on the central theme of commanding economic activity.

But today’s most visible version of antieconomics takes the form of modern monetary theory. MMT featured heavily in a recent flatteringprofile of Professor Stephanie Kelton in the New York Times titled “Is This What Winning Looks Like?” “Winning” in this context refers to MMT’s growing popular appeal, with Kelton as the public face following her 2020 book The Deficit Myth.

Kelton’s MMT is a political and fiscal program, not a macroeconomic theory. It argues deficits don’t matter because money issued by a sovereign government is never constrained (unlike resources, as Kelton admits). Thus governments don’t “pay” for things the way individuals or businesses do, and furthermore, public debt is actually a private benefit to someone. The problem is not paying for government programs, but rather identifying them—robust public works, job guarantees, universal basic income, food and housing, Green New Deal programs, Medicare for All, etc.—and, more importantly, creating the public will to support them politically.

In Kelton’s words, MMT “teaches us to ask not ‘How will you pay for it?’ but ‘How will you resource it?’ It shows us that if we have the technological know-how and the available resources—to put a man on the moon or embark on a Green New Deal to tackle climate change, then funding to carry out those missions can always be made available. Coming up with the money is the easy part.” The Deficit Myth, in sum, is what one commenter called “a plea to use permanent wartime mobilization for civilian ends.” Endless stimulation, not better and cheaper production, is the goal of fiscal (or monetary) policy.

This is antieconomics in its fullest expression. Resources exist (from whence?); are commanded by or at least available to the state, if not outright owned by the state (taxes? seizure? forfeiture?); and then are put in service of an undefined political mandate (what “we” want). Funding is an afterthought, as the fiscal authority creates money as needed. But in fairness to Kelton, the US federal government in 2020 spent roughly $6.5 trillion, twice what it raised in taxes ($3.4 trillion). In a very narrow sense, MMT “works” in the short term for the benefit of politically favored groups.1 This is the seen. But proper economics, as Henry Hazlitt and Frédéric Bastiat explained, requires looking at the long-term effects of a policy on everyone. This is the unseen. For MMTers, the vast opportunity costs of government spending, even when the economy is nowhere near “full employment,” go unseen.

Perversely, media critics defended criticisms of Kelton’s Times feature on the grounds of sexism. She is lauded, not surprisingly, as a rare standout in the male-dominated field of academic economics. The attacks on her work, we are told, come from older jealous white men (e.g., former Treasury secretary Larry Summers) who don’t appreciate the “new” economics she proposes and who envy the attention she has brought not only to herself and MMT, but to the broader push for egalitarian economic justice. Kelton, after all, served as an economic advisor to democratic socialist presidential candidate Bernie Sanders and supported Elizabeth Warren. Old neoliberals like Summers, by contrast, still support the outdated idea of fiscal constraints.

But beyond the absurd allegations of sexism—surely Kelton knows how merciless Twitter and other platforms are to everyone—is the more alarming suggestion that the practice of economics is too male and needs a female version. Economics is too adversarial, too concerned with being right, and in need of a more collaborative (read: female) approach. The implications of this for all social sciences, not just economics, are staggering: we would upend the search for knowledge to reflect a different logic between men and women—what Mises called “polylogism.” Would this not require an entirely new epistemology across all scientific disciplines?

None of these diversions will allow us to escape reality. Economics starts and ends with scarcity, an inescapable feature of human reality. Any conception of freedom from material and human constraints requires a posteconomics world, either an earthly utopia or a heavenly abundance. In our world, however rich relative to the past, scarcity is the starting point of economic analysis. In our world, individual human actors make “rational” choices only within the context of constraints: time, capital, intelligence, ability, health, and location. And every choice has an opportunity cost. 

Professional economics is in big trouble, and only an aggressive new generation of Austrian-trained praxeologists can undo the damage done by the prescriptive and political antieconomists. 

  • 1. The US government is one such favored group, given the dollar’s status as the world’s reserve currency coming out of the Bretton Woods agreement, a powerful military, plentiful land and natural resources, and other economic advantages. Is MMT only a viable system for wealthy, powerful countries? 

Author:

Contact Jeff Deist

Jeff Deist is president of the Mises Institute. He previously worked as chief of staff to Congressman Ron Paul, and as an attorney for private equity clients. Contact: email; Twitter.

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The Poverty of the United Nations – Foundation for Economic Education

Posted by M. C. on November 6, 2021

Would Burundi Be Better Off If America Impoverished Itself?

The fact is that Americans consume more because Americans produce more. That’s right—more than 6 percent of the world’s potato chips, baseballs, skateboards, and countless other things. If we didn’t first produce, we wouldn’t have it to consume or to trade for what we really wanted. How can such an elementary point, such a basic principle of life and economics, be lost on anyone who doesn’t have to sign his name with an “X”?

https://fee.org/articles/the-poverty-of-the-united-nations/

Lawrence W. Reed

Lawrence W. Reed

wenty years ago, a United Nations report listed the United States as consuming 115,540 kilowatt-hours of energy per person per year. At the same time, each person in the tiny central African nation of Burundi was using up just 120 kilowatt-hours. My guess is that today, the average American is still consuming about a thousand times as much energy as the average Burundian. It’s also a safe bet that the “experts” at the United Nations want Americans to feel just as guilty about the disparity today as 20 years ago.

Is this something about which Americans should flog themselves in unremitting guilt? Does Burundi use less energy because America uses too much? Is world energy a fixed pie, with America greedily hogging more than its quota at the expense of the Burundis of the planet? Would Burundi be better off if America impoverished itself? Questions like these were answered definitively by free-market economists decades ago, but like a nagging mother-in-law, the questions just never go away.

You’ve heard this international class warfare stuff before, from many sources besides the United Nations. A few years ago, the mantra of the international statist community—repeated endlessly in the media—was this: “Americans are only 6 percent of the world’s population but they consume 40 percent of the world’s energy.” Greed was supposed to be the explanation for this disparity, and the solution offered was for America to spread its wealth in foreign-aid gifts to the less fortunate countries of the world.

Energy, of course, wasn’t (and still isn’t) the only thing of which America consumes more than its share of global population. We also eat more than 6 percent of the world’s potato chips and broccoli. We enjoy more than 6 percent of the world’s indoor plumbing, hearing aids, and baseballs. We operate more than 6 percent of the world’s cars, trucks, hang gliders, tricycles, and skateboards. We listen to more than 6 percent of all lectures and read more than 6 percent of the world’s books. And we probably put up with more than our share of nonsense too.

