Poverty, An economic necessity?

I think that the poor will always be exploited, we will never have that utopian society everyone wants.

However, capatalism works, as far as statistics go more and more people move up above the poverty line every year. The precentage of the population in poverty is essentially shrinking, however we dont notice it because our population grows as well. Not to mention that we are poorly informed of world poverty standings and only center our findings on individuals in individual countires which doesnt really work well with other world statistics like demographics.

Socialism, I like better for the reasons you described. But, in escence all the nations are socialist. Sure it is less so here, but we still have social security and taxes. I think thats enough, these things just need to work more efficiently.

But it's not about having a Utopian society, it is about what is fair, even though everyone says "life isn't fair", it should still be so. We've evolved far enough, I hope, that things like fairness in life can be possible. Hell, even the definition of 'poor' is quite loaded anymore. What would one consider to be poor? How much, or little, money do you need to make to be considered in the poor bracket?
I feel that more and more of the 'middle class' Americans are slowly being ground away by the 'rich'. Furthermore, I feel that our welfare system as it is has way too many people on it who know how to work the system vs. those who are on it out of necessity. This same welfare system is also working against the middle class because it affects our money most. The same for gas prices. Welfare recipients in PA get an actual 'car allowance' for maintenance and other needs per months, as well as a fuel 'allowance' based on job needs, if one works, and most don't or at least they work the minimal amount of hours so as not to put a dent in their benefits. Who pays for this? The middle class. The rich are too good at hiding and diverting their assets so as not to be 'penalized' for being wealthy by having to give back their fair share to society.
Besides all of this, how does capitalism help the poor? It gives them a pittance of a wage so that they can go home and drool over the next 'have to have' item that advertisers pump through the airwaves 24/7. Then they just give their 'newfound wealth' back to the system which keeps them enslaved. Maybe if our focus was on other things besides the material, a meager wage would go farther. Unfortunately, our senses are assaulted daily by those who wish to help us part with our money. Whether we do or not is pointless in itself since the very system which feeds us is also the one which starves us. Think about that one.

To the originator of this thread, I suggest you give your own money to help the poor. Do not take any of mine through taxes. Don't make me pay for your bleeding heart.

Ahhh, the voice of reason amongst us. This mentality is why we backslide as a society vs. moving forward. To those who think this way... despite my preachings I would have you know that in a given situation, if the roles were reversed and I could watch you squirm as you lose all you hold dear, especially through no fault of your own, I would be the first to gleefully 'kick you in the teeth when you are down'. I would laugh in your face at your troubles and woes and take no pity, no compassion... as you seem to show towards your fellow man. Harsh justice is a bitch and it sounds like you 'deserve' to have some. Maybe it will teach you 'appreciation' and 'respect'.

Sorry if that response seemed harsh but it is how I feel. I am far from what anyone would ever consider a 'bleeding heart' but I still know how to show compassion. It is up to those of us who are 'stronger' to take care of those who can't do it for themselves. To the first one who throws the old "survival of the fittest" out there... shame on you.

Well, some facts.

a) For richness to exist, poorness also has to exist. If everyone had the same wealth, people would be neither. That said, what we pay our CEOs in this country has to be inefficient. We could import a Japanese CEO for a lot cheaper, and I do not believe there is anything intrinsic about American CEO's that make them better then foreign CEO's.

2) On the healthcare issue, I believe there are enough positive externalities to where government should offer some money towards health care in some form.

The short answer is yes, the technical answer is economics require that some people willing to work for less whether it be a teenager just needing spending money or a single mother to support her baby. Business is a system where the workers produce a product that is a more valuable than their salaries. How much more valuable depends on the owners or the board of directors. Extra money is used to minimized more risk that wasn't finiancially possible when initally starting the business, such as lawsuits, low demand, insurance. Or the owner needs his own private jet.

In american unless you're in some rural-rural area, such as Appalachia, far from Red Cross center or homeless shelter...it's almost impossible to go hungry in the USA. For me, poverty in USA means lacking material stuff; like internet connection, cell-phones, video games, large screen tv. Povery in many other countries means malnutrition, lack of food. Poverty means different things in different countries. In a global perspective the entire USA is rich feeding off poor countries.

