Why There Is Poverty – Theory

Short answer: Because there are hyperproductive people and there is only so much work to be done.

Long answer: Let us argue that every working person has to provide enough real, tangible, concrete value (food, housing, electricity etc.) for two people (retirees, kids, pregnant women, disabled, diseased, administrators, politicians, police, military, salesmen, artists etc.). Let us estimate the amount of money he has to earn per month at 2000 $ (1000$ housing, 600$ food, 400$ other expenses like clothes, water, electricity). So every person has to create a value of 4000$ on average per month, but that’s just a side note.

Now let´s look at a different example: A capitalist has an apartment block of 100 apartments planned and built by 49 people (plus himself, which makes 50). That takes 5 years (relatively realistic). That makes for 2 apartments built per 1 person in 5 years, these apartments house on average 2 people and cost, say, around 600.000$, so 1.200.000$ value created per worker in 5 years.

A person earning 2.000$ a month (like in the beginning) would have to work for 50 years times 24.000$ per year to provide as much value. Even if you estimate the price of apartments differently and you say the living costs of 2 people are higher, you definitely won´t get the duration down to 5 years. So, the average person is less productive than some (groups of) people, which must obviously be true.

[ Side note: I watched a documentary which showed a tomato plantation in the USA that produced more tomatoes than entire Italy and was run by a few dozen people. ]

If some (groups of) people provide a huge amount of the r.t.c. (real, tangible, concrete) value, then most people will provide less than the required value per person (or the 2 people, considering retirees, kids, pregnant women, disabled, diseased, administrators, politicians, police, military, salesmen, preachers, social workers, doctors, teachers, etc.) and will thus make less money in professions focused on providing this kind of value.

Illustration: If you decided to grow tomatoes in your yard, could you live off of that? Could you compete with the big tomato plantations? You couldn’t even cover your costs, unless you own acres of land.

So, if they´re smart, they´ll get different jobs, for example as administrators, politicians, police officers, military workers, salesmen, entertainers, lawyers, authors or artists etc..

[ Side note: Researchers indirectly provide r.t.c. value by increasing the productivity of people working in r.t.c. professions. ]

As time passes, we develop new technologies and thus become more productive, especially in professions providing r.t.c. value, thus the amount of people required to produce r.t.c. value is reduced and the amount of people providing other kinds of values rises. Thus, more r.t.c. value has to be produced per person working in r.t.c. professions, so normally productive people have even less of a chance at getting into r.t.c. value producing professions.

So what happens to the people working in non-r.t.c. professions? Well, they become for example administrators or politicians, military workers and police officers or salesmen, preachers, social workers, lawyers, entertainers, authors and artists. The last few professions are characterized by strong competition, as there is only a certain amount of entertainment and counselling necessary, so the amount of people able to make a living in them is strongly limited and the jobs will have a clear hierarchy of success.

Necessarily, people remain without well-paying jobs, or jobs at all, as there is no valuable work to be done. If you sweep floors or work as a cashier or do the same repetitive motion in a factory, frankly, your work isn´t worth much and you could mostly be replaced by a machine, which is only a question of time. Ergo, your salary sucks.

As automatization increases, which will no doubt happen, and more and more people will work in non-r.t.c. value providing professions, which (not only) experts prophesize, then this will become worse and worse.

This is the cost of progress and is thus hard to avoid ( , but might not be impossible, growth as an economic goal has been criticized lately, but I don´t know much about that).

Ownership of this text up to this point:

First published on monkmass.club on 17.06.2021 at 13:17 (UTC +01:00) by user “admin”, but edited for clarity and brevity on 27.08.2021 at 08:03 (UTC +01:00).

Compare page 93 of: Kelly, Kevin, 1992 – Out of Control – The New Biology of Machines, Social Systems and the Economic World – Published by Basic Books, A Member of the Perseus Books Group; E-Book ISBN: 978078674703

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