All Commentary
Monday, February 1, 1988

Perspective: Who Are the Poor?

When St. Paul’s cathedral was rebuilt after the Great Fire of London of 1666, King Charles II visited the finished building. Upon completing his inspection, he allegedly turned to the architect and proclaimed that he found the cathedral “awful, amusing, and artificial.”

The architect was delighted. In those days, the word “awful” signified what today we would call “awe- inspiring.” “Amusing” and “artificial” corresponded to today’s terms “amazing” and “artistic.” This is a rather striking example of the usually harmless ways in which words change in meaning over the years.

Yet some changes in the meaning of words are ominous. Consider the word “poverty.”

The term has always signified a significant shortfall of goods and services relative to some standard. But what standard?

The goods and services needed for bare survival? The goods and services necessary for basic health? The goods and services needed for a “tolerably comfortable and secure existence”? Over the years, poverty has been equated with a significant shortfall of goods relative to all these standards.

The latest suggested standard, however, is profoundly different from the above. Poverty today is widely understood in terms of a significant shortfall of goods relative to the goods possessed by the wealthiest members of a given society.

In this way, the notion of “poverty” has been linked to the concept of “equality.” To abolish poverty it becomes necessary to ensure that the “gap” between the wealth possessed by the poorest members of a society and the wealth possessed by the wealthiest members of that society does not exceed some—necessarily arbitrary- -factor.

Some quite amazing conclusions derive from this definition of poverty:

By this definition, a society in which all people were equally destitute would be a society without poverty.

If poverty signifies a significant shortfall of goods relative to the goods possessed by the wealthiest members of a society, poverty can be claimed still to exist until complete equality of possessions is realized. All that has to be done is continually to redefine what constitutes a “significant shortfall.”

In this way the “poor are always with us.” So, alas, is the veritable army of government-employed “poverty fighters” primarily responsible today for defining poverty!

Each conclusion, surely, is absurdly unacceptable. That says something about the definition!

John K. Williams

Robbing Ourselves

Consumption by the wealthy, however conspicuous it might be, represents only the “tip of the iceberg” and isn’t much affected by the various tax schemes whether of the “soak-the-rich” or “help-the rich” variety. Increase their taxes and the bulk of the tax will be paid fromtheir savings—savings which ultimately provide the housing stock, factories and productive machinery which house and employ millions of citizens. (Decrease their taxes, on the other hand, and again their consumption is relatively unaffected, but savings, investment, employment all increase.) Dole the increased tax receipts from the wealthy out to nonproducers and you increase demand without increasing supplies. Prices will rise and everyone’s standard of living will decline accordingly.

Only to the extent that the wealthy are first able to restore a portion of their confiscated assets (through higher profit margins in response to increased consumer demand, for example) will they begin to offer jobs, agree to higher wages for workers, and so on. The net result is that the wealth bestowed on nonpro-ducers is derived not from one wealthy stratum of society but rather from all strata, roughly in proportion to income and wealth shares that prevailed before the attempted redistribution.

William T. Chidester

Market Vantage

Pass the Hay . . . .

I strongly suspect that if Henry Ford had had to bring out his Model T in today’s environment, the courts and the regulators would have stopped him. Dam thing was dangerous; why, you could break your arm cranking it. Of course, horses were dangerous, too, but as an established technology, horse transportation would have fared better in the courts and regulatory halls . . . .

We are stifled by our own do-gooders, our law courts, our bureaucrats. Today the Wright brothers could not get off the ground. Could our early railroads have passed an environmental impact or safety test? What would the unions have done to Eli Whitney’s cotton gin?

Peter Huber, writing in the July 13, 1987

issue of Forbes.

  • The Reverend Dr. John K. Williams has been a teacher and is a free-lance writer and lecturer in North Melbourne, Victoria, Australia. He was resident scholar at FEE from April to October of this year.