Make a bigger pizza

The most annoying verse in the Bible is Matthew 26:11: “You will always have the poor with you, but you will not always have me with you.”

Initially, no one wants to publicly admit that the war on poverty is unwinnable, at least according to this verse. Second is the idea that Jesus of Nazareth seems to be saying, with poverty being forever, console yourself with the fact that ‘The Messiah’ is now with you but won’t be here forever. “Maybe go and fight poverty after I am gone.”

Commentators attempt to explain this verse with another. Deuteronomy 15:11: “There will always be poor people in the land. Therefore I command you, “You shall open wide your hand to your brother, to the needy and to the poor, in your land.” Give charity to the impoverished.

But any discussion on poverty reduction must start with—because of what is apparently a Divine Law— mentioning China. “Beijing, April 1, 2022—Over the past 40 years, the number of people in China with incomes below $1.90 per day has fallen by close to 800 million.”

Interestingly, but rarely, if at all, do you see any context to that data. Let’s look deeper.

In 1980 the global economic output (GDP) per capita was $2,552. For China the per capita output was $195. Is this the point where we mention “Low Base”? I will grant that 30 years is probably not enough time for a communist revolution to show any dramatic positive economic benefits, although in 1960 the per capita was $90 so it did double in 20 years.

Between 1980 and 2021 the global per capita increased to $12,235 and China’s increased to $12,556, so China saw an incredible rise from the ashes. Further, China’s largest nominal increase started in 2000.

But what is significant about 1980? It was the US and China reestablishing diplomatic relations and signing a bilateral trade agreement in 1979. As a result, between 1980 and 2004, Us-china trade increased from $5 billion to $231 billion. The total value of China’s global exports was $20 billion in 1980; in 2005 it had risen to $760 billion.

Maybe all those sport shoes, clothing, and Christmas decoration factories that moved from the Philippines to China also helped raise those 800 million Chinese out of poverty.

Nonetheless, poverty—no, let me rephrase that—wealth disparity is a massive global problem. And it is a problem, not because of any noble or humane reason but because “poor people” tend to eventually tear down governments and begin to “eat the rich”.

The riots in France are not about money as such but that “rich” people who do not have to worry about living comfortably in their golden years are asking the ones who have effectively struggled financially all their lives to make sacrifices.“why are some people poor?” That is always the wrong question. The question should be, why are some people rich? Poverty is the natural condition of humanity.

For thousands of years, essentially until the First Industrial Revolution, “poverty” was the default setting. The ‘One Percenters’ were wealthy normally from killing and plundering the next-door neighbor —or the next country—who had two cows instead of only one.

The industrial revolution began in the mid-1700s and for the first time in human history allowed for more than simply subsistence farming. With the technological advances came urbanization. Note this. In 1800 less than 3 percent of the world’s population was living in cities of 20,000+ population.

Policy makers and other “dogooders” are incompetent and lazy, not understanding how poverty and wealth disparity is reduced. The example is always Robin Hood and the mythical “Steal from the rich and give to the poor.” Examples: “In Finland, penalties for traffic violations are pegged to taxable income.” “California Utilities Propose Charging Customers Based on How Rich They Are”.

Global—and Chinese—poverty was reduced through “wealth creation.” Create genuine wealth through production and not through financial gimmicks and then disparity goes way down. Make the pizza bigger and not just rob someone else’s slice.