and Ridding Ourselves of Poverty
It is a remarkable fact that humanity currently has the technological and organizational capacity to easily feed, clothe, and house all 8 billion people currently inhabiting planet Earth. Should you doubt this, simply consider the efficiency of current employment. In the United States, only 0.32% of workers are in Farming, Fishing, and Forestry occupations, only 0.31% of workers are in Textile, Apparel, and Furnishings occupations, and only 4.2% of workers are in Construction and Extraction occupations, according to the U.S. Bureau of Labor Statistics. If you round their total up to 5% of currently employed Americans and assume that twice as many people are needed to supply, manage, and distribute the output of those workers, as well as compensate for trade imbalances, that would still suggest that only 15% of the roughly 141 million currently employed persons in the U.S. are needed to feed, clothe, and house the roughly 333 million persons residing in the United States.
What these statistics show is that, given our current technological and organizational capacity, humanity is reasonably able to feed, clothe, and house all 8 billion of us using a labor force that is roughly ⅔ that of China’s. Such being the case, poverty is not a consequence of an incapacity to supply essential goods and services nor is it a consequence of an insufficient demand for essential goods and services.
Rather, poverty is a consequence of how the global economy currently operates.
It may seem peculiar that the word “economy” comes from the Greek term for household management (oikonomia). Yet, the terminology is entirely appropriate. Managing a household involves the allocation of labor and other resources for the purpose of benefiting the household. So, the bigger the “household” is, the bigger its economy is able to be. Likewise, the better an economy is managed, the more the entire household benefits. Thus, if an economy does not benefit its household entirely, the economy is not being managed well. What the widespread existence of poverty makes clear is that our global economy is currently being mismanaged. So, why is that?
Understanding the Basics
Fundamentally, the allocation of household labor and other resources is managed through a combination of giving, exchanging, and taking (considered stealing, when done without permission). While giving only requires the action of the giver and taking only requires the action of the taker, exchanging requires actions to be agreed upon and undertaken by both a buyer and a seller. When multiple parties agree to and engage in fractional exchanges, in which portions of things are exchanged, the additional complexity of doing so is substantial enough to require the creation and use of money.
Money is a medium for the exchange of surplus resources.
What this means is that money is used to facilitate the exchange of a portion of a buyer’s available resources for a portion of a seller’s available resources. Since having a surplus is having an amount leftover, a resource is only available to trade when it is in surplus, because if a resource isn’t in surplus that means it’s being used for some other purpose and therefore isn’t available to be exchanged. So, for people without net surplus resources (namely the poor), relying on exchanges to increase the effective value of their surplus resources (as is done by the rich) is not especially helpful. Instead, in an exchange economy, the poor struggle both to attain the resources they need and to enlarge whatever surplus resources they may have. This has often led the poor to rely on taking things to fulfill their needs and wants (mostly by taking from Nature and taking things given by others) rather than relying on exchanges of surplus resources.
While people who lack surplus resources focus on their needs more so than their wants, people who have abundant surplus resources focus on their wants more so than their needs, seeing as the fulfillment of those needs may be treated as a given. This is why what is referred to as the global economy, which focuses on the fractional exchange of surplus resources on a global basis, is only a subset of the human economy, which addresses the total allocation of labor and other resources serving the entire household of humanity. Subsequently, in order to rid ourselves of poverty, we must address the human economy’s fulfillment of both needs and wants rather than the global economy’s fulfillment of only wants.
It is a sad irony that it is more expensive to be poor than to be rich, especially when it comes to spending time. The poor must work far more hours to have their needs met than the rich must. This is partly due to the fact that the poor lack the surplus resources that they would otherwise be able to invest towards decreasing costs and increasing the value of their time and labor. The ability to reap the rewards of investment is one of the reasons why the rich tend to get richer while the poor tend to get poorer. Yet, it isn’t the only reason. Rather, there is something else about the global economy that is even more fundamentally unequal.
Whenever an economic exchange takes place, the buyer and seller must agree on the price of the exchange. Normally, the price of the exchange is an agreed upon amount of an agreed upon currency. However, the price of an exchange may alternatively consist of any combination of bartering, currencies, and contractual terms. Regardless of what form it takes, the price that the buyer and seller eventually agree upon is largely based on how much economic leverage each party has over the other.