Capitalism is cool in that it adaptible...people can move up and down. Of course their always will be lazy folks that complain and demand government money...but really they just can't get their butts of the couch to learn new skills.

I've never heard it referred to as being 'cool'. There's a new one for me.

The thing about socialism is, it's a great theory that falls flat on its butt when put into practice. You're fighting against human nature, and more importantly, it's a system that only takes ONE selfish person to ruin. Why only one? Because it's an attitude that spreads like weeds in a garden.

I'm currently living in a socialist nation, and it's not like there's a whole lot of compassion or even help for the underclass. In fact, there is even less in the way of social support networks to help those people than in the capitalist nation I'm from. I've been told by the locals themselves, "law of the jungle" is in effect. Personally I find that hilarious, as they're all in the upper middle class and climbing, but would more likely than not be the first to cry bloody murder if someone were to take advantage of them.

I think the sentiment of the OP is nice, but here's a basic rule about people: humans, as a species, suck. Individuals can be nice to other select individuals, but by and large, kindness gets you nowhere fast. Cold, callous, and cynical...check, check, and check.

Personally, I can't usually tell the difference from the truly needy and those who are lazy sacks of crap, and I'm too much of a cold-blooded bastard to chance helping the latter even if it means turning away the former. Guess I've seen one too many professional beggars in my time here. I've seen one armed cripples scrounging in the garbage to collect empty bottles to sell and not resorting to begging and acting the victim, and I've seen perfectly able-bodied people using children to garner sympathy for their self-degrading way of life. People who CHOOSE to beg because they're a bunch of whiny snots who think "working is too hard."

Captialism didn't spawn those wretches, it merely gave them an excuse.

stirring up trouble again, Marcus?



i'd rather my heart were bleeding than cold and dead.

oh, and don't make me pay for your atrocious war, either.



i hate this argument. the so-called experts can't agree on what human nature is, so what makes the populace think they've got it down? i'm in the nuture camp myself. yes, competativeness is a "natural" human trait, but so is cooperation. it's society and culture that supress one and exacerbate the other.

i agree to an extent that autocratic "socialism" is bunk. but what most people fail to realize about communism is that it's never existed: not as what it was meant to be anyway. the closest thing was the Paris Commune of 1871. the thing is, Marx believed for Communism to work, it had to grow almost organically from Capitalism. Russia was barely rounding the bend from feudalism, China was even less advanced and going through a civil war, Yugoslavia was created by the Soviet Union, and Cuba had barely loosed the shakels of colonialism. Marx believed the first communism would appear in England, and grow out of industrial capitalism. a few younger theorists i've met believe Marx had automation in mind when he was talking about the transition between economic models, but that he lacked the word itself.

He was obviously wrong, but not for reaons most people think. what Marx failed to anticipate was that capitalism had barely matured in his day. he thought that industrial capitalism was as far as it would go, but that form of capitalism became secondary by the end of the great depression. today's capitalism is based on consumption and service. through marketing and advertising, capitalism found a nearly inexahustable market in the human heart and mind. but i still think it can't go on forever. i think each generation becomes more and more jadded to advertising gimicks. i mean, back in the '50s and '60s, commercials were a simple display of the product - perhaps with a dance or catchy song. now, there are forms of advertising you can't even be sure are advertising. but i think there's a limit. the mind can only take so much.



so, are you really naive enough to believe that society and culture play no part in determining who you are, the choices you can make, and the trajectory of your life? niiice.

For this subject, I will share one fact and one opinion:

Opinion: I think poverty is the product of sin. If mankind would just not keep committing wrongs against one another, there wouldn't be poverty. Sure, there's the occasional homeless person on the side of the street who is really wronging himself. But the majority of the time, it's people wronging other people--war, economic starvation, greed, etc..

Fact: anthropologists have done scientific studies on happiness vs. income. What they found was, the RELATIVE income in a given society has a close correlation with happiness level, according to their surveys. In other words, you go to some poor Pacific Island, and the richest of the poor would be happier. But you go to Beverly Hills, the guy with only the $3 million house would be unhappy.

