Rethinking Poverty and Charity — Better ways to help the poor and the least of these
This article is going to be Part 1 of a two-part series. While my core target audience will be Christians who want to help the poor, I don’t think these ideas will be solely limited to Christian readers, and I welcome constructive feedback.
As Christians, when we think of charity, we usually think of two things. One of these is helping the poor who are in economic distress, and the second is spreading the Gospel. In this article, I intend to address the first, addressing how Christians can better tackle issues related to poverty, and what we can do to better help the poor.
In my second article, I intend to talk about how we can better spread the Gospel, getting back to what the Bible teaches in a 21st Century World. This will include talking about issues that Christians get wrong, and things that we are doing even in Conservative Evangelism that are completely unbiblical.
Poverty in the late 20th Century
When I was a kid I would often see images on TV of children in Africa dying from hunger. I remember a man with a white beard walking through the slums explaining that 30,000 children die every day from hunger. A tiny face with a dark complexion would then look into the camera with a message that transcended languages “Will you help me?”
The man with the white beard was from an organization that was known as “Christian Children’s Fund” and he explained that for something like 30 cents a day, we could give clothes and food to a needy child, and they could go to school, and get an education.
The ads were powerful, and they stuck with me.
As a Christian, I believe that God has called me to help the poor. It would be impossible to read the Bible and conclude otherwise. But even for those who are not Christians, God has revealed that the poor are not to be ignored. This general understanding of this aspect of morality is part of what we call God’s “Common Grace.”
Yet many will be surprised to learn that starvation-level poverty has fallen by some 80% around the world since the year 1970. This is a fact that cannot be ignored, especially if we intend to be serious about helping the poor.
Rather than being the result of charity, these numbers are primarily due to another word that starts with a “C” — Capitalism.
Korea, A Case Study
Just a few generations ago, North and South Korea were both dirt poor. We all know that North Korea became a place of darkness, a place ruled by a totalitarian dictator who claims to be a god, and forces his people to live in the largest prison on the planet, in abject poverty. There are stories coming out of North Korea of the people being so poor that they are forced to eat grass and bark to the point where their skin takes on a green tone.
In South Korea, however, they did the opposite. They allowed some economic freedom, and Western businesses came over to trade. Originally, the people were paid very little. But even this small amount was a great improvement in their lives. They grew in their skill, and ability. In economic terms, we would say that they developed their human capital. Gradually they were able to sell their labor for more money, and they began to climb the economic ladder.
According to Dr. Yaron Brooks, if you go to Seoul today, they are as wealthy as people in the West, having done in a few generations what it took the West hundreds of years to accomplish.
Africa, Poverty and Solar Power
So what about those poor kids in Africa? What can be done to help them?
In short, there is a lot than can be done for the people of Africa, and a lot is being done.
Let’s look at the example of Akon, a musician worth a very large fortune who started a company bringing inexpensive small-scale solar power units to people in remote villages.
As a result, people in these communities have experienced a dramatic difference in their quality of life. They are able to keep their businesses open past dark, women are able to walk the streets without fear of being attacked by lions, and children are able to study for school, even after the Sun has gone down.
The implications for their economy are striking! One can easily imagine the new opportunities that this will create. Consider alone, the increased ability to purchase basic vaccines, rather than seeing one’s children suffer from preventable disease.
Far from plundering the poor, as critics of Capitalism often claim, (falling into the economic fallacy of the fixed-pie) this man is helping countless millions of people to improve their lives, while undoubtedly making a profit in the process.
This is part of why Capitalism is superior to Charity in many ways. While Charity does have it’s place, Capitalism is sustainable, and the wealth created can spread and grow, like apple trees, from one part of the world to another.
Instead of merely giving a community fish and rice for a day, they are gaining the ability to sustain themselves with fish farms and rice paddies. (If I may be pardoned for my use of a rather literal metaphor.) The community is now better off than they would be from a mere hand-out, and the Capitalist here grows in his or her wealth from helping others.
Far from being the band-aid of “Charity,” which transfers momentary wealth, both parties are made richer as a result. Not only is the Capitalist better off, but the community that he or she has helped is far better off than they would have been through charity.
In the case of Akon’s company, those kids who can now study their books after dark, may decide to study agriculture, and they may decide to create a farm that hires dozens and feeds thousands. Or they may decide to go to medical school, or start a business.
Put in simple terms: Charities can accept an apple from one man, and give it to another, Capitalism plants apple trees.
