As most economists could point out, there’s no point asking what are the causes of poverty, because poverty is the default condition. Getting people out of poverty, that is a much more interesting discussion. Tim Worstall responds to a recent video from someone who clearly doesn’t understand where wealth comes from:
From this video here. Given that Grace [Blakeley] herself posts it she must approve the content.
Because the way that capitalism generates prosperity for some is by generating misery for others. You cannot have universal prosperity in a capitalist system. Just think about, like, this phone. What has happened for me to be able to hold this phone in my hands right now? A bunch of kids in the Democratic Republic of the Congo, at gunpoint, have been sent to scratch coltan out of the ground …
So, first thought. If the world, the economy, is a zero sum game then yes, we can only have some prosperous if others are not — some can only have more pie if others have less. On the other hand if we know how to bake the pie bigger then all can have more at the same time.
So, do we know how to make the pie bigger?
That source of Brad DeLong means yes, this is correct. Where’s that inflexion point, that bend in the curve? About where we start doing capitalism with free markets. As Marx, K himself pointed out capitalism is really very productive.
OK, so we know how to increase the size of the pie, it is possible for all to gain. It is not necessary for some to get less in order for others to gain more. The central contention is wrong. Provably, obviously, wrong.
Oh, sure, sure, it could work out that we take stuff off others in order to feed some. You know, say taxing child carers in order to pay train drivers massive salaries, as we do. But it’s not in fact necessary.
We can also check this another way:
So, lots and lots have become better off in this period of capitalism. Sure, sure, we should do better as a civilisation, we want all to do so. But while so many have got better off no, it is not possible to say that this has been done at the expense of those in extreme poverty. Because extreme poverty itself is set at the subsistence level. If you take stuff off the extreme poor then they die — that’s what subsistence level means. So that majority of humanity has not got rich by nicking it off the extreme poor. Because if they had there would be no extreme poor as they’d all be dead.
So, the overall claim is simply wrong. But it’s also wrong in specifics.
