How can a System reduce Poverty?

 

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.

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