If a buyer is party to an exchange to fulfill a need while a seller is party to the exchange to fulfill a want, the seller has more leverage over the price of the exchange. If a seller is party to an exchange to fulfill a need while a buyer is party to the exchange to fulfill a want, the buyer has more leverage over the price of the exchange. So, the poorer the party to the exchange is, the more that party is in a state of need and the less leverage that party has over the final price. At the same time, the richer the party to an exchange is, the less interest that party has to engage in the exchange if the price is not what they want. After all, the rich most often don’t need to exchange their surplus resources, whereas the poor most often do. Consequently, the final price in such unequal economic exchanges is a result of the intersection of what the rich want with what the poor can afford. So, as long as poverty is allowed to continue and as long as the rich want more riches for themselves, on average the rich will get richer while the poor get poorer, all due to compounding, unequal economic exchanges.
The societal need to compensate for the impoverishing effects of compounding, unequal economic exchanges has been known about for a very long time. It is the basis for religious obligations to give charitably to the poor, prohibitions on usury, the Jubilee as described in the Old Testament, as well as the steep, progressive income taxes found in many socialistic countries. The issue of how to compensate for the effects of compounding, unequal economic exchanges has even been worked out mathematically, in what is known as the Affine Wealth Model. Yet, it is readily apparent that charity has not been enough to prevent poverty, usury is still rampant, the Jubilee has not been in effect for over 2,500 years, and very few countries engage in sufficiently progressive taxation, as determined by the Affine Wealth Model, to compensate for compounding, unequal economic exchanges. So, why is that?
Greed is the desire to have more than one needs at the expense of others having less than they need.
The problematic consequences of greed do not arise because people want more than they have. Rather, the problematic consequences of greed arise when the needs of others are ignored. Yet, that is exactly what our global economy has been doing. By focusing on facilitating and increasing the exchange of surplus resources (wealth) to fulfill the wants of the wealthy, the needs of those lacking resources (such as the poor) are simply excluded from the global economic model. This ignoring of the needs of others then corrupts the profit motive. The desire for profit (the desire for gain and surplus) is entirely well and good when everyone’s needs are already being met. But, if profit is gained at the cost of others having less than they need then the profit motive becomes an instance of greed, which then provides justification for objections to capitalism.
Much as the ignorance of others’ needs corrupts the profit motive, greed corrupts economies.
Since the purpose of an economy is to manage a household’s labor and other resources for the benefit of the entire household, the desire of those with economic power to have more than they need at the expense of others having less than they need is a direct cause of the mismanagement of economies. Admittedly, it may not be the only reason for the mismanagement of economies but greed is entirely sufficient to corrupt an economy. Before it makes any sense to consider other potential causes of mismanagement, we must first eliminate the corrupting influence of greed from those with economic power if we are to manage the human economy well. So, how might we do that?
Well, greed is a consequence of fear. Specifically, greed results from a fear of lacking enough to fulfill one’s wants. The more one is wanting, the more one is operating from a feeling of lack, no matter how much one has. Since it is natural for us to stop wanting what we already have, regardless of how much we enjoy what we have, unlimited wants enable unlimited fears of lack which enable unlimited greed. When people act on the basis of greed, by prioritizing fulfilling their wants over the fulfillment of others’ needs, those in need have even more justification for their own fears of lack. This can then result in a sort of fearful scramble for surplus resources that leads to a few individuals atop a large pile of people attempting to reach heightened levels of surplus, with many left in a state of crushing need at the base of the heap. Meanwhile, the rest must claw their way through the middle as part of their “struggle to get ahead”. Clearly, this approach is entirely unhealthy.
In order to heal the human economy, it is essential that we cure ourselves of the disease of greed. And, greed is indeed a disease, a blinding one at that. Just as illness decreases one’s ability to function, wellness increases one’s ability to function. By creating conflict and scarcity out of a vast abundance of surplus resources, greed decreases our ability to function, both individually and collectively. As a disease, greed is contagious. Wherever a fear of lack is spread, the disease of greed is spread along with it.
Fear is contagious — because fear is a mental virus.
Being a virus, fear requires hosts in order to replicate and spread. It simply cannot do so on its own. This is why curing viral diseases requires boosting the immunity of the host (which is what vaccines and healthy immune systems do), rather than (vainly) attempting to eliminate every instance of the virus a host might come in contact with. What this means is that we can eliminate both greed and poverty by immunizing ourselves from the fear of lack. If we trust that there are enough surplus resources to meet everyone’s needs (which there certainly are) and we trust that our needs will be met (regardless of a potential inability to exchange surplus resources) then what is there actually to be afraid of?
