Category: Poverty

Blog author: jcarter
Tuesday, February 4, 2014
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povertycureCan the current model of humanitarian aid generated by networks of large philanthropic foundations, NGOs, and Western governments actually alleviate global poverty? The latest Liberty Law Talk podcast asks Acton’s Michael Miller, director of the new Poverty Cure Initiative, to address that question and to explain what conditions can lead to prosperity:

As Miller discusses, the prevalent humanitarian aid model frequently uproots the very beginnings of the circles of exchange that must exist for wealth to be created in these societies. Frequently missing as well in the current approach is understanding how crucial the rule of law, property rights, and markets are in the uplift from poverty, and that frequently, these economic and legal orderings are absent in regions of hardship. Consequently, the conditions for human flourishing don’t exist and cannot be created by large philanthropic interventions, which everywhere substitute parental relationships between the donor and recipient in the place of real human flourishing in these communities.

Click here to listen to the podcast.

“We need transformation, relief, and opportunity…in that order,” says AEI’s Arthur Brooks in a new video on conservatism and poverty alleviation. “Transformation starts with culture. Transformation is faith, family, community, and work…That’s the beginning of getting people into the process of rising.”

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In his new book, Knowledge and Power, the imitable George Gilder aims at reframing our economic paradigm, focusing heavily on the tension between the power of the State and the knowledge of entrepreneurs — or, as William Easterly has put it, the planners and the searchers.

“Wealth is essentially knowledge,” Gilder writes, and “the war between the centrifuge of knowledge and the centripetal pull of power remains the prime conflict in all economies.”

In a recent interview with Peter Robinson, he fleshes out his thesis:

Quoting Albert Hirschman, Gilder notes that, “Creativity always comes as a surprise to us,” continuing (in his own words), “if it didn’t, we wouldn’t need it and planning would work….Entrepreneurial creativity is almost defined by its surprisal —  by its unexpected character.”

Making room for such surprise requires a dose of Hayekian humility, but as for the shapes, contours, and origins of the surprise itself, Christianity has plenty to say. (more…)

povertycureWhile serving in an inner city ministry, Ismael Hernandez began to have doubts about whether he was effectively serving the poor. “For the first time in my ministry work I felt dissatisfied with what I was doing,” says Hernandez. “I saw that I was simply a ‘stuff-giver’, a bureaucrat of compassion, and under the weight of the free stuff I was dumping at the poor was their spirit, slouching aimlessly, awaiting.” He realized that the human person is not only called to change but also to choose:

Christian anthropology asserts that from the beginning of our lives we are created as subjects, not objects moved by forces; even if these forces are well intended. In pursuit of the safety that a parasitic life offers, some find comfort in the boredom of meaningless life or on the pity of others. The truth is that much of what we were doing for the poor was about ourselves and how it made us feel. We began and ended in moral posture that justified our endless call for resources to pass on to others; never daring to challenge the poor themselves, as that was blaming the victim. We had become the brokers and middlemen of a flow of goods passing from a set of hands to another but barely making a dent in the condition of those who ended up with the loot.

Read the rest to hear Hernandez’s five essential principles of poverty-alleviation.

War on Poverty special page article banner“Why, if we have made such great strides reducing poverty,” asks Scott Winship, “is there such widespread belief that, to quote Ronald Reagan, ‘We fought a war on poverty, and poverty won’?”

We won the War on Poverty in the sense that the prevalence of material hardship has declined. According to Meyer and Sullivan, just 8 percent of Americans live at the low standard of living endured by a third of Americans in 1963. But it was a limited and costly victory. Elderly entitlements will bankrupt the country moving forward. Great Society-style no-strings-attached welfare may have had behavioral and cultural impacts that have hurt child opportunity at the bottom. Upward mobility has not expanded. The conservative turn toward welfare reform after 1980 and the limited embrace of a work-promoting safety net by New Democrats produced an important shift in anti-poverty policy, but historically conservatives have not been constructively engaged in formulating a positive opportunity agenda for children at the bottom. That this is changing is the most hopeful sign in domestic policy in some time.

Read more . . .

