I've had a series of unfortunate events occur to me the past few months that has made me think about the state of being poor and poverty in general. It's magnified by a similar series of unfortunate events happening to the people I know.
This post is not going to be an appeal for help (I don't ask for help) and this isn't even a criticism of capitalism or an endorsement of it or any other alternative socioeconomic system, but more or less a condensed reflection on socioeconomics in general. However, I'm going to try to condense this into a blog post more so than a lengthy essay that few of you would probably have time to read. (The full blown essay is coming whenever I launch my full personal website in January).
Capitalism is a very, very complex economic system. It's as fair as it is unfair, as rewarding as it is punishing, as galvanizing as it is heart wrenching. The successful capitalist formula is not rooted in the promise of growth and prosperity, but in the fact the system's success is based on the reality that is it not necessarily all inclusive. It's allure is in what is not guaranteed. If you remember the infamous speech given by Michael Douglas' character Gordon Gekko in 1987's Wall Street, his "Greed is good" sermon is fairly true: the bottom line premise about it is that success can be brought when you are motivated by wants and needs.
Being a finance major, I know enough about economics to know that markets work very well with little government interference: the market is nothing more than just a needs and wants matrix (or, as Adam Smith called it "the invisible hand"). Government policy generally interferes with that matrix -- sometimes beneficial, sometimes harmful. However, free market capitalism comes with a caveat -- that part that as my staunch libertarian friend calls the "mathematical outcome" of living with mediocre incomes due to either being consistently unlucky in the labor market, a myriad of preventable or unpreventable personal afflictions, or a nasty combination of both. This "outcome" results into turning to those that will be willing to provide them assistance, whether it would be friends, family, government programs, or what is increasingly becoming under greater scrutiny in major metropolitan areas such as Houston -- high-interest, short term loans.
Keeping that in mind, I want to mention briefly a opinion piece that was written recently by a director from the Texas Civil Rights Project that was posted in the Houston Chronicle. The column, which detailed a week long experiment that participants had to live on $31.50 a week for food -- which is roughly the per person allotment for the current food stamp program. Both James Harrington, the writer of the post, and those that left comments had a point -- $31.50 a week for food is hard, but it can be done if people as one put it, "knew how to shop". However, shopping for food is not an exact science and shopping methods may or may not be able to be replicated across all areas and all 50 states. Additionally some states tax groceries (i.e., Oklahoma), have varied nutritional needs, and so on.
My point? It's easy to say something can be done when you yourself is able to do it. Consequently, it's easy to say something can't be done when you feel that you can't do it. It's this dichotomy that is a component part of the age old debate between interventionist government programs and free market fundamentalism (and I don't mean that derisively).
But that's the reality of capitalism. Despite widely believed (more correctly, accepted) convictions of how successful capitalism has been, it also needs to be noted that successes do have consequences that can be perceived as positive and negative. If capitalism had no perceived negative consequences, then socialism would have never materialized. If capitalism had no perceived negative consequences, then many of the socioeconomic justice movements that have popped up over the past two centuries plus would have never occurred.
But as I said, capitalism's allure comes from the lack of the guarantee. It gives people hope. It gives people excitement. A lot of free market champions get turned on by it. However, as I mentioned before, capitalism's gifts of grace has come with many Trojan horses of despair. I will say this however -- to credit capitalism with "solving" many of the world's perceived problems is fair, yet not completely accurate; the same thing could be said with blaming capitalism for "creating" many of the world's problems is fair, but not completely accurate.
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