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James Peron

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The Artificial Imposition of Poverty

Posted: 11/16/11 09:40 AM ET

Most of the world's poverty is not self-inflicted, yet apparently many seem to think it is.

My experience, living in Africa, tells me otherwise. Much of global poverty is imposed and I don't mean by evil "multi-national corporations" or "globalization." Those myths are easily debunked. The real causes of poverty in these nations are not hard to find.

First, however, I'd like to start with what is not the cause of poverty. People in poor nations are not poor because they lack ambition or are lazy.

When I first moved to Africa, I lived in small apartment. Almost immediately upon moving in there was a knock on the door. A woman asked if she could have a job cleaning for me. The idea was foreign to me. I even had negative emotions about people "exploiting" the poor and hiring them at low wages. I declined, but she begged. She insisted she was a hard worker. My dilemma was that I didn't have a lot of money. I told her that. She named a wage that seemed ridiculously low.

I could not pay her what I thought to be a decent wage. Yet, by refusing her services I was sending her away with nothing. Clearly, she did not agree with my evaluation of the situation. I relented and hired her.

When I moved to a house, the same thing happened. A woman with a child appeared at my door looking for work. She had no home and was staying in a small "maid's quarters" with another women she knew. The child was a grandchild that she cared for. I agreed to hire her without a second thought and then she asked if I had a place for her to live. There was a small building behind the house, with storage on the ground level and two rooms above it. I thought it insufficient but it was all I had to offer. She thought it fantastic and started clapping her hands with joy when she looked at it. It was a huge improvement for her.

I regularly had people asking for work, while few asked for hand-outs. These people were willing to work. In the streets of the city, I would pass hundreds of hawkers, with blankets on the ground, or just cardboard. They would have paper plates of tomatoes or potatoes or some other vegetable. Some sold handicrafts. They would sit on the ground from early morning until it was dark, trying to earn what most Westerners would see as small change.

Outside the cities, the industriousness of the poor was more apparent. In rural areas, women would walk long distances for water. Their homes, sometimes barely shelters at all, were built by themselves, as best they could. There were villages I would drive by, with every home built by the people who lived in them. People would plant small gardens to grow food. Some just planted flowers to make the desolation a bit more bearable.

But here is what else I saw. Periodically, the police would sweep through the cities confiscating all the goods hawkers were trying to sell. Hundreds at a time would lose everything they had, because they didn't have permits to sell their goods. Nor did the legal system recognize their property rights. It was not unheard of for governments to send in bulldozers and level entire villages because no land titles were held.

Throughout the continent, farmers were told they had to sell their produce to a central marketing board run by politicians or their families. Farmers would get paid at rates below the market price. The board would resell at full market value, keeping the difference for the politicians and their friends. Farmers who wanted to sell to others were often arrested for it. Many simply resorted to producing what they needed for their families -- nothing more.

In Zimbabwe, the socialist Robert Mugabe made much of "land reform." What this meant in practice was the destruction of hundreds of thousands of jobs. Wealthy farms were confiscated. Most went to the military, police officials, politicians and Mugabe's relatives. A few were turned into "collective" farms, where no single peasant farmer was allowed to own anything. They were moved onto the farms and left there. Anything they produced did not belong to them, so they did the only rational thing available. They plundered every scrap of value they could out of the property and returned to homes where what little they could produce belonged to them.

Throughout the continent, the governments would plunder the people. They created impediments, making it difficult to produce, and then plundered what little was produced anyway. The people had few, if any, property rights; neither in land, nor in their labor and its fruits.

The aid these vampire governments received was used to oppress people, to fund wars or police states. Here and there, a show project would get some funds and the Western media would lap up how beneficial foreign aid was for the poor. But thugs such as Mugabe would use the Land Rovers donated to them by the British government so police could round up dissidents who dared protest his tyranny.

The people were industrious. They worked hard. But without property rights in the fruits of their labor, or the ability to own the homes they built, they were impotent. Between impediments put in their way, and plundering of what wealth they succeeded in producing, the incentives these people had were destroyed.

These were not people born to be poor, nor did they earn their own poverty through choices they made. Poverty was imposed on them by the governments that ruled them. That they were able to produce anything at all is a testament to their industriousness.

