Cycle of poverty

From ArticleWorld

The cycle of poverty refers to the catch-22 situation where an individual who is born into poverty does not have, and can not acquire, the resources needed to improve their economic situation; and thus, stay poor throughout their own lifetimes and will most likely pass on that heritage to the next generations.

The root of the problem goes back to the time when serfs and peasants had to pay most of their crops to their landlord as rent or taxes and were only allowed to keep the barest minimum to live on. They could not save and because they could not save, they could not invest. Without investment in either human or physical capital, their situation could not and did not improve, but continued to be poor for generations.

Causes

The cause of the poverty cycle depends on which politics you follow. According to the Left, social injustice and inequality are to blame for the situation where the rich get richer and the poor get poorer. Those whose thinking veers more to the right consider that the interference of the state in the economy takes away the incentive to create wealth due to the erosion of property rights.

Many would agree that the lack of education is probably one of the biggest causes of the problem. A good education increases the skills one has to bargain with, but in order to get a good education children need to have the time, energy and motivation to study. In many countries of the world, children work from a very young age and so the ‘luxury’ of an education is denied them.

Solutions

If it was easy, it would have been done a long time ago. Unfortunately, there are many theories but successful practice of them very rare. Socialist thinking tends to emphasise social inequality as the main reason for economic repression. Most modern governments promote accessible public education for all as well as an efficient welfare system. Legal systems need to be strengthened in favour of the poor and their rights.

According to the political Right, these practices will only make the problem worse and the solution lies in the creation of new wealth achieved through a free market economy operating with little state interference.