HEADLINES OF THE DAY: ANOTHER 15,000 PEOPLE DIED YESTERDAY BECAUSE THEY WERE TOO POOR TO LIVE. THE RICH INCREASED THEIR WEALTH YESTERDAY BY $0.3 BILLION. THE 21st CENTURY VERSION OF THE FRENCH REVOLUTION IS ONE DAY NEARER.
“O Ye rich ones on earth! The poor in your midst are My trust; guard ye My trust, and be not intent only on your own ease.”
Bahá’u’lláh
A preview of the unpublished book A CIVILIZATION WITHOUT A VISION WILL PERISH: AN INDEPENDENT SEARCH FOR THE TRUTH by David Willis at willisdavid167@gmail.com. CHAPTER 1: INDIFFERENCE TO POVERTY (Part 81). This blog is a continuation of the review of ENDING GLOBAL POVERTY: A GUIDE TO WHAT WORKS by Stephen C. Smith, published in 2005.
DOES INEQUALITY MATTER?
Respectable and connected to society
Traditionally, the two notions of extreme poverty and inequality have been addressed separately. Humans are social beings, with a fundamental need to fit into the human communities around us. Adam Smith observed in 1776 that one needed a linen shirt and leather shoes to show your face in public in London. If a poor family has no other money for a radio, they may forgo food and medical attention to remain respectable and connected to society. The media and society at large are implicitly telling them that they are a failure if they do not own such goods.
The result is not only greater poverty, but also slower economic growth
Inequality has other effects on poverty. For example, the more unequal the wealth, the larger the fraction of the population that is unable to put up collateral for a loan. Among other things, this means fewer children can attend school and fewer businesses and microenterprises can expand. The result is not only greater poverty, but also slower economic growth, as well as transmission of poverty across generations. We do not need to greatly reduce inequality before we can achieve basic goals, such as minimum nutrition and literacy. The health, psychological, social, and political power dimensions of poverty must be taken into account when designing programs to meet basic needs. We need to pay attention to rising local inequality, when this results from gains for the rich at the expense of gains for the poor.
Chapter 2: The Keys to Capability: Eight Keys to Escaping Poverty Traps
The escape from poverty requires the keys to unlock poverty traps. In providing various kinds of freedom, the keys to capability are intrinsically valuable. They also open the door to increasing income and wealth, which can in turn provide the means for building further capabilities and assets and resiliency to the many risks and shocks that people in developing countries face. Only with sufficient capabilities and assets can a person’s escape from poverty be reasonably secure over the long run. Acquiring the keys to capability can enable most people to use their resourcefulness to escape from extreme poverty, even when they do not live in high-growth countries and their standard of living remains very modest. The keys to capability are closely interrelated. Unlocking one capability can sometimes help unlock others, but by the same token, the benefits of having one key are inherently limited if you lack the others.