Solving Global Poverty...

[Michaelangelica]

I saw an interesting show last week about Mini or Mico-banks that give tiny loans mainly to women to start businesses. Loans with low interest and no security. A loan may be as little at $10.
These banks are having great success with 95% repayments and helping people from the worst poverty. One is about to list on the stockmarket!
One has started in Brooklyn NY, USA!(loans about $3,000+)

Even more interesting was how groups of retirees in the USA would meet and collect a little money to help fund a Third world bank.
This is a movement that is changing millions of lives for the better.
Giving dignity, pride, a sense of achievement, education and jobs to millions.

[hug]

I haven't read some of the above material, but I do have a few thoughts.

First, and perhaps most foundationally, according to my understanding of "morality" (which is what I study), from a scientific and philosophical standpoint, I do believe that it can be shown, with a high degree of confidence, (avoiding the word "proven") that letting global inequality continue to increase, unabated, or actually fueling it, would be immoral. Thus, I don't believe that we are talking, here, about something that would be "nice" to do, or something inconsequential. I think the topic is vitally important. For example, (just as one example of what could happen), even though these issues (to follow) alone may not bring complete catastrophe (although a couple of them could), the combination of them could do so. The issues: Global warming, instability caused by global inequality, nuclear proliferation, and terrorism. There was a great article written recently, I think by Robert Wright, (but I could be wrong on that), in The New York Times, discussing that combination of factors or something like it (it might have included three of these four, I can't remember). In any case, the destabilizing changes and pressures caused by global warming and/or substantial global inequalities, combined with the availability of weapons and people ready to harm others, is a bad combination. Very bad.

That said, I question single solutions or solutions that some countries impose on others, in this area, i.e., poverty and income disparity. I think that we (wealthier countries) should create and offer a multiplicity of wise and helpful choices. One solution won't fit for everyone. And, people like choices. And, we can't be sure of the best choice in any given situation. And, some of these choices could be contingent on some sort of action on the part of the receiving party, as long as the link makes sense and is fair and is well-intentioned. For example, . . .

You could offer lots of choices, . . . i.e.,

"We want to help but aren't sure of the best solution for you. So, here are some things that we could do, if you like . . .

* We'll loan you (individual, group, or country) up to this amount, at zero or low interest rate, if you use it for A, B, C, D, or E type things.

* We'll give you $XXXX, yours, if you use it for F, G, H, or I type things.

* We will have our companies in these industries (X, Y, Z, etc.) NOT enter your markets for 20 years, as long as you develop your own industries in those areas and not merely buy the stuff from other countries, and especially not country 1, 2, 3, or 4.

* We will not do many of these things if you build certain types of plants that will spew carbon dioxide for years to come. Instead, we will help you finance and build other types of plants for your energy needs that are much more clean.

And so forth. My point is, if we think smartly and responsibly, and if we give other humans help and choices, and if our intentions are honorable, then I think we can help make some progress on this issue. But, for that to happen, it seems that some attitudes must change.

I hope this helps. If someone is interested in the moral argument that indicates that we really should (!!!!!) be smart and help mitigate global inequality, and that it would be downright immoral for us to ignore the issue or fuel it and make it worse, please let me know. Here, I'm not speaking of "morality" as a relatively arbitrary set of rules or norms. I'm talking about "morality" from the standpoint of a rooted science-based understanding of morality's origins, roots, universal dynamics, and etc.

If you haven't read the recent Robert Wright article, I suggest it, and you can find it on the Times's website, using a search. Cheers. "hug"

[Boerseun]

Thanks, Hug. Interesting post.

There are problems to this, however. Simply put, removing global inequality isn't simply a matter of taking from A to give to B. After all, if you think about it, if everybody had a million dollars, money would lose all worth and meaning. Or even simpler; wealth cannot exist without poverty to define it.

