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What can governments do to end poverty in their countries? Is a solution possible under capitalism?

Hello, I come from Argentina, and in my country, poverty is an issue we still can't eradicate, even though extreme poverty has been around for many decades now.

What still baffles me is the fact that although the Government gives away money to those with reduced incomes, poverty is as bad as always. Poor people can now (at least) fulfill their basic needs, but they have now become dependant on the Govt to give them the necessary resources for life (and politicians do not care about this, since this way they can keep on "buying" their votes with cash). They don't have jobs (and some do not even bother to find one) and most still live in slums under really poor conditions. So, it's obvious this solution is only benefitial in the short run... eventually the Government is going to run out of money and we'll still have the same number of people in the streets.

Moreover, I read yesterday how India is going to start doing the same thing, but I guess that probably won't go anywhere either.

Now, what do you think is the solution to stop this vicious circle of poverty? What is your Government doing about it?

Bear in mind that Latin America has just extreme poverty levels (not as much as Africa), but still much more than the First World countries. At least in my country there is a surprisingly high number of slums (check some photos in wikipedia: http://es.wikipedia.org/wiki/Villa_miseria )

In my opinion, emphasis should be made on giving labour to these people outside-the-system. But for that, we need to offer public AND quality education. Yet I'm conscious that a malnourished child is not going to be able to be properly educated, is he?. So what can we do to ensure that child will have a better future? It's difficult to come up with a solution, but we're in the 21st Century now, it's about time we stopped poverty.

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    Jan 7 2013: Re: "What still baffles me is the fact that although the Government gives away money to those with reduced incomes, poverty is as bad as always."

    Great point. It often seems to me that it is an illusion to think that government can "fix" economy. Poverty is of the spirit. First and foremost, it's inside our heads. Take indigenous people in the Amazon forests. Do they live in poverty? WE would think so. But do THEY think so? Compare the definitions of "rich" and "poor" in U.S. and in an Amazon Indian tribe.

    Perhaps, a better question is "how to end human suffering?"
    • Jan 9 2013: Interesting point. But the thing is, these indigenous people are not part of society, they don't belong to Capitalism. They can satisfy their basic needs, can't they? Maybe they don't have proper health care, but they have enough to survive.

      While the Poor of our societies do not even have the chance to satisfy their basic needs. And that's sad. They don't need BMWs, Porsches, or a house in Beverly Hills... they need to be able to live in good condition, that's all.
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        Jan 9 2013: The definition of "basic needs" varies from society to society. It also changes over time in the same society, even in the same family. Who considered a cell phone or Internet service to be a "basic need" 20 years ago?

        Doesn't it baffle you that indigenous people in Amazon jungle, as you say, can satisfy their basic needs and have enough to survive, and people in modern societies don't?
        • Jan 9 2013: But I'm not considering cell phone or Internet service to be a basic need. I feel like that's a "secondary need" (It's important to be computer literate these days to get a job), but some organisations are regarding it as a basic need, as you say.

          It does baffle me that some people in our societies don't have enough to survive. I'm obviously not talking about the WHOLE of society (quality of life has improved, on average) but a small sector of society that still can't live on good condition. And economic growth has a limit. It would be wrong to say, since the economy is expanding and GDP per Capita is going up in the long run, that eventually we're going to be better off! That might be possible, but in expense of other being worse! And I'm not just talking about a First World country... do you really think that some African or Latin American countries can just eradicate poverty when their economies are just based on exporting natural resources?
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        Jan 9 2013: Again, I see economic growth as a spiritual issue. There is such thing as "spirit of the nation" - the idea that unites the people. E.g., freedom, democracy, and individual rights is such an idea in the U.S. It makes people enthusiastic and proud of their country. I grew up in Soviet Ukraine. Soviet propaganda created enthusiasm around the idea of communism. Media maintained a positive image of the country. Negative domestic news were downplayed or suppressed. Achievements were announced on every corner. This artificially inflated enthusiasm and stimulated the economy. Soviet Union "broke Hitler's back bone", developed nuclear technology, launched Sputnik, and the first man into orbit. People had access to free college education, free medical care, etc.

        Ukraine has resources for a first-class European economy. It's as big as France and almost twice larger than Germany. Best soils in Europe. Huge resources of coal, iron, oil. Access to Black sea - huge asset for trade, navy, and tourism. Strategic location for gas and oil pipe lines from Russia to Europe. Soviet Ukraine produced steel, automobiles, buses, tractors, trucks, tanks, airplanes, TV sets, etc.

        Since the collapse of the Soviet Union, people took pride of "independence". But the spiritual slavery remained. Politically, Ukraine never acted as an independent country. All post-soviet history, the government fractions were fighting over whether Ukraine should suck up to Russia or to the West. I do not understand why. Why being a truly independent European country was never an option? There is no national pride as far as I know from talking to my friends and relatives. Corrupt politicians are selling immense natural resources for personal profit. It's the same inferiority complex that prevents individuals from success. It works the same way at the national level. It's a spiritual issue, in my opinion.
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        Jan 9 2013: Now, consider the U.S. economy. Financial crisis seems to be over. Interest rates are historically low. People are there. Resources are there. Corporations have slimmed down and accumulated a lot of cash. Why is there unemployment? Because companies don't hire people. They fear economic instability, fiscal cliff, changes in tax policies, European crisis. Negative news are all over the media. But why economic news are negative? Because people don't have money to spend. Corporations do not pay, some companies have not raised salaries for years and laid off a lot of people. Isn't that a "catch 22" problem.

