Solution to poverty - Socialism or Capitalism?

[Cicero2.0]

Hey everyone. In today's developed world where we have glasses that can access the internet and robots that can think on their own, it is a shame that there are still people in parts of the world living under 1$ a day.
What can governments do to end poverty in their countries? Is a solution possible under capitalism? Or did Karl Marx had the right idea with his recommendation of a socialist government?

Less State means less incompetence, less corruption, less problems. Governments do more bad than good after all, and should only have restricted powers, limited to the minimum necessary.

Socialism/Statism will only make poverty worse. Poverty will be solved the moment people start giving importance and value to work. Many people prefer not to work, but only to receive free benefits form their governments, acting like spoiled adolescents. It is the statism that keeps people from developing, they want us to be eternal dependents and treat us as if we were stupid.

Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.
Thomas Paine

Pretty good summation. Government should defend us, enforce contracts, and keep the peace. All with as small a foot print as possible.

[giveBTCpls]

Governments can do nothing except exacerbate the problem, usually by equalizing the pain shared.

In a free economy, all economic actors can improve there lives thru serving other humans (work) and either saving or spending their just reward(money). Poor people will be around though, either because of unfortunate circumstances which are a part of life and can be mitigated in several LOCAL ways, or they choose to remain poor.

Let's say it's true and one can improve there lives thru serving other humans (work). But: Why would these that aren't as genetically gifted to learn the skills that are best paid (because sometimes hard work is just not enough) deserve a worse life quality (less money) than these that are genetically gifted to do everything right without being a constant struggle forcing your brain to do so?

[Nicolas Dorier]

Governments can do nothing except exacerbate the problem, usually by equalizing the pain shared.

In a free economy, all economic actors can improve there lives thru serving other humans (work) and either saving or spending their just reward(money). Poor people will be around though, either because of unfortunate circumstances which are a part of life and can be mitigated in several LOCAL ways, or they choose to remain poor.

Let's say it's true and one can improve there lives thru serving other humans (work). But: Why would these that aren't as genetically gifted to learn the skills that are best paid (because sometimes hard work is just not enough) deserve a worse life quality (less money) than these that are genetically gifted to do everything right without being a constant struggle forcing your brain to do so?

Nothing will prevent you to help them, but forcing other to do so is coercion.

If you do you'll start asking a question : is he genetically stupid, or does he plays stupid ?
Such question are never asked when you spend somebody's else money. But you will if it is your own.

[giveBTCpls]

Neighter...

The sloution to end povrety is a Ressource based economy.  We are one on a spaceship, profit and endless growth economy is not sustainable..  lookup RBE and learn about it.  Imo, its THE solution to a healtier and better life for everyone aboard spaceship earth.

But how do you get from here to there? That's is the question that tuned me into Bitcoin. This may be an important part of the transition.

I agree with this. I also see Bitcoin as a part of a transition to a RBE, when we no longer need to trade, a fully open source society. Of course this seems so distant to me right now, I don't see such thing happening in my lifetime and im not 30 yet, so there. I do see something like Bitcoin starting a big revolution in economy and disrupting this rotting enviorment. God knows what and how will happen next and to what extent.

[giveBTCpls]

Well, I think neither of capitalism or socialism can be ultimate solution to poverty.. Firstly, we need to expel the fact that poverty can be eradicated.. I guess poverty can never be removed..
People say that Capitalism emphasis on superiority, and thus creates inequality in the society.. True but then it is also inspires one to improve..
Which are today's greatest nations? US, China, France, England, Rome, Greece, and the list goes on and on.. And then these are not only the greatest nations, but they also have the wealthiest population also.. Is there anything common to them? Simply, Capitalism !!

What the hell did i just read?! Greece is among greatest nations right now? Capitalism is bringing fascism in Greece right now in levels noone saw for like 70 years. People are working for 480 euro while having serious university degrees and know 2 foreign languages while their benefits and health system is getting chooped by the day. (Did you know that many work without pay just to get experience) But of course in Europe the media celebrate  the progress with 27% unemployment and doubling suicide rates.

Meanwhile the free market in greece gives state assets to billionaires for less than peanuts...

