How to solve poverty

Politicians on the left think they have the solution to poverty. But all they have are more problems.

By Quentin Langley

Dateline 13 May 2005

Solving the problem of poverty seems pretty simple to some politicians. Take John Kerry. He solved his own financial difficulties the day he earned a billion dollars in the time it takes to say “I do”. For most people it is not that easy.

It is easy to assume that poverty is all about income. Give more income to poor people and they will get richer, right? Not that easy. For a start, not everyone with low incomes is poor.

In the last year of his life, the publisher, politician, spy and con-artist Robert Maxwell lost around $3 billion. That is the lowest income ever recorded by anyone, anywhere. So was he the poorest man who ever lived? Or one of the richest?

Now Maxwell was certainly an extreme case, but, surprisingly, he is not unrepresentative of "poor” people. During the 1980s the number of people in the “poorest” 10% who were either company directors or self-employed doubled. And surveys in Britain the 1990s showed that half the people in the “poorest” 10% had above average expenditure levels. These people are not poor in any real sense – they are business people having one bad year. A lot of them have swimming pools and some of them have yachts.

What happened in Britain and America in the 1980s is that people got more entrepreneurial, not poorer. So the number of people with roller coaster incomes which occasionally dip to, or even below, zero went up. The simplistic statistics showed poverty going up. They were wrong.

Poverty in western countries is not about a shortage of food. Relative poverty – the type we have in the west – is often characterised by obesity, not hunger.

But relative poverty does exist. And that having less of it would be good. If governments can do something that would genuinely help alleviate poverty, that has to be worth at least discussing. It is my contention that government can and should do a great deal. Government can stop causing poverty.

What is it that characterises poverty in the west? We have seen that it is not a shortage of calories. Food is available at a wide range of prices. Nor is it a shortage of transport. Cars are available at many prices, and there is a flourishing second hand market. There are low cost airline tickets and cheap cell phones. Poor people have televisions and washing machines.

What is it that they don’t have? They don’t have good schools. They don’t have police protection. They don’t have decent housing. They don’t have proper healthcare. In fact, while they have everything that the private sector provides, they entirely lack the things that government has either taken over completely or seeks to provide to poor people.

The very things which governments seek to provide because otherwise the poor wouldn’t get them, are exactly the things that poor people don’t have. The things we leave to the market are provided, like food, cell phones and airline tickets, at every possible price to suit rich and poor alike.

So, yes, there is one thing the government could do to cure poverty. The government could stop causing it. It could start by pulling out of education, health, law and order, housing and pensions. That would be a start.

Copyright © Quentin Langley 13 May 2005

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