So why should a single mother supporting a baby be willing to work for a lower wage?
It will just mean she will have to work more hours in order to house and feed the baby, which also means higher child care expenses and more time away from the baby.

If you refuse to get an education, refuse to work hard, and just sit back and mooch off the government, dont be upset if society exploits you. With capitalism, we all have the opportunity to make it big, you just need hardwork and determination.

As an professional economist I would have to argue that everyone should be paid according to their marginal productivity.

Some interesting facts:

- the poor people in the Western world are richer than the 90th percentile in the developing countries

- Within Western countries poor people (10th percentile) today are as rich as rich people (90th percentile) a generation ago. Just ask what your parents had and how many times they could go on a holliday to a different continent back then.

Actually, this is an interesting topic that's been tumbling about economic circles for quite some time. When all is said and done, however, there's no real necessity for there to be poor people in a capitalism at all, if labor supply is willing to match labor demand.

Every company, every entrepeneur, every venture seeks to grow; growth requires capital, and human labor is capital as well. Growth creates jobs, requires skill, and requires specialization to go with it. As long as the labor pool has access and mobility to acquire the specialization and skills required to fit the demand, then unemployment will drop: Someone sees a job and they then take it.

Of course, that all plays into mobility as a facilitating factor in achieving this fluid labor market. Stops exist on a variety levels, from the intrapersonal, mental level of hesitance or self doubt to even such things as cultural constraints or fears - 'selling out', if you will. This can lead to a stagnation of labor and cause the labor pool to coagulate, in a sense.

For more about the cultural constraints, by the way, I'd suggest running an Amazon.com search on 'underground economy'. There's been a number of books in recent years about why poor urban neighborhoods refuse to be upwardly mobile.

In an international sense, of course, there's always that consideration of 'exploiting the poor' or 'sweatshop labor'. The fact of the matter is, of course, that while a pound or two US dollars per hour is absolutely miserable pay in England or the United States, many countries have far more impoverished economies and a far lower cost of living; what we would consider to be pitiful pay would pass as middle class employment in some areas.

Is this to say that child labor is an economic feasibility? Well, no, not at all. The irony in such a matter is that the more a nation forces its children to work, the less time they have to adapt for more productive jobs that would grow their economy further. Working for a dollar today will literally cost them thousands in a couple of years. Forfeiting growth will only stagnate their economy on a global scale.

There's also that element of 'trickle down economics' I'm sure that some are likely to point out involving highly productive countries spreading their wealth to poorer nations, but it's all too possible and, in fact, occurs as we speak. China's lucrative relationship with the United States has fueled their economy for the past twenty or thirty years, and India too is vaulting forward with an aggressive modernization plan. The question isn't whether we will continue using their labor, but whether we will be using their engineers, their doctors, and the other collegiate graduates they'll be churning out asking for salaries relative to their lower cost of living.

All in all, though, the jobs are out there, they're vacant, and they're available. Look through online job searches and newspapers - people are willing to hire. The question we should be asking isn't 'why are the rich blind to the poor' but 'why don't the poor look for advancement'.

When my dad/grandad went to a different continent, they travelled with a Springfield rifle--not an American Express card.

LOL, wow.

um, as a professional economist, are you smoking crack? i just posted this chart in another thread, but heck, why not here?



those are 2003 dollars. anthropologists typically define a generation as 20 or 25 years, and even nearly 2 generations ago the 10th percentile wasn't anywhere close to the 90th percentile. and that's census data right there.

What I meant was that people in the 10th percentile can now afford things the 90th percentile from a generation a go could only afford, for example going three times a year on a holliday (perhaps this is only possible in Europe with the vast amount of leisure time we have compared to the US). Another example, a generation ago people had to spend a much bigger share of their income to food, over a generation this has dropped considerably, the same goes for transportation etc..