Noone is inspired to improve. 10% of Greeks have been inspired to go stab minorities, pick abortions over births, suicide, start doing drugs and leave the country. If this is what you mean improvement then okay. Ah and its not going to be something temporal. There are no plans for fixing this for the next 10 year at least...

Legit my friend, as someone living in spain I can relate, and you can relate to me because we are living the system rot to hell IRL, daily. Most people that say "just go out and put yourself out there, get a job" etc, just don't get it. You have to be on a dead end to trully get how fucked up this thing is. Im getting half of my monthly income from advertisement campaings with Bitcoin, this is how fucked up things are. When Stunna starts cutting payments im literally dead lol.

[giveBTCpls]

What still baffles me is that although many Governments has been giving away welfare aids to people below a certain income level, this does not help solve poverty at all.
Poor people can now fulfill their basic needs, but they have now become dependent on the Govt to give them the necessary resources for life. I think this is a gross misallocation of resources which could have been put to better use to create jobs instead of making poor people dependent.
It doesn't take a genius to figure out that this solution is only beneficial in the short run so why is it still being done?

In Denmark less than half the population works. Half their income is taken from them before it even hits their bank accounts and redistributed to those who do not work. It's even worse than that since government employed get their saleries from taxes, and that sector is ever-growing.

Think how it would be if there were no welfare checks. Taxes could be low, maybe 15% instead of 50, wages would go down while actual buying power would go up due to less taxation. Everyone who works would be wealthier, and more people would work out of necessity so the country would be more productive. The only downside is that people who can't or won't work would be worse off, but there is no perfect system. It's really a matter of, do we want a functioning country where the majority benefits or do we want 0% of the population to live in the street?

In Spain, the welfare system is so fucked up that you have to be half crippled to get something, and even those with legitimate minusvalies are having problems getting their deserved monthly paychecks, what this means is even if these that may be just lazy (and we could discuss if lazy is just a word to describe a legitimate biological problem that really makes working for you hell) aren't getting a single penny from welfare, you don't see any improvement or people being successful as entrepeneurs. In my observations the only thing i've gathered is poverty attracts more poverty and success stories aren't the norm. Similarly, money attracts money, this is why people who inherit can keep on building more and more of it wasting almost no energy.

[unpure]

What still baffles me is that although many Governments has been giving away welfare aids to people below a certain income level, this does not help solve poverty at all.
Poor people can now fulfill their basic needs, but they have now become dependent on the Govt to give them the necessary resources for life. I think this is a gross misallocation of resources which could have been put to better use to create jobs instead of making poor people dependent.
It doesn't take a genius to figure out that this solution is only beneficial in the short run so why is it still being done?

In Denmark less than half the population works. Half their income is taken from them before it even hits their bank accounts and redistributed to those who do not work. It's even worse than that since government employed get their saleries from taxes, and that sector is ever-growing.

Think how it would be if there were no welfare checks. Taxes could be low, maybe 15% instead of 50, wages would go down while actual buying power would go up due to less taxation. Everyone who works would be wealthier, and more people would work out of necessity so the country would be more productive. The only downside is that people who can't or won't work would be worse off, but there is no perfect system. It's really a matter of, do we want a functioning country where the majority benefits or do we want 0% of the population to live in the street?

In Spain, the welfare system is so fucked up that you have to be half crippled to get something, and even those with legitimate minusvalies are having problems getting their deserved monthly paychecks, what this means is even if these that may be just lazy (and we could discuss if lazy is just a word to describe a legitimate biological problem that really makes working for you hell) aren't getting a single penny from welfare, you don't see any improvement or people being successful as entrepeneurs. In my observations the only thing i've gathered is poverty attracts more poverty and success stories aren't the norm. Similarly, money attracts money, this is why people who inherit can keep on building more and more of it wasting almost no energy.

Can always vote with your feet and go elsewhere if you are young and ambitious.

