There
are many efforts underway to focus attention on
world poverty. In a world of growing wealth, the
statistics on global poverty are staggering.
According to the United Nation's Millennium Project,
there are currently 1.2 billion people living in
poverty. 50,000 deaths per day occur worldwide as a
result of poverty. Every year more than 10 million
children die of hunger and preventable diseases.
More than half of the world's population lives on
less than $2 per day and 800 million people go to
bed hungry every night.
To combat the situation, there are massive efforts
underway, from churches, to charitable
organizations, to local, state, federal and
international government programs designed to
eradicate poverty. Billions of dollars in foreign
aid have been distributed to countries around the
world to help feed the poor. Poverty reduction
targets have been set. International goals have been
announced. Deadlines have been determined. Agreement
has been reached by every national leader that
poverty must be eradicated.
There are faith-based programs designed to feed the
children; education programs designed to create
awareness of poverty and starvation; corporate
programs designed to enhance global development,
helping to create business or to bring existing
corporations into nations to provide jobs; and
government programs designed to build hospitals,
schools, and businesses to create jobs and improve
healthcare and education. Charitable contributions
and government money, either from the local level or
through foreign aid, are the main source of funds
for the efforts.
Yet little progress is being achieved as, in fact,
the problem continues to escalate. There is an
ever-growing disparity between rich and poor. Why?
To date, nearly every effort to eradicate poverty
has focused on temporary relief of the suffering
rather than getting to the root of the poverty and
creating real solutions to actually eradicate
poverty permanently. The result of such efforts,
while well intended, and perhaps necessary in the
short run, to assure the poor are at least kept
alive, will not solve the problem of poverty. In
fact, such programs may actually make the situation
worse.
Frankly, there is not much new in this type of
activity. For more than fifty years, governments and
charities have been focused on rushing aid to the
poor and starving. Yet none of these efforts address
the basic reason poverty exists in the first place.
The solutions which call for more and more aid
simply respond to the visual effects of poverty such
as starvation, ignorance and poor health. None truly
address the cause. As a result, rather than easing
the situation, the number of poor continue to grow.
Most of the current anti-poverty efforts focus on
redistributing funds from wealthier nations to
poorer ones, either through mandatory taxation or
charitable donations. This system ignores the fact
that tomorrow the poor need to be fed again.
Taxpayers or the voluntary donors must dig into
their own funds yet again to help. The process is
repeated daily, each time the poor recipient is only
temporarily helped, as the taxpayer or the donor
become poorer themselves. Meanwhile, as massive
funds are moved in and out of governments,
bureaucracies are institutionalized to run the
system. More and more money goes to feed the
machinery of poverty than gets into the hands of the
intended poor. Such a system sustains poverty rather
than eradicates it.
Meanwhile, some corrupt and totalitarian governments
also learn how to divert funds into their own
coffers, again, depriving the poor of their daily
bread. A system of bribes and local corruption often
exist, making it nearly impossible for average
citizens to receive government services. Such a
system forces many of the poor to live outside of
society in a virtual underground economy. This
actually serves to sustain poverty against the
efforts of those trying to eradicate it.
In addition, some international policies actually
institutionalize poverty. Policies which prevent or
severely restrict development and energy use result
in the violation of the most basic human rights,
denying economic opportunities and the chance for
better lives, the right to rid their countries of
diseases that were vanquished long ago in
Europe and the United States.
For example, lack of electricity means no water
purification or sewage treatment, no power for
offices or hospitals, and no stoves to replace
pollution-belching, lung-disease-causing open fires.
There is also mounting pressure by outside
organizations against the use of agricultural
biotechnology. That means farmers cannot use insect
and disease-resistant crops that would reduce the
need for pesticides, not can they increase yields
and profits. Again, the system sustains poverty
rather than eradicates it.
It is becoming increasingly clear that poverty will
never be eradicated unless those working on the
problem will allow themselves to look for a
drastically new way to attack it. Simply put, rather
than constantly applying band-aids to the effects of
poverty, they must look for the cause and fix it.
One must first look at the world and see where
wealth is created and why it is so. The greatest
example of wealth creation is obviously the
United States. It is the beacon of wealth and
freedom for the entire world. Most in the world envy
the US's wealth and seek ways to share it, yet very
few look at how the nation got there or care to try
to copy its system for success.
Why is the United States so wealthy? Is it the
possession of vast natural resources? Africa has
more. Is it the existence of greater industry? Japan
has more. Is it the existence of a superior
education system? The US now ranks below the top ten
nations in education.
The reason the United States continues to lead the
world in wealth, standard of living, and abundance
is
that the average resident of the United States has
the ability and the opportunity to invest and
produce capital.
Why can ordinary citizens of the
United States produce their own capital
to create personal wealth, and yet most of the rest
of the world fails at such an attempt? The answer is
actually very simple. The
United States has created a very easy,
immediate, complete system for recording and
securing ownership of private property.
Peruvian economist
Hernando de Soto explains the root of
American wealth in his book, The Mystery of Capital.
In his book de Soto asks, "Why does Capitalism
thrive only in the West, as if enclosed in a bell
jar?"
Capitalism, he argues, "is the force that raises the
productivity of labor and creates the wealth of
nations. It is the lifeblood of the capitalist
system, the foundation of progress, and the one
thing that the poor countries of the world cannot
seem to produce for themselves."
