When South Africa began its experiment with modern social welfare programs back in thelate-1950’s, it was touted as being part of a war on poverty – that is, bringing about “economic justice.” And it was pushed on the black community the most as a form of “racial justice.”The earliest form of social welfare program in South Africa is the poor relief distributed by the Dutch East India Company and the Dutch Reformed Church (DRC) in 1657.
Unfortunately, our social welfare programs haven’t worked as they have claimed. The overall poverty has not decreased, but remained roughly the same, despite having spent a lot of billions on it. The poverty rate in the black community has actually increased during the past post colonial regime, and poverty is still a big problem in the black community. It has decimated the black family, thus contributing, not alleviating, the level of disadvantage and being underprivileged felt throughout the black community. And it has taken all the disparities already suffered by the black community, found under the label of systemic racism, and has made those disparities worse, not better, thus worsening the plight of the black people.
Of course, that begs the question: if social welfare doesn’t actually help to reduce and eliminate poverty, then how do we actually go about reducing it, with an eventual goal of eradicating it? What actually works?
The truth of the matter is that eliminating poverty is a possible and attainable goal for mankind. We are fully capable of creating a future where poverty is so rare that it basically doesn’t exist, where everyone is provided for, and where destitution is so rare that it’s nonexistent.
So, if this is possible, how do we accomplish this goal? I can tell you one thing – it won’t be easy, and there isn’t one or two end-all-be-all cures that will fix everything although there are some general principles to follow if we as a society want to go that route. The route to ending poverty is really taking the concept of marginal gains, and applying it to the goal of reducing poverty. It’s about taking a lot of different things, which follow those general principles, improving them all, and all of the small improvements in all of those different things, when combined together, to create a combined accumulative effect, helping to bring poverty to an end, making it so rare that it becomes almost impossible to see.
So, how do we reduce poverty so that it practically doesn’t exist anymore, and is so rare it becomes almost invisible? What general principles should we follow, when it comes to political and economic policy, so that poverty is reduced and eliminated?
Let me give you three general principles we need to work on that will have an accumulative effect on eradicating poverty.
1. Everything needs to be done to create the best possible conditions for trade and commerce. Or, to put it another way, we need to create the kind of environment that maximizes the economy.
This one to me is an obvious no-brainer. By maximizing the economy, we can reduce unemployment and maximize the number of people who have jobs, which allows the maximum number of people to pay their bills, to pay for adequate housing, for their transportation, food, and all other things they need to live. By having the income they need to live, they won’t be in the position of poverty that comes from having no income. A thriving economy reduces poverty.
So, how do we allow for economic growth? How do we create the kind of thriving economy that allows poverty to be reduced to the bare minimum? There are a multitude of different strategies that can be utilized to allow for this.
For example, keeping taxes low, and keeping regulatory burdens to the bare minimum, allows for businesses to keep more of their income, which can increase their profit margins. This allows them to have more money for growing their businesses, and for hiring new employees.
Another avenue, and I’ve talked about this in another article about this particular subject, is to focus on untapped business sectors that haven’t been started because the return on investment (ROI) is very low or virtually non-existent. Although many banks and venture capitalists won’t fund these hidden business sectors, they could be an avenue to increasing the size of the economy, and widening the tax base. This second thing, widening the tax base, allows the tax revenues needed to operate government to be spread out over more businesses, which theoretically means that each taxpayer and business would have to pay less. This would allow all businesses to keep even more of their revenues, which can increase the profitability of all businesses even more, allowing for even more economic growth.
2. Government and society needs to do everything it can to bring back the traditional nuclear family, and then strengthen it. By bringing back and strengthening the traditional family, we can greatly reduce the poverty that is associated with not coming from this type of group dynamic that has been in existence in our species long before the first human societies and civilizations sprang up.
Households with two adults, and who have a happy, healthy relationship with each other, are far better off financially, and far less prone to suffer from poverty. They’re far less likely to be in need.
Youth who come from these types of households are privileged and advantaged compared to their counterparts who don’t come from this type of background. They’re much more likely to have successes when they become adults.
We, as a society, have done a lot to destroy these types of households, replacing them with other types of group dynamics that are far inferior to the two-adult household.