[theonewhowaskazu]

Look at it logically. The primary cause of poverty, other than the variety caused by mental conditions, is generally lack of investment in labor efficiency, in economics terms "capital." The average worker in America, for example, benefits from quite a bit of capital. Worst case scenario you go to work in say Walmart. That's even if you come to the table with extremely low amounts of human capital (i.e, education). In walmart you benefit from easy access to food (during a lunch break you can get food served to you in a number of minutes), there are machines that aid you in your work letting you get more done faster, work that would otherwise need to be occurring in many different locations is now centralized into one hub. Result? You get a lot more done faster. Obviously, the owners of Walmart are also taking a huge amount of profit from the improved efficiency, but the worker also benefits. The reason is that with a greater profit margin, there is a greater room for companies to lower prices. With the lowered prices, comes greater quantity demanded. With greater quantity demanded, comes more demand for labor. That ups the price of labor, otherwise known as wages.

So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization.  Not necessarily capitalism or socialism, although people must be motivated by capitalism in order for it to work. The more efficiently "stuff" can be moved around the planet, the more it makes sense for companies to  take advantage of low labor costs overseas. In order to take advantage of that cheap labor, they have to send capital there, thereby improving those people's productivity, so they in turn can demand more. The vast majority of poverty in the world is caused merely by special gaps meaning that some people are valued more as workers merely because of where they happen to have been born. This will naturally go away as the costs associated with remote labor are reduced due to things like the internet, more efficient transportation, etc.

There's local poverty too, poverty of people living right alongside loads of capital, but all things said this accounts for a very small portion of poverty on the planet. This type of poverty may be a growing pain associated with globalization as capital flows to overseas locations, there is reduced demand for labor in the industrialized nations. However, as the people overseas lower their saturation of poverty to that in developed nations, then this element goes away.

If governments want to lower poverty, there are two steps:
1) Encourage firms to invest in capital.
2) Allow workers EVERYWHERE to make use of that capital.

There's also a third thing, that should be obvious but I won't get into right now:
3) Encourage/allow individuals to invest in education, i.e, human capital.

Once you have this baseline understood by everyone involved, then you can actually discuss whether socialism or capitalism more adequately meets these goals.

EDIT: note, this post is specifically addressing "how to reduce poverty" not "how to increase the average wealth per capita.

[Harley997]

What still baffles me is that although many Governments has been giving away welfare aids to people below a certain income level, this does not help solve poverty at all.
Poor people can now fulfill their basic needs, but they have now become dependent on the Govt to give them the necessary resources for life. I think this is a gross misallocation of resources which could have been put to better use to create jobs instead of making poor people dependent.
It doesn't take a genius to figure out that this solution is only beneficial in the short run so why is it still being done?

In Denmark less than half the population works. Half their income is taken from them before it even hits their bank accounts and redistributed to those who do not work. It's even worse than that since government employed get their saleries from taxes, and that sector is ever-growing.

Think how it would be if there were no welfare checks. Taxes could be low, maybe 15% instead of 50, wages would go down while actual buying power would go up due to less taxation. Everyone who works would be wealthier, and more people would work out of necessity so the country would be more productive. The only downside is that people who can't or won't work would be worse off, but there is no perfect system. It's really a matter of, do we want a functioning country where the majority benefits or do we want 0% of the population to live in the street?

In Spain, the welfare system is so fucked up that you have to be half crippled to get something, and even those with legitimate minusvalies are having problems getting their deserved monthly paychecks, what this means is even if these that may be just lazy (and we could discuss if lazy is just a word to describe a legitimate biological problem that really makes working for you hell) aren't getting a single penny from welfare, you don't see any improvement or people being successful as entrepeneurs. In my observations the only thing i've gathered is poverty attracts more poverty and success stories aren't the norm. Similarly, money attracts money, this is why people who inherit can keep on building more and more of it wasting almost no energy.

There are other social programs in Spain and throughout Europe then just "welfare". Unemployment is a big one as people will receive money just for not working. Most of Europe also makes it very difficult for a company to fire someone so an employee can slack off at work, not doing their best and have few ramifications at work.

