Sheldon Richman on explaining poverty

Had [foreign aid advocate Mickey Leland] given the issue some thought, he might have discovered that the proper question is not “Why are these people poor?” but rather “Why is anyone rich?” Man was born in poverty; it needs no explanation because it is simply the absence of wealth. What needs to be explained is how anyone ever beat poverty and became prosperous. A certain logic is missing from the simple-minded argument that the rich got that way by robbing the poor.

We needn’t have expected Leland and his colleagues in Congress to discover the truth for themselves. It was readily available to the most casual investigator and has been available for many years.

In the 1830s two Englishmen understood it: standing grief stricken at the grave of a child who had died of starvation, one of them, Richard Cobden, turned to his friend, John Bright, and said, “Come with me. There are in England women and children dying with hunger – hunger made by the laws. Come with me, and we will not rest until we repeal those laws.” In the next decade Cobden and Bright united the efforts of industrialists and laborers in a crusade to repeal the causes of starvation in England: the Corn Laws, which made grain imports artificially expensive. Their success brought a period of unprecedented prosperity to England.

Cobden and Bright understood the source of prosperity. Men begin with only their labor and nature-given materials. They have to apply their labor to rearrange the materials in order to produce things of value. That requires ingenuity. And ingenuity is clearly the more important of the two. In fact, it is ingenuity that turns nature-given materials into resources. It was ingenuity that turned worthless underground black gunk into valuable oil. It was ingenuity that turned sand into silicon. Nature, strictly speaking, does not provide resources; it provides materials. A resource is a product of man’s mind; a material stamped with man’s purpose.

As important as ingenuity is to the creation of wealth, it does not exist unconditionally. To think, to discover what they need and how to produce it, men must be free. They can’t create at the point of a gun.

~ Sheldon L. Richman, "Phony Benevolence," The Free Market, October 1989