This is a companion post to my offering of last week declaring victory in America’s war against poverty. If you missed that post, it is available on Substack and on my website: www.mllg.us. The above headline notwithstanding, poverty has no root cause; it is the natural condition of mankind. We begin in paleolithic times.

The Natural Condition of Mankind

At the dawn of civilization our ancestors subsisted as hunters-fishers-gatherers. There was no economy per se. People were divided into small families or clans, each of which functioned as a putative economic unit. They coexisted with other such units, mostly peaceably, sometimes not. Their lives, short and brutish, were on a bare subsistence level – wholly dependent on the fickle bounty of the sea, the exigencies of the hunt and the caprice of nature.

What economic lessons can we sophists of the twenty-first century glean from such primitive people? What, if anything, can they teach us? Surprisingly, they teach us an ineffaceable economic truth applicable across all time and space, i.e. the natural and normal condition of mankind is poverty. There is no known instance where any aboriginal population existed in any state other than poverty.

Most people understand the natural condition of man is poverty, but fail to grasp its implications. Progressives prattle about the root causes of poverty and even have declared war against it. America has spent $25 trillion since it declared war on poverty in 1964. In 60 years of that war, poverty has not been reduced one whit.

Those who consternate about the causes of poverty are wasting their time. They are asking the wrong question. The question we should be asking is: what causes wealth and how can we bring it about. Wealth is not a natural condition of mankind and is rare throughout the sweep of human history. Wealth creation must be understood and fostered. It is only by understanding wealth that poverty can be alleviated.

Progressives assert that, for example, lack of education creates poverty. This is a posteriori reasoning. People are born uneducated. To create wealth they need to become educated. Education creates wealth; ignorance does not create poverty.

What Causes Wealth?

Harken back to our paleolithic fishermen ancestors. They struggled to spear enough fish to survive, until a nascent capitalist thought of a net. Since capital did not yet exist anywhere to finance the construction of this fisherman’s net, he had no choice but to create his own. He worked every waking hour for months accumulating enough extra fish (his capital) to allow him the time to construct his net.

The net worked as planned and our budding capitalist now generated a surplus of fish to trade for other goods – in the process giving birth to the division of labor. His capital investment made him wealthier than the others in his clan – but it also made everyone else better off. He now generated capital which could be used by other entrepreneurs in his clan to increase the prosperity and well being of everyone.

Capitalism Creates Prosperity and Eliminates Poverty

What worked for our capitalist paleolithic fisherman is the same thing that worked for the capitalists who founded Wal-Mart, Amazon, Tesla, Apple and Microsoft. They have become immensely wealthy, but in the process they have enriched all our lives and increased our productivity. Not one of these successes was created by government or socialism. Who has done more to benefit the common man – Henry Ford, Steve Jobs and Sam Walton – or any king, president or commissar?

Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty worldwide is nearly eliminated and every metric of human well being is improving. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Wal-Mart and Costco.

To continue to improve the lives of everyone and to end poverty, we must shed our shibboleths. Unlike our stone age ancestors, we do not blame poverty on deities, animal spirits or the position of stars. Today, progressives and the media blame poverty on bogeymen like greed, multi-national corporations, western civilization, capitalism, fossil fuels, racism, free trade and lack of diversity, equity and inclusion.

In the twenty-first century we understand how to create wealth and eliminate poverty, but we fail to do so because of obeisance to the false gods of progressivism.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com