So what we need to do (and think about this for a minute), is the following:

Instead of exporting Wealth to the Third World, maybe we should be importing Poverty. This might sound contradictory, but bear me out:

Say you've got a standard neighbourhood in the States, for instance. This neighbourhood consist of ten houses, of which three are upper class, and six are broad middle class, and the remaining one is lower class. Compare this to a representing neighbourhood in Africa, where one house might be comparable to the American lower class, and the rest are below-the-breadline tin shacks. Now think about this...

What the current model tells us is that we should be exporting Wealth to the Third World, whilst protecting our own wealth at home. Our own domestic wealth rises, with the nett effect that there's a permanent and continuous migration from the lower rungs to the higher rungs. This removes our population from the harsh reality and value of a single dollar's worth. The nett effect is inflation and devaluation of our own currency, as domestic wealth keep on rising. A car wash cost maybe $5. The price of a car wash is measured against what someone would charge for an hour's manual labour. If the poorest of the poor have millions of dollars (if the altruistic 'spreading of wealth' realises) then they would charge considerably more than $5 for a carwash. So, a certain amount of poverty is necessary for capitalism to work, unless you want your trust funds and pension funds and savings accounts to become completely and utterly meaningless.

So, to cut a long story short:

In order for the dream of 'Wealth Redistribution' and 'Helping the Third World' and all that, to actually work, then somehow, a certain amount of poverty must be imported from the Third World to the West. Maybe 'offshoring' certain businesses to the Third World is exactly that, seeing as it's taking jobs away from the West.

I don't know how the heck this is supposed to work, but it'll require a definite paradigm shift. The alternative is an endless spiral of devaluating western currencies and inflation.

[Michaelangelica]

Originally Posted by Boerseun

Thanks, Hug. Interesting post.

There are problems to this, however. Simply put, removing global inequality isn't simply a matter of taking from A to give to B. After all, if you think about it, if everybody had a million dollars, money would lose all worth and meaning. Or even simpler; wealth cannot exist without poverty to define it.

The reality is, we take more from the developing world than we give.

Instead of exporting Wealth to the Third World, maybe we should be importing Poverty. This might sound contradictory, but bear me out:

I can't follow your logic

What the current model tells us is that we should be exporting Wealth to the Third World,

No just stop ripping them off

the nett effect that there's a permanent and continuous migration from the lower rungs to the higher rungs

.
This might be the American (Usan) Dream but it does not necessarily follow logically, in reality and is no economic model I am aware of.

and devaluation of our own currency, as domestic wealth keep on rising.

The only thing that is stopping the USA inflation is a devalued Chinese currency and the powerhouse of the Communist System in China. Otherwise the US could not be conducting expensive, illegal wars.

So, a certain amount of poverty is necessary for capitalism to work, unless you want your trust funds and pension funds and savings accounts to become completely and utterly meaningless.

Amen brother; Isn't it the truth.

So, to cut a long story short:

In order for the dream of 'Wealth Redistribution'

Most of the several trillion dollars of "wealth" is in off shore British (about 1/3) or other offshore accounts so the richest in the world can avoid tax.
What do you think is propping up (and why do we have? ) the pound, and not a Euro?

I don't know how the heck this is supposed to work, but it'll require a definite paradigm shift. The alternative is an endless spiral of devaluating western currencies and inflation.

Again your economic logic eludes me. How, and for what reason, do you export poverty?

[Highlander]

I see two problems.

1) If ALL the poor were fed and given all the chances the world population would explode to even more unmanageable levels. Bad as this sounds and it breaks my heart too, but we need to have humans die off... and at a bit of a faster rate too.

2) Capitalism is a wasteful, destructive and immoral giant in the world. The world's wealth is locked up in multinational corporations that simply sit on it. Sure they have what is called disposable revenue but in the end what they spend, give to charities, waste, lose etc is no where near the amount that is kept. What needs to be done (but will not be lets face it) is get rid of capitalism entirely. Capitalism is the engine of our destruction.

[Michaelangelica]

[QUOTE=Highlander;173479]I see two problems.

