What is the cause of poverty? The other day I was visiting a Boston based organization that was struggling to raise the achievement levels of poor inner city minority kids and was asked that question. The issue of poverty, and in particular the version that is prevalent in all of our large cities, was all too familiar to me. In fact poverty has always been the immovable object seeming to block all our efforts to make such things as safe neighborhoods, good schools, and home ownership realities for the inhabitants of our inner cities. But I had never in all my contact with the beast answered the question of its origins. Now I will.
The cause of poverty, I told my questioner, is two-fold. The first cause is when the free exchange of goods (and ideas, because there’s also intellectual poverty) is interrupted and brought to a halt by such things as excessive rules and regulations, tariffs, walls and other physical barriers, and violence of all kinds, including intimidation, outright theft, and most of all war. Haven’t we always known that new wealth, which alone can reduce and finally eliminate poverty, stems from the free exchange of goods and ideas?
The second cause is greed. Yes, that’s right, pure and simple greed.
The Gross Domestic Product of the poorest 48 nations is less than the wealth of the world’s three richest people combined. For even when goods flow, as into Russia after the breakup of the Soviet Union, as now out of China in shipping containers bound for the West, as into the home of Cinderella in the baskets of her step sisters on market day, just a few enjoy the benefits of these movements of goods. Today in Russia, as in the Soviet Union earlier, the many continue to do without, Cinderella remains in rags still waiting for her Prince to come, and in China tens, perhaps hundreds of new billionaires share the country unequally with hundreds of millions of the still poor.
Just recently I read that Palestinian goods were beginning to flow into Israel: “KARNI CARGO CROSSING, Israel, June 5, -- Palettes of fresh produce, seafood, and office furniture rolled into Israel from the Gaza Strip last week, marking the first substantial flow of goods from the economically battered Palestinian territory since February.” This policy turn about was the work of Amir Peretz, the leader of Israel’s Labor Party as well as Israel’s Minister of Defense. Peretz believes that terrorism is best fought by relieving the stress on the Palestinian people. It is his conviction, as that of many of those on the political Left, that the exchange of goods between Palestine (Gaza) and Israel will alleviate to some degree, depending on the amount of exchange, the wrenching poverty of the Palestinian territories. But until the terrorists stop being terrorists the free flow of goods between the two zones will not happen and poverty will continue to dominate the lives of the Palestinians.
Examples of obstruction to the free exchange of goods are everywhere. For examples of greed we have only to live. Most of our wars on poverty would undo the effects of greed by some form of redistribution of wealth. For governments haven’t yet understood that the war on poverty ought to begin in the market place, and not proceed from the pocket books the wealthy. Both Christianity and Communism had as one of their goals the elimination of greed, or at least the reduction of the disparities between the rich and the poor. But they also made the pocket books of the wealthy their principal target, and did little or nothing to promote the free exchange of goods and ideas. Whereas Communism is a clear failure in making the world a better place, the jury on Christianity is still out.
The United States is today the wealthiest nation on Earth. Yet poverty is also clearly with us. In 2004 the official poverty rate was 12.7%, or 37 million people. To reduce the number of people in the ranks of the poor the Democrats would increase the tax burden on the wealthy. The Republicans would deregulate the market place and thereby increase the size of the nation’s wealth. Both efforts seem necessary because even the relatively untrammeled exchange of goods and ideas in this country has not yet much slowed the growing disparities between the rich and the poor.
