Defeating Poverty
by Dr. Doug Cardell
To discuss poverty, we first have to define it. Some poverty is absolute; some is relative. Absolute poverty is having insufficient resources for adequate food, clothing, and shelter. Relative poverty is the lower 10% to 20% of the population. It varies because people define it differently. We can never eliminate relative poverty because there will always be a lower 10 to 20 percent. However, we can and should eradicate absolute poverty. The key to defeating poverty is creating poverty-proof people. How can people become poverty-proof? The most essential factor is a far better understanding of economic principles. None of these principles are complicated, but they are often misunderstood. First and most important is the concept of value. Without understanding value, economic success is unlikely. The earlier in life this is achieved, the better. Therefore, understanding value must be a key component of early years education. When I started this website, my first article, Let's Not Work - Let's Create Value was about value. I expanded on it in several subsequent articles What Is It Worth and Value and Worth. Several other articles explain it in context. Without understanding value, one cannot understand basic economics, and without understanding basic economics, one is constantly at risk of making mistakes that lead to poverty. Developing this value understanding is essential because most people make value decisions early in life. The earlier in life this occurs, the better, but one can change those decisions later in life, but it is more challenging. You can read more about value by clicking the links, but we'll describe it briefly here. Absolutely nothing has intrinsic value. Value exists only in the purchaser's mind, or more correctly, in the combined minds of consumers. Gold is more valuable than iron because, while both are uniquely useful, iron is more plentiful than gold, so consumers compete by paying a higher price. Breathable air is more necessary to life than gold, but it is free because it is plentiful. Purchasers, consumers, and buyers, by any name, are the sole deciders of value. How does knowing this help defeat poverty? Every job, every career, every occupation is based on creating value for others. Poverty—remember, we are talking about absolute poverty—is caused by producing too little value for others. Too few people grasp the concept that the value you take is equal to the value you make. Because of this lack of understanding, many people make inferior education and employment choices. The question everyone should ask when planning how to make a living should be, "What can I do that I would really enjoy that creates the most value for others?" Most folks end up in accidental career paths. They go out and look for a job, take one that isn't too bad, and pretty soon, they get a raise and then another, and then it becomes difficult to change paths. They go to work every day not loving it or doing their best to create value for others. They probably won't be in poverty, but it won't get them ahead much, either. Other folks take any job available and move from job to job, trying to find something they don't hate. After they've changed jobs a few times, it becomes harder to find the next one because changing jobs often is a red flag for employers. They don't want to invest time and money in training someone who will leave in a few months. Unemployment can easily lead to drinking or drugs, which, of course, makes things worse. These are the folks who fall into absolute poverty. A lot of folks think that those in absolute poverty are lazy, but that's not the problem. The problem is that they made bad choices due to a lack of value understanding. Once they reach this point, it is more difficult to reverse the situation, but it's not impossible. Poverty-proof people understand that to receive value, one must create value in equal measure. They know that to receive more, they must create more. They know that working harder isn't the answer to greater rewards. What matters is not how hard someone works but how much value they create. They also have internalized the idea that value only exists in consumers' minds. They design their educational goals, skill acquisition, and evaluation of their talents to maximize their ability to create value. Some look to the government to address poverty. That's a mistake. It's been 57 years since the war on poverty began supplying benefits in 1966, and poverty is about the same. In those 57 years, poverty was between 11 and 15 percent. When instituting the war on poverty, President Johnson said, "Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it." It failed. Why? Because it did nothing to make people poverty-proof. Many suggest that the leftists in positions of power do not want to end poverty. They want to use it as a campaign issue. If poverty ended, they would no longer be able to promise to fix it, as they have for generations. No one seems to notice that those decades of promises have been unfulfilled. I don't know if that's true, but if it's not more than half a century of failure should make it clear that those promises are just more CO2 added to the atmosphere. I positively reject the idea that there are people incapable of creating value for their fellow human beings. Anyone who can monetize their ability to create value is poverty-proof. If you want to improve your standard of living, look for ways to joyfully generate increased value. If you have minor children or grandchildren, help them learn about the importance of creating value to improve their earning power and emotional well-being. Creating value is far more satisfying than working. If you regularly deal with any children, help them to be poverty-proof. Every decision is an economic decision since it involves allocating resources. Every action has a cost, which might be money, but it could also be energy, well-being, or time. Every activity also has a perceived benefit; only by understanding value is it possible to evaluate the exchange accurately. Young people make many life-changing decisions: education, drugs, physical fitness, etc. But many adults also need help to understand value. Let's create a country and, ultimately, a world full of enthusiastic, positive, poverty-proof people. If you want to learn more about this, many other articles on these pages will help.
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