When all is said and done, we should not be surprised to see the grandchildren of these poor villagers sitting next to the grandchildren of today’s Westerners at the World’s most elite universities. That is something that mere charity cannot accomplish on a World-wide scale.
Microloans — Giving a man a fishing pole
One of the more interesting concepts I hear people talking about today is the concept of a “microloan.” Basically these are small loans given to poor people to help them to start a business, or improve a business that they have. Rather than being charity, these are small loans that are paid back over time.
As an American, $25 or $50 is not an amount that I would be willing to waste, but neither is it the end of the world. But for someone in the developing world, a loan of even $25 is the difference that it takes to start a business so that they can provide for themselves, and their families. This is not charity in the traditional sense, this is a loan, that it is expected will be returned.
Kiva is an organization that I have personally used to give out microloans in the past. I loaned money to two women, and one man through this organization, and all of them paid me back.
The only downside to Kiva is that the loans are given without interest, meaning that what you loan is what you receive back. In my case, I actually lost a little bit of money, because of the difference in the exchange rate due to inflation.
That said, I was able to help three people, who were then in turn able to help their families and their communities.
In the long-run, I would like to invest in microloan companies that do charge interest. Perhaps a company that charges 10% after one year, but is willing to work generously with the borrower.
That might sound shocking to some, however if done properly, both the borrower and the lender become richer as a result. Economics is not a zero-sum game, and money is not the same thing as wealth. This is why it is possible to loan money to people in a community, and turn a profit, while making the community richer as a whole, and creating a net gain of wealth in the world.
See my article on this basic concept of economics:
The Biggest Economic Fallacy of All — Money VS Wealth
There are a lot of misunderstandings about economics, and many of these misunderstandings affect the decisions we make…
India, China, and Hong Kong
Historically certain parts of the world have been synonymous with poverty in American speech. “Eat your dinner, there are starving children in China who would love to have that.” (Or India, or Africa.)
Typically the pat answer I received for why there was such poverty in the world was “overpopulation.”
But today, India and China have higher populations, and are better off now than they were just a generation ago. Why is that? The surprising answer is that both nations have since allowed more economic freedom for their people, and more free trade with the rest of the world.
In the 1990’s people in India were prevented from importing cars or watches. The stated purpose of these regulations was to preserve the automotive and watch industries. The result was that Indians were using wind-up watches, rather than digital, and automobiles that were on par with an American automobile from the 1950’s. Today, international trade has created more opportunity for people in India to trade wealth with the rest of the world, and the quality of life in India has dramatically risen as a result. (And this improvement was not just in the area of watches and cars.)
The quality of life for the average Indian is still not where it should be, but thanks to the little bit of freedom that their government has granted, it’s not where it was.
[The economist, Thomas Sowell has written a lot more about India and economics than what I can do justice writing about here.]
In China, under Mao, the Chinese were forced to go work on the farms. Tens of millions of Chinese starved to death as a result. A centrally planned government was an absolute failure, as it has been in every other nation in history.
In Hong Kong, things were different. Hong Kong allowed economic freedom, and allowed people to freely and openly trade with one another. If you wanted to do business, you could do so. As a result of this freedom that Karl Marx decried as “Capitalism,” millions of people were able to live better lives. Hong Kong was a beacon of freedom, against the dark backdrop of the rest of China, trapped in the red shadow of Communism.
It’s easy for Marxists to dismiss every failure of their ideology with the phrase “Well, that wasn’t real Communism.” Or “Well, that wasn’t real Socialism.” Not only is this a classic example of the “No True Scotsman” fallacy, this is often after years of praise from Americans on the Left.
Yet the reality remains, that “Almost Communism” resulted in the deaths of over 100 million people, while “Almost Free Markets” (i.e. Almost Capitalism) has brought billions of people out of poverty.
Poverty In The United States — The inner city, ghetto schools, and welfare
Here, in the United States, poverty is almost synonymous with the inner city. African Americans living in the ghetto are the first group that typically comes to mind when we talk about the poor.
Usually, the answers proposed for urban poverty have to do with Welfare, Affirmative Action, and giving more money to inner city schools. Ironically, these failing ghetto schools often receive more money than the national average, but more on this in a bit. Furthermore Affirmative Action has been shown to actually harm black graduation rates in California’s state university system. Once the UCLA got rid of their Affirmative Action program, black graduation rates actually increased.