The fact is that Americans consume more because Americans produce more. That’s right—more than 6 percent of the world’s potato chips, baseballs, skateboards, and countless other things. If we didn’t first produce, we wouldn’t have it to consume or to trade for what we really wanted. How can such an elementary point, such a basic principle of life and economics, be lost on anyone who doesn’t have to sign his name with an “X”?

Unfortunately, the U.N. is at it again. Last September it issued a document called “The Human Development Report 1998.” The richest fifth of the world’s nations, declares the report, accounts for 86 percent of private consumption. Never mind the inherently dubious nature of adding up “private consumption” in almost 200 different countries.

The report is yet another lamentation about how the rich have it and the poor don’t: the richest fifth purchase nine times as much meat, have access to nearly 50 times as many telephones, and use more than 80 times the paper products and motorized vehicles than the poorest fifth. While two billion people worldwide supposedly go without schools and toilets, self-indulgent Americans are painting themselves with $8 billion in cosmetics and Europeans are feasting on $11 billion in ice cream. To reduce these horrid inequalities, the report recommends that “consumption levels among the poor” be increased to “basic” levels.

Think about that. The poor nations don’t consume much now, and the U.N. tells us that the answer is for them to consume more. How are the poor nations to get more? Change their ways? Produce more, perhaps? If the U.N. thinks that poor nations’ low productivity is at fault here, there’s little sign of it. As the New York Times revealed, “the report only skirts the issue of what role the poorest nations themselves play in this predicament.”

The sad fact is that in those poor countries like Burundi, indigenous political and cultural barriers to production constitute the overwhelming if not exclusive source of poverty. Routinely, the chronically destitute nations of the world are the ones that make war on private property, keep out foreign investment, impose viciously punitive taxes and regulations, spend inordinate sums on the military, squander resources on corruption and public works boondoggles, and in general, penalize or even kill anybody with enough spunk to start a business. These nations don’t consume much because, as a result of these barriers, they don’t produce much. It’s as simple as that. And it’s no coincidence that reports to the contrary come forth from a world body in which the ranks of the benighted are legion.

What poor nations need to do is to create the enlightened political and cultural conditions whereby capital investment and the resulting production are encouraged instead of suppressed. This is not new information. It’s the same formula by which America emerged from the status of 13 poor backwater colonies to the wealthiest nation on the globe. With a relatively free economy, America has shown the world how to go from Model T’s to space shuttles in less time than most peoples have taken to get from dirt paths to gravel roads. Other countries from England to Hong Kong can boast similar accomplishments as well, and for similar reasons.

It is no disgrace that Americans consume 40 percent of the world’s energy, or whatever the number may really be. Rather, it is a tribute to our ingenuity, creativity, and enterprise. We’ve put our God-given abilities to work within a system that even with all its government intervention is still infinitely more hospitable to production than Burundi’s. If we restricted our energy consumption to just 6 percent of the total world supply, our lives would be shorter, less healthy, and a lot more painful. There would be fewer of us, and not by choice. The rest of the world would be worse off too because poor people cannot materially do much to help other poor people through trade.

People who are interested in ending poverty and really solving economic problems would do well to read Adam Smith’s The Wealth of Nations and ignore any report that comes out of the United Nations.

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Lawrence W. Reed is FEE’s President Emeritus, Humphreys Family Senior Fellow, and Ron Manners Global Ambassador for Liberty, having served for nearly 11 years as FEE’s president (2008-2019). He is author of the 2020 book, Was Jesus a Socialist? as well as Real Heroes: Incredible True Stories of Courage, Character, and Conviction and Excuse Me, Professor: Challenging the Myths of Progressivism. Follow on LinkedIn and Parler and Like his public figure page on Facebook. His website is www.lawrencewreed.com.

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Congrats Poverty, for winning the war on poverty

Posted by M. C. on October 1, 2021

Another war lost. Poverty and inflation won.

But the fundamental premise is flawed. Government can’t eradicate poverty anymore than it can eradicate a virus.

For starters, poverty in the US was already in decline, dropping from 18.5% in 1959, to 13.9% in 1965 (according to US Census Bureau data).

Yet in 1974, a decade into LBJ’s ‘all-out war’, poverty started rising again. Go figure— the 1970s saw the beginning of hardcore economic stagnation and debilitating inflation.

No amount of government support could counteract the destruction they were causing.

And by 1993, the poverty rate in the US was roughly the same as it had been in 1965.

So essentially the United States government had declared War on Poverty… and Poverty won. It was a stalemate at best.

See the rest here

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Our New Normal: Inflation, Poverty, Starvation, Economic Collapse, Fascism, Marxism, Communism, and Murder – LewRockwell

Posted by M. C. on September 18, 2021

In reality, it has but one objective, and that is to achieve total global governance and universal control over all.

https://www.lewrockwell.com/2021/09/gary-d-barnett/our-new-normal-inflation-poverty-starvation-economic-collapse-fascism-marxism-communism-and-murder/

By Gary D. Barnett

“So long as the people do not care to exercise their freedom, those who wish to tyrannize will do so; for tyrants are active and ardent, and will devote themselves in the name of any number of gods, religious and otherwise, to put shackles upon sleeping men.”

~ Voltaire

The gullibility of man it seems has no bounds, for if it did, how could so many be so blind? As I reflect on the past 18 months or so, it is quite alarming to understand the scope of this scam called a ‘pandemic,’ and how this entire country (and world) have embraced lies, deception, and tyranny of such magnitude. Mass murder at the hands of the state has already begun, but with the rollout of deadly and poisonous injections purposely mislabeled as ‘vaccines,’ the murder of large numbers that is democide, will be evident among this entire population for years to come. The perpetrators of this genocidal takeover of society are now coming after all children, and will attempt to poison as many as possible with their ‘vaccines’ over the course of this year and next.

Only a nation of pathetic cowardly fools would allow such an abdominal fate for their own defenseless offspring. This type of behavior indicates a total lack of intellect, and a mass ignorance of reality. It also indicates widespread indifference, which is the incarnate of a sick and immoral society.