1) If ALL the poor were fed and given all the chances the world population would explode to even more unmanageable levels.

Um if you haven't already noticed it has already we are aiming for 7 billion
Once born, you cannot let people die (as we now do). Especially long, lingering deaths like starvation, diseases like malaria, TB and AIDS. We would shoot a starving animal.

2) Capitalism is a wasteful, destructive and immoral giant in the world.

Yes, all true, but to paraphrase Churchill "It's a shit of a system but show me a better one."
We don't have to be wasteful, destructive and amoral. Many are making stands against all three. Even in the hard-nosed, money-driven corporate world.

[Boerseun]

"A shit of a system" - isn't that the truth!

My logic is that if we keep on enriching the Third World (or try to, at least), and we reach the dream of bringing them to our standards of income and living, then currencies would lose value. The Wealth we export (through investing in the Third World) needs to be offset by 'exporting' (okay - probably not the best term, but bear with me) a certain amount of poverty to the West. This isn't done as some sort of 'thermodynamic' balance or any such thing, it's simply necessary to maintain the value of money.

If the west keep on getting richer, and offloads enough of that wealth to the Third World to make them get rich as well, global economy would collapse because money will have no further worth. Look at my carwash example above. If everybody has money, nobody will be rich. So, instead of having a scenario of nine rich guys and one poor guy in the West, and one rich guy and nine poor guys in the Third World, a balance need to be struck where there are maybe six rich guys and four poor guys in both the West and the Third World. That would maintain the value of the currency in question. The problem is, for this to work, the Third World will gain five rich guys, but the West will have to gain a few poor guys. That's what I mean with importing poverty.

Selling this idea to the West will be impossible, but unless such a 'rebalancing' is achieved, no help in any form to the Third World with the express intent of raising their levels of Wealth could be attained without spiralling inflation and devaluation of the currencies employed by the West.

Capitalism might be a shit of a system, but unfortunately, it seems to be the system most in tune with human nature. All other systems have come and gone. It resonates with human nature, and that doesn't guarantee it to be a good system. After all, there are many human traits that leaves a bad taste in the mouth, like greed and avarice. But it's in our makeup, nonetheless. And all we can do is to accept it for what it is and manage it to our best interest. And making everybody stinking rich won't work - it'll be worse all round.

It's a dilemma. A conundrum. An enigma. But our current approach is pointless to the extreme.

[gribbon]

This all seems far too general. Each and every country has had its own individual problems, their own unique failings, and their own solutions. That’s why when people say that corruption is the main reason for Africa remaining poor, they aren’t talking neccessarily sense. Indeed, some countries in Africa, (such as Nigeria) really have been crippled by corruption, but others ( such as Niger and Eritrea )are hardly any more corrupt than countries that are now booming (such as Russia etc).

We really do need to discuss how to solve poverty in each and every country which we regard as poor.

Let’s start with the absolute and utter poorest we can find:

Chad

So then, shall we debate how to improve this country?

Here’s a few improvements to begin with:

Improve the pathetic infrastructure.
Eliminate corruption.
Improve education.
Slow population growth.
Improve agriculture
Use oil production to finance growth.

Shall we continue?

[Michaelangelica]

OK there is a glimmer of understanding occurring here.
But
Money has the value we all decide it to be. It has no intrinsic value by itself. We all agree that it is worth something and carry on this fantasy.
Gold used to be money because it was rare, precious, sparkely, desirable and your mistress loved it.
Now we use paper. Figure that out!
A countries currency's exchange value is either pegged. (ie China's Govt. decides how many US$ it is worth)
or
the market decides.(The currency "floats" and is traded by speculators, in order to make more money)
the things that influence the markets are many but chief among these would be "Can I get my money back if I lend it to the USA?...? .Afganistan? etc"
If there is a big element of risk I will ask for a higher interest rate. International money often flows though the capital markets looking for the best rate. If there is a lot of inflation in my country the interest rate will go up (in a"free" market)
This is economics.
It is all very silly and will never help the poorest of the poor.
That's why we need mico-lending- charging interest as in the real world but with no security and lowish rates. Some (5%) very poor people will become much poorer. But 95% will become rich enough to send their kids to school and hire someone else to help. this is waht happens with micro-lending. (Strangely, this is how women think, men would put the kid's to work and save $ hiring anyone).
We are then not enriching people they are doing it themselves.