[twiifm]

Look at it logically. The primary cause of poverty, other than the variety caused by mental conditions, is generally lack of investment in labor efficiency, in economics terms "capital." The average worker in America, for example, benefits from quite a bit of capital. Worst case scenario you go to work in say Walmart. That's even if you come to the table with extremely low amounts of human capital (i.e, education). In walmart you benefit from easy access to food (during a lunch break you can get food served to you in a number of minutes), there are machines that aid you in your work letting you get more done faster, work that would otherwise need to be occurring in many different locations is now centralized into one hub. Result? You get a lot more done faster. Obviously, the owners of Walmart are also taking a huge amount of profit from the improved efficiency, but the worker also benefits. The reason is that with a greater profit margin, there is a greater room for companies to lower prices. With the lowered prices, comes greater quantity demanded. With greater quantity demanded, comes more demand for labor. That ups the price of labor, otherwise known as wages.

So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization.  Not necessarily capitalism or socialism, although people must be motivated by capitalism in order for it to work. The more efficiently "stuff" can be moved around the planet, the more it makes sense for companies to  take advantage of low labor costs overseas. In order to take advantage of that cheap labor, they have to send capital there, thereby improving those people's productivity, so they in turn can demand more. The vast majority of poverty in the world is caused merely by special gaps meaning that some people are valued more as workers merely because of where they happen to have been born. This will naturally go away as the costs associated with remote labor are reduced due to things like the internet, more efficient transportation, etc.

There's local poverty too, poverty of people living right alongside loads of capital, but all things said this accounts for a very small portion of poverty on the planet. This type of poverty may be a growing pain associated with globalization as capital flows to overseas locations, there is reduced demand for labor in the industrialized nations. However, as the people overseas lower their saturation of poverty to that in developed nations, then this element goes away.

If governments want to lower poverty, there are two steps:
1) Encourage firms to invest in capital.
2) Allow workers EVERYWHERE to make use of that capital.

There's also a third thing, that should be obvious but I won't get into right now:
3) Encourage/allow individuals to invest in education, i.e, human capital.

Once you have this baseline understood by everyone involved, then you can actually discuss whether socialism or capitalism more adequately meets these goals.

EDIT: note, this post is specifically addressing "how to reduce poverty" not "how to increase the average wealth per capita.

You are correct but this increases inequality gap.   Which can be destabilizing to economies

Its a tough issue and we in uncharted territory

Also I don't agree that lower prices help the worker.   It helps consumers.   But I'd rather have job stabilitity than lower prices

[am]

So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization.

Sure, if we're looking to go from 1 to 1. What about 1 to n? What's going to be post-globalization?

I think if you really thought about moving humanity beyond 'poverty', you need 1 to n.

[blumangroup]

What still baffles me is that although many Governments has been giving away welfare aids to people below a certain income level, this does not help solve poverty at all.
Poor people can now fulfill their basic needs, but they have now become dependent on the Govt to give them the necessary resources for life. I think this is a gross misallocation of resources which could have been put to better use to create jobs instead of making poor people dependent.
It doesn't take a genius to figure out that this solution is only beneficial in the short run so why is it still being done?

In Denmark less than half the population works. Half their income is taken from them before it even hits their bank accounts and redistributed to those who do not work. It's even worse than that since government employed get their saleries from taxes, and that sector is ever-growing.

Think how it would be if there were no welfare checks. Taxes could be low, maybe 15% instead of 50, wages would go down while actual buying power would go up due to less taxation. Everyone who works would be wealthier, and more people would work out of necessity so the country would be more productive. The only downside is that people who can't or won't work would be worse off, but there is no perfect system. It's really a matter of, do we want a functioning country where the majority benefits or do we want 0% of the population to live in the street?

In Spain, the welfare system is so fucked up that you have to be half crippled to get something, and even those with legitimate minusvalies are having problems getting their deserved monthly paychecks, what this means is even if these that may be just lazy (and we could discuss if lazy is just a word to describe a legitimate biological problem that really makes working for you hell) aren't getting a single penny from welfare, you don't see any improvement or people being successful as entrepeneurs. In my observations the only thing i've gathered is poverty attracts more poverty and success stories aren't the norm. Similarly, money attracts money, this is why people who inherit can keep on building more and more of it wasting almost no energy.

Can always vote with your feet and go elsewhere if you are young and ambitious.

