Poverty

TAFKAS is currently reading Progress by Jonah Norberg.  This is the opening to chapter 4:

[P]overty has no causes. Only prosperity has causes.  (quote from Jane Jacobs)

Why are some people poor?  That is the wrong question.

We do not need an explanation for poverty, because that is the starting point for everybody. Poverty is what you have until you create wealth.

TAFKAS repeats – Poverty is what you have until you create wealth.  

It does not say Poverty is what you have until you transfer wealth.  It does not say Poverty is what you have until you confiscate wealth.  It does not say Poverty is what you have until you redistribute wealth.  It does not say Poverty is what you have until you tax wealth.

If only our social justice warrior political totalitarian elite recognized this.  Here is some evidence, as if evidence mattered to these people.  Feelings, vibes and zeitgeists seem more important.

Correlation is not causation but the period of rapid decline in ultra-extreme poverty (less than $1.90) per day seems to correlate with a period of lowered taxes and reduced regulation.

Good thing the neo-socialists of the west know better are now proposing increased taxes (income and wealth – yes you too ALP AND LNP) and increased regulation.

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28 Responses to Poverty

  1. stackja

    Socialism needs lots of OPM.

  2. Gavin R Putland

    It does not say Poverty is what you have until you transfer wealth. It does not say Poverty is what you have until you confiscate wealth. It does not say Poverty is what you have until you redistribute wealth. It does not say Poverty is what you have until you tax wealth.

    And similarly, it does not say Poverty is what you have until you speculate on how much wealth will be exchangeable for existing assets.

  3. it does not say Poverty is what you have until you speculate on how much wealth will be exchangeable for existing assets.

    Pardon. What does this mean?

  4. Shy Ted

    In Oz, poverty is what you have if you just keep going to work and paying your taxes long enough.

  5. Angus Black

    The correlation (and, I contend, the causation) is with the industrial revolution which changed “human leverage” by orders of magnitude and thus changed the world for the overwhelming good of all.

  6. Angus Black

    …having said that, nothing offers so much advantage that the Green/Left can’t find a way to more than undo the effect.

  7. Gavin R Putland

    I mean: You don’t cure poverty by creating legal titles to assets that are not created by human effort, allowing such assets to be bought and sold speculatively, and taxing the fruits of such speculation at lower rates than the fruits of production.

    Or, with apologies to Thatcher: The problem with speculating on existing assets is that eventually you run out of other people’s money.

    Or, with apologies to Churchill: I contend that a nation trying to speculate its way into prosperity is like two men standing in buckets and trying to lift each other up by the handles.

    Or, with apologies to various cartoonists: A nation trying to speculate its way into prosperity is like two snakes trying to swallow each other by the tails.

    It is true that you can’t cure poverty by taxing wealth creation. It is equally true, much far less frequently stated, that you can cure poverty by taxing the obstacles to wealth creation.

  8. Gavin R Putland

    Correction: “much far less” –> “but far less”.

  9. Bruce of Newcastle

    Socialist Venezuela pays welfare and pensions to the people who qualify for it.
    They are transferring money to those people which has been taken from others.
    The problem is the socialist government has so destroyed wealth production that those pensions and unemployment benefits are worth a few cents per week, because the pot of money is empty.

    That is what wealth does: it gives money that can be transferred to those in need.
    And that is what socialism does: so destroy a nation that it can no longer help those people.

  10. stevem

    ACOSS define poverty as “people living below the poverty line of 50% of median household income.” This definition means that if every person in Australia suddenly earned 10 times their current income not one person would be lifted out of poverty!

  11. Tim Neilson

    stevem
    #2921505, posted on January 30, 2019 at 4:19 pm

    Correct.

    The definition of poverty has nothing to do with people’s living standards.

    It’s about making sure that enough people are defined as living in “poverty” to make “poverty” look like a big problem, to facilitate advocacy of “progressive” “solutions”.

  12. Gavin R Putland

    If every person in Australia suddenly earned 10 times their current income, rents and prices would rise proportionally, and not one person would find it any easier to make ends meet — except, of course, for those socialist policies that limit the frequency and size of rent increases (albeit not so severely as to prevent rents from keeping up with the market in the long term; and that’s a good thing).

  13. Tel

    Gavin R Putland, can you name one advance in science or technology that did NOT first start out as someone speculating over a risky idea? To put that a different way, name an invention that was fully known and understood BEFORE it was invented.

  14. Gavin R Putland

    Tel @ #2921528: Advances in science and technology are creative and productive. They are not analogous to buying a taxi plate and waiting for the price to go up. The latter, however, is quite analogous to buying a piece of land and waiting for the price to go up. What? — the land speculator might also build something on the land? Yes, and the taxi-plate speculator might also drive a taxi. The mere fact that the same person engages in two different activities does not make those activities economically or morally equivalent.

  15. Tim Neilson

    If every person in Australia suddenly earned 10 times their current income, rents and prices would rise proportionally,

    Not necessarily. What about imports?

    In any case it depends on why incomes rose. If it was just changing the denominations on currency you’d probably be right, but if it was because as a nation we experienced a bout of sanity and consequently increased our productivity you wouldn’t be.

