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Asking the Correct Questions About Poverty

Asking the Correct Questions About Poverty

| August 27, 2019
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Recently I heard a presentation by a geopolitical analyst and author, Peter Zeihan, who posited that global GDP had grown by a factor of 10 since WWII, while the population of the world had only grown by a factor of 3.  Hmm…. maybe that is why the static analysis that our politicians ply us with doesn’t work. A growing pie - who knew?

Then, last week, one of my favorite economists posted on his blog a discussion about worldwide economic growth going back to the year 1000!  Below are some excerpts and a link to the entire post: Asking the Correct Questions About Poverty and Slavery.

 

 

“A couple examples below of asking the wrong question.

Wrong Question No. 1: What is the cause, explanation, or origin of poverty?

Reason it’s the wrong question? Because human history is a story of abject poverty that has been the natural state of mankind for many, many thousands of years (see chart above) and therefore no explanation is needed or necessary to understand the historical origins of poverty.

Thomas Hobbes famously described the natural state of mankind in the 17th century as “solitary, poor, nasty, brutish, and short.” More recently, Jonah Goldberg in his 2018 book Suicide of the West wrote that “The natural state of mankind is grinding poverty punctuated by horrific violence terminating with an early death. It was like this for a very, very long time.”

As the natural state of the human condition for millennia, poverty really has no “cause” or “origin” and therefore the question “What causes poverty?” is meaningless and irrelevant.

Correct Question: Not what causes poverty, but what caused the unprecedented and phenomenal “hockey stick” rise in economic growth and human prosperity and flourishing illustrated in the chart above that suddenly started a few hundred years ago, especially in the West?

As Thomas Sowell explains in this video: https://youtu.be/nKWqvXUoF5o 

It’s not the origins of poverty that need to be explained. What requires explaining are the things that created and sustained higher standards of living [illustrated in the chart above]. There’s no explanation needed for poverty. The species began in poverty. So what you really need to know is what are the things that enable some countries, and some groups within countries, to become prosperous.”

I am paraphrasing here, but I believe it was Thomas Sowell who said that the whole concept of income redistribution presupposes that income is distributed in the first place. But income is not distributed, it is earned!

Until next time, Cheers!

Jim

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