So, it seems that the so-called “new normal” of totalitarian rule over a slave-like society, is not just the fault of those who wish to rule over us, but more so the people at large for allowing this to happen without proper resistance. Blaming the enemy is easy, but accepting blame of self is avoided at all cost, and this attitude is even worse than that of tyrants. It is expected that the evil among us who are the ruling class exist, but the evil of mass apathy can never be accepted or excused.

In the course of the past few months, this country’s citizens have fully acquiesced to the will of a totalitarian regime, and in the process, have laid bare their weaknesses due to an unfounded fear. Many believe there is safety in numbers, but that is only the mindset of herd animals, not humans. By voluntarily allowing for the death and destruction of part of the herd, the rest survive to live one more day, but when people accept this attitude, they also have to accept the death and destruction of their family, friends, and neighbors as normal for survival. If that is the case, it seems that the evolution of the human species is going backward, and that is exactly what collectivism is meant to accomplish.

With this comes the consequences of non-action, and under these circumstances, those consequences are always at the discretion of the tyrants. What has happened to date should be enough for anyone to see the folly of having confidence in any state or nation. What began with lockdowns and quarantines, led to business closings, job loss, extreme stress, supply line disruption, shortages, higher prices for goods and services, (inflation) and of course economic chaos. This in turn led to much more poverty, despair, and starvation, setting the stage for the next phase of this takeover. By this time, the people should have recognized the totalitarian nature of what was going on, but alas, they remained obedient and passive, and watched as their world was decimated.

In order to see the writing on the wall, one must seek out and accept the truth, regardless of the risk involved in doing so. To avoid the truth in favor of hiding from reality, hoping that someone else will ‘fix’ things, is exactly what all tyrannical rulers seek in the populations they are attempting to control. It is my expressed opinion, that the timing of this takeover coup was based fully on the fact that the master class knew that the general population was too afraid, too dependent, and too apathetic to fight back against this dictatorial authoritarianism that had been planned for decades. The timing of this was genius, because the masses acted in exactly the manner desired.

While no such thing as ‘Covid-19’ actually exists, and has never been identified, the real threat that is the real pandemic, had been held aside for just the right moment, and early this year the ‘vaccine’ pandemic was released. The ‘vaccine’ is the bio-weapon, and the so-called non-existent variants a of a non-existent virus, are the result of the deadly ‘vaccines.’ In other words, the ‘vaccine’ is the pandemic, and all those who have voluntarily taken the injections will be the victims of this staged pandemic. Once the deaths from these jabs reach unprecedented numbers, and they will, the rest of society who have not succumbed to the idiocy of taking such a dangerous concoction, will be blamed. In effect, all will have been targeted by the criminal state, whether they got the injection or not. The ‘vaccinated’ group will be sick and dying, while the unvaccinated group will be hunted by the state. This is why this society has already been divided by stealth in order to pit those vaccinated against those who are unvaccinated; a sinister plot meant to solidify control of both groups.

This is a communistic takeover attempt, that has all the elements of Fascism, Marxism, and Communism rolled into one. It is the most dangerous time in history for the inhabitants of this planet, as it is an attempt to achieve a globalized takeover of all in order to convert to one technocratically controlled system, where there are an ‘elite’ few’ at the top, their enforcers and corporate partners below, including government, with the rest being a slave class known as the proletariat.

While this ‘pandemic’ is thought to be about a mystery virus, it is not, as the virus narrative is just the tool being used to accomplish the real agenda, which has its roots based in the guise of ‘sustainable development’ marketed through the idiocy of man-made climate change. This has been fully outlined in the UN’s Agenda 21 and Agenda 30, and in the aptly named “Great Reset’ agenda described by Klaus Schwab and the World Economic Forum. In reality, it has but one objective, and that is to achieve total global governance and universal control over all. To be successful in this venture, many hundreds of millions, or more likely billions, will need to be murdered. The ‘vaccines’ are the tools of murder, so avoidance of these injections at all cost is imperative.

This is not a new threat, but it has been carefully manipulated to occur at this time in order to coincide with the people’s ignorance and indifference, their prepared division, their weakness and dependence on the state, and therefore their cowardice in the face of adversity. This ‘vaccine’ is the key to success for the evil and criminal rulers, so the fewer of us that take this witches brew, the more of us who will be able to fight back against this heinous attempt to destroy humanity. Our only hope is to remain non-compliant, to disobey every order, and to abolish the current governing system that has assumed dictatorial powers with the voluntary cooperation from the masses.

“The opposite of love is not hate, it’s indifference. The opposite of art is not ugliness, it’s indifference. The opposite of faith is not heresy, it’s indifference. And the opposite of life is not death, it’s indifference.”

~ Elie Wiesel

Source and reference links:

The silent weapon that is the mRNA ‘vaccine’

The non-existent ‘virus’ called ‘Covid-19’

Sustainability and super pandemics

Agenda 21

Agenda 2030: Global communism unleashed

‘Covid’ equals murder: the children are next

Covid-19 ‘Vaccine’: A slow-motion genocidal bioweapon

Gary D. Barnett [send him mail] is a retired investment professional that has been writing about freedom and liberty matters, politics, and history for two decades. He is against all war and aggression, and against the state. He recently finished a collaboration with former U.S. Congresswoman, Cynthia McKinney, and was a contributor to her new book, “When China Sneezes” From the Coronavirus Lockdown to the Global Political-Economic Crisis.” Currently, he lives in Montana with his wife and son. Visit his website.

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Biden’s Rescue Plan Won’t Reduce Poverty | Mises Wire

Posted by M. C. on March 20, 2021

The Urban Institute’s study claims that the Rescue Plan will reduce the number of people in poverty in 2021 “by about 16 million, from over 44 million to 28 million.” This will be accomplished, according to the study, because the plan will increase “aggregate net resources” for households currently under the poverty line by $87 billion, or an average of about $3,850 per family.

The report, however, gives away the game early on. “Our analysis does not include the macroeconomic effects of the policy changes.” This is often referred to as a “static” analysis.

This admission alone should be enough to dismiss the Urban Institute’s findings.

https://mises.org/wire/bidens-rescue-plan-wont-reduce-poverty

Bradley Thomas

Imagine thinking the government can reduce poverty.

