Conversation on Poverty

An old friend, James, who helped train me in Perl many years ago, recently came to me with a request: he wants to work on the problem of poverty, internationally and domestically, from a new perspective. His belief is that, rather than throwing money at the problem in the form of welfare or foreign aid, the development of personal micro-level capability is required. In the inner city, this means responsibility, inner peace in place of negative influence, and opportunity. Internationally, it means the tools of exchange and opportunity, and the ability to direct entrepreneurial drive into productive pursuits.

This is clearly the direction that programs are headed, though slowly. Welfare programs have been reformed toward these ends, and development economics has moved from supporting foreign aid in the form of blank checks, to building institutions; micro-loans and in-kind support for education have replaced cash that went directly to support dictators. But many of the new programs have been twisted to produce outcomes similar to the old programs, and poverty is still a major problem.

My friend came to me because I work at the Heritage Foundation, and he felt that the loudspeaker that Heritage possesses on the policy stage might serve this issue well. The idea is to build a bridge between the left-wing "peacemaking" groups, the right-wing responsibility advocates and the libertarian anti-state-programs people.

James says he hopes to understand the impact, if any, of wide-spread training in constructive conflict resolution and other proven-effective peace-building techniques. His hypothesis is that educating people to effectively cultivate peace in their lives and relationships will at worst make them more productive and save the rest of us a lot of money, and at best, result in a more secure world. He can advocate for policy in various left-wing peacemaking communities, while I can advocate among the "rightwing" such as Heritage, and the libertarian community and academia.

I pointed James to Pete Leeson's excellent lecture for FEE on development. He enjoyed it a lot and wrote the following email in reply. The email below, although it is just some rambling thoughts, brings up so many important questions and ideas that touch on so many of the issues that George Mason economists, in particular, are working on, that I was inspired to share it and invite thoughts from the best minds I know. Please share your reactions, questions, apprehensions, and references to relevant studies. Let's get a conversation going, and see what we can come up with. I've spoken to a couple of people at Heritage, and if we can come up with something, they may be on board.

I recommend listening to Pete's lecture if you aren't familiar with his take on development economics, as it is a great starting point for this conversation. This is what James is referring to in the email.

First, this is so interesting for me! I'm so pleased to be able to learn this stuff - thanks so much for sharing your knowledge! I have a ton of questions...

I was impressed with the talk, of course. There's a lot to learn there, and I'm sure that a lot or all of it holds water, but I keep thinking that it's all well and good, but it doesn't seem to take into account certain significant realities...

I whole-heartedly agree with the self-interested actor model here, just looking at it from a different perspective. The self-interest of the most powerful actors is likely the cause for the state of the world - or is that a tautology?

I'm under the impression that the US government, through covert means, has been intentionally undermining the well-being of poor, resource-rich countries for the last 50 years - whenever and wherever they can - in order to amass power and wealth for US corporations (link). I wonder if there's any discussion of that - or what is the understanding of that - within Heritage? Were those actions taken to shore up private property rights for the citizens of those countries, or so that we could own everything and they could remain in abject poverty? It's going to be a long wait indeed before the populations of these countries create good institutions if they're constantly being torn down by such well-funded and organized outside forces.

One form of aid that strikes me as the logical next step after hearing the talk is: we should send people in to teach all developing peoples about the benefits of private property rights... it couldn't result in any corruption and would cause the population to create their own enlightened institutions. What do you think?

One other thing I'm interested in is this: my understanding is that economists in general start with the idea that people are motivated by a need to be useful - so people want to produce more or something like that in order to be more useful. This belief - I understand - leads to measures such as GDP, which measure cash value but not other resource or human happiness. I'm more of the opinion that people are motivated by a desire to be happy, to have no problems. When people are not very good at taking care of themselves, they seek to enrich themselves but after people get good at taking care of themselves, which often includes having some stable means of self-support, they start to look to take care of other people (people are always surrounded by problems - first their own, and then others'). There are some economic thinkers who've come up with measures which try to take this kind of thinking into account - the Genuine Progress Indicator is one example. Do you know anything about this? I'd love to hear your reactions to these kinds of things.

When I look around, a lot of people are working awfully hard to cultivate happiness. Yet, given all the effort expended, there doesn't seem to be the abundance in terms of human happiness that I would have thought. We have so many technological marvels, so much infrastructure, we know so much about the universe and the world, and yet people don't seem to be much better off for it in terms of either individuals' own ease and inner peace, or peace between people either domestically or internationally. I know that significant progress can be made to achieving genuine long-term happiness if we apply ourselves, but it seems that not enough resources have been devoted to making this a reality. That's what I'm talking about, not aid. I'm talking about finding out what's the best way to cultivate peace for everyone, and teaching people so they can become engines of peace in their lives and communities.

Thanks again - this is fascinating for me. I'm sure that I'm asking a few stupid questions here. After all, I'm a pre-econ 101 person. I'll browse fee.org... I wonder if there's anywhere you might point me to get a basic education?

Those are just some thoughts and questions that James had, he will join us in the comments. Note that he brought up some very interesting, I think, theoretical questions, practical questions, and ideas. He is very open minded, I hope you will join him in this good spirit. Please make use of the open comments.

Update: On a related note, I may be working with the "Protecting American Sovereignty" group at Heritage on their initiative to prevent the movement toward One World Government, or toward world governance (international regulatory regimes), through advocating freer markets and freer trade instead, to combat global financial unease. Because security, as well as economic security, is of great concern to them, terrorism is a major issue for them. For this reason, development and combating poverty through institution-building and trade also fit into that program. Perhaps this could be one way of bringing this initiative to Heritage.