Any one of these topics could be a whole book in and of itself. And for a general article on poverty, there is only so much that can be said within a limited space. That said, I want to point to the work of Doctor Thomas Sowell. Dr. Sowell is one of the greatest economists in the world today.
In this five minute clip, Dr. Sowell discusses the impact of charter schools in America’s urban ghettos.
For the longer version of this interview, please see the following link.
Clean Water — An example of charity done well
I don’t want to leave readers with the sense that all charity is futile, and that business investments are the only way to end poverty. Ultimately Capitalism is the only way to ensure the economic future for a people long-term, but there are ways that traditional charities can help people in the poorest parts of the world to begin to climb the economic ladder.
Providing communities with a clean, renewable source of water is one of the best things that can be done for “the least of these” (as Jesus called them) in the 21st Century. There are places in the world where people have to walk for miles just to get clean water. This means less time to focus on providing other needs, such as food and education for themselves, and their children.
This video will give a brief introduction to this problem.
Depending on the region, all it takes is $30 to provide clean water to one person for the rest of their life.
Let that sink in, and read that sentence again if you have to. For $30 one person will never again have to worry about not having clean water. If that is not a good cause, then I don’t know what is.
This $30 will improve the quality of life for one individual on a dramatic scale, allowing them the possibility to take control of their future. Food, medicine, clothing, and education may then be brought within reach.
Clean Water is just one example of the fact that charity has it’s role, and it’s a very important role. But when we give to charity, we should be very smart about how we give. In the case of clean water, there are multiple charities out there, both Christian and non-Christian, and many of them are doing wonderful things.
On the other hand, there are “charitable” organizations within the United States where most of your money goes to inefficient administrative overhead, and very little of it actually goes to helping anybody. That is part of the reason why I almost never gave to charity drives that would pop up here and there when I was in college. Even some of the medical research charities were using the money for research that I would consider unethical, as a Christian in the biotech industry.
That does not mean that we should not give to charity, because we should, but it is important to know where our money is going, and what we are actually giving to, and not to get caught up in the emotion of the moment.
Keep in mind also, that you do not owe any particular person anything just because they are poor. That might sound harsh, but it is an area that Christians almost always get wrong. I remember a time where I was visiting a friend in another city, and I saw a homeless man begging. I could not stop, but I was probably praying about going back. Then, maybe half a block away, I drove past a liquor store.
Other times I have seen people begging for some spare change to buy some food. But when I offer to buy them food, they decline. I even had a lady come in while I was sitting at a Burger King so she could ask for money to go buy a happy meal for her kid at McDonalds — McDonalds being about three miles away.
Another time, I was sent a FaceBook message by a guy in Uganda — and I would love to tell this story in detail sometime, but I am sure you can imagine how it went. Here’s the short version. The guy seemed very legit, interestingly enough, and had a “ministry.” It took a black woman at a bank telling me never to wire money to someone I don’t know in Africa. (I was considering it.) It wasn’t something I would have accepted from another white man — I needed to hear it from her.
Instead I found several local places in the guy’s area who could help him, and recommended he help people in his area who wanted to start businesses get on Kiva. This guy had excuses galore! He kept talking about how the people in his community can’t use Kiva, because they do not know English well, but his English was just about perfect — and there is no reason he could not have helped them.
I had quite a few recommendations for places he could go for help, but the only way in the whole wide world that this man could be helped was by me personally wiring money to him. -_-
I ended up using that money to pay off some of my bills, and grow my online ministry instead. I also probably bought some clothes, which probably brought money to people in foreign countries. Not to mention that pizza I bought from a Little Caesars that primarily was hiring African Americans.
Shockingly, I helped myself, and others in the process, including the thousands who benefit from my educational ministry.
Ways to Invest
There are plenty of ways to invest in companies that are encouraging growth in the developing world. I personally use the app known as Stash. Without going into too much detail, this allows me to invest in companies all over the world, and to build a profit in the process. Far from being dirty parasites, as we have been trained to think, these companies are creating the wealth that is bringing billions of people out of poverty.
Some of the “ETF” portfolios in Stash include those for clean water companies, companies prominent in the developing “Up and Coming” world, and those in the Asian pacific. There are also plenty of more traditional routes for investment. Closer to home, one of the more successful ETFs in the app is called “American Innovators.”
This is a slightly older video reviewing Stash and Acorn, two great apps for beginning investors. This video is a little out-of-date, so I want to point out that Stash does allow you to invest in individual companies now, not just ETF portfolios.
