The Politics of Poverty

In a study released in Financial Times in late 2006, it was revealed that the richest 2% of adults in the world own more than 50% of the total assets, while the poorest half of the population hold a mere 1%. [1] Statistics like this were highly prevalent during the Obama presidential campaigns, and they are get repeated in pop culture through propaganda such as Michael Moore’s “documentary” Capitalism: A Love Story. Although these statistics may help to foster greed and envy among the poor of the world, they really only confirm the “Golden Rule” of politics—i.e. he who has the gold makes the rule—a point that is well-made by Hernando de Soto in his book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.

Not to be confused with the 16th century Spanish explorer by the same name, de Soto is an economist by trade. His main focus is what we might refer to as the “shadow economy”—one that operates directly alongside the “legal” economy, but without the paper trail. “In his native Peru, de Soto found that the rural and urban real estate held outside the legal system was five times the total valuation of the Lima Stock Exchange and fourteen times the value of all foreign direct investment in the country through its documented history. Nor is Peru unique in this respect. Much the same story could be told of the Philippines, Egypt and other Third World countries.” [2] De Soto’s research helps to put the seemingly lopsided statistics from the Financial Times into a different perspective.

While the Bible declares that “the earth is the Lord’s and all it contains, the world and those who dwell in it” (Psalm 24:1), the balance sheets of the top 2% tell a different story. De Soto shows that the lion’s share of the world’s wealth never ends up being accounted for or even reported. If the thinly distributed wealth of the bottom half of the economic food chain cannot be shown to be an asset or a liability to the upper half, it will be virtually ignored. As far as government bookkeepers are concerned, it doesn’t exist if it can’t be taxed. But it also can’t be counted toward that country’s GNP. The economic elites of that country (or at least the ones with a paper trail) take their investment capital to stronger foreign economies, which causes their own country’s governmental economy to get that much weaker. It becomes an economic “survival of the fittest” where the fittest get to define the terms.

The same philosophical assumptions that drove the worldview of Marx and Hegel are being used today to deny a huge segment of the population any stake in the wealth of the world. “In the hands of the communists and other revolutionary reformers, the Darwinian emphasis on the survival of the fittest was used to justify their revolutionary activities and their efforts to destroy the traditional theistic political and economic philosophies and institutions which stood in their way in their struggles to remake the political and social life of both Europe and America.” [3] The Lord may own the cattle on a thousand hills (Psalm 50:10), but the social Darwinists at the pinnacle of the “legal” economy are redefining wealth to be strictly monetary in nature. Real estate, livestock, land, resources, etc. don’t get counted toward the legal system if they don’t show up on paper. The miles of bureaucratic red tape involved with the legal system make this next to impossible.

De Soto and his team of researchers have examined the processes in a number of Third World countries. In Peru, the process to get a legal title to your home consists of 5 stages and the first stage alone involves 207 steps. In Egypt, anyone who wants to acquire and legally register a lot on state-owned desert land must wend his way through at least 77 bureaucratic procedures at thirty-one public and private agencies. These procedures can take anywhere from five to fourteen years. In Haiti, it is 19 years. Against this background, it is hardly surprising that most economic activities in most Third World and former Communist countries take place illegally, in the underground economy. Less than half the people employed in Venezuela work in legal enterprises. [4]

Armed with this understanding, we can say this about the statistic that the wealthiest 2% own 50% of the world’s assets: “So what?” The statistic itself is as meaningless as Darwin’s phrase “the survival of the fittest.” Statements like this are self-authenticating (they are what is known in logic as a tautology). In other words, the wealthiest 2% in the world—on paper—own more than 50% of the stuff—on paper. That is, the wealthiest people in the world own most of the stuff. Duh, we don’t need economists to tell us this. Similarly, when Darwin gave “survival of the fittest” to the world, he merely taught us that the fittest ones are the ones that survive. That is, he made the scientific observation that the strong will dominate the weak…thanks Charles, for clearing that up. The top 2% may own half of the reported monetary assets of the world, but this only begs the question: What is wealth? If we allow wealth to be defined by loudmouths like Michael Moore and those in the top 2%—i.e. if we allow the Golden Rule to be applied—they do indeed own 50% of the world’s “wealth.” But if we broaden the definition to include more than money, as de Soto has, the picture looks much different.

[1]  Chris Giles, “Richest 2% hold half the world’s assets,” Financial Times (Dec. 5, 2006). Online here.
[2]  Thomas Sowell, “A gem of a book,” Online here.
[3]  C. Gregg Singer, From Rationalism to Irrationality (Phillipsburg, NJ: Presbyterian & Reformed, 1979), 130.
[4]  Sowell, “A gem of a book.”



Posted in Business, Debt, Economics, Entertainment, History, Poverty, Welfare Tagged with: , , , , , ,
  • gray_man


  • wishladya

    In the early 70’s I very briefly drove a taxicab in the inner city. I learned that the black community has a “black market” and an underground economy that has nothing to do with taxes and rules and regulations. There were people providing services, goods & materials, all underground. At the same time many of them were “customers” I later ran into when I worked for the Township Trustee, they were on the dole, receiving “welfare”, I have seen these same people using food stamps. They drove fairly new Cadillacs and the women wore minks. They had their hair done beautifully & had fancy nails. They were not “living poor”. They went around the government rules and provided for themselves and their families. When something was offered “free” from the government they took advantage of it. These businesses are still operating underground. I think the white community is now leaning in that direction or if they are not, perhaps they should. Is there another way for the “poor” to survive? Is the “white” community too afraid to buck the rules & regulations? I see that a lot having worked in a law office for many years. I’ll admit to having the same fears.

