Why are people poor? Seems like we still do not know.

It’s such a simple question. Right? We would like to believe that it has an obvious answer. Someone’s poor because they did not get a great education, did not have every opportunity available to them, their parents did not encourage them, their teachers ignored them, their employer did not help them develop, someone, in short, somewhere, did not do their job right. The system let them down.

Now that I opened this can of worms here’s something which you might want to spend a couple of minutes reading: Poor Concentration: How Poverty Changes the Way You Think. The question of course is not just why someone is poor (because that assumes a level of comparison which must set a standard for a basic level of being classified as non-poor which is global), but why is someone in a position where they do not have sufficient means to meet basic needs.

If we divorce this question from the multitude of variables which it brings up (things like connections, opportunities, smarts, education, will power and personality) it boils down to a couple of logical things: One has to be the individual (and their innate mechanism) and the other has to be the system they operate in. If we assume that suddenly, somehow, we are all reduced to the intellect of amoebas then biologically and evolutionary we will get a society where some amoebas will have more wealth (they came across a great food hoard) and some less (they were not so fortunate in their travels) but overall, we will have an acceptable standard of living where the amoebas at the bottom of the pyramid are not scraping for scraps.

This happens in a so-called balanced environment which seems to be capable of sustaining the lifeforms within it.

It’s a question of scale

Let’s scale this up to our society to see why we have not been able to create what amoebas seem so easily to be able to enjoy.

Scale in both wealth and work environments provides its own, unique set of challenges and needs to be managed effectively in order to be made to work.

One of the reasons, which I have covered here before, has to do with the application of Capitalism as a concept which is allowed to run away with itself. Again, from science, we know that a runaway environment only has one end in sight and it is a bad one. Self-destruction is a trait inherent in unbalanced environments.

Unlike amoebas we are responsible for creating much of the environment we operate in and we are gifted with the capability to work to improve it. My contention is relatively simple and based upon my direct experience of working, at the highest level, in companies with workforces in the range of 250,000 plus. Companies of that size cannot get by, by putting in place strict controls which compel the workforce to work hard and then police them with managers (incidentally, at one level that is also the Communist model of society). Such a structure is too top-heavy with too many resources allocated to too few people in order to enable them to oversee far too many.

A system like that has built-in inefficiencies which aggregate and need more work and resources to shoehorn into a temporary fix. The result is that eventually the system becomes vulnerable to relatively small factors, requiring just the tiniest of a shove to topple. Funnily enough, this describes not just Communism but also Capitalism when left unchecked. To get back to the subject however, the companies which become global forces to be reckoned with are the ones which put in place systems which make work fun by taking away all the barriers stopping those within their workforce from working at their best.

The list here is far from exhaustive and it cuts across all industry sectors:

  • The John Lewis Partnership
  • Google
  • Gore Tex Associates
  • Starbucks (in its regenerated form)
  • IBM
  • Coca Cola
  • HSBC
  • Virgin
  • Toyota
  • Sony
  • Nokia
  • Microsoft

Companies like these do not just hire people, they hire so many people that it is next to impossible to hire ‘the best of the best of the best’ so they cannot rely for their success on the qualities, abilities and well-meaning intentions of those they bring in. So they do the next best thing: they create a culture which helps elevate those working for them, training them for their job, empowering them in their roles, removing obstacles in their work as these arise (which is what managers predominantly do) and creating, in short, the kind of work environment which allows those who work for them to bloom, develop and prosper. As a result the company also profits handsomely.

Society can learn from businesses

Now let’s take this model and apply it to society. The number of countries which even approach it, which have elevated work to the level of art and social calling rather than sheer necessity are also the ones which are part of the world’s top global economies. Even within them, as evidenced by the Times article study, above, there are inconsistencies which lead to inequalities which are throwing the mechanism out of kilter.

Money makes the world go round

Two questions remain here: Do I propose a solution and is it capable of delivering a result that really works? Given the fact that the US Administration did fight a war against poverty in America, in the 80s and apparently ‘lost’ you could be forgiven for thinking that poverty is too hard to solve and might even perhaps be an eternal part of our societal strata, as endemic as wealth at the top levels of society. This, to my mind is not really so, though again this is far from saying that what I propose is easy to put into effect. To fail to address it however is to slip into the myth that wealth (as in the top 1%) generates wealth for everyone.

This suggested not too long ago by the world’s richest woman, Australian mining tycoon Gina Rinehart, who ironically enough inherited hers. Wealth generates its own gravity that then serves itself. It naturally attracts opportunities, it frequently creates its own set of opportunities and all of it feeds itself so that money does, indeed, make more money. This also logically as well as historically suggests that money rarely gives any of its wealth away.

Having wealthy people creating millions of low-wage jobs is not wealth-creation and it is only job creation in the technical sense of the word. In essence the result is not different from that of the Lord of the Manor and his serfs in feudal system where his lands, indeed, created ‘jobs’ that used to maintain entire villages and towns but which all contributed to the same net-result: the wealth of the Lord, rather than his serfs.

So what am I proposing, really?

01.    Create social environments designed to generate opportunities rather than replicate yet another hierarchy.

02.    Start to recognise real value as opposed to short-term dollar value in everything we do. This requires a fresh approach. In Four Common Sense Causes That Fail the Logic Test I have already outlined examples where we appear to be locked in our thinking and unable to break out of patterns of behaviour because. At some point we need to learn to break with tradition.

03.    Question everything. The times when we’d start off with a proposition, put it into play and tie our ego, countless millions of dollars and the lives of generations, into a pattern that clearly does not work, have to become a thing of the past.

04.    Accept nothing but results. If a system does not work we must stop being afraid to change it. Ideology is a luxury that these days appears to create only entrenched attitudes. What we want, really, is for society to work. Really work. And for that to happen we must accept that each of us, everywhere, has a role to play.  

Social media changes things

Online marketing (and social media marketing is a crucial part of it) creates, generates, and perpetuates practices and approaches which also impact upon the way we interact with one another. This, in turn, affects the way we learn to work online, treat each other online and approach common issues, online.

In short, social media, has the ability to change everything by bringing into the equation greater transparency, accountability, collective bargaining power, greater voice for the individual and more control. Funnily enough, these have been the very things demanded by a ‘working class’ across the centuries which saw work evolve from something manual done in a field for the lord of the manor to something intellectual created using a computer.

Social media has been the force behind the Arab Spring and the Occupy Wall Street movement. It is the force behind what we call the socialisation of business. I believe change starts in small ways. With a thought and the ability to share it. This, here, is mine.

Update -  May 4th 2015

In the time since this post was first written the world has grown more transparent. The global credit crunch provided a window into widespread inequality and research has began to look at some of the social issues we experience with a new understanding. One such study shows how social mobility contributes to the "escape from poverty" of children born into low-income families. The study not only shows the pathways our of poverty, but it also highlights some of the circumstances that conspire to keep families in perpetual poverty across generations.  

Update - August 3rd 2016

The real cost of managing poverty versus trying to eradicate it for a national economy is shown in these figures on the UK Economy. These are even more conservative when we realize that people trapped in poverty are essentially cut off from actively contributing to a nation's growth. 

Update - April 2019

Canada has managed to reduce poverty by a staggering 20% in a two year period by applying community-building principles and a coordinated, resource-sharing approach that, in hindsight, makes total sense. 

Related Posts

The anachronism with capitalism
It Happens Online or it Does not Happen at All. The Wall-Street Protests
How to Make Better Business Decisions
Why downsizing is wrong as a business strategy