For most readers of this website, the thought is laughable. And for good reason. The government has no resources of its own. Every dollar it spends it must first either tax, borrow, or print. Taxing and borrowing redirect money from the voluntary, productive sector of the economy to the hands of politicians. Printing new money erodes the value of currency already held by citizens, harming low-income households disproportionately, while distorting important market signals like interest rates that are vital to coordinating the economy’s complex patterns of production and exchange.

Nevertheless, the Urban Institute—a highly influential and deep-pocketed left-leaning think tank—just released a report claiming that the recently passed American Rescue Plan will reduce the poverty rate by one-third in 2021.

Major media outlets like the Washington Post and CNN wasted little time in reporting on the study’s findings.

The report’s methodologies and assumptions, however, are highly questionable and cast doubt on the legitimacy of its conclusions.

The Urban Institute’s study claims that the Rescue Plan will reduce the number of people in poverty in 2021 “by about 16 million, from over 44 million to 28 million.” This will be accomplished, according to the study, because the plan will increase “aggregate net resources” for households currently under the poverty line by $87 billion, or an average of about $3,850 per family.

The report, however, gives away the game early on. “Our analysis does not include the macroeconomic effects of the policy changes.” This is often referred to as a “static” analysis.

This admission alone should be enough to dismiss the Urban Institute’s findings. Assuming that the massive changes to the money supply, government debt, and incentives to work, spend, or save will have no effect on behavior or other “macroeconomic effects” like price inflation is wholly unrealistic.

For starters, how many households will fall back below the poverty level when price inflation pushes up the cost of living, especially the cost of common household needs like groceries, gas, and utilities?

In January, grocery prices were already up 3.7 percent year over year, the largest such increase in a decade, with beef leading the way with an 8 percent rise.

Gas prices are up more than fifty cents per gallon already this year, and are expected to surge beyond three dollars a gallon this summer. Oil prices are up more than 20 percent this year, and continue to climb.

Add in a “rescue plan” of $1.9 trillion, most (if not all) of which will be newly created fiat currency, and price increases should be expected to accelerate still further. The rescue plan will cost nearly $5,800 for every man, woman, and child in the country (more than $23,000 per family of four). Yet according to the Urban Institute’s calculations, even those households targeted for the greatest amount of relief will receive on average $3,850 per family.

Basic math indicates that low-income households will struggle to keep pace with the rising cost of living, even with the financial relief.

More specifically, the Urban Institute attempts to evaluate the impact of four specific measures contained in the rescue plan.

Unemployment Benefits

The plan will add another twenty-five weeks of federal benefits, along with an additional $300 a week. This would continue to be in addition to the normal state unemployment insurance benefits, which average about $300 per week.

At an annualized rate, a household with two people collecting an average of $600 per week in UI benefits would be receiving the equivalent of more than $62,000 per year, nearly matching the national median household income of $68,703.

This obviously provides strong incentives for people not to work, and to hold out for ideal, well-paying job opportunities that may never materialize. Fewer people actively working means lower amounts of production, which limits the quantity of available goods and services. A limited supply of goods and services being chased by a dramatically increasing amount of dollars will help to drive up prices more significantly.

Discouraging work and productive activity is the opposite of helping to alleviate poverty.

And what about the longer-term effects on the recipients once the benefits expire? How much more difficult will it be for them once again to find work after another six months of being out of the workforce? The Urban Institute leaves such questions unaddressed.

SNAP Benefits

The Urban Institute report also estimates that the extension of increased Supplemental Nutrition Assistance Program (SNAP) benefits would serve to reduce poverty by one-tenth of a percentage point.

The assumption here again is that the value of the benefits isn’t being traded off against higher food prices, an assumption that is naïve at best and intellectually negligent at worst. The higher cost of living may force more people below the poverty line than the benefits would enable to exceed it.

“Stimulus” Checks

Of the four measures analyzed in the Urban Institute’s report, the “stimulus” checks of $1,400 for most Americans are predicted to “produce the largest projected poverty reduction.”

The checks are purported to provide “relief” to families enduring financial struggles thanks to the covid lockdowns. But in spite of the significant spikes in unemployment, especially concentrated in the fields of hospitality and leisure, the majority of people receiving the stimulus checks will have suffered little to no interruption in their incomes.

Once again, however, the Urban Institute simply adds in the stimulus check amounts to low-income households’ incomes and declares that the additional income will propel many households above the poverty threshold with the assumption that the stimulus checks will have no other “macroeconomic effects” like price inflation.

Child Tax Credit

Finally, the study claims that the Rescue Plan’s child tax credit increase from $2,000 to $3,600 or $3,000 (depending on the age of the child) will “substantially boost the income of families with children.”

I recall Nancy Pelosi describing $1,000 tax cuts for working Americans as “crumbs” in 2018. But now a similar amount is described by the Urban Institute as a substantial boost in income.

Nevertheless, even though on the margins this additional income from the credit could push some families above the measured poverty rate, it remains irresponsible for the Urban Institute to merely wish away the negative impact of rising prices on low-income households in their analysis.

Only Productivity Reduces Poverty

Claims that government can “boost” the economy, or “create” jobs, or reduce poverty should be met with harsh skepticism.

With no resources of their own, the government can at best rearrange jobs, incomes, or patterns of production. But even more likely, the process of doing so will hamper economic progress, destroy jobs on net, and exacerbate poverty.

As John Chamberlain, the late economic historian, stated, “Poverty in society is overcome by productivity, and in no other way. There is no political alchemy which can transmute diminished production into increased consumption.”

Government “stimulus” or “relief” plans are long on encouraging more spending of newly created dollars, but short on encouraging actual production. The combination makes for a perfect recipe for price inflation, but not poverty reduction.

The fact that a report like the one produced by the highly esteemed Urban Institute must resort to such damning assumptions to conclude that the Relief Plan will reduce poverty bolsters my point. Author:

Bradley Thomas

Bradley Thomas is creator of the website EraseTheState.com, and is a libertarian activist and writer with nearly fifteen years of experience researching and writing on political philosophy and economics.

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Historical Lessons in Prosperity vs. Poverty – LewRockwell

Posted by M. C. on February 5, 2021

By 1350, Kublai Khan had been dead for decades. But the Yuan dynasty’s economic overseers were still printing paper money like crazy. And it was causing severe hyperinflation across China.

People’s lives were turned upside down by the government’s fiscal irresponsibility, and rebellions broke out across the country.

By 1368, the Yuan dynasty had completely collapsed, and a destitute peasant farmer-turned-monk named Zhu Yuanzhang rose up to become Emperor and found the new Ming Dynasty.