Not necessarily as you need to be somewhat qualified in order to get a work visa to another country.

[theonewhowaskazu]

Look at it logically. The primary cause of poverty, other than the variety caused by mental conditions, is generally lack of investment in labor efficiency, in economics terms "capital." The average worker in America, for example, benefits from quite a bit of capital. Worst case scenario you go to work in say Walmart. That's even if you come to the table with extremely low amounts of human capital (i.e, education). In walmart you benefit from easy access to food (during a lunch break you can get food served to you in a number of minutes), there are machines that aid you in your work letting you get more done faster, work that would otherwise need to be occurring in many different locations is now centralized into one hub. Result? You get a lot more done faster. Obviously, the owners of Walmart are also taking a huge amount of profit from the improved efficiency, but the worker also benefits. The reason is that with a greater profit margin, there is a greater room for companies to lower prices. With the lowered prices, comes greater quantity demanded. With greater quantity demanded, comes more demand for labor. That ups the price of labor, otherwise known as wages.

So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization.  Not necessarily capitalism or socialism, although people must be motivated by capitalism in order for it to work. The more efficiently "stuff" can be moved around the planet, the more it makes sense for companies to  take advantage of low labor costs overseas. In order to take advantage of that cheap labor, they have to send capital there, thereby improving those people's productivity, so they in turn can demand more. The vast majority of poverty in the world is caused merely by special gaps meaning that some people are valued more as workers merely because of where they happen to have been born. This will naturally go away as the costs associated with remote labor are reduced due to things like the internet, more efficient transportation, etc.

There's local poverty too, poverty of people living right alongside loads of capital, but all things said this accounts for a very small portion of poverty on the planet. This type of poverty may be a growing pain associated with globalization as capital flows to overseas locations, there is reduced demand for labor in the industrialized nations. However, as the people overseas lower their saturation of poverty to that in developed nations, then this element goes away.

If governments want to lower poverty, there are two steps:
1) Encourage firms to invest in capital.
2) Allow workers EVERYWHERE to make use of that capital.

There's also a third thing, that should be obvious but I won't get into right now:
3) Encourage/allow individuals to invest in education, i.e, human capital.

Once you have this baseline understood by everyone involved, then you can actually discuss whether socialism or capitalism more adequately meets these goals.

EDIT: note, this post is specifically addressing "how to reduce poverty" not "how to increase the average wealth per capita.

You are correct but this increases inequality gap.   Which can be destabilizing to economies

Its a tough issue and we in uncharted territory

Also I don't agree that lower prices help the worker.   It helps consumers.   But I'd rather have job stabilitity than lower prices

It raises inequality, but in the process raises everyone's wealth. The question is basically, "You can either accept $0, in which case everyone else gets $0, or you  can accept $1 in which case everyone else gets $10." You'd be stupid not to accept the $1.

Also, just a quick checkup, all workers are consumers. EVERYBODY is a consumer. If you eat food, you're a consumer. When prices go down without the quality of the product being hit, and no aggregate jobs are lost (although jobs might shift around from point A to point B) net poverty decreases. This is what happens when you open up borders (to exports and imports, that is. not necessarily to immigration because then there's whole other deals that get involved).

[twiifm]

You can't be a consumer if you are unemployed.  Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?

[theonewhowaskazu]

You can't be a consumer if you are unemployed.  Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?

1) So long as you're eating / consuming electricity / using gas / drinking water / etc... you ARE a consumer and will benefit from lower prices. Its literally that simple. So stop BSing about terminology here.

2) Yes, except the guy overseas who took your job (A) is willing to accept lower wages thus is a more worthy candidate than that job than you and (B) he lives among more poor people and therefore is in a much worse situation than you are when unemployed. And (C) hiring the other worker results in everyone else benefiting from lower prices. Of course from YOUR perspective you want the job over your competition. But in what economic/moral/logical way does that make ANY SENSE whatsoever? The answer is it doesn't.

[twiifm]

You can't be a consumer if you are unemployed.  Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?

1) So long as you're eating / consuming electricity / using gas / drinking water / etc... you ARE a consumer and will benefit from lower prices. Its literally that simple. So stop BSing about terminology here.

