Poverty, Control, and Capitalism

Poverty is directly tied to the economic system, we will explore that in this post

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What is Poverty?

In this we start with poverty as a state of being extremely poor. Now we must answer what it means to be poor. To be poor is to lack the ability to have a standard of living that is considered comfortable to modern society. Now we must explore what this means. We will start with modern society. By modern society I assume it means the most prevalent society at the time. In different situations different parts of societies can be compared, so in that regard it can be relative. Next we will look at what standard living that is considered conformable to modern society is. This is more subjective, but people need food, water, shelter, clothing, and education to survive in modern society. Unlike past societies, these can be easily provided for all members of today's society, which makes it a good baseline.

Poverty is when members of a society lack the conditions stated above. Using food as an example. On average half of all food is thrown away before it even makes it to your plate. With one in nine people suffering from chronic undernourishment (essentially starvation), its easy to see the problem. We produce far more than enough food to feed everyone, the question is why. The simple answer is that those in poverty do not have enough money to afford it, so feeding them is not profitable. But that is not deep enough. [1][2]

The next questions are: why do they not have the money to pay and why does it matter that they can’t pay? Africa is a prime example of the first question. Every year around 40 billion more dollars leaves Africa than enters it. To put this in perspective, “solving” world hunger would cost an estimated 30 billion a year (which includes profit to the farm owners, so it is really far less). This is due to one major factor: Profit. This takes two forms, loans and regular business profit. The amount owed is actually increasing faster than the GDP of the country, making paying them back impossible. This profit from external countries with the extremely cheap labor of the third-world countries is often called super-profits. They help combat the tendency of the rate of profit to fall. This is needed to sustain capitalism. Aid to 3rd world countries is a lie, we are not helping them we are stealing from them. That’s not even the whole story. [3][4]

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Production and Control of Resources

The control of resources is the most important element in defining the function and form of an economy. The answer to the question: “Why does it matter that they can’t pay” lies here.

According to Karl Marx the driving force in society is the development of productive forces. In other words to increase our knowledge and reduce socially necessary labor to produce. When this is stalled, employment, life, economic growth, and rising living standards can not be guaranteed.

In the beginning of capitalism was a force for progress. Any company that was too slow on the uptake of new technology was pushed out the market. As these markets expanded and capital became more concentrated, the economy ran into a problem. There were no new markets on every front to expand in, no new land and resources to divide up among the rich. That has lead into the stagnation we see today, it is a problem intrinsic to capitalism. It must always expand, and when it doesn’t it stagnates. By the 20th century major discoveries slowed to a crawl and the majority were not made of markets and capitalism, but of governments to use as weapons of war. This is only worse today. (Ignoring the so-called golden age of capitalism, which was a post war boom caused by the need to re-build infrastructure after the world wars.) During that time military spending outpaced R&D spending, making military industrial complex a bigger industry than progress. (The USSR on the other hand took 44 years to go from an agricultural 3rd world country to putting the first man in space, hundreds of years of capitalist progress in 44.)[5]

There is something that doesn’t intuitively make sense here, how can there be no new markets and 3rd world countries that are in need of development? This gets into the aspect of control. You can’t profit off of something you can’t control. The capitalists use loans and debt to keep the 3rd world country from building up their means of production. This keeps them dependent on exploiting their own workers for the west, just so they can survive. If the means of production were built up too much there is often a revolution to shake the fetters of capitalism. In this instance military force is needed to smash the country and break the means of production, just to prevent it from happening in other countries.

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Poverty exists for a reason. This reason is not well hidden but people don’t seem to enjoy searching for it or learning of it. My goal is to at least share this knowledge widely enough that some begin to think.

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[1] [2] [3] [4] [5]