To stimulate the economy ravaged by inflation, the Ming dynasty created an unprecedented level of economic freedom.

Markets and industries were deregulated; the government abandoned its monopoly on salt production, for example, and merchants were encouraged to allow market competition to set prices.

https://www.lewrockwell.com/2021/02/simon-black/historical-lessons-in-prosperity-vs-poverty/

By Simon Black

Sovereign Man

As the grandson of Genghis Khan, Kublai Khan had a lot to prove.

So he set his eyes on the biggest prize in the known world at the time: southern China.

Kublai Khan completed his conquest of China in 1279, forging a new empire and creating the Yuan dynasty.

The Mongols were known for their expensive habits— they liked war and women especially. So when the money started to run out, administrators in the Yuan dynasty started printing paper money.

Yuan officials weren’t the first to come up with this idea; the government from the prior Song dynasty had also printed paper money. But there was a huge difference—

Paper currency from the Song dynasty, known as guanzi, was backed by copper, silver, and gold coins.

The Yuan currency, however, was backed by nothing. So whenever the government started to run out of money, they simply printed more.

By 1350, Kublai Khan had been dead for decades. But the Yuan dynasty’s economic overseers were still printing paper money like crazy. And it was causing severe hyperinflation across China.

People’s lives were turned upside down by the government’s fiscal irresponsibility, and rebellions broke out across the country.

By 1368, the Yuan dynasty had completely collapsed, and a destitute peasant farmer-turned-monk named Zhu Yuanzhang rose up to become Emperor and found the new Ming Dynasty.

To stimulate the economy ravaged by inflation, the Ming dynasty created an unprecedented level of economic freedom.

Markets and industries were deregulated; the government abandoned its monopoly on salt production, for example, and merchants were encouraged to allow market competition to set prices.

In time, the government stabilized the currency and reintroduced metallic coins. And by the 1500s Ming officials even allowed foreign currencies like the Spanish Silver Dollar to circulate in China.

This proved a much more stable medium of exchange than fiat currency, and the Chinese economy blossomed as a result.

Wealth rose dramatically. China was able to build canals, bridges, expand and fortify the Great Wall into the brick and stone mammoth we know today, and complete numerous other public works projects.

(Incidentally, as we discussed recently, taxing the rich was not the main method of funding this infrastructure. Instead, merchants were praised, and held in high esteem, for their voluntary contributions to the public good.)

And overall China had become one of the wealthiest, most powerful countries in the world.

It’s not hard to see why. Economic freedom. Deregulation. Stable currency. Responsible spending.
We’ve seen these elements over and over again throughout history.

In the 10th century, the city-state of Venice followed a similar model of economic freedom.

At a time when Medieval Europe was choking on the feudal system, Venice was one of the few places where even peasants could strike it rich.

The Venetian government established limited partnerships, enshrined the rule of law, and eventually established the Venetian Gold ducat– a gold coin that quickly became widely accepted around the world for international trade due to its purity and stability.

As a result of such policies, tiny Venice became one of the wealthiest and most powerful economies in Europe.

Centuries later, the Netherlands advanced this model even further, becoming the most capitalist country the world had ever seen up to that point.

The Dutch established the first stock exchange, the first publicly-traded companies (like the Dutch East India Company), and countless other financial innovations ranging from mutual funds to stock options.

The government stepped out of the way and allowed the private sector to flourish. They kept taxes reasonable and the currency stable; in fact the Dutch guilder– a silver coin– became the reserve currency of Europe during the 1700s.

History is full of more examples that show how economic prosperity is actually a pretty simple formula.

All it takes is economic freedom, fiscal responsibility, and a stable currency. This is also how the United States became the wealthiest country in the world.

But the direction that the US and most of the West are taking now is the opposite.

They demonstrate a complete lack of fiscal responsibility. They spend trillions of dollars now like it’s no big deal. $30 trillion in debt– 50% larger than the size of the entire economy– is nothing to them.

The central banks also keep debasing the currency; they ‘printed’ so much money last year that the Federal Reserve’s balance sheet nearly doubled in the span of a few months.

And there are plenty of examples of that throughout history as well.

The Western Roman Empire collapsed as a result of its never-ending corruption, fiscal irresponsibility, and currency debasement.
The French Bourbon Monarchy, the Austro-Hungarian Empire, the Ottoman Empire— they all ended as corrupt, bloated, highly-regulated bureaucracies with enormous debts.

Sometimes it helps to just step back and look at the big picture— 5,000 years of human history makes it pretty obvious what elements create prosperity versus poverty.

So when you see your government actively embracing extreme deficits, money printing, nationalization of industries, debilitating taxes, and other Marxist principles, ask yourself– are these the principles of prosperity or poverty?

Again, history is quite instructive.

Remember, though, we’re talking about trends here– the bottom won’t fall out tomorrow morning.

But that makes it even more important to think about the future (and your family’s future). Because your government certainly isn’t thinking about it.

You can’t control what politicians and central bankers are going to do. You can’t control the national outcome. But you can control your own outcome… and your own future prosperity.

If they raise taxes, for example, you can be prepared to take legal steps to reduce what you owe.

If devalue the currency, you can preserve your savings in alternative assets.

If they excessively regulate business, you may consider restructuring in a more advantageous jurisdiction.

This is what a Plan B is all about– ensuring that whatever happens or doesn’t happen next, you’ll always be in a position of strength.

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years.

Reprinted with permission from Sovereign Man.

The Best of Simon Black Simon Black is an international investor, entrepreneur, and founder of Sovereign Man. His free daily e-letter Notes from the Field is about using the experiences from his life and travels to help you achieve more freedom, make more money, keep more of it, and protect it all from bankrupt governments.

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The Ron Paul Institute for Peace and Prosperity : Fedcoin: A New Scheme for Tyranny and Poverty

Posted by M. C. on July 28, 2020

Fedcoin poses a great threat to privacy. The Federal Reserve could know when fedcoin is used, who is using it, and what they use it for. This information could be shared with government agencies, such as the FBI or IRS.