The New York Times unwittingly highlights many of the points from the Acton Commentary, Maria Shriver’s Big, Big Government Rescue Plan For Women. In a piece entitled “Sarah’s Uncertain Path,” the Times takes a  look at poverty in America, focusing on a pregnant 15 year old girl.

Sarah’s family certainly has a rough go of it. And the Times would lead us to believe, just as the aforementioned Government Rescue Plan, that Sarah’s family and those like them are victims:

There is a myth in America: if you have a strong moral compass, work hard and make good choices, you will have equal opportunity. But after two years of listening to and documenting low-income families in rural America…we have witnessed a starkly unequal playing field.

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mother and daughterIs America inherently unfair to females? Do we need to expand government programs and invest in new ones in order to get women out of poverty and keep them above the poverty line?

Carrie Lukas, the managing director at the Independent Women’s Forum, believes the answer is a resounding, “No!” Lukas replies to the recent Shriver Report: A Woman’s Nation Pushes Back From the Brink. There are a lot of negative issues with this report, but Lukas says the primary one is selling “American women on the progressive political agenda.” The overall message of the report: “women are under siege in America, and only bigger government can save them.”

Lukas notes the flaws in The Shriver Report:

There is no recognition that a higher minimum wage and more generous mandatory paid leave programs can destroy job opportunities for women, particularly women seeking flexible work arrangements. There is no discussion of how the war on poverty itself, by encouraging the breakdown of the family, has contributed to many women’s current predicaments. There is no consideration of how existing government regulations, from our regulations on energy, to food, to health care, drive up the cost of everything American families must buy and discourage job creation, robbing people – particularly those “on the brink” with the fewest skills – of desperately needed employment opportunities.

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100930_minimum_wageYesterday I mentioned that translating economic principles into intuitive concepts is one of the most urgent and necessary tasks to prevent such evils as harm to the poor. Today, William Poole provides an excellent example of what is needed with his “common-sense thought experiment” on minimum wage increases:

Suppose Congress were to enact a minimum wage $50 higher than the current one of $7.25 per hour. Would a minimum of $57.25 reduce employment? I know of no economist who would assert a zero effect in this case, and recommend that readers ask their economist friends about this thought experiment. Assume that the estimate is that a minimum of $57.25 would reduce employment by 100,000. The actual number would be far higher but 100,000 will do for this thought experiment. Now, consider several other possible increases of less than $50. The larger of these increases would have substantial effects, the smaller ones smaller effects.

But is there reason to believe that a minimum of $10 would have no effect? I have never seen a convincing argument to justify that belief. If you accept as a fact that a minimum wage of $57.25 would reduce employment, and you accept as a fact that some workers are currently paid $7.25 per hour, then logic compels you to believe that a small increase in the minimum wage above $7.25 will have at least a small negative effect on employment.

The only escape from this logic is to believe that there is a discontinuity in the relationship between the minimum wage and employment. No one has offered evidence that there is a discontinuity at a certain minimum wage such that a minimum above that has an effect and one below does not.

Far too often, advocates of minimum wage increases tend to dismiss such thought experiments before giving them due consideration. I think I know why. I don’t mean to cast aspersions on their motives (it certainly sounds like I’m about to cast aspersions on their motives, doesn’t it?), but I suspect they fear that admitting the undeniable logic of this reasoning will cause them to lose the moral high ground.
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Many people believe laws to protect ownership and private property primarily favor the wealthy. But as Prof. Dan Russell explains, lack of property protections can lead to abject poverty.

(Via: Institute for Faith, Work, and Economics)

A recent speech by U.S. Senator Marco Rubio laid out what his press office terms “Conservative Reforms for Combating Poverty.” It began well and had a nice line or two emphasizing the role family breakdown plays in perpetuating generational poverty, but then it went all technocratic and wobbly.

So, for instance, at one point he argued that a lack of education is one reason for the decline of marriage among the poor, noting that “64% of adults with college degrees are married, while only 47% of those with a high-school education or less are.” How does he know that being married doesn’t make one more likely to pursue higher education, or that both tendencies aren’t caused by something else? (more…)