Stash is, of course, not the only option for using business to help people in the poorest and developing regions of the world. There are pharmaceutical companies, for example, that are searching for cures for HIV, and vaccines against malaria.
That does not mean that every company on Earth is a golden star of moral virtue. After all, companies are run by people. But the ignorant stereotype often pushed by the American Left that profit is somehow synonymous with “greedy exploitation” bears little resemblance to the reality of what we are seeing both in the West and in the developing world.
A Better Way Forward
Here in this article I gave examples of several companies and charities that are tackling issues related to poverty in our world. My focus here was to explain not that free markets are the only solution to poverty, but that they are necessarily the major solution.
I also explained how poverty is often caused not by a lack of resources, but by putatively well-intended government policies. Keep in mind, however, that other factors, such as geography, and cultural differences, including how much people value education, have been shown to play major roles in economic differences between groups and nations. But this is more than I can address here.
Here we’ve seen examples, such as Akon, and Kiva, and talked about how they are directly helping those in the poorest regions of the world.
But what if Christians can do more? We’ve done a lot historically to bring food, and resources to the rest of the world, but as we look at what has been economically helpful in the long run, what more can we do to help those in need?
Starting a “selfish” for-profit business might be the best way to help others. Consider a man who invents some new clean water technology, or a woman who invents a better method of solar power. Consider the capitalist who creates a less expensive automobile for people in China and India, so that people can have more job availability.
Such scenarios were widely explored in the SciFi realism novel Atlas Shrugged by Ayn Rand. In the book, Rand imagines a world where a number of new inventions come out, including a metal that was far stronger, and far cheaper than steel. Yet corrupt “Altruistic” government policies were implemented to attack the “Greedy Capitalists” who were “out for profit” and who were ironically the ones moving the world forward as a result.
The sad reality of actual history is that so many people have an inverted understanding of economics, and over a hundred million people have needlessly died thanks to their heart-felt approach to the world.
All of this leaves open a number of questions.
What if Christians were able to dominate in the world’s markets, creating businesses that turn a large profit, while also running our businesses in ways that are consistent with a Christian ethic? In the case of biotechnology, this would mean avoiding embryonic stem cell research, as a start.
What if the top CEO’s of tomorrow’s world were Christ-followers who understood that wealth is not a zero-sum-game and could see how they could bring education, food, and clean water to the world, and who could rightly and justly create and empire and a fortune in the process?
What if instead of giving a man a fish, we helped entire communities to build fish farms, and we did this as our business?
What if we learned to move past out prejudices against “Capitalism” and “dirty business” and learned that the Bible never taught that money in-and-of-itself was bad, but that money is God’s gift to man so that we can more easily trade our wealth from one to another?
What if we got off our ignorant high horses, and started to use the most powerful tool to end poverty in the history of the world, and ignored the self-righteous parasites that have invaded our universities who complain about “Greedy Capitalism” while demanding that others fund their lavish lifestyle and their $100,000 Social Justice degree?
In the Bible, we see a number of verses that people often use to reinforce their prejudice that money is evil, but which if read straight from the page should make us shudder at the idea of standing in the way of economic freedom, simply because of popular rhetoric.
The main passage that comes to mind is found in Luke 16. Here Jesus tells the story of a Rich Man, and a poor man named Lazarus. The Rich Man here refused to help Lazarus in life, and when both men died, Lazarus went to Abraham’s bosom, while the Rich Man went to a place of torment.
Bible Gateway passage: Luke 16:19-31 - New American Standard Bible
The Rich Man and Lazarus - "Now there was a rich man, and he habitually dressed in purple and fine linen, joyously…
Keep in mind that this passage is likely not a parable. For one thing, the passage is never labelled as a “parable.” For another, parables generally do not include specific names.
This Rich Man refused to help the poor, even the poor who were dying at his doorstop. Presumably, this was a great sin that brought him to the place of torment. It need not be the case that this Rich Man had to help Lazarus by throwing him charity, perhaps he could have hired him for just compensation.
How much more deserving will those so-called followers of Christ be who stand in the way of the one force that is bringing billions out of poverty, not out of refusal or laziness to help, but who are actively chopping at the trunk and poisoning the roots from which all men, women, and children, rich and poor alike, gather their food?
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Also be sure to check out the interview I did with Cody Libolt based on this article: