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Wednesday, March 02, 2005

Problems with Measuring Poverty

The Economics Club had a few guests at the last meeting--a debate on the minimum wage--playing bongos, deploring the living conditions of America's poor, and calling for "progressive" distributions of wealth. The assertions of how destitute the lower classes truly are remained one of the most relevant but conflicted points of the day. But, what are the parameters of such conditions? How do we gauge poverty in New Orleans, where the standard of living is low, compared to that in New York, where it is markedly higher? Moreover, how do we make similar comparisons between poverty levels in the US and Tanzania? Let's look at some statistics. 46% of America's poor own their own home and 76% have air conditioning. Larger than 66% of America's poor have more than two rooms of living space per person. 97% of the people considered poor in the US own color television sets. Even 62% them have either cable or satellite television. Tanzanians, on the other hand, don't have energy or the property rights necessary for any of these amenities. Fire (!!!) is the chief energy resource in this truly impoverished country. Can you really picture the majority of America's "poor" lighting fires with sticks?
Furthermore, isn't malnourishment a prominent problem facing those in the lower classes? Apparently not in America, where the greatest problem confronting the bottom of the socioeconomic ladder is obesity. In Tanzania, however, food is scarce enough to make even Kate Moss look portly.
Maybe instead of focusing on giving poor Americans more handouts as is the practice in Tanzania (they receive TONS of foreign aid and all wealth earned is swiftly redistributed into welfare programs and Julius Nyerere's pockets), we ought to focus on enhancing the economic factors that make our poor so much better off in absolute terms of poverty. The only way to stimulate economic growth and socioeconomic mobility--something that hasn't occured in Tanzania--is by letting people get rich--something Tanzania hasn't allowed and America's expanding welfare policies diminish. We should strive to help our poor continue to make absolute gains instead of paying so much attention to relative levels of wealth. Cuba, Tanzania, the USSR, and Red China all embarked on legislation intended to equalize wealth across the population. Disaster and destitution followed. In contrast, the US has a history of private property rights and self-determination that preclude us from the hazards of socialism. If we want the problems confronting our poor to become more bearable, America ought to reject the coercive distributions of wealth advocated by bongo players throughout the world. Individual autonomy alone will help our lower classes climb the ladder of poverty and avoid a fate similar to that of Tanzania.

1 Comments:

  • You make some good points. The poor of US are not as bad off as the poor in many other countries (but not as well off as the poor in some Europeans that have a more generous welfare state than the US). It seems that many of us tend to measure ourselves against others, rather than on an absolute scale. For example, I might be overweight, but I might not feel overweight when I compare myself to my neighbors. If we measure our well-being using relative to others, then the policy prescription may be different. Undoubtedly, free market policies help a society become wealthier as quick as possible. However, I don’t know that they have much to say about the distribution of wealth within a society. Although it is true that developing countries have greater disparities between the rich and poor than developed countries (see my post about wealth distribution: See my post on wealth distribution), among the wealthy countries, the US has the largest disparity between rich and poor.

    The name-calling (“bongo players” for those who disagree with you) takes away from the strength of your points. People may misinterpret your smugness for arrogance and hostility and become more disinclined to listen to the line of your reasoning. It helps to try and see things from their point of view which can help you make points to sway those who don’t agree with you. Reserve the name calling when preaching to the converted, who will appreciate it more. Remember, you’re not trying to win points with those who agree with you, but trying to get people who don’t agree to think about why you feel your approach helps the poor more, which their approach perhaps makes the poor worse off.

    By Blogger John Topoleski, at 6:25 AM  

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