Category: Poverty

cow-faceDuring the Spanish Civil War, an American farmer named Dan West served as an aid worker on the front lines. His mission was to provide relief to weary soldiers, but all he was allotted to give them was a single cup of milk.

This meager ration led West to wonder if more could be done. “What if they had not a cup,” thought West, “but a cow?”

The “teach a man to fish” philosophy behind that question inspired West to found Heifer International, an organization that provides farm animals to needy families and communities in developing countries. It’s an appealing model (like many Americans, my family has made donating a farm animal a holiday tradition) but does it work? Is giving an animal an effective option for helping the poor?

Developmental economist Bruce Wydick agricultural economics professor Chris Barrett studied the impact of farm animal donations:
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OK, this is going to be a tough call. But Acton Research Fellow Jordan Ballor has bravely stepped up with his nominee for the “Worst Christmas Song Ever” in a piece for Patheos. His pick? Band Aid’s syrupy “Do They Know it’s Christmas?” Ballor reminds us that the song …

… was released in 1984 as part of Band Aid, an effort organized by Bob Geldof in response to a famine that struck the east African nation of Ethiopia. The song certainly captures the spirit of the season, as its charitable aims are noble enough. The problem, however, is in how these good intentions are translated into word and deed. The song describes Africa largely as a barren wasteland, “Where the only water flowing is the bitter sting of tears.” It continues in this vein. Africa, the onetime breadbasket of the Roman Empire and home of the Nile River is a land “where nothing ever grows, no rain nor rivers flow.” The title question likewise plays into the supposed desperation of the continent. The only “Christmas bells that ring there are the clanging chimes of doom.” The response to this call is supposed to be charity from the affluent West, to “feed the world” and thereby “let them know it’s Christmastime again.”

In this depiction of Africa, “Do They Know It’s Christmas?” perfectly encapsulated the patronizing approach to international development that dominated the twentieth century and is still largely with us today. On this account, rich people in Europe and North America have a duty to help those who cannot help themselves in Africa, a place destitute not only of material resources but also spiritual and intellectual assets as well. As development economist William Easterly has argued, this attitude evinces a kind of tyrannical neo-colonialism, where the power, knowledge, and wealth lies entirely with the “First World” and those in the developing world are reduced to a kind of vassalage.

Agree with Ballor? Give us your pick for the worst Christmas song ever in the comment boxes below.

consumptionWhat if told you that between 90-100 percent of Americans are living in “healthcare poverty.” You would probably object and say that while the country certainly has a healthcare crisis, my numbers are surely inflated. After all, most people in the U.S. have access to healthcare.

In reply, I explain that while it’s true most people are able to consume healthcare services, they are still in poverty since those services are paid for at least partially by the government or private insurance. You would probably respond that I seem very confused on this issue. And you’d be right.

Yet when we hear reports that between 14 and 16 percent of  Americans are living in poverty, few people bother to ask, “Are they talking about consumption or income?”

The reason it matters is the same reason that most Americans are not in “healthcare poverty”: they are able to consume more goods and services than they are able to pay for with their income. As James X. Sullivan, an economics professor at Notre Dame, has explained:
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Blog author: jcarter
Tuesday, December 8, 2015
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microloans240wIf you give a man a fish you feed him for a day, but if teach a man to fish, you feed him for a lifetime. But what if a man knows how to fish but can’t afford a fishing pole? Or what if he knows how to sew but can’t afford a sewing machine? Can farm, but lacks a plow?

The recognition that some people have skills to make themselves self-sufficient but lack capital to buy the tools they need to support themselves was one of the motivations for the microlending movement.

In the early 1980s Muhammad Yunus, a Bangladeshi economist and social entrepreneur, began a project in which he used his own money to deliver small loans at low-interest rates to the rural poor. He later founded Grameen Bank to extend microlending to other communities in Bangladesh. In 2006 Yunus and Grameen Bank won the Nobel Peace Prize “for their efforts to create economic and social development from below.”

For free market advocates like me, this sounded like an ideal poverty-fighting initiative. Indeed, for about ten years I’ve been a funder of Kiva, a non-profit microlending network. I’ve always liked the idea that I was able to play the role of a small-scale venture capitalist, funding entrepreneurs in developing countries.

But in my zeal to help I never bothered to ask, “Does it work? Does microlending really help people escape poverty?”
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Sales-taxImagine you’re at the checkout line at the supermarket and the clerk asks how much income your family earns each year. Offended, you ask why that is any of her business.

“We need to know to determine how much sales tax you need to pay,” the checker politely explains. “If you’re classified as the ‘working poor’ you need to pay more sales tax.”

“I think you have that backwards,” you helpfully add. “You mean the working poor need to pay less sales tax, right?”

“Oh, no sir,” she say, still blissfully cheerful. “It’s a new anti-poverty program initiated by the federal government that helps the poor by making them pay an addition sales tax on their groceries.”

Although it isn’t stated so clearly or applied so directly, the federal government has in fact implemented an “anti-poverty” initiative that does just that. As economist Thomas Macurdy says, “Most Americans wouldn’t cheer this program, nor would most political leaders champion it. Yet that is what happens when Congress raises the minimum wage.”

Earlier this year Macurdy published a study in the Journal of Political Economy that examined the effect of the minimum wage on the poor. As he explains in the Wall Street Journal, his findings show that the minimum wage serves as a tax on the poor:
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Conversations about justice tend to quickly devolve into debates over top-down solutions or mechanistic policy prescriptions. But while the government plays an important role in maintaining order and cultivating conditions for society, we mustn’t forget that justice begins with right relationships at the local and personal levels.

In Episode 4 of For the Life of the World: Letters to the Exiles, Evan Koons explores topic from the perspective of hospitality, a theme we find throughout the Biblical story.

How do we approach and treat our neighbors? How do we act and interact, collaborate and exchange, relate and participate alongside each other? Are approaching our neighbors as co-creators made in the image of a holy God, and structuring our associations and institutions in a way that reflects his design for creation? (more…)

aeibrookingsreportIn our increasingly polarized society, it’s often difficult  for conservatives and progressives to find common ground. It’s even more rare for policy experts on the left and the right to find proposals that they can jointly agree on. So it’s rather remarkable that just such a diverse group has created a detailed plan for reducing poverty and increasing economic mobility.

With support from the American Enterprise Institute and the Brookings Institution, a group of scholars “worked together for more than a year to review the best available evidence and craft a plan that all believe would be effective.” Despite differences in moral values, they found consensus on three values that all Americans share: opportunity, responsibility, and security.

Next week I’ll be posting some of the individual details and recommendations from the report. But for now I wanted to highlight their twelve broad recommendations:

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