Can Government Eradicate Poverty?

Dec

12



Every political leader, a representative of “the people” realizes that nobody in “the people” like to face poverty. Yet, poverty is wide spread. Every government aims its political and ruling program at reducing scarcity and helping the poor. Often the statist argues that government is necessary because if there will not be a government, who will care for the poor, the depraved ones. Politicians often use this “altruistic” propaganda to lure the voters.
The only practical solution to the problem of poverty in masses is to increase the productivity of individuals. In absence of government interventions, for the rational profit motive, free market provides an explainable way to make most efficient way for the usage of resources and to minimize the wastage, thus free market naturally is the solution to poverty. Yet, by means of interventions, government induces irrationality in the market and hence, reduces the productivity while increasing the wastage of resources. Obviously, with reduced productivity and enhanced wastage of resources, the government itself becomes the cause of mass poverty and scarcity.
At the failure of all their agenda to reduce poverty, they further come up with same propaganda of “helping the poor”. Well, the end results of government interventions just come out to be opposite. Does government really want to help poor?

Inflation

In order to hide the evil result of government interventions, it becomes necessary for the government to play with its own issued “Fiat Currency” to manipulate the illusionary GDP figures. As a result, poor people become further poor while government keep emphasizing on the increased GDP rates. When a common man asks, how is that possible that with increase in GDP, poverty is also increasing? He gets the answer that although GDP is increasing at a fixed positive rate (Indian GDP is supposed to be 7%); the prices are increasing at much higher rate. Government than stress that although Gross Domestic Product is appreciable, but inflation is the cause of concern. When government decides the prices and inflationary rate, why is it increasing? Terms like Gross Domestic Product or National Domestic Product has no meaningful relation with productivity of market. When government introduces new currency either by printing currency, purchasing bonds, manipulating interest rates, or by announcing bailouts and help packages, those who use the money at first (obviously, the rich), may get benefits, but the same money becomes the reason of Inflation (Price Rise) and Poverty. No government takes responsibility of Poverty though.

Minimum Wages[1]

Minimum wage law is commonly known as the saviour of poor and unskilled minority workers. What are its real effects? Minimum wage law forces employer to pay workers no less than Rs80/- per day. At a higher wage, more workers seek employment, but the employer suffers loss of income and hence desires fewer workers to employ. It is simple, if price of sugar will increase, one will use lesser sugar, if price of labour will increase, one will wish to employ lesser workers. In addition, when one can employ a better and skilled worker at say Rs100, why will he employ an unskilled workers at Rs 80/-? That is, the chances of employment for the poor become further less and he is forced to absurd poverty. On the other hand, because of general decrease in will to employ people, even the skilled labour suffers unemployment. Without employment, unskilled worker never gets a chance to work and improve his skills. Thus, he remains without work with any chance to gain any skills. He may choose to beg or be a robber. Obviously, unemployment increases crime rate too, further causing problems to poor.
Thusly, Minimum wage law is compulsory unemployment, reduction in production and it is an incentive to crimes in society.
Furthermore, employers, knowing demand for employment is more, can afford to discriminate between workers. They may employ only the workers of their own caste or religion, as they will have to give Rs80/- to whosoever they employ. Thus, minimum wage law creates caste and religious tensions, hence further crime in society.

Government Health Care[2]

only the people of the poorest section that suffers lack of medical services
only the people of the poorest section that suffers lack of medical services
Government health care system is another such propaganda that is meant to help the poor. First of all, government controls the medical fraternity and education board of India and does not allow free market to produce medical practitioners in enough quantity to serve the ever increasing number of patients. Than, government makes the medical education so clumsy, time consuming, tough and costly that seldom youth want to be a medical practitioner. Again, government forces those “so less in number” produced medical practitioners (doctors, nurses, medical assistants) to work “involuntarily” in villages at least salaries for first few years, and hence makes the medical sector unattractive. With so less number of medical practitioners, the cost of health care reaches enormous heights. In addition, doctors employed at government hospitals suffer the pressure of extreme work-load and to reduce that, they start discriminating and ignoring the patients. Obviously, the poor suffers. Government try to help poor by subsidizing some common medicines. Thus, the profit of medicine production reduces and hence investment also reduces resulting in scarcity of not only doctors and equipments, but scarcity of most common drugs and medicines too.
Government hospitals cannot be maintained properly because of lack of incentive of profits and the natural competition to provide cheapest, best and trustworthy services to the patients. Hence, although poor may go to government hospitals, they seldom get any proper services and treatment. On the other hand, the richer government officials often enjoys the benefits of government hospitals while the common middle class men prefers to go to private clinics.
Overall, only the people of the poorest section that suffers lack of medical services because of Government intervention.

Higher Education

As explained above, Government has a unique fetish to control the Higher education sector. Universities and higher colleges get massive government funding via tax-payers. Seldom has a poor kid gone to higher education. On the other hand, among the rich, it is customary to graduate, no matter they many of them never learns anything and even if they learn, they never uses it ever. While the poor, because of government intervention in education sector, suffers even a scarcity of good and cheap primary education.

Denial to earn an honest living

Government surely causes poverty through its interventions in market, yet government let the poor to earn a proper living, Government is not stopping any poor person to work hard and make fortunes, is it? Yes, government strictly denies the poor to earn honest living by enforcing various barring laws like permits, licenses, regulations, bureaucratic hurdles, zoning laws etc. A rich person can simply bribe the government official and start making money through his business, a poor man even cannot get enough land to open his tea stall nearby a main road. He will have to bribe the police constable, the municipality officials and many more. Thus, by stamping out potential competition from small business, government serves the big business of rich people. On the other hand, the poor again suffers unemployment, as they can not pertain to self-employment. Thus, they find only two possible ways for them, either to be a beggar, or to be some sort of criminal.

Way to Oligarchy

Government control over market is the reason of all types of corruption. In a free market, if a person want to accomplish a project, he need to pay the exact price that the project will cost, not more, nor less. Under government, the person can simply bribe the politicians and bureaucrats to favour him by employing certain policies to reduce the cost of his project. Thus, government control over market always turns out to be oligarchic in nature where some politicians and rich businessmen makes a cartel to maintain the monopoly and control the poor public.

Conclusion:

As one can see, not only the aforementioned government interventions but any form of government intervention in market destroys the natural order and ability of the free market to reduce poverty and create peace and prosperity. By means of cost control[3] , government actually increases the prices of necessary commodities while production and supply reduces vastly, hence further causing poverty.
Whenever in whatever way government intervenes with market, it creates chaos resulting in wastage of scarce resources, unemployment, and reduced productivity. As a matter of fact, although politicians propagandize their political motives as to help and serve the public and poor society, the government actually is the worst enemy of poor and whatever way it intervenes with Market, it does so just to hurt and inflict poor further.
Hence, in order to really help the poor and let India progress, government needs to leave the Market Free. As free market will reduce the employment rate to zero, (human labour is scarce resource) productivity will increase and poverty will reduce.
No person able to produce and earn a good honest living will choose to be a criminal or beggar.
That will surely reduce the extremes of poverty and hence will reduce the crime rate too.

Footnotes:
  1. Inhumanity of Minimum Wage law, ReasonforLiberty []
  2. Abolition of Cost is Cause of Corruption, A discussion about socialized medicines, Reason for Liberty []
  3. Reason of price Rise and effects of Cost Control, Reason for Liberty []

Related Posts

424 views

Leave a Reply

CommentLuv Enabled

Subscribe without commenting