    • Snowman8wa

      Charity to the poor should come from the heart. I, as a Christian, struggle with the panhandlers; who I feel, ruin it for people with REAL PROBLEMS.
      They cry “I NEED” when in fact they are pulling in (self professed in many cases) $185.00 a day. That’s $28.00 an hour based on a 7-hour “Shift” of just sitting at a street light and begging. Ohhh yeah…..TAX FREE!
      Signs like “TOO CUTE TO PROSTITUTE”;
      What about working at McDonalds? Too cute for that? Starbucks likes cute girls….
      Ask them to come and mow the lawn………guess that job isn’t “ODD” enough….
      And of Course to through in the “guilt Factor”
      “GOD BLESS…….
      Charity begins at home, but let your charity go to the people who are truly in dire need and not thieves……….
      Semper Vigilo, Fortis, Paratus et Fidelis

    • LeSellers

      Whenever people live in a community that makes rules forbidding “private interest” (a 45¢ phrase meaning “greed”) those people will find ways to get what they want.

      I don’t know if it’s a direct patrimony from their slave ancestors, but slaves always got around ol’ massa in meaningful (albeit little) ways. Thomas Jefferson frequently had to buy produce from his slaves’ gardens and other stuffs, too, because his fields and manufacturies didn’t produce what he needed.

      In A Day in the Life of Ivan Denisovitch, Aleksandr Solzhenitsyn explains how the prisoners got over on the guards using the same kind of mentality and cunning. Ivan found a broken hacksaw blade and hid it in his glove. The blade was forbidden, but he got it anyway. Women sold themselves in the GULAG for “half a kilo”. Children harassed the other prisoners and the guards, too.

      Each group had a justifiably moral basis for their acts of rebellion: they were denied the basic human dignity of private interest. Their lots in life were misery and cruelty. Their sufferings were simply inhuman. But they were criminals under the laws of men.

      In today’s socialist world, we are all guilty of economic crimes. We buy things on the ‘net and do not pay the state’s “Use Tax” on those purchases. We barter baby sitting; a little carpentry work for some welding. What our parents or grandparents took for granted, the freedom to use one’s own property without bothering others, is now forbidden by a myriad of zoning laws, noise ordinances, nuisance laws and so on.

      One of our sons-in-law has decided that the only way to slay this monster is to bleed it to death. He applies for grants, handouts and all manner of “gifts” from Santa the state and encourages others to do the same. He doesn’t need this largess, he wants to strain the system until it dies of overexertion.

      It seems wrong to us. But I thoroughly understand his motivation and his goal. Maybe it’s a little rebellion, a rebellion that does not require blood. The problem is, he’s one of the 20%. Every time he takes a nibble, the state grabs a whole bite from him. We who actually pay their taxes cannot win the “Gimme Game”.

      Mr. O’bama, will there ever be any Jobs?

    • GVJaneAz

      Hispanics have the same “cash society”, while collecting every benefit available for free from the gov’t. They don’t have bank accounts…just untraceable income. WE ARE SOOOO STUPID!

  • marineh2ominer

    None of this matters , the demonrats will ALWAYS find a way to divide and create antagonism between anyone and everyone that they feel a need to control .

    • GVJaneAz

      They have a different brain than Republicans and Libertarians.

  • awkingsley

    Good article!

  • GVJaneAz

    I got a $19 a month increase as my S.S. COLA….Wonder what these cretins will get in an increase who work for the gov’t. At least 5%. $109 a month for medicare…adds up to pretty expensive healthcare cost to retiree’s, and next year $124 going in to United HeathCare/AARP’s pockets. Evil hypocrites. While the illegals live free on every benefit possible and free healthcare, while they rape the Medicare funds…with their Medicaid and their kid programs. Seniors are being liquidated and the gov’t is building the poverty bunch to keep them in office.

  • fliteking

    Politics of Poverty –

    ” I need someone ta watch / counsel / pay fo muh kids and pay fo all of muh food and ride and housin and health ridee and cell phone and cable and legal fees and muh cigisttes and and muh boyhomies food and clothes and beer and cigisttes , oh, and I need some spendin money too. I’d like ta make moe than folks workin hard in America who make $20.00 hour. ” – aww yea foo.. “

    This goal has been reached thanks to the liberals. Americans who make $20.00 or less are helping to pay for welfare recipients who make MORE money per year when all income streams are considered.

    “Oh, wait, I ova-spent again dis month and ‘lost’ muh food stamp card . . . can I get a new rcard (yes) and then get gifts from da Salvation Armuh and Toys fo Tots . . . or somebody else . . . don’t want dem keeds ta go witout . . – aww yea foo..”

    We are our own worst enemy. We will tolerate the above and do nothing about it – – – makes it our fault.

    I feel dam sorry for the middle class who make less than welfare recipients but are still paying for it.

  • Mudpuppy

    Michael Moore is a fat, disgusting, lying pig. It would have been better if you ignored him. See photo.

    “There are lies, damn lies and statistics.” Anyone can make any statistic mean anything.

    This just goes to show that “life will find a way.” Try as they might, governments can’t keep people from economic activity. It just goes underground.

  • Elizabeth Villalobos

    I enjoy the responses that many or your readers share. I am also a christian I work in an emergency room so I see people of all races milking the system. I see hispanics who have come from Mexico on medicare and medical. They have land in their former country but still get these benefits from us. I see RiCH Asians bring their parents over and get them on Medi-cade. I see lazy people who are young adults of all races wanting to get everything for free. The government has become their provider. I will also say that lately I have been spending much time in prayer and what I see coming is not good. Each one of us will give an account for what we do and why we do it. I will say one more thing I see many christians who live a compromised life. They too milk the system. The bible says we are to care for our own to the best of our ability. We say it’s the white, the black, the brown, the yellow, But in truth it is humankind of all races.

Political Outcast Newsletter

Political Outcast email marketing powered by InboxFirst