That White Banner

Some of you may have noticed that little white banner I put up on my blog. I saw it on other blogs, and decided to go with the flow and put it up on mine.

But it will never happen. Poverty can not be ended. Why? Let us explore that topic now.

We need poverty. Without poverty, there would be nothing left to exploit. And without anything to exploit, capitalism as we know it today could not function.

It is very simple. The name of the game is to produce stuff for the lowest cost possible. And how do we do this? Is steel any cheaper in the USA than it is in India? No, steel is a commodity and the price is set by the market. So is plastic cheaper in India than it is in the USA? No, once again plastic is a product made from crude oil, which once again is price set by the market.

So how do we lower cost? What is the one cost factor that DOES vary? Why, labor of course!

Labor in devloped nations is very costly. Workers demand a decent wage, benefits, vacation time, and so on. Society demands clean air and water. So to make anything in the USA, you have to factor in these costs. It is no wonder that production is moving to other places.

Now what does poverty have to do with all this? In a impovrished nation, labor is really cheap. VERY cheap. Workers have no concept of "paid vacation". Vacations are a luxury, something you only worry about once survival is taken care of.

And if you are worried about your survival, who gives a crap about the air? In very poor nations, people are in conflict with nature. Nature is the bad guy. Nature causes it to rain too much, or not enough. Nature causes storms that blow down your house. Nature kills your food supply. Nature is the bad guy to people who are sustinance workers. And if nature is the bad guy, you are less concerned about pollution.

So in areas of high poverty, labor is cheap, benefits are unknown, and pollution regulations are not very strict. Seems like a great place to set up a factory to me!

But we can still end poverty, can't we? Yes - IF you want to see the cost of everything increase ten fold. Inflation would sky rocket. The value of a dollar (and every basic unit of currency) would drop like a rock. Production cost would be out of control.

So we would STILL have poverty! Only more people would be living in it. Unless your wage matched the increase in the price of everything, you would end up with less. And even if your wage went up, this would only put more inflationary pressure on the dollar. So no matter what - you loose.

And what about the third world? They would still be poor. They would have more dollars in their pocket, but those dollars would be worth less.

So all this ending poverty talk, while it sounds good and may be a noble cause, is not realistic. The world can not afford it.