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R H
  • R H
  • Chicago, IL
  • United States

TEDCRED 30+

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Why do we NOT invest effectively in the poor and marginalized so they can participate in the global economy?

Nearly half of the world's population cannot effectively participate or contribute to the global economy. Basic economic theory holds that each 'participant' in the economy is a 'unit of productivity' providing a return on investment. In other words, it's more profitable to have people working and consuming than not. Yet nations continue to allow and accept that the poor and marginalized are - to borrow from another popular phrase - 'too big to succeed'.

In my view, the (relatively) small investment in infrastructure, education, and basic healthcare in the poor and marginalized will be more than made up by their increased productivity and spending. The rich think they're rich now, just imagine the wealth created by having 3 billion more people buying their stuff? I know there are obvious problems with this: corruption, unified effort, immediate ROI, etc. - but why is this such a 'tough sell' to national leadership? They're always looking for ways to increase the tax base.

3+ billion people now contribute to the world gross productivity. What if that were doubled? To me, this is the next threshold of economic growth -bringing in those who have been left out. Yet, we don't even talk about it. What do you think?

Topics: economics society
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    Oct 31 2012: ... continuation from the previous post ...

    So which wealthy country do you think is ready to concede to such an altruistic gesture? I think none. It would probably be the most unpopular political measurement a party could ever take: "If you elect us, we promise to give your money and jobs to the guys in the other country. We know you'll be poor, but you be noble :)". Sorry but I could not resist.... It is impossible, unfortunately, under current economic models.

    The other solution would be to consider updating our economic models, which in my opinion is the right course of action, but not at all easier. If we considered human beings and the skills and knowledge they poses as economic values and could somehow model this into our current economy, for example: print money when a person is born and give it to the person (not physically but use it for it's education and upbringing), print money when a person graduates university and again, somehow make that person beneficiary of that sum, what you suggest could be possible. The hundreds of millions of people that live int those poor countries would suddenly worth a lot of money (they would be value in by themselves) which I personally think they actually are, of course in the beginning due to lack of education they could not be assigned a lot of value (sorry for being prejudicious but the reality is that our economy requires a lot of skills to be competitive) but still it would be a start and a path for progress which could gradually accumulate. Of course such a measurement has many implications and is not as easy as I put it but it would be a way out of the current status quo.
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      R H 30+

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      Oct 31 2012: Wow. Thanks for your insights, and I agree wholeheartedly with an economic evolution that would be similar in effort as we are providing for our technological evolution. I would like to ask a couple of questions just so I'm clear: If it's a 'zero sum game', why do we keep printing more money, and adding cash to the money supply so there's more of it? and, What do you mean by 'altruistic gesture' to invest in the poor and marginalized for a high return? Thanks again.
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        Oct 31 2012: By 'altruistic gesture' I meant to invest in the poor and marginalized not for high return but at the expense of their wealth.

        For the other question, it is important to understand that our economy was not modeled after a zero-sum game. It has developed on its own a lot earlier than the models were discovered but it happens that it closely resembles a zero-sum game and so this is a good model for the economy. To make an analogy, water does not freeze because we invented temperature, WE developed this measurement system to describe ITS behavior.

        That being said, We print money for various, usually wrong reasons:
        - sometimes to compensate for deficit, this usually creates inflation, because new money enters the market, money that does not have coverage (coverage according to current value systems, ex gold in the national treasury)
        - wealthy powerful countries sometimes print money to pay the debt to other countries after they took a loan. Personally I think this is totally immoral and devastating to the economy globally.

        There are other reasons too, but it really comes down to the fact that money is printed when it cannot be acquired the legitimate way (save for the initial printing stage and the refreshing of bills on the market) and this almost always negatively impacts the economic environment, exactly because the system is not designed to handle such a process.

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