 
 
 
 
 
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01:12 PM on 11/21/2011
The idea that governments should ensure at least a somewhat equitable distribution of wealth among its people is anathema in the U.S. and is under attack in Europe as well. In Africa it was never allowed to take hold, and the financial powers that run the world seem to like it that way. I think its absolutely insane that the consensus opinion is that we spend too much money on entitlements - like health care and education. That the wealthy corporations need less 'regulation' because they provide the 'jobs'. The elite class that run these corporations are not interested in providing jobs, they just want more money, and each job created means money that, for them, flows in the wrong direction. I do hope that the 'occupy movement' is a sign that the American People are finally waking up to this fact. I don't think 'the one percent' as individuals are inherently evil, nor do I propose class warfare, but a new model needs to be built that strips power from the financial institutions, for those institutions are structured so that policies that keep the money flowing upward to the elites of all countries benefit them as well. That power is currently corrupting all nations, not just Africa. I do hope a way can be found to 'fix the system', because it is obviously totally out of control.
12:42 PM on 11/21/2011
You don't have to live in Africa to experience this government imposed poverty. The idea that food stamps, educational subsidies and health benefits are entitlement programs that 'the poor' are unworthy to receive are examples of the same mindset occurring here in the U.S. But the gutting of these programs here is more subtle and insidious than the more blatant practices your article highlighted. It is almost that as the economy grows, and the 'one percent' that are the beneficiaries of this growth get richer, the idea that 'the government' spends too much money on 'entitlements' and restrictions on the wealthy (i.e. corporations and their stock holders) must be removed gets stronger. It gets pretty hard to believe that this is not deliberate. It is probably just human nature, or some mathematical property of the capitalistic economic system that puts pressure on that system to make the 'elite' even stronger, rather than a conspiracy. It sure seems like one though, and government needs to find a way to ensure a more equitable distribution of the wealth of our nation. Its too bad that idea has been branded 'socialism' and therefore 'anathema' to American values. It only seems to be common sense to me.
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Rob O
There is no freedom without responsibility.
11:06 AM on 11/21/2011
I agree that most of the time, the poor are not to blame for their poverty. To survive, they have to be more resourceful than most everyone else.

In much of Africa, corrupt governments rule in collusion with the resource extraction industries (mining and oil companies) and foreign governments looking out for their corporations. So it's not an either/or situation, there's plenty of blame to spread around. Mugabe seems like an exception to this situation -- just as greedy, but in opposition to the West rather than in collusion. I don't see how you can generalize from Mugabe to all of Africa.

The IMF and World Bank also applaud a government for confiscating land from local landholders in order to build some large "development" project with borrowed funds. And in a prime example of denying local property rights, agricultural companies are making deals with African governments to secure access to arable land, reducing the actual small landholders to tenants or just kicking them off. There's plenty of blame to go around.
05:20 PM on 11/20/2011
so the fact that each of these nations are loaned sums of money at exorbitant interest, and can never repay it has no bearing on their poverty?

i disagree. its fairly straightforward, the same problems there are the same problems here, the difference is largely in what their gov'ts can get away with - and the margin between them and us is narrowing rapidly - and the orders of magnitude of the problems experienced.

here in canada we have people living in third world conditions, a large chunk of the population living in poverty. is it better here than there? sure, for some, but the difference is largely illusionary.

we have access to better services - theoretically - and a more constant supply of goods, yet we pay substantially more, and are taxed more, as well.

bottom line, we're all getting poorer, and for the same reason, the deck is stacked against us, and the owner class is printing funny money to buy up real assets, and leave us all in the gutter.
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Alex Nowrasteh
11:08 AM on 11/21/2011
"here in canada we have people living in third world conditions­, a large chunk of the population living in poverty."