Maybe my family was just lucky but I don't know... I remember my grandparents having it waaaaay better off financially than my parents. And my parents have it waaaaay better now than I do.
My paternal grandparents were able to buy their house in a couple of years, purchase a new car almost every year, definitely every two (of course this ended in the early seventies, but Pap always had a new ride and the pics to prove it). They also took family vacations (anyone in the US remember those?) annually... real vacations to actual places... not DisneyWorld crap (I admit, I would love to go but at what price? A second mortgage perhaps... might not be that bad but you know what I mean). Pap played trumpet for KDKA 'big band' radio. After that he was a bartender at the downtown Hilton where he remained until retirement. He didn't do too badly, especially as a bartender.
My dad's parents both worked, unlike my mom's. Pap was in the US Postal Service and gram worked for an old toy company, Wolverine toys, making toys for little girls. Even though they weren't considered as 'wealthy' as my mom's parents, they never wanted for anything and always seemed to have the cash necessary to purchase/emergency funds.
Maybe it's just me but times may be different, it doesn't mean they are better. I couldn't even scrape together 1000.00 right now if my life depended on it, yet gram and pap had the stuff lining their mattresses... and they had cars, and a house, and food, and clothes, and medical care, and a TV, and a stereo... shall I go on?

oh really? some items, perhaps. i can certainly get a computer more cheaply than my grandparents. but food? no. housing? no. check your consumer price index, dude. in fact, i just hoped over the the Bureau of Labor Statistics and made a quick CPI chart for y'all.



the dollar value is an average cost of most products people need to live, in adjusted (1982-1984) dollars (which I'll just call 1983 dollars).

so... do you like being wrong?

I hope this discussion can remain productive. According to dystopic's chart, the average good costs 20x as much in inflation-adjusted dollars now as it did in 1913, and 5x as much as it did in 1973. That seems a bit much. However, if gasoline is a heavy component of the CPI, I'm inclined to believe it.

it includes almost everything i (and big brother) can think of that you might need to spend money on in a year, including transportation and housing. here's a breakdown of how much of that $100 each product took up last year: WWW Link

Well, I'm not a professional economist, just a student who's trying to get into the field now coming out of the military, but here's what I see.

There has to be poor in order for there to be rich. Otherwise, everyone would be making the same, and that doesn't work. Now, poverty can be eradicated- and should be- since it's a positive externality. Allowing the poor to starve usually leads to the poor becoming violent, which is expensive to put down.



I believe the opportunity is there to be upwardly mobile. Problem is that there is a segment of society that seeks to create a "rent seeking" atmosphere- generally from the left side of the spectrum, but the right has some of this as well. They tend to make up stories about white privilege or some other sociological bullcrap that is at most a minor factor. Many people seem to not realize that a growing percentage of a larger pie is better then half of a smaller pie. Inequality reduces over time.

One issue that is coming into play is that the safety net is strong enough that people are valuing time over money. With work becoming increasingly specialized, that is not necessarily a bad thing- especially on the unskilled labor end of it.



I wonder, is that "trickle down" or "trickle up" The main increase I believe is due to an increased level of productivity from globalization. That's what raises real wealth. One concern I have about the US is that we may end up with a glut of education without the capacity to use that education. We should expect real slower growth rates relative to the rest of the world- as globalization does by mathematical logic have to produce two forces: the first force being a general upward trend caused by increased efficiency and productivity- the second force being a "regression to the mean" effect caused by factor price equalization.



Wish I had found the job years ago, wouldn't have had to enter the military. I enjoyed my time in, but it's not what I wanted in life. I think I finally found something I enjoy- and am going for that at the moment.

hahaha a previous statement of yours is some other "sociological bullcrap":



that's a hallmark sociological statement.



oh, that'd be easy to realize, but it's not reality. most of us have a shrinking percentage of a growing pie, which is infuriating. as the (government-gathered) stats in my first chart show, adjusted income for the lower 50% of the country has barely changed over the last 40 years, but the costs of living have more than quadrupled during that time.

how is that possible? rather, how can people possibly live in those conditions? well, people live in far worse in other countries, i'm not debating that. but the U.S. can do better than it is. tetleytea said cost of living change seems a bit much. people have made up the difference with debt, and by going without some of the things they might have (such as a car).

also, that main CPI average doesn't reflect the cost changes in certain markets. i have a feeling the change is food costs didn't jump as steeply as other products did in the 70s. if i had more time, i might play around on their website to compare the average cost changes of, say, food items, transportation, housing, luxury, education, and medical expenses. now that would be an interesting chart (at least to a sociologist).