keep on enriching the Third World (or try to, at least), and we reach the dream of bringing them to our standards of income and living,

I'll say it again we are NOT enriching anyone but ourselves. Underdeveloped countries give more than they take in aid.
We only "invest" ( ie often "steal") when they have something we want oil, gas, gold diamonds
All countries, will never, and can never be as rich and profligate as the USA. Quite simply, the planet cannot afford it.

On aid

In fact, nothing has done more to undermine the ability of Third World populations to feed and support themselves than the billions spent on megaproject development. Vast uneconomic mining schemes in the Amazon poisoned watersheds and devastated native economies. The logging and deforestation of the world's tropical rainforests ended sustainable forestry practices and led to erosion and downstream agricultural destruction.

PMag v11n3p08 -- Misspent billions: Third World aid?
USA could help by stopping pork-barrelling farm subsides and let third world countries trade with you.

In the last few years the third world has pressed for a better deal in international trade. So far developed countries have refused to make any agreements that would achieve a substantial redistribution of wealth in favour of the developing countries

We could spend less on ourselves?

Very broadly speaking, there are two schools of thought when it comes to foreign aid; the crusaders and the infidels.
The crusaders hold that the United States and other economically advanced nations -- the collective West -- spend much too little helping poor nations overcome their poverty. The infidels maintain exactly the opposite; i.e., that the West spends too much. Which school has it right? Paradoxically, they both do.

The Debate About Foreign Aid
Trade Not Aid

Exposing the myth of Third World aid


June 17, 2006
Page 1 of 2 | Single page

PERHAPS the most important question of our time is why the West's efforts to help the world's poorest people have been so disappointing and even counterproductive, writes Michael Duffy.
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PERHAPS the most important question of our time is why the West's efforts to help the world's poorest people have been so disappointing and even counterproductive. In the past 50 years, we have spent $US2.3 trillion on foreign aid, to disturbingly little effect. An important new book suggests this has had a lot to do with the arrogance of the "big push" approach favoured by many development economists and organisations such as the World Bank and the United Nations.

William Easterly is a professor of economics at New York University. He used to be a believer: for 16 years he was a research economist at the World Bank
. . .
Easterly says the $US2.3 trillion hasn't achieved what it should have. This is because much of it has been given as part of a never-ending series of internationally planned and co-ordinated "big plans". He believes the alternative would be to encourage more market-oriented activities among the poor themselves.
. . .
he's saying that much foreign aid is delivered using a Soviet approach that Westerners would never dream of applying to their own economies.
. . .
In fact, in the 50 years to 2001, the poorest 20 per cent of countries (excluding communist and Persian Gulf oil nations as special cases) on average increased their income by about the same amount as all other nations. Perhaps the most surprising finding in the book is that foreign aid appears to have had nothing to do with this.
. . .
Easterly goes further, arguing that aid can actually prop up undemocratic governments. He draws a comparison between aid and the so-called "oil curse", where countries in which natural resources contribute a large proportion of wealth are more likely to be corrupt
. . .
Easterly believes the time has come to abandon big plans and adopt a more humble range of approaches that involve much more feedback from aid recipients. We need to look at small things that work locally and see if they can be replicated elsewhere. One idea is for "development vouchers" as a way for the poor to tell us what they want most.
But Easterly has no big plan of his own: he just thinks it's time for the post-colonial West to stop believing it still knows what's best for the Rest.:

Exposing the myth of Third World aid - Opinion - smh.com.au