Is it so hard to believe that the ability to track purchases would be used in the future to “discourage” individuals from buying guns, fatty foods, or tobacco, or from being customers of corporations whose CEOs are not considered “woke” by the thought police? Fedcoin could also be used to “encourage” individuals to patronize “green” business, thus fulfilling Fed Chair Jerome Powell’s goal of involving the Fed in the fight against climate change.

http://www.ronpaulinstitute.org/archives/featured-articles/2020/july/27/fedcoin-a-new-scheme-for-tyranny-and-poverty/

Written by Ron Paul

If some Congress members get their way, the Federal Reserve may soon be able to track many of your purchases in real time and share that information with government agencies. This is just one of the problems with the proposed “digital dollar” or “fedcoin.”

Fedcoin was initially included in the first coronavirus spending bill. While the proposal was dropped from the final version of the bill, there is still great interest in fedcoin on Capitol Hill. Some progressives have embraced fedcoin as a way to provide Americans with a “universal basic income.”

Both the Senate Banking Committee and the House Financial Services Committee held hearings on fedcoin in June. This is the first step toward making fedcoin a reality.

Fedcoin would not be an actual coin. Instead, it would be a special account created and maintained for each American by the Federal Reserve. Each month, Fed employees could tap a few keys on a computer and — bingo — each American would have dollars added to his Federal Reserve account. This is the 21st century equivalent of throwing money from helicopters.

Fedcoin could effect private cryptocurrencies. Also, it would limit the ability of private citizens to protect themselves from the Federal Reserve-caused decline in the dollar’s value.

Fedcoin would not magically increase the number of available goods and services. What it would do is drive up prices. The damage this would do to middle- and lower-income Americans would dwarf any benefit they receive from their monthly “gift” from the Fed. The rise in prices could lead to Congress regularly increasing fedcoin payments to Americans. These increases would cause prices to keep rising even more until we face hyperinflation and a dollar crisis. Of course, we are already on the path to an economic crisis thanks to the Fed. Fedcoin will hasten and worsen the crisis.

Fedcoin poses a great threat to privacy. The Federal Reserve could know when fedcoin is used, who is using it, and what they use it for. This information could be shared with government agencies, such as the FBI or IRS.

The government could use the ability to know how Americans are spending fedcoin to limit our ability to purchase goods and services disfavored by politicians and bureaucrats. Anyone who doubts this should recall the Obama administration’s Operation Choke Point. Operation Choke Point involved financial regulators “alerting” banks that dealing with certain businesses, such as gun stores, would put the banks at “reputational risk” and could subject them to greater regulation.

Is it so hard to believe that the ability to track purchases would be used in the future to “discourage” individuals from buying guns, fatty foods, or tobacco, or from being customers of corporations whose CEOs are not considered “woke” by the thought police? Fedcoin could also be used to “encourage” individuals to patronize “green” business, thus fulfilling Fed Chair Jerome Powell’s goal of involving the Fed in the fight against climate change.

Fedcoin could threaten private cryptocurrencies, increase inflation, and give government new powers over our financial transactions. Fedcoin will also speed up destruction of the fiat money system. Whatever gain fedcoin may bring to average Americans will come at terrible cost to liberty and prosperity.


Copyright © 2020 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
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Some Facts Worth Knowing – LewRockwell

Posted by M. C. on June 3, 2020

A recent study by Just Facts, an excellent source of factual information, shows that after accounting for income, charity and noncash welfare benefits such as subsidized health care, housing, food stamps and other assistance programs, “the poorest 20% of Americans consume more goods and services than the national averages for all people in the world’s most affluent countries.”

Scientific surveys of U.S. residents have found that the mental health of about one-third to one-half of all adults has been substantially compromised by government reactions to the COVID-19 pandemic. There are deaths from non-psychological causes, such as government-mandated and personal decisions to delay medical care,…

https://www.lewrockwell.com/2020/06/walter-e-williams/some-facts-worth-knowing/

By

Imagine that you are an unborn spirit in heaven. God condemns you to a life of poverty but will permit you to choose the country in which you will spend your life. Which country would you choose? I would choose the United States of America.

A recent study by Just Facts, an excellent source of factual information, shows that after accounting for income, charity and noncash welfare benefits such as subsidized health care, housing, food stamps and other assistance programs, “the poorest 20% of Americans consume more goods and services than the national averages for all people in the world’s most affluent countries.” This includes the majority of countries that are members of Organization for Economic Co-operation and Development, including its European members. The Just Facts study concludes that if the U.S. “poor” were a nation, then it would be one of the world’s richest.

As early as 2010, 43% of all poor households owned their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage and a porch or patio. Eighty percent of poor households have air conditioning. The typical poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other cities throughout Europe. Ninety-seven percent of poor households have one or more color televisions — half of which are connected to cable, satellite or a streaming service. Some 82% of poor families have one or more smartphones. Eighty-nine percent own microwave ovens and more than a third have an automatic dishwasher. Most poor families have a car or truck and 43% own two or more vehicles.

Most surveys on U.S. poverty are deeply flawed because poor households greatly underreport both their income and noncash benefits such as health care benefits provided by Medicaid, free clinics and the Children’s Health Insurance Program, nourishment provided by food stamps, school lunches, school breakfasts, soup kitchens, food pantries, the Women, Infants & Children Program and homeless shelters.

We hear and read stories such as “Real Wage Growth Is Actually Falling” and “Since 2000 Wage Growth Has Barely Grown.” But we should not believe it. Ask yourself, “What is the total compensation that I receive from my employer?” If you included only your money wages, you would be off the mark anywhere between 30% and 38%. Total employee compensation includes mandated employer expenses such as Social Security and Medicare. Other employee benefits include retirement and health care benefits as well as life insurance, short-term and long-term disability insurance, vacation leave, tuition reimbursement and bonuses. There is incentive for people to want more of their compensation in a noncash form simply because of the different tax treatment. The bottom line is that prior to the government shutdown of our economy in the wake of the coronavirus pandemic, Americans were becoming richer and richer. The question before us now is how to get back on that path.

Speaking of the COVID-19 pandemic, Just Facts has a couple of interesting takes in an article by its co-founder James D. Agresti and Dr. Andrew Glen titled “Anxiety From Reactions to Covid-19 Will Destroy At Least Seven Times More Years of Life Than Can Be Saved by Lockdowns.”

