poverty Archives - the patient investor

August 12, 2013

Only Capitalism Can End Poverty | Cato @ Liberty

Marian L. Tupy argues that free enterprise is the best cure for poverty:

According to the World Bank, global poverty is declining rapidly. In 1981, 70 percent of people in poor countries lived on less than $2 a day, while 42 percent survived on less than $1 a day. Today, 43 percent live on less than $2 a day, while 14 percent survive on less than $1. “Poverty reduction of this magnitude is unparalleled in history,” wrote Brookings Institution researchers Laurence Chandy and Geoffrey Gertz in a recent paper. “Never before have so many people been lifted out of poverty over such a brief period of time.”

April 2, 2013

Everything you think you know about poverty is wrong | Deseret News

Mercedes Whie reports on a lecture by developmental economist Lant Pritchett:

One common belief among people working in international development is that a poor country can be changed by improving its education system, but Pritchett’s research suggests otherwise. The problem in poor countries is that they cannot make effective use of their people’s skills, Pritchett said, so giving them more skills does lead to development. Counter-intuitively, his research has shown that countries whose education system improves actually grow slower on average. He suggests that one reason for this may be that putting more educated people into a corrupt bureaucracy may result in more sophisticated corruption.

November 16, 2012

How Mitt Romney lost the unlosable election

William Bennett writes that President Obama won the 2012 election by winning 93% of the African-American vote and 71% of Latino votes, while Mitt Romney won white voters 59% to 39%, according to exit polls. If the GOP believe they lost the election because of race, they are destined to repeat the same mistakes over and over again. The key to their loss is that Obama won 60% to 38% among those who make less than $50,000 a year and among 18- to 29-year-olds he won 60% to 37%.

Capitalism is failing these two sectors of the population: low income earners and the youth. Poverty rates are highest among Black and Hispanic voters but young voters are also becoming disaffected, with almost half recent college graduates unemployed or under-employed. The seriousness of the situation is illustrated by the following statistic:

According to a Pew Research poll taken last year, 49% of Americans age 18-29 have a positive view of socialism while just 46% have a positive view of capitalism.

Mitt Romney might have sold his message to the middle-class and small business owners but he alienated the very people who suffered most from the economic downturn. He failed to define his campaign as a war against poverty and unemployment. Instead of looking the disaffected in the eye and telling them what he could do to get them a job, he spent his time preaching to the choir.

via Republicans lost the culture war – CNN.com.

November 16, 2012

US: Poverty rates

From the US Department of Health & Human Services:

US Poverty Rates

I suspect that most US voters are concerned about poverty (don’t believe everything you are told during an election) but where they differ is on how to address the issue. The view from the left is to raise taxes on the rich in order to increase welfare benefits to the poor. The right believe the solution is to get the economy back on track. That would create more jobs and increase tax revenues — which could enable more welfare spending. It is important to avoid the trap of long-term welfare dependency, but the solution is always going to be a compromise between the two extremes.

If Republicans want to be taken seriously by Black and Hispanic voters they need to pay more than lip service to fighting poverty.

October 31, 2012

Why We Can't Solve Big Problems | MIT Technology Review

Jason Pontin, MIT Technology Review Editor, provides some interesting insights into why innovation sometimes fails.

Sometimes big problems that had seemed technological turn out not to be so, or could more plausibly be solved through other means. Until recently, famines were understood to be caused by failures in food supply (and therefore seemed addressable by increasing the size and reliability of the supply, potentially through new agricultural or industrial technologies). But Amartya Sen, a Nobel laureate economist, has shown that famines are political crises that catastrophically affect food distribution. (Sen was influenced by his own experiences. As a child he witnessed the Bengali famine of 1943: three million displaced farmers and poor urban dwellers died unnecessarily when wartime hoarding, price gouging, and the colonial government’s price–controlled acquisitions for the British army made food too expensive. Sen demonstrated that food production was actually higher in the famine years.) Technology can improve crop yields or systems for storing and transporting food; better responses by nations and nongovernmental organizations to emerging famines have reduced their number and severity. But famines will still occur because there will always be bad governments.

Yet the hope that an entrenched problem with social costs should have a technological solution is very seductive — so much so that disappointment with technology is inevitable. Malaria, which the World Health Organization estimates affected 216 million people in 2010, mostly in the poor world, has resisted technological solutions: infectious mosquitoes are everywhere in the tropics, treatments are expensive, and the poor are a terrible market for drugs. The most efficient solutions to the problem of malaria turn out to be simple: eliminating standing water, draining swamps, providing mosquito nets, and, most of all, increasing prosperity. Combined, they have reduced malarial infections. But that hasn’t stopped technologists such as Bill Gates and Nathan Myhrvold, the former chief technology officer of Microsoft (who writes about the role of private investors in spurring innovation), from funding research into recombinant vaccines, genetically modified mosquitoes, and even mosquito-zapping lasers. Such ideas can be ingenious, but they all suffer from the vanity of trying to impose a technological solution on what is a problem of poverty…….

via Why We Can't Solve Big Problems | MIT Technology Review.

October 28, 2012

The real solution to poverty: JOBS | CIS

By Andrew Baker and Peter Saunders:

There are two ways to reduce “poverty”: increase the value of welfare benefits faster than the value of wages, or move substantial numbers of people off welfare and into full-time jobs. Anti-poverty campaigners invariably emphasise the first option and neglect the second, but the first actually undermines the second……

The real solution to poverty: J-O-B-S, J-O-B-S, J-O-B-S | The Centre for Independent Studies.