Thursday, June 25, 2009

The poverty cylce and its tendency to undermine conventional economic theories

Poverty Cycle or "The Cycle of Poverty" has been defined by this encyclopedia as "a set of factors or events by which poverty, once started, is likely to continue unless there is outside intervention. Once an area or a person has become poor, this tends to lead to other disadvantages, which may in turn result in further poverty". I always wonder about this malevolent spirit laced truth, thinking as to whether this drive is internally or externally drieven.

Coming from a poor country, I always think of the cyclic of events that seem to conspire to our doom. In this blog, I will not want to focus on grand ideas of getting out of this poverty cycle. I will endeavour to let the sick thoughts of passing the blame to someone pass until I see myself as the man in the mirror. Quoting Karl Marx when he said the "labor of man continues the work of God, who, in creating all beings, did but externally realize the eternal laws of reason". Is this labor of man subject to other factors? Certainly. I cannot dare to differ with this basic reasoning. It is time for this force to come from within. Nowadays, external interventions are accompanied with string attachments that makes it difficult to cause significant intervention to those wishing to come of the poverty cycle. I have vowed to work with my own hands and not to sell my soul to this unfortunate "beggers" economy. It should also be noted that I have no personal desire to acquire the whole world but I have strong ambitions to grow financially.

Secondly, whenever possible assist more in the production of what I do not have. "“The capacity for all products, whether natural or industrial, to contribute to man’s subsistence is specifically termed use value; their capacity to be given in exchange for one another, exchange value...........since a very large number of the things I need occur in nature only in moderate quantities, or even not at all, I am forced to assist in the production of what I lack. And as I cannot set my hand to so many things, I shall propose to other men, my collaborators in various functions, to cede to me a part of their products in exchange for mine." - Karl Marx. This I can do by developing the capability to spend. My ability to spend is highly correlated to the amount I can earn. I still wonder about the Keynesian Theories which articulate that "some micro-level actions of individuals and firms can lead to aggregate macroeconomic outcomes in which the economy operates below its potential output and growth". In many of developing countries, majority of individual efforts get swallowed up by a few of the all powerful minorities.

I struggle to ensure that there is value in what I offer and pray that I do not get unwarranted attention to those who thrive on "helping the poor" but shall succeed on what I have the ability to deliver and produce meaningful output. I wonder how much this contribute to my country's drive towards poverty eradication but certainly this has had an effect on my personal efforts to overcome the poverty cycle. Touting this invisible line that exist for those striving to come out of poverty. It is at this point in time that one needs to pull all the inner strengths to be able to drive yourself across this unfortunate divide. This will require long hours of work with little pay coupled with little regard for personal pampering as the drive to achieve this becomes greater and greater as the hope to break through the poverty circle possesses oneself. This is so for those who know the pains of poverty and strive to overcome ( Read Slumdog Millionnaire...). Who their worst nightmare would be to wake up poor!!!

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