Well, clearly we don’t trust that our needs will be met regardless of a potential inability to exchange surplus resources. Clearly we don’t trust that others will be sufficiently generous with us to meet our needs. Why trust that others will be sufficiently generous with us — when we ourselves aren’t sufficiently generous with others? Such is the depraved, self-justifying reasoning of fear.
The same as with any other virus, fear replicates itself at the expense of its hosts. Without a fear of lack, humanity has every reason to economically cooperate in order to fulfill everyone’s needs along with fulfilling as many wants as possible. With a fear of lack, humanity gradually succumbs to the conflict-ridden consequences of greed, depriving many of what they need while needlessly depriving many others of what they want. So, to heal the human economy, we must be generous with others and trust that others will be generous with us. And, how do we do that? By releasing our fears…
You release a fear whenever you stop believing its excuses.
It is only by believing in fear that you act in fear. So, to immunize yourself from fear, simply stop believing it. After all, fear is an illusion that is far more harmful than helpful. As when handling fire, danger is real — but fear exists only in the mind. Just because you feel fear does not mean that you need to act on it. Instead, you can always choose to act from love, with care.
It is not an overstatement to point out that fear underlies all conflicts, most especially violent ones. Fear may be very familiar to everyone — but in our modern, interconnected, and destabilized world, fear is no longer affordable or sustainable. Humanity must now cooperate more and more effectively than it ever has before if it is to solve the many growing problems humanity has created. Either humanity will release its fears, so that its fears die out, or humanity itself will die out. At this point in our evolution, those are the only remaining options.
A Healthy Human Economy
When not infected with fear, a healthy human economy is more than able to eradicate poverty while vastly increasing the supply and distribution of surplus resources. In other words, a healthy human economy is much wealthier than an unhealthy one — and that is in large part because its wealth is shared much more widely. This increase in both the volume and distribution of wealth is made possible because a healthy human economy is one that efficiently allocates surplus resources to fulfill human needs before attempting to fulfill human wants. When concentrating surplus resources into only a few hands, the overall flow rate of surplus resources is far less than its potential. Reduced flows of surplus resources then create compounding economic failures and inefficiencies that are symptomatic of an unhealthy human economy. While an unhealthy human economy is rooted in fear, a healthy human economy is rooted in love, quite literally.
Love is felt as a knowing and desire to increase the ability to function of that which is loved. To love is then to act upon the love that one feels.
Logically speaking, a healthy human economy cannot encourage greed, because doing so goes against the requirement of a healthy economy to benefit its entire household. In contrast, acting to increase a household’s ability to function is a loving thing to do and does benefit the entire household. Since illness decreases one’s ability to function, a human economy rooted in fear and infected with greed is ill and unhealthy, by definition. Since wellness increases one’s ability to function, a human economy that is rooted in love is well and healthy, by definition.
To understand why this is the case, it helps to understand that humanity is a species. As a species, humanity is essentially a multicellular living organism, just like you and I are. In the same way that your body creates surplus resources and distributes them throughout your body, humanity creates surplus resources and distributes them throughout its body. In the same way that parts of your body are less able to function when deprived of needed resources, parts of humanity are also less able to function when deprived of needed resources. In the same way that excessive concentrations of surplus resources (i.e., fat) harm the ability of your body to function, excessive concentrations of surplus resources (i.e., wealth) harm the ability of humanity to function. Of course, this does not mean that wealth is bad, anymore than it means that fat is bad. Rather, the question is whether our fat and wealth are being used in a healthy way (increasing the ability of the body to function) or in an unhealthy way (decreasing the ability of the body to function).
Practical Health Measures
Once we understand what a healthy human economy is, we can then determine practical steps for us to heal the human economy we have. Of course, just because a step is practical does not mean that it is simple or easy. After all, our human economy has been ill with poverty, fear, and greed for a very long time. So, with all that in mind, below is an initial prescription for facilitating the process of healing:
- Replace fear of lack with love of self and others.
- Ensure that greed is not rewarded.
- Provide everyone with a basic income to fulfill their basic needs.
- Tax wealth instead of income.
- Replace debt with shareholding and gifting.