2) Yes, except the guy overseas who took your job (A) is willing to accept lower wages thus is a more worthy candidate than that job than you and (B) he lives among more poor people and therefore is in a much worse situation than you are when unemployed. And (C) hiring the other worker results in everyone else benefiting from lower prices. Of course from YOUR perspective you want the job over your competition. But in what economic/moral/logical way does that make ANY SENSE whatsoever? The answer is it doesn't.

A person is a consumer AND a worker.  What I said is lower prices help consumers but not workers.  This is the reality.  Offshoring jobs to lower cost labor markets lower price of consumer goods but along w this you lose jobs.  When you lose jobs you lose consumers.  Then you have viscous  downward spiral when instead you want a virtuous upward spiral

Why is that hard to understand?  If I'm a garment worker what do I care that I can buy a shirt for $5 instead of $20 if I only buy few shirts a year?  I'd rather pay $20 and still have a job.  Even though everyone consumes without jobs they consume LESS!  That is the point.  When given a choice or jobs or prices, policy makers should prioritize jobs because thats what drives the economy

The problem w your way of thinking is that its isolated.  The reality is that corporations off shore jobs so that they can get higher profit margin.  I know this because I did it in my own business.  The off shore labor receive some benefit and consumers receive some benefit.  Owners also get more profit.  Taken as isolated cases sounds like win-win-win.  However, looking at it from a macro perspective everyone loses in the long term.  If the middle class erodes we lose the consumer base which drives the economy.  


Its not a moral issue its an economics issue.  Here is the paradox.  Corporations are forced to lower prices to meet consumer demand.  The easiest way to lower COGS is to cut labor costs. The Chinese workers work for cheap but they still can't consume US products until their wages become almost equal to ours.  But once their wages get close to ours the labor market would shift again to a cheaper place like Vietnam or Bangladesh.  Pretty soon instead of inequality being a local issue it will be a global issue.  Once it becomes a global issue economies will destabilize and in turn society will destabilize

I'm not even saying globalism is bad and maybe it is a necessary step in capitalism's evolution.  Just saying you can't ignore issues of inequality.  The last time we had this much inequality gap was right before Great Depression.  Inequality AND Globalism is a hot topic in economics right now.  Its not clear cut as what you make it out to be.  Part of what you say is true.  Globalism has helped industrialized certain economies but its also destabilized others

[LostDutchman]

Hey everyone. In today's developed world where we have glasses that can access the internet and robots that can think on their own, it is a shame that there are still people in parts of the world living under 1$ a day.
What can governments do to end poverty in their countries? Is a solution possible under capitalism? Or did Karl Marx had the right idea with his recommendation of a socialist government?

Don't know much abut history, do you?

[Erdogan]

With interest rate of 0, investments will be totally random, productivity will go down and everyone's children will grow up with hunger, sickness, and ignorance.

There is always powerful support for the politican that can offer new money at zero interest.

[michaelwang33]

You can't be a consumer if you are unemployed.  Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?

1) So long as you're eating / consuming electricity / using gas / drinking water / etc... you ARE a consumer and will benefit from lower prices. Its literally that simple. So stop BSing about terminology here.

2) Yes, except the guy overseas who took your job (A) is willing to accept lower wages thus is a more worthy candidate than that job than you and (B) he lives among more poor people and therefore is in a much worse situation than you are when unemployed. And (C) hiring the other worker results in everyone else benefiting from lower prices. Of course from YOUR perspective you want the job over your competition. But in what economic/moral/logical way does that make ANY SENSE whatsoever? The answer is it doesn't.

When someone is unemployed they have very limited resources. It is very rare that someone will not consume anything at all (only use stockpiles of food, ect) but it does happen.

[profitofthegods]

In the twenty first century socialism vs capitalism is a false dichotomy - they are both flawed.

The solution is prosumerism - consumers taking control of the means of production and participating in the process of production via various processes and channels, including revenue sharing, crypto-equities (coins as shares etc), collaborative open source development, 3D printing and other home manufacturing, decentralization in general and ultimately the creation of customer owned DACs.