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Financial Freedom Is Merely Organized Common Sense
Avoiding Poverty
Unanimous agreement on anything is near impossible. We are complicated beings with different priorities and assessments of reality. Mike Huckabee once said that he believed it would be impossible to get a state legislature to pass a resolution unanimously even if it was stating the value of motherhood.
Despite that warning, could we generally agree that poverty is something to be avoided?
If we can agree that it is undesirable then perhaps we should seek ways to reduce it or eliminate it entirely. We can likely agree on that too.
Agreement ceases over the method to reduce or eliminate it.
The current choice seems to be government action of one kind or another. Is that realistic? Maybe but there is no certainty. Bear in mind that you must never hand a problem to people with the stricture that they will be punished if they solve it. Cure poverty, be fired, be the new poor, is a career path that few would follow. Perhaps a better way would be to examine the fundamentals of acquiring money. Presumably failure here results in poverty.
Walter Williams is a respected American economist who has addressed the problems of poverty for a long time. He estimates that poverty arises from three sources as shown in this comment re poverty in Egypt:
“Poverty in Egypt, or anywhere else, is not very difficult to explain. There are three basic causes: People are poor because they cannot produce anything highly valued by others. They can produce things highly valued by others but are hampered or prevented from doing so. Or, they volunteer to be poor.”
If people supply goods or services that others value, it is difficult to see how they will be poor.
But, as Professor Williams points out sometimes they are prevented from doing so or the cost is too high. The skill is not especially valuable until you connect it to a marketplace. Finding and nurturing customers is an important skill. At the same time regulation and other impediments to commerce may flatten your aspirations. There are entire branches of government that could be aptly renamed, “The sales prevention department”
Volunteer to be poor seems an unlikely choice but sometimes actions unintentionally create that condition. Here’s Williams’ road map out of poverty:
Complete high school; get a job, any kind of a job; get married before having children; and be a law-abiding citizen. Among both black and white Americans so described, the poverty rate is in the single digits
You can volunteer to be poor by making poor choices.
Perhaps if people decided to be personally responsible for their life’s outcome, there would be less poverty and very likely, less government interference in everyday transactions.
This is not rocket science, but discipline and personal responsibility seem out of fashion today. The outcomes are inevitable.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
Contact: don@moneyfyi.com 705-748-5181
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Let’s define poverty before we pontificate on how to avoid it. In Western countries poverty is a political term, diagnosed on a sliding scale–a certain lower percentile of average income. This is relative poverty, and responds well to the cures prescribed. Outside our hemisphere the rest of humanity is wracked by involuntary, generation-bridging absolute poverty, which features people routinely dying in the streets from malnutrition and disease. IMHO we should focus on relieving absolute poverty, for which the prophylactics outlined in your thoughtful essay have limited or no efficacy. In global terms, Prof. WIlliams’ version of poverty is more akin to financial inconvenience spawned by ignorance and social irresponsibility.