1. Replace fear of lack with love of self and others.
Living in fear of “not having enough” is far less enjoyable than living in love with yourself and others. Yet, the choice is always yours in each moment. Just as it is healthier to love a scared child than to do whatever the child says, it is healthier to love yourself than to act on your fears. Just as it is healthier to love yourself than to act on your fears, it is healthier to love others than to act on their fears. The more you allow yourself to be inspired by love, rather than motivated by fear, the more you inspire others to do the same. Fortunately, love is also contagious.
The human economy heals when humans behave in healthy ways, first with themselves and then with each other. How lovingly you care for yourself shows others how lovingly you are able to care for them. How unlovingly you treat yourself shows others how unlovingly you are able to treat them. Healing the human economy starts by healing the human heart — because, without the ability to feel love and without the ability to feel the responsibility we have to love ourselves and each other, we inevitably behave irresponsibly.
2. Ensure that greed is not rewarded.
It is clearly irresponsible to reward greed. The more we reward greedy behavior, the more we incentivize it and the more ill our economy becomes. Greed is rewarded whenever greedy behavior results in increased amounts of things that people desire, such as wealth, power, social status, and attention. At present, many laws, regulations, policies, and tax schemes throughout the world reward the greedy with increased wealth and power. At present, it is common for cultures to socially reward the greedy by giving them increased social status and attention relative to how much wealth and power they have, rather than how much merit or wisdom they’ve accrued. This situation needs to change if we are to heal the human economy.
To ensure that greed is not rewarded, we can start by publicly and consistently pointing out that greed results in societal illness whenever we witness greed being rewarded. This is not a call to blame and shame but rather a call to create and maintain public awareness of the dangers of greed itself. Giving more attention to those who engage in greed, instead of giving more attention to the dangers of greed, only serves to reward the greedy. So, instead of rewarding the greedy, disregard those who perpetuate greed. While loving them as best you can, avoid needlessly giving them your time, attention, money, votes, or other resources. The more aware everyone is of the dangers of greed, the higher the cost and the lower the payout is to the greedy. By choosing to give your time, attention, money, votes, and other resources to those who exemplify love rather than fear, you sideline the greedy while both implicitly and explicitly encouraging a healthy human economy.
3. Provide everyone with a basic income to fulfill their basic needs.
Since a healthy human economy is one that first fulfills needs and then fulfills wants so as to benefit the entire household of humanity, humanity requires a means to ensure the fulfillment of basic needs, first and foremost. Both currently and historically, the resources used to fulfill humanity’s basic needs have been supplied by Nature. Whether as hunter-gatherers or as fishers and farmers, human beings have treated natural resources as surplus resources to be given, taken, and exchanged. With a vast array of governments, people, and businesses staking claims of ownership over dwindling land and other natural resources, however, it is clear that on average each of us has less access to surplus natural resources than ever before.
Whereas in a world of fear we must fight with each other to access limited resources, in a world of love we must cooperate with each other to share limited resources. In the same way that each of us has a right to breathe air and drink water, each of us also has a right to eat food, to be adequately clothed, to be adequately housed, and to receive necessary medical treatment. None of us has the right to judge others as unworthy of having their basic needs met. As it has been said, judge not lest ye be judged.
To ensure that our basic needs are met (regardless of a potential inability to exchange surplus resources), the easiest way to do so is to provide everyone with a basic income that enables each person to purchase the resources they require to fulfill their basic needs. Having a basic income not only allows for the elimination of poverty; it also allows those with minimal surplus resources to start investing in themselves and others so as to create new sources of wealth to be exchanged, rather than taking from Nature or from others. The resulting increased volume and efficiency of economic activity causes a healthier human economy to grow vastly wealthier than it ever could while ill.
4. Tax wealth instead of income.
Because income is used to pay for the fulfillment of needs as well as wants, income is both needed and wanted. Reducing income by taxing it is thus capable of preventing the fulfillment of one’s needs and wants, rather than serving to fulfill one’s needs and wants. While historically income taxes were necessary to fund governmental services for public benefit, that is no longer the case. In the same way that humanity is able to determine and allocate the ownership of currency amounts in bank accounts (rather than counting cash in hand) humanity is now able to determine and allocate the ownership of any other surplus resource that can be identified (rather than reviewing claims and contracts). As a result, it is now possible to tax wealth instead of income. This approach enables a healthy human economy the same way that utilizing body fat to power your body (instead of utilizing blood sugar) increases your body’s stability, resilience, endurance, and metabolic rate.
