What's the best way to fight poverty?

It’s an age-old goal among philanthropists that a primary goal of giving is to fight poverty. But what’s the best way to fight poverty?

Leftists would argue that seizing the wealth of the rich is the best thing to do. (The Koch brothers, of course, would have their wealth seized four or five times, just so the wealth-grabbers can feel better.)

But Deirdre McCloskey, in a provocative op-ed in the Financial Times, makes a different point: the goal in fighting poverty is for capitalists to figure out ways to make poor people’s lives better. (For people bothered by the FT’s high pay wall, McCloskey has posted the piece on her website.)

I don’t know McCloskey’s work as well as I should, but her reputation is as the economist English majors like. She has appointments at the University of Illinois (Chicago) in the departments of economics, history, English, and communication, and I get the sense her books are economic history with a strong literary bent.

So it’s little wonder she starts her piece with an exchange from Anthony Trollope’s great political novel Phineas Finn. “Making men and women all equal. That I take it to be the gist of our political theory,” declares the novel’s heroine, Lady Glencora, a staunch Liberal Party member.

Joshua Monk, a political radical, counters “Equality is an ugly word . . . and frightens.” He calls for poor people’s lives to be made better through “free trade and compulsory education and women’s rights.”

Ever since Trollope, McCloskey notes, the debate is between people who think the way to help the poor is through income redistribution and those who favor capitalism. She notes “the true liberal should care only about whether the poorest among us are moving closer to having enough to live with dignity and to participate in a democracy.” What matters is that the poor are living better lives than they were a generation ago, and they’re doing so because poor people have things their parents lacked—better heating, air conditioning in the summer, fresh fruit in the winter.

Although health care continues to be costly, medicine continues to advance, and there are many medical advances that directly benefit the poor. Read the lives of people who lived a century ago and you’ll find far too many cases men died of heart attacks at fifty-five because no one understood the problems of high blood pressure. But the scientists who discovered baby aspirin and beta-blockers have done far more good for the poor than any politician.

McCloskey notes that seizing the wealth of the rich will do little to help the poor. Expropriating and redistributing the wealth of the eighty-five richest people in the world, she calculates, would only raise the incomes of the poorest half of the world by about a dime a day. A far better strategy, she argues, is for the world to abolish punitive trade barriers and protectionist schemes that prevent the productive farmers and manufacturers of the Third World from selling goods the First World needs and wants at a fair price.

But the rich would live better lives if they fired their publicists. The problem many of us, even on the right, have with the people who built great fortunes is not the money they made, but that it’s spent on giant houses, colossal yachts, and bottles of booze that cost four figures a bottle. Of course the rich have the right to spend money as they please, but we also have the right to think such expenditures unseemly.

Here Warren Buffett provides a constructive example. I have strong disagreements with Warren Buffett’s philanthropy, but he deserves our respect for living in a house he bought in the 1950s and for liking the sorts of simple pleasures he did when he was rich that he did when he was young and struggling.

Andrew Carnegie’s “The Gospel of Wealth” is timeless because Carnegie’s advice to the philanthropist remains unsurpassed, as in this passage:

This, then is held to be the duty of the man of wealth: To set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of all those dependent upon him; and, after doing so, to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer . . . in the manner which, in his judgment, is calculated to produce the most beneficial results for the community.

---