Scientific surveys of U.S. residents have found that the mental health of about one-third to one-half of all adults has been substantially compromised by government reactions to the COVID-19 pandemic. There are deaths from non-psychological causes, such as government-mandated and personal decisions to delay medical care, which has postponed tumor removals, cancer screenings, heart surgeries and treatments for other ailments that could lead to early death if not addressed in a timely manner. Interesting and sadly enough, New York state enacted one of the strictest lockdowns in the U.S. but has 22 times the death rate of Florida, which had one of the mildest lockdowns.

As I pointed out in a recent column, intelligent decision-making requires one to not only pay attention to the benefits of an action but to its costs as well.

 

 

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New York vs. Texas: NY Has Nearly 50 Times More COVID-19 Deaths Per Capita | Mises Wire

Posted by M. C. on April 29, 2020

Many states now report total deaths per 100,000 that are
one-thirtieth the size of New York’s toll. Texas, for instance, reports
total deaths numbering 2.3 per 100,000. The total in South Dakota, which
has been much maligned for not imposing any statewide lockdowns, is 1.2
deaths per 100,000.

Were New York a foreign country, the US’s total death rate from COVID-19 would be cut by 36 percent:

The truth, of course, is that these statements by politicians and government “experts” were attempts to justify extreme government edicts that have created widespread unemployment, poverty, child abuse, and illness. They are irresponsible scare tactics employed for political purposes, and were never based on any actual evidence or knowledge about the situation. After all, these officials don’t even know the fatality rate of COVID-19.

https://mises.org/wire/new-york-vs-texas-ny-has-nearly-50-times-more-covid-19-deaths-capita?utm_source=Mises+Institute+Subscriptions&utm_campaign=da4fb45608-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-da4fb45608-228343965

As of April 26, there were nearly 55,000 COVID-19 deaths reported in the United States. Of those, more than 22,000 (or about 40 percent) were in the state of New York alone. New Jersey was in second place, with nearly 5,900 COVID-19 deaths reported.

If we combine these two states, we find that a majority of COVID-19 deaths in the United States have come from them alone. Combined, these two states accounted for more than 51 percent (28,213) of all deaths, while all other states combined made up less than 48.5 percent (or 26,567) of deaths.

ny

Measured in terms of deaths per 100,000, New York (114 per 100,000) and New Jersey (66 per 100,000) also had the highest rates. But New York had the worst rate by far.

New York’s number of deaths per 100,000 soars above those of all other states, is double that of Massachusetts, and is more than seven times those of Maryland and Pennsylvania.

The difference becomes even more stark as we move west and south. New York’s death rate is now 22 times as large as Florida’s and 25 times that of Alabama.

compared

Many states now report total deaths per 100,000 that are one-thirtieth the size of New York’s toll. Texas, for instance, reports total deaths numbering 2.3 per 100,000. The total in South Dakota, which has been much maligned for not imposing any statewide lockdowns, is 1.2 deaths per 100,000.

Were New York a foreign country, the US’s total death rate from COVID-19 would be cut by 36 percent:

ny

Whenever comparisons of this sort are made, however, many claim that all areas of the country will closely follow in New York’s footsteps unless ever more strict lockdown measures are taken immediately.

Indeed, we’ve been hearing for weeks that various states and regions are just “two weeks behind New York” in terms of COVID-19 infections and deaths.

For example, more than a month ago, the Philadelphia Inquirer on March 27 quoted one medical expert claiming: “We anticipate we are no more than two weeks behind New York City….Cases are doubling every two to three days. We had 46 confirmed cases last night. You do the math.”

Also in Pennsylvania, a medical expert from Lehigh Valley on March 22 insisted that “we are two weeks behind Manhattan in terms of spread and seriousness.”

On April 3, Maryland governor Larry Hogan proclaimed that his state was “about two weeks behind New York.”

Meanwhile, on April 1 WBHM reported that an Alabama health official had claimed: “Birmingham is about two weeks behind New York City.” Nearly a month later, Jefferson County, Alabama, where Birmingham sits, reports a death rate of 5 per 100,000, or 4 percent the size of New York’s death rate.

When we note outlandishly incorrect predictions such as these, a common response from lockdown boosters is “Well, social distancing prevented that!”

But did it?

So far, there’s no empirical evidence even showing that social distancing works. As T.J. Rodgers wrote in the Wall Street Journal this week, there is no correlation between government-forced “shutdowns” and a muted number of deaths from COVID-19:

No conclusions can be drawn about the states that sheltered quickly, because their death rates ran the full gamut, from 20 per million in Oregon to 360 in New York. This wide variation means that other variables—like population density or subway use—were more important. Our correlation coefficient for per-capita death rates vs. the population density was 44%. That suggests New York City might have benefited from its shutdown—but blindly copying New York’s policies in places with low Covid-19 death rates, such as my native Wisconsin, doesn’t make sense.

Similarly, political scientist Wilfred Reilly ran the numbers, taking into account factors such as population and population density. He found no evidence “that lockdowns are a more effective way of handling coronavirus than well-done social-distancing measures” and concluded:

The question the model set out to ask was whether lockdown states experience fewer Covid-19 cases and deaths than social-distancing states, adjusted for all of the above variables. The answer? No. The impact of state-response strategy on both my cases and deaths measures was utterly insignificant.

Moreover, the timing is less than convincing for the “lockdowns worked!” claims. For example, in the case of Maryland, the governor claimed, “we’re two weeks behind New York,” even after a stay-at-home order was in place. That is, his prediction assumed social distancing. Nearly a month later, Hogan was clearly very wrong.

In Alabama, on the other hand, a statewide stay-at-home order did not come down until thirteen days (i.e., nearly two weeks) after the New York lockdown. Had Alabama truly been “two weeks behind,” it would have already been nearly comparable to New York in its death rate by the time the order was implemented. Obviously, that didn’t happen.

The truth, of course, is that these statements by politicians and government “experts” were attempts to justify extreme government edicts that have created widespread unemployment, poverty, child abuse, and illness. They are irresponsible scare tactics employed for political purposes, and were never based on any actual evidence or knowledge about the situation. After all, these officials don’t even know the fatality rate of COVID-19.

Now, it’s entirely possible that as time progresses later waves of illness could increase total deaths, and there may be some “hot spots” where there are serious strains on the medical infrastructure. However, given the track record of the experts in predicting who is two weeks behind New York, it looks like it will only be a coincidence if these predictions of New York–like death rates prove correct at some point. Just as financial permabears often “predict ten of the last two recessions,” I have no doubt that many government-employed experts will predict twelve of the next three hot spots. Meanwhile, thanks to these experts’ recommendations, important medical procedures will be banned, people in need of medical care will be frightened into staying home, and food shortages may become a reality.