If you think poor Canadians like in "third world conditions," you need to actually travel around the third world a bit. Absolute poverty, like the kind that exists in much of the third world, is unbelievable terrible to our pampered Western minds. The relative poverty in developed countries would be like heaven to many of them.
05:19 PM on 11/21/2011
you obviously haven't been paying attention to the mentions of reserves in critical conditions... and i'm not limiting it to indigenous, there's plenty of homeless and poor slipping through the cracks of harper's police state.

the strategy thus far has been to make housing so ridiculously unaffordable that we all pile into communities and couch-surf, thus making the problem "disappear". reality is, poverty is alive and well in canada, and its being intentionally fomented by those in a position of power, utilizing their power to profit.

http://www.thestar.com/news/canada/article/1089015--northern-ontario-reserve-begging-for-evacuation#.Tsg0M_oS8CT.facebook

just an example. more exist, and are readily available if you're interested in actually reading them.
10:46 AM on 11/20/2011
I should have begun by agreeing with parts of your post. The gist that poverty is being imposed is spot on.

Colonialism may be over, but the colonialists created the lingering dynamics. Everything from the Cold War to aid packages has had non Africans deciding many issues since.

The contracts and bribes from multinational companies that encourage denial of property rights so resource extraction could continue is not the fault of Africans beyond the corrupt leaders.

The money and weapons we, the West, Russia and now China, give the corrupt to keep them in power and undermine elections cannot be ignored.

I can stick a feather in my hat and call myself an eagle, but it does not make it so. Likewise, an objective analysis shows Mugabe to be a corrupt crony capitalist no matter how he labels himself.

The land distribution as you describe it in the post does not match a definition of socialism.

The blame for the current state of affairs in Africa is shared.
Excusing the roles of the multinationals and calling it a myth is the part that is demonstrably inaccurate.
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James Peron
05:14 PM on 11/20/2011
I think you over-emphasize the issue of resource extraction. The continent is rich in resources but some of the worst poverty is in places where resources are not being mined. In Zimbabwe, for example, the government previously was more favorable to mining and poverty was declining, not expanding. After Mugabe stopped recognizing property rights everything got worse including mining. Also, on the ground, some of the biggest advocates of property rights for the poor were people like the Oppenheimers, mining tycoons. They helped fund various anti-apartheid groups for decades as well as projects that emphasized property rights for the poor.

None of this is to say that no multi-national corporation has ever done anything evil. Businesses, like NGOs, can be corrupted when they access to state power and the use of state power will normally be grabbed by those who are rich and powerful for their own good. But multi-nationals have little presence in Africa and are only a very tiny percentage of the problem there.
12:03 PM on 11/19/2011
The origins of the system described here was colonial with much of it designed by the multinational corporations.

The author dismissing their involvement is factually incorrect.

Denial of property rights was not an African idea. But then, any describing a dictator like Mugabe as a socialist and then defending the European colonialists who stole the best native lands and denied locals their property rights may not be a fair source of information.
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James Peron
09:58 PM on 11/19/2011
Colonialism did a lot of harm but then colonialism has been over for half a century. If you contend those bad laws are still on the books, after half a century, whose fault do you think it is now?

I read many critiques that multinationals invest little in Africa and have little presence there. So which is it? Are they there too much or not enough?

And Mugabe has been quite open in describing himself as a socialist since before he took power in 1980.
10:05 AM on 11/19/2011
Love the article. Cannot agree more. People are honest and willing to give their best, if only they are given a chance. Modern economy, is destroying those means of livelihood, while mercilessly filling the coffers of a few. Greed is good. Selfishness is virtue, but so kindness. Markets are great at extracting efficiency, but markets are not perfect and they lend themselves to monopoly and abuse if not watched by its citizens, whom it should serve. Markets should serve the well being of its people, not the other way round.
schatsie
Wall Street is Worse than Vegas
10:56 PM on 11/18/2011
Fabulous article.....Best I've read about poverty.... When you listen to the neocons. they have deluded themselves that the poor have asked for being poor instead of the poor being rippped off in so many ways, including the lack of decent mass transportation, a rational healthcare system and jobs being outsourced and insourced....
10:08 AM on 11/17/2011
Awesome article! I found it on Facebook and I am going to share it. World Vision is trying its best to alleviate the situation but I fear there is some niavety...working with governments or the U.N. does *not* do any good. What is needed is to help people defy and throw off the system.

Also, the International Society for Individual Liberty is working hard. See isil.org. They understand this.

