Tuesday, March 4, 2008

The "Relative" Poverty Gimmick

How is it that despite the steadily expanding array of products and services in most areas of our advanced industrial society at ever lower prices (relative to earnings) does “poverty” seem such an intractable and even growing problem? Its been over 40 years and many trillions of dollars spent since President Lyndon Johnson launched his “War On Poverty”, and yet the calls for a greater and greater transfer of wealth and income (I call it institutionalized armed robbery) from the producers great and modest to the “poor” continue unabated. In the 2008 presidential campaign, a major presidential candidate, Democrat John Edwards (no longer a candidate), based his entire campaign on a “Two Americas” strategy. This is the theory that there is a large “underclass” of the “poor” (37 million, he says) locked into economic destitution. He vows “the elimination of poverty in America in 30 years”, through massive government intervention, of course. We’ve heard it all before.

Leaving aside the small number of people who are physically and/or mentally incapable of fending for themselves, shouldn’t we be at the point where the poverty problem is no longer a major national concern? You would think so. But the welfare statists have a gimmick for keeping the game going. That gimmick is called relative poverty. Relative poverty is based on the doctrine of egalitarianism, which in economic terms means every individual has a right to the same material benefits regardless of productive efforts.

So what constitutes poverty today? In a report on the state of poverty in America, the Heritage Foundation says the following:

“ For most Americans, the word ‘poverty’ suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 37 million persons classified as ‘poor’ by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's ‘poor’ live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of house­holds equal those of the median American household in the early 1970s, after adjusting for inflation.

The following are facts about persons defined as ‘poor’ by the Census Bureau, taken from various government reports:

 Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

 Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

 Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.

 The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

 Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

 Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

 Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

 Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.”

In other words, today’s poor live a life of unimaginable luxury compared to the industrial tycoons of the 19th century or the royalty class of the 18th, who didn’t have electrification, indoor plumbing, automobiles, etc. Judged in absolute (i.e., objective) terms, poverty is virtually non-existent in America today. But according to the egalitarian doctrine of “relative poverty”, the “poor” will always be with us because, no matter how wealthy, there will always be a class of people who have less material wealth than others and will thus fall below some arbitrarily devised “poverty level” of income.

What does real poverty look like? Andrew Bernstein writes:

“ It is difficult for men in the industrial West today to conceive of the kind of poverty that was widespread in pre-capitalist Europe. By a test employed in Lyons, France, in the 17th century, poverty was reached when daily income was less than the daily cost of minimum bread requirement- in other words, when a person could not make enough money to buy a crust of bread. A quarter to half the population of 17th century England subsisted near or below this line of destitution.

If the U.S. Bureau of Labor Statistics were to today employ a similar standard of poverty, Americans below the poverty line would be those making $18 a month, or $216 a year.”
(The Capitalist Manifesto, page 58-59)

Poverty, then, is not a problem that is intended to be “solved”. What the “poor” represent today is not actual poverty, in the historical context, but a means to electoral advancement for phony, power-seeking politicians like John Edwards. They are merely window dressing for the advancement of statism. This is why the definition of poverty keeps changing. Some day, poverty will mean having the smallest yacht. Just as President Johnson’s “War on Poverty” didn’t “work”, So John Edwards’s “Two Americas” anti-poverty scheme won’t “work”. It is not intended to “work”.

So remember where your tax dollars are going. Most likely, they are not going to a starving child. Even if they were, it would be immoral. Tax-funded “charity”, like tax–funded religion, is a violation of individual rights.

No, your tax dollars are very likely going to someone with a car, air conditioning, a color TV, and quite possibly a house. In other words, to someone just like you, except that you worked for his car, air conditioning, color TV, and quite possibly his house.

Statists use many gimmicks to advance their agenda. Relative poverty is one of them.

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Christine said...

Wow, amazing statistics! Great post.

Kathy said...

Excellent article. It sure brought things into perspective. I would like to keep my money and donate to causes which I feel are worthy of my values and beliefs.