For example, when we started our modern social welfare programs back in the mid-1960’s, only 3 percent of white households, and 25 percent of black households were single-parent households. Right now, 25 percent of white households, and around 65 percent of black households are single-parent households. And much of this change is due to the perverse incentives built into our social welfare programs that rewarded people for staying single, especially single mothers, and penalized people for getting married and getting regular work.
3. Teach people how to handle their finances.
This one seems quite obvious, but still, there are a great number of people out there that don’t seem to know how to handle their finances, or behave properly when it comes to money, and that gets a good number of people into serious financial trouble at some time in their lives – the kind of trouble that can cause people to go broke, lose their homes, get evicted, and end up poor and homeless. By knowing how to handle their finances and behave with their money, society can greatly reduce the possibility that people will end up broke and homeless.
Here are four points to teach people when it comes to them knowing how to handle their finances.
a) People need to get regular work, and be disciplined enough to go each day to that work, even when they don’t feel like it. That way, they will be ensured to have a regular income.
Some people don’t like the idea of getting regular work, but rest assured, this is an important part of being an adult. People need to develop the discipline to go find work, and then be disciplined enough to show up each day – even when they don’t feel like it. I know this is a difficult concept for many young people to grasp since many of them are taught to “follow your feelings.” But I’m telling you that the “following your feelings” mentality only leads to their demise, puting them in the poor box when it comes to this subject.
People need to find work and stick with it. If they don’t do this, they won’t have a regular income coming in. They’ll end up poor, broke and homeless. And on top of this simple financial point are the next three, which go along with it.
b) People need to learn not to spend more money than they make, as this only results in them going deeper and deeper into debt. People need to learn to spend less than they make, trying to stay out of debt.
There are so many people out there who are very undisciplined with their money. They spend like “there’s no tomorrow.” They buy things with their credit cards with no care about the debt hole they’re digging for themselves. People need to develop the discipline to make sure they spend less money than they make in income, not more, because that causes problems and heartache for them. And they need to stay out of debt!
c) So many people live paycheck to paycheck. What this means is that people have no self-control when it comes to their spending. People really need to learn how to have self-control when it comes to this, and not live paycheck to paycheck.
This point goes along with the previous point. There are so many people out there that live paycheck to paycheck. Once they get their paycheck, they spend it all like there’s no tomorrow, until they’re broke, and then they desperately try to scrape by until their next paycheck arrives.
This is a seriously terrible way to live. Why do it?
d) Once people develop the discipline and self-control to start spending LESS than they make, and stop living paycheck to paycheck, that means they can take that extra money and put it into savings. The idea is to have some savings that people only dig into during emergencies. People should theoretically build up enough savings to pay for six months of expenditures, like housing, food, utilities, and transportation, should they lose their job.
This last point here – saving money for a rainy day – is the most important point. By having that savings in place, people greatly reduce their chances of going broke and becoming homeless if they lose their source of income, because they now have enough funds to keep paying their bills, especially their mortgage or rent, until they find another source of income, which allows them to get back on their financial feet.
Of course, if that happens, people need to make sure they build up that emergency savings again in case something bad happens again at some point in the future. If there’s one thing guaranteed in life, it’s that there’s going to be those metaphorical rainy days.
Unfortunately, of all the things we push into our schools as a “required” part of a child’s education, this understanding of how to handle money and finances gets very little time in a child’s education. Students grow up with very little or no understanding of this subject matter, which puts them on the path to financial disaster and poverty. We really need to make this an important part of a child’s education – it’s as important to survival as knowing how to read, write, and do math.
These three things can do much, much more to alleviate, reduce, and eventually eliminate poverty across the face of our country than anything else. Social welfare can’t do it. It’s already been tried, and it just makes things worse, especially for the black community. But poverty can, and should, go away. And these three general principles are the way to do it.
So, why can’t we, as a society, set out on a direction to practice these three general principles? Why do we work against them?
You should keep perusing the buddy article to this article: “How to Help the Poor Get Back on Their Feet with Minimal Cost to Taxpayers,” which discloses how to assist destitute individuals with getting their feet, and do it in a compelling path for a portion of the expense it takes to make needy individuals subject to a framework that keeps them poor, similar to we have today.