        It may be possible to jump-start the economy "Soviet style" - by suppressing negative news in the media and creating a perception of bright economic prospects. Government censorship or publishing deliberate lies don't seem to be a good idea, but, perhaps, the media could simply shift focus from problems and disasters to progress, achievements, and opportunities. Changing the public mindset is all that it would take. Economic demand is still there - people still need places to live, food to eat, and cars to get from place to place. There is no need to mint trillion-dollar coins or waste public money on subsidies. Just let go of "needless worry and undue anxiety" (that's what they routinely pray for in Catholic churches). Again, it's a spiritual issue.
        • Jan 10 2013: What you're saying reminded me of sth I read in an Economics textbook:

          "In December 1975 the Government of Portugal — a provisional government in the process of establishing a democracy—feared that it was facing an economic crisis. Business owners, alarmed by the rise of leftist political parties. issued dire warnings about plunging production. Newspapers speculated that the economy had shrunk 10-15% since the 1974 revolution that had overthrown the country's longstanding dictatorship. In the face of these reports of economic collapse, some Portuguese were pronouncing democracy itself a failure. Others declared that capitalism was the culprit, demanding that the government seize control of the nation's factories and force them to produce more. But how bad was the situation, really? To answer this question, Portugal's top monetary official invited his old friend Richard Eckaus, an economist at the Massachusetts lnstitute of Technology, and two other MIT economists to look at the country's national accounts, the set of data collected on the country's economic activity. The visiting experts had to engage in a lot of educated guesswork: Portugal’s economic data collection had always been somewhat incomplete, and it had been further disrupted by political upheavals. For example, the country's statisticians normally tracked construction with data on the sales of structural steel and concrete. But in the somewhat chaotic situation of 1975, these indicators were moving in opposite directions because many builders were ignoring the construction regulations and using very little steel. Still, they went to work with the available data, & within a week they were able to make a rough estimate: aggregate output had declined only 3% from 1974 to 1975. The economy had indeed suffered a serious setback, but its decline was much less drastic than the calamity being portrayed in the newspapers. (While later revisions pushed the decline up to 4.5%, that was still much less than feared
        • Jan 10 2013: That is from a Macroeconomics textbook by Paul Krugman. So yes, you do have a point that media and public perception of the economy affects the overall result of the economy. But even if this information was not expressed the same way, I guess the economy would still be slave to these "I'm going to stop consuming/investing because worse times are coming", since its in the human nature to "save for the rainy day" even if the cause underlying this was not clear.
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        Jan 10 2013: Re: "its in the human nature to "save for the rainy day" even if the cause underlying this was not clear."

        If that were the case, the governments wouldn't be dealing with trillion-dollar debts and the social security programs would be unnecessary.

        Re: "I'm going to stop consuming/investing because worse times are coming."

        Sounds like a self-fulfilling prophecy. What does seem to be in the nature of social species is to pick up each others emotions spreading them exponentially. Perhaps, it serves for survival when one frightened animal causes the whole herd to flee. It's easy to explain how this behavior evolved: it's better to flee when there is no predator around than not to flee when there is one. It also seems to be the basis of empathy.

        But on the other hand, this behavior often does a disservice causing panic, for example, or economic downturns as we are discussing.

        If you read Matthew 6, it seems to offer a solid advice for economic prosperity and a recipe for happiness at the same time: 1) give to the needy - from your heart, not to appear righteous, not for tax returns or public approval; 2) never ask for more than "daily bread" (basic necessities for today); 3) forgive debts; 4) resist temptation (for this we need a solid understanding of what constitutes "our daily bread" as we discussed above); 5) limit consumption (fasting) - not to appear righteous, but for your own sake - to develop will power to resist temptation and make it easier to help those truly in need; 5) invest in people, not things; 6) do not worry for tomorrow - let go of fears. That's my secular interpretation. Don't you agree?

        I hope, I don't sound too moralistic...
        • Jan 11 2013: Let's see. I didn't say that "saving for the rainy day" meant that we'd survive these "rainy days". Sometimes it cannot be predicted. Other times it is not enough to avoid "catastrophe".
          Social security programs actually serve for this purpose. You are ensuring that in the future you'll have enough to get by, by putting money in today.

          Interesting case about Governments. In my opinion, these actually work the other way around, since they serve short-term purposes for the politicians (not losing political votes and to come through their term of office), so getting in debt even when things are going relatively well is not a bad thing to do.

          I think you are right maybe it's not that people are just "prudent" but that they rather behave "irrationally", as you said, just like a herd would do when one of them reacts at something.

          I didn't know about what Matthew 6 said (I've never read the Bible to be honest). While it does seem like a good "moral path" to follow, I guess it's impossible for everyone to follow it. Heck, I don't think ANYONE follows number 2 and number 4... not in our capitalist society.

          That's just my humble opinion on this matter. Feel free to give me your own opinions :)

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