So glad this article appeared...thank you!
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James Peron
02:56 PM on 11/17/2011
ISIL does no charitable work similar to this and almost no work in Africa. There are groups that fight for property rights and good law in AFrica, ISIL is not one of them.
03:00 AM on 11/22/2011
Let's forget fighting for property rights in Africa, and just fight for property rights for human beings. Too many people throughout the world - both politicians and laypeople - discount human rights and believe that bankrolling despots makes sense. First, we need to educate ourselves, and then - and only then - can we possibly accomplish anything. The Ludwig von Mises Institute and Foundation for Economic Education are good places to turn to.
01:50 AM on 11/22/2011
I haven't seen much activity from ISIL since the death of its founder, Vince Miller.
12:21 AM on 11/17/2011
Very precise! Our governments here in Africa make us poor. The poor needs property rights to change their situation.
10:10 AM on 11/17/2011
See isil.org! The International Society for Individual Liberty is hard at work in restoring property rights.
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James Peron
02:57 PM on 11/17/2011
Sorry, but it does not.
01:55 AM on 11/22/2011
On the front page of ISIL's website, I see an invitation to come to their world conference in Sicily. That conference ended almost three months ago! In what sense are they "hard at work" if website updates take months?
10:35 PM on 11/16/2011
I had similar experiences of poor people being industrious and creative in Southern Africa, as they are around the developing world. It's refreshing to see an American commentator who notices that the divisions in Zimbabwe are mostly not black versus white anymore but a privileged postcolonial elite versus the impoverished masses. Other factors play a role in imposing poverty: rich world agricultural subsidies; trade protectionism; even historical coincidences like AIDS, which does not ravage Burma or North Korea, despite their atrocious governments, but saps the life and productivity of relatively well-managed countries like Botswana and South Africa. Still, African governments have an awful lot to answer for.
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James Peron
11:46 PM on 11/16/2011
I agree with everything above. One of the points I tried to emphasize in my book on Zimbabwe was that the attacks on "white farms" were not to get the farmers, that was just the excuse. Mugabe had his eye on the hundreds of thousands of people who lived in protected villages on these farms. They were outside the reach of his armed thugs who intimidated and beat people prior to elections. Mugabe lost a critical referendum and attacked. The two groups of voters he couldn't get easily were those in urban areas and those on the farms. His thugs unleashed a two prong attack on those groups to make sure he could win future elections. The media concentrated on the racial issue, but that would explain the attacks on teachers, black professionals, black businessmen, etc.—people who tended to oppose Mugabe's regime.

All the other factors are other ways poverty is imposed on poor countries—particularly I think agricultural subsidies in the US and Europe and trade protectionism. Both those policies are very destructive, along with ethanol subsidies pushing up world corn prices making it harder for the poor to buy food.
10:18 AM on 11/17/2011
James -

Thanks so much for that article! I believe you are 100% right.

I suggest you touch base with the International Society for Individual Liberty at isil.org.
04:32 PM on 11/16/2011
James, what a humane and thoughtful post. So many people substitute good intentions for actions that truly make a difference. All people need is a chance. Remove the obstacles and they will respond.
04:28 PM on 11/16/2011
James, this is one of the most humane and moving posts on African poverty I have read. So many people have good intentions, but their actions perpetuate the problems. All they have to do is remove the obstacles and people will respond.

Thanks for your insight.
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11:32 AM on 11/16/2011
sounds like the business model hatched by the 1%...
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James Peron
03:15 PM on 11/16/2011
So letting the poor own the property they live on, allowing them to sell the products they produce directly to customers, instead of through corrupt departments, is part of the 1%? Seriously? Or do you just side with dictators and killers like Mugabe? Are you actually worried about the poor or just concerned about power? Your comment is quite amazing and revealing.
06:34 AM on 11/19/2011
Read it again, he/she is agreeing with you, the 1% being those elites profiting from the poor, pretty much all around the world not just Africa, we're all being exploited by government and the rich.
02:02 AM on 11/22/2011
When I first read this comment, I thought the "business model" reference regarded the author's approach to ending this poverty. If the "business model" in question actually refers to government controls, you might want to clarify.
10:42 AM on 11/16/2011
You are so correct. Five minutes of observations confirms that rotten governments are the cause.