Why not in other countries? Because the laws and
practices of most countries in the world make it
nearly impossible for average citizens to own
property or to prove ownership of property. There
are vast obstacles to gaining legal ownership. For
example, in Mexico it takes twenty years before a
piece of property can be recorded. In Peru, it took
de Soto's team of experts 289 days to legally
register a new business, even after paying over
$1,200 in registration fees. In the Philippines, a
prospective property owner would first have to
organize an association with his neighbors in order
to qualify for a state housing finance program. The
entire process could take 168 steps, involving 53
public and private agencies and taking 13 - 25
years. And so it goes in country after country.
The impact of a fee of $1,200 in a poor nation is
enough to forever discourage even the attempt to
register property. Such an amount, in many
developing countries may equal an entire year's
income. It is important to note the impact free
markets and private property have on the income of a
nation's citizens. The per capita income for
Americans is $41,400 per year. For Europeans, where
more government control is exercised, the per capita
income is $27,400. In the former Communist nations
of Eastern Europe it is now $3,295. Yet, just a few
years ago it was $2,047. As more freedom and greater
ability to own property grows, so does the per
capita income.
If ownership of property cannot be properly recorded
and able to be traced directly to the owner, then it
cannot create equity and cannot be used as
collateral for credit. It is not of value to the
owner, only an expense. This situation has created,
in de Soto's estimate, over $9.3 trillion in "dead
property." That is property that cannot be used by
anyone to create equity and therefore wealth.
Where it is common practice in the United States to
buy property, hold it for a few years and sell it at
a
substantial profit or move up to a better home,
thereby creating individual wealth, such a system is
basically unheard of in most nations of the world.
If one doesn't have or can't prove title, then no
bank will make loans on the property. In nations
where property cannot be easily and legally
registered, the only recourse is to go to friends
and relatives, get a smaller loan (thereby reducing
one's ability to build a company) and still never
have title to the business or the business property
financed that way. Though people may live on and pay
for property for years, it is hidden in an
underground economy not beneficial to the individual
or the national economy because ownership cannot be
shown.
"In the West, by contrast," de Soto argues, "every
parcel of land, every building, every piece of
equipment, or store of inventory is represented in a
property document that is the visible sign of a vast
hidden process that connects all these assets to the
rest of the economy." 70% of all small businesses in
the United States are started by equity loans on
personal homes. Small, independently owned
businesses employ the majority of people in the
U.S.
This then is the hidden secret of why the West is so
wealthy and the rest of the world is mired in
poverty. Obviously, poverty can never be eradicated
until everyone has the equal opportunity to own and
benefit from the wealth associated with private
property ownership.
There are many corporations and private and
government programs that are working to establish
industry and create jobs in poor nations. Certainly,
having a job is necessary to living a better
existence. Such jobs, while certainly a step up from
daily aid, are not the complete answer. Simply
working a job and paying for one's daily needs does
not build wealth, and it does little to help make
citizens independent to fulfill their dreams. Yet,
"providing jobs" has become the most advocated
method of eradicating poverty.
As stated in the beginning, there are literally
thousands of programs designed to provide
subsistence for life. It is, however, a life of
perpetual bread lines and dependency on the charity
of others -- necessary to exist, but hardly an answer
to fulfill dreams, wants and desires.
During the great depression of the 1930s, when many
were out of work and flat broke, they were, of
course, grateful for the assistance of private
charities and government agencies. Such relief
efforts helped them feed their families and provide
the bare essentials of life. But they weren't happy.
They weren't satisfied. Instead they had a drive to
stand on their own -- to make their own way -- to live
independently. In the United States, most finally did
break free of the assistance and create an
independent life. As a result, the U.S. economy
soared, new industries rose, and a vibrant economic
engine grew out of the ashes of the Depression. For
most Americans, the drive to own their own private
property was the goal to be achieved. The process
became known simply as the American Dream.
Today's poor in undeveloped nations certainly want
the same opportunities to advance. Yet many now live
in societies that are in some ways 3,000 years
behind the modern world. Because of its system of
private property ownership, the West has created a
world of advanced technology, health, and leisure,
where life expectancy is increased each decade. In
the West, people truly can pursue a life of
happiness.
Yet, in most of the world where poverty continues to
increase, life is one of hopeless drudgery, where
the constant drive for survival leaves little or no
time for dreams or personal happiness or
achievement. The West pours money into a broken
system that simply does not address the problem. As
we rush to provide each day's aid, few charities or
government programs seem to take the time to
understand that hope and dreams aren't constant
breadlines. Daily aid doesn't allow the poor the
opportunity to live their lives on their own terms.
Eradication of poverty in the world won't come from
endless aid designed for mere existence, nor will it
come from simply providing jobs. The answer to
poverty in the world will come only from providing
the tools needed to create new, independent wealth.
That tool is private property ownership.
Tom DeWeese
is one of the nation’s leading advocates of
individual liberty, free enterprise, property rights
and back-to-basics education. For over thirty years
he has fought against government oppression.
In 1988, Mr.
DeWeese established the
American Policy Center (APC), an activist think
tank headquartered in Warrenton, VA. In 1992 Tom
DeWeese became passionately involved in the fight
for the preservation of American private property
rights and against intrusive environmental
regulations. He is also a recognized leader in the
fight to preserve American national sovereignty from
intrusive United Nations policies on global
governance. APC has also joined the fight to rescue
American education from federal intrusion and the
fight for American privacy rights against intrusive
government data banks, and a national identification
card.
Mr. DeWeese
makes regular appearances on radio and television
talk shows and has articles published in several
national publications.
Tom DeWeese
is the publisher/editor of
The DeWeese Report. You can contact Mr. DeWeese
here.
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