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What 5 factors create poverty?

Feb 22, 2019

Welcome to Finance and Fury, the Furious Friday edition

This episode is a flow on from the previous furious Friday episode question from Nick, about poverty.

Last episode we talked about how poverty is defined and the economic factors of poverty, which play only a part.

Today we will cover off on the major contributors of poverty. There will be a third part for answering the question about the types of government systems.

Poverty is a social problem:

  • Poverty as a lack of resources, so poverty at an individual rate
  • We didn’t address the social problem of poverty, communities, under-employment, lack of skills etc.
  • Social problems are secondary factors

Dr. Phil Bartle:

  • Spent time living with poor communities
  • Dedicated his life to the development
  • Much of our aid contributed to poverty
  • Empowerment methodology – struggle produces strength and ability
  • The solution is the removal of the big 5 factors
  • No moral judgment is intended

The Big 5 factors:

  1. Lack of knowledge – people keep knowledge to themselves and a lack of skills is the result. Expose individuals to training, not general education. Ivan Illich believes schooling keeps people poor in impoverished nations.
  2. Disease – absenteeism is high and productivity is low. Being healthy contributes to the eradication of poverty. Prevention is much better than treating a disease.
  3. Apathy – people feel powerless to try and change their conditions. Why try if the game is against you? Jealousy brings people back to poverty. Thomas Sowell shows cultures of a community. Some cultures help a community, some degrade a community.
  4. Corruption and Authoritarianism – a major cause of poverty. It is stealing from the public at a multiplier of detrimental effect. Using taxation as a way to fund the political class. Dictatorships have war, famine, and poverty.
  5. Dependency – this results from receiving charity. It is a short run solution but becomes depended on. Once they know what to do and how to do it, they can get themselves out of poverty. Empowerment is the alternative to charity.

Summary:

  • These 5 big factors all coexist together and contribute to furthering each other.
  • If we fight the factors of poverty, it will contribute to the decay of those factors and ultimately poverty
  • Tackling all 5 Is very important to reduce poverty, with empowering communities.
  • I don’t want to diminish those struggling, some people have been dealt with awful hands
  • Don’t believe in the easy band-aid solutions

In the next episode:

  • We will go through what system works best to reduce the 5 factors
  • To build resilience rather than dependence

Thanks for listening

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Resources:

The money multiplier effect can be learnt about in this podcast about the centralization of power and control of the economy - https://financeandfury.com.au/furious-friday-the-centralisation-of-power-and-control-of-the-economy/

Black rednecks and white liberals book - https://en.wikipedia.org/wiki/Black_Rednecks_and_White_Liberals