The real question we should be asking ourselves is why is New York is such a mess in terms of COVID-19? New York’s deaths aren’t just high by US standards. The state’s total deaths per 100,000 are higher than both Spain’s and Italy’s, both of which are considered to be among the most hard-hit countries on earth. New York has reported nearly as many COVID-19 deaths as Spain (23,500), even though Spain has a much larger population of 46 million. New York is also only about 5,000 deaths behind Italy, even though Italy has a population three times the size of New York State.

Indeed, these numbers are so high that one wonders if deaths are even being counted properly, or if there is something about New York’s medical infrastructure that is especially inferior. Perhaps New York is home to a particularly virulent strain of the disease. Perhaps the disease was in circulation for far longer than the experts insist is the case. The experts don’t know the answers to these questions.

Nor should we expect answers to these questions any time soon. But what we do know is that it strains the bounds of credibility to insist that South Dakota will soon be New York if it doesn’t impose similar lockdown measures. This doesn’t mean that no caution is warranted, or that high-risk populations should neglect social-distancing measures. But the claims that we’re all “two weeks behind New York” are neither accurate nor helpful.

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Lived 30 miles from NYC for a year. Manhattan, with its persistent aroma of sewage, packs and stacks 70,000 people per square mile.

After a year near Cesspool City, I was so ready to return to a West Coast county with fresh air and two people per square mile.

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EconomicPolicyJournal.com: Three Big Problems with How Most Look at Inequality

Posted by M. C. on November 24, 2019

http://www.economicpolicyjournal.com/2018/10/three-big-problems-with-how-most-look.html

By Arkadiusz Sieroń

The issue of income and wealth inequality has gained public awareness recently, becoming an important economic problem in our time. Unfortunately, the quality of the public debate about this topic remains very poor. In this piece, I would like to point out three main shortcomings of the problem at hand.

Good and Bad Inequality

First, people do not differentiate between good and bad inequality. There is nothing inherently bad about inequality, since it’s, after all, only a formal characteristic of the relationship between certain values, like incomes of different people. What really matters is the reason of the inequality. Inequality that results from “rent seeking” and lobbying the government to implement beneficial regulations for the influential and already wealthy interest groups (you may think of banks “too big to fail”, farmers demanding subsidies or domestic industries supporting import tariffs) is obviously bad. Inequality caused by the quantitative easing programs, which increased prices of financial assets held by a relatively small number of wealthy individuals, is also not worthy of praise.
However, inequality resulting from economic progress does not deserve to be condemned, does it? During the Industrial Revolution, workers moved gradually from agriculture to manufacturing, which initially widened the inequality. But this is how the progress happens – it never occurs smoothly, as not all people take advantage of new market opportunities to increase their productivity at the same time. The current upswing in inequality also seems to be driven by technological progress, inter-sectoral reallocation of labour (from manufacturing to services), and globalization. The question whether we should oppose it equals to question whether we should be against progress itself. I hope it’s clear now that inequality may be either positive or negative, depending on its causes, and that the bad ones are not necessarily driven by the free-market capitalism, the favorite whipping boy for all the misery of the world. Instead, it’s crucial to understand that the rise in inequality observed recently in some western countries may result from many causes, including the global economic growth lifting people out of poverty all over the world.

Are People Sinophobic?

This leads us to the second weakness of the public debate about the inequality: many people adopt too narrow, Western-oriented perspective. Just look at the chart below.
Chart 1: Change in real income from 1988 to 2008 among percentiles of global income distribution
sieron1.png
As one can see, almost the entire bottom 75 percent has seen its real income rise between 1988 and 2008 – and some percentiles made really significant gains. Although it clearly shows that globalization benefited enormous number of people, intellectuals and the press are focusing on the working class in the West, whose real income relatively stagnated. It’s an unpleasant fact for these people, for sure. However, the funny thing is that they are between the 75th and the 90th percentile of the global income distribution, which mean that they belong to a global upper-middle class. From the global perspective, the current buzz about rising inequality is not a sign of concern about the poor at all – it is a worry about the income of an elite disturbed by the increased supply of low-skilled workers from developing countries. Surely, one can criticize the rise in inequality due to globalization – but it implies an assumption that the relative economic situation of the working class in developed countries is more important that the absolute increase in real incomes of Chinese or Indians. It turns out that the authors of Oxfam’s reports and other people who supposedly take care of human misery actually suffer from sinophobia.

Inequality or Poverty?

This is connected to the third cardinal sin of the contemporary debate about the income inequality, perhaps the most important one. People often confuse inequality with poverty, although these terms mean something different. The former occurs when people have different incomes, while the latter is when people do not receive enough money. Many people criticize the inequality, but what is really disturbing is not the fact that some have lower income than others, but rather that some has very little.
Fortunately, this is where capitalism enters the scene. Let’s see the chart below, which paints the spectacular reduction in the global extreme poverty over the last few decades.
Chart 2: The percentage share of the world population living in extreme poverty, from 1820 to 2015.
sieron2.png
As one can see, in 1820 almost all people in the world struggled for less than $1.90 per day. One hundred and fifty years later, still 60 percent of the global population lived in extreme poverty. Since then, the ratio declined to 9.6 percent. It means that billions of people have been taken out of extreme poverty. This progress is mind-blowing, especially for people who blame capitalism and ‘neoliberalism’ for the rise in inequality, although it is hardly surprising for economists who know that free markets enable economies to grow. Indeed, poverty was the default state of the humanity. What enabled for its reduction was simply to let poor people get richer by protecting property rights, liberalizing markets, and freeing trade.
This is how capitalism works: it generates wealth through free exchanges and accumulation of capital which increases the labour productivity. Therefore, the call for the greater economic equality for its own sake not only diverts us from the issue of poverty, which is the real problem, but it may be even counterproductive and hamper the economic growth — the only genuine means of eradicating poverty.
Arkadiusz Sieroń (sieron.arkadiusz@gmail.com) is a Ph.D. candidate at University of Wrocław, Poland. He is a 2018 Research Fellow at the Mises Institute, and winner of the 2018 Lawrence W. Fertig Prize.
The above originally appeared at Mises.org.

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