Mar 1, 2019
Welcome to Finance and Fury, the Furious Friday edition.
This is part 3 in the poverty miniseries, which is alongside the supply side economics flow on.
The first episode was supply and poverty.
The second episode was the big 5 factors of poverty.
Today we will put it all together to derive a system that can reduce overall poverty.
This system: will it be perfect?
- Just look at Utopia
- “misplaced faith in political utopias has led to ruin”
- All systems have flaws
- Having less freedom leads to more poverty
- Could technically lead to more poverty, if it’s by choice
The system has to be 2 parts:
- What system works best to reduce the big 5 factors: reduce diseases, increase knowledge, reduce apathy, reduce authoritarianism and build resilience rather than dependence.
- What provides individuals freedoms?
Disease:
- Death from chronic disorders in the first world
- Death by horrible diseases in the third world like respiratory infections, diarrheal diseases etc
- The necessities: clean water, electricity, food, and education
- Where do these factors come from? Why aren’t these a problem in Western countries?
The System:
- Corruption comes with any system
- Greater power can show more corruption
- But power is needed to provide a structure for secondary factors
- Money in politics can represent a form of corruption
- There is no sense of service working in institutions
- Any powerful system will punish you for speaking truth about their evils
- Lack of transparency within institutions, to remove this, politicians should forgo financial incentives
- The formal education of politicians and the real world experience of politicians are very slim
- Reducing the element of these factors helps to reduce poverty, by using a meritocracy
What does any system have the ability to create?
- The remaining 3 factors - dependency, apathy and authority
- The more power the government has, the worse off the population are
- The focus should be not to make the population reliant
- The battle between freedom and free stuff
- Welfare helps to a point, but after that point it keeps people in poverty
- The safety nets can either be voluntary or compulsory
- Most people don’t want to support people who want to remain in the safety nets
- These are not long term solutions
- The lack of knowledge is a responsibility of ours
- 12 years of school is not enough, Focus on practical and applicable skills. A libertarian view on education. Learn the basics
- The best and brightest from these suffering populations leave, leaving no one to help fix local issues
- Community systems that can help build self-reliance, dialectic systems help communities
Recap of the System:
- Allows for the provision of infrastructure, concentrated responsibility to provide this
- Corruption needs to be low to reduce poverty
- Lack of decision-making ability
- Provide jobs and the ability to get jobs
- Greater the economic freedom, the lower unemployment is and the lower tax is
- More freedom means less inflation and the greater price purchasing parity
- Countries at the bottom have high government expenditure to GDP %
The last 3 factors are solved by individual and Economic freedoms
- Small percentage of people think that poverty has gotten better, the majority think poverty has gotten worse
- Stop using a relative poverty measure, only 4% of Australians are in absolute poverty. It's not extreme poverty.
Which political party seems to be on the right track?
- Listen to the podcast to find out!
- Government spending is about $16,000 per person in this country
- Public earnings are about $1,775 pw whereas private earnings at about $1,590 pw.
- The 74 senators have interesting life experience before politics
To summarise the episode:
- More economic and individual freedom, the lower the poverty rates
Next week:
Back on track next week with the pitfalls of supply-side economics. There are 2 major faults.
If you liked the episode let us know by leaving a review, or get in touch with us at the contact page here.