  16. Iampeter

    Spartacus, as someone who in previous threads said, “the family unit is a socialist one,” I can only assume you view socialism as voluntary, loving, caring and compassionate. Also, as a cornerstone of human civilization.
    You’ve also said, in response to me describing a world of rights protecting government and capitalism, that it has, “never existed, will never exist and one suspects that even if it did exist, no one would want to live in it.
    Given these very clear statements from you before, it’s puzzling to read these recent posts from you criticizing wealth redistribution and socialism.

    How can you be so critical of family units? Think of the childrens!

    Also, what on earth is “neo-socialism?”

    God, I love the cat.

  17. NuThink

    If every person in Australia suddenly earned 10 times their current income, rents and prices would rise proportionally,

    Would that not push everyone into a higher tax bracket, therefore the only beneficiary would be the government who would have a larger portion of the country’s wealth to pay for their silly schemes to save the world. I am neither a tax lawyer nor an economist so please correct me if I am wrong.

  18. Gavin R Putland

    Tim Neilson @ #2921578: Yes, “it depends on why…”

    Similarly, if our productivity increased because of some independent cause, the advantage would be competed away in higher rents. But if our productivity increased because of supply-side policies that pushed down rents, so that investment in productive capacity were not so severely crowded out by the cost of occupying space, that would be a different story.

  19. Gavin R Putland

    NuThink @ #2921612: Yep, you gotcha me there, if there were no tax-bracket indexation.

  20. Tel

    Gavin R Putland #2921543,
    All of the activities you describe involve taking risks and making predictions of the future… that by definition is speculation. There’s not a whole lot of things you can do in life without speculating somewhere on something. Even the person who sits home and does nothing is speculating on lost opportunities (choosing NOT to speculate is itself a speculative choice).

    Now I see you have convinced yourself that there’s some activities you like and some that you dislike. By all means don’t partake in the activities that you don’t enjoy, no one is forcing you. However we are all very fortunate that you are not the one who gets to make this decision for everyone else. Unless you can demonstrate some kind of violence being done what’s so bad about leaving people alone to get on with their lives in peace? Why do you feel such a need to force other people to do it your way?

    I can understand that the taxi plate holders got upset when their value was lost, but they knew they were taking a risk from the start. No one guaranteed them a profit. In that particular case they started riots and the weak knee government knuckled under very quickly … that’s an example of one group of people getting their way by being pushy, but in the long run it will do them no good. The taxi plate concept was a political creation and now the politics has swung the other way these things are swept aside. That’s a known speculative risk that you take when indulging in politics.

  21. mem

    God, I love the cat.

    Agree it keeps my brain alive and working.
    I’ve been trying my best to think through this quote: “Poverty is what you have until you create wealth.” I can neither grab the tail nor the head of it. Having managed financial counselling services for people who were totally stretched and had no food in the fridge or cupboard yet lived in big new homes in development areas that had no public transport { so needed two cars if both spouses needed to work to pay mortgage}
    then one spouse loses job and they fall into debt, I can’t help but believe that education, intellect, background and considered risk taking make a big difference between wealth creators and wealth takers. On the other hand you need an environment that will back risk where it adds value to the economy.

  22. RobK

    Mem,
    Risk implies some rate of failure. Some degree of misadventure is afforded all of us (to a greater or lesser extent). I doubt anyone would argue against some safety-net to allow punters to have another crack at finding their niché, or manage expectations etc.. Being allowed to fail early and often, if you learn from it, is not a bad thing. It is actually a freedom that allows success to develop and be cherished.

  23. Gavin R Putland

    Tel @ #2921636: Yes, very conveniently for those who want to defend pure speculation, any productive things that you can do will involve speculating somehow on something. But, very inconveniently for those whose lives or livelihoods depend on production, there are also speculative things that you can do without producing anything. The tax systems of most countries punish incidentally speculative production more severely than deliberately non-productive speculation, and there’s no surer way to get yourself branded a ratbag than to suggest that it should be the other way around.

  24. Shy Ted

    To put that a different way, name an invention that was fully known and understood BEFORE it was invented. Sex robots.

  25. Muddy

    From the point of view of an economic dunce, let’s say that via redistribution, selective executions etc., all those previously defined as ‘living in poverty’, are now not so. Every single individual now has exactly the same amount of resources (including ‘money’). Then what? Will not a percentage of previnpovs (previously in poverty) not mismanage or fritter away their freesh!t in the knowledge that ‘easy come, easy go?’ Who do you then steal from/blackmail/execute to again provide the now back-to-poverty vermin with another round of freesh!t? For how long does this go on?

    My point is, does not the theory of ‘equality’ (in terms of poverty) depend on the naive belief that every beneficiary has both the willingness and ability to responsibly manage their windfall? So the utopian outcome will be transient at best.

  26. Tim Neilson

    For how long does this go on?

    For as long as the previnpovs keep voting for the pollies who’ll do it, of course!

  27. Lilliana

    Muddy #2921676

    I think the same thing. The left’s obsession with equality of outcome is insanity. Keep taking from those who do and give to those who don’t. There is no poverty in Australia. Even the poorest are relatively comfortable yet we have to give more and more. Why should I pay for other peoples poor choices?

  28. Gilas

    Why should I pay for other peoples poor choices?

    Because you live in a country populated by an ignorant, financially-illiterate, stupid (as in IQ), culturally-deprived demos which has voted for charlatans and chancers since the early 1970s.
    Democracy in such circumstances IS the worst form of government, and we don’t have a Trump, not even beyond the horizon.

    Take it like a (wo)man and swallow.
    I have to.
    (until I emigrate)

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