When taxing wealth instead of income, only surplus resources, rather than needed resources, are used to fuel governmental expenditures. Because economic inequality is primarily a consequence of compounding, unequal economic exchanges due to the leverage afforded by wealth rather than differences in income, taxing wealth instead of income increases economic equality while also incentivizing the efficient creation of new wealth to replace the wealth being taxed. When otherwise taxing income instead of wealth, taxation systems encourage wealth over income, which discourages income while encouraging inflation of existing asset valuations, thereby increasing economic inequality. Fundamentally, a healthy human economy requires returns on the investment of labor to be greater than returns on the investment of money in order to incentivize wealth creation through the use of labor rather than asset price inflation due to increasing scarcity.
The key to enabling the taxation of wealth instead of income is in requiring registered ownership while facilitating fractional ownership. Just as with money, ownership is a social construct that we humans created; neither money nor ownership exist in Nature. When you were born, the only thing you owned was your own body. Everything else that you have since come to claim ownership of is a resource that was given, taken, and/or exchanged by others who also didn’t innately own anything other than themselves. As with money, ownership is merely a set of tacit agreements that enable agreed upon behaviors. Therefore, we can update our agreements to base them in love, instead of basing them in fear. By requiring the registration of ownership, we stop behaving as though people own things simply because they assert command over them. Instead, registration of ownership allows for an explicit, public agreement of ownership that enables greater responsibility for what one owns, while also enabling more effective cooperation and avoiding needless conflict. It is by facilitating fractional ownership that we then enable wealth to be taxed regularly as a percentage without triggering the sale or valuation of assets at the time of taxation. Shares of ownership can then be publicly traded for money to fund governmental services when those funds need to be drawn upon, rather than requiring those being taxed to pay variable sums of money directly to governments. This vastly simplifies and lightens the burden of taxation on all parties.
5. Replace debt with shareholding and gifting.
Debt, the agreement to pay in the future for surplus resources that were loaned in the past, causes economic illness. The reason for this is that debt is incurred by those having a need in order to satisfy the wants of those loaning the surplus resources being borrowed. This then results in unequal economic exchanges, usually involving interest rates that are correlated with economic leverage. For example, payday loans and recurring credit card debt generally charge very high interest rates (sometimes after an alluringly low introductory rate to initiate the debt) because those incurring the debt have little to no economic leverage to reduce their debt burden. In comparison, mortgage loans offer much lower interest rates because those incurring the debt have the economic leverage of owning a property that they are then able to sell when needing to pay off their debt. No matter the interest rate or other terms attached to a debt, however, the fact that debts are incurred on the basis of need to fulfill the wants of those with surplus resources means that the use of debt amplifies the compounding, unequal economic exchanges that fuel poverty and unhealthy wealth concentration.
To ensure a healthy human economy, debt needs to be replaced with shareholding and gifting. Gifting, such as by providing everyone with a basic income, prevents the need for incurring debt out of desperation. Shareholding, such as by enabling registered fractional ownership, allows for investing in the creation and preservation of surplus resources rather than in the diversion of surplus resources from those in need to those in want. Because debt creates obligations for debtors, debt reduces their ability to function and thereby creates illness by definition. In comparison, gifting increases the ability of the gifted to function while shareholding increases the ability of the shareholders to function. When it comes to ensuring a healthy human economy, both gifting and shareholding support the allocation of labor and other resources for the purpose of benefiting the entire household of humanity, whereas debt does not.
When knowing how to heal, being ill becomes optional. With knowledge, love, and care, we are able to heal and thrive as the species we are. With ignorance, fear, and greed, we are left to extend the economic, moral, and societal illnesses that we have chosen to learn through up until now. Humanity, the immature species that we are, can no longer afford to live in ignorance of ourselves and others or to remain ill with constant conflict. Our need to cooperate for the benefit of all is ever increasing and will not be reversing. Observably, our species has begun to mature. Observably, our species is gradually learning to act more responsibly in our own home. Yet, it is up to us to learn our lessons well and take the responsible actions needed to rid ourselves of poverty, greed, and fear. We are responsible for our choices. We are responsible for our illnesses. And so, we are responsible for healing our human economy.
Note: This article is available with footnotes at https://ErezAscher.com