Poverty is arguably the number one problem in the world today.

Poverty
causes not only much human suffering. It also contributes greatly to
social conflict, war and environmental destruction.

There are levels of poverty in all countries around the world.

Interesting points to note are:
1) New Zealand does have some poverty but its rate is less than 1%.
2) The USA, the richest country in the world, has somewhat more poverty
than China, which was considered until recently an underdeveloped
agricultural country.
3) Venezuela, which has far more wealth and natural resources than
Kenya, has almost the same rate of poverty as Kenya.

Poverty is clearly on the political agenda in Venezuela. President

Chavez has an aim, shown through promises made during his election
campaign in 1998, to remove poverty.

Standard economics text books give various reasons (except

neo-colonialism) as causes of poverty. Some relevant points:
1) The poor generally do not have enough to consume, let alone to save.
So the explanation of low rates of savings and investment is trivially
true, but not helpful.
2) Poverty and low education standards are tightly correlated. The
average child in Venezuela has 5 years of schooling. In Australia the
average is 10, and in the USA 12 years. Poverty cannot be solved without
increasing education but is poor education the cause of poverty?
3) While many argue that overpopulation causes poverty, there is good
evidence to believe that poverty causes overpopulation. And China with a
much higher population than the USA has less poverty.
4) Countries in the equatorial belt tend to have lower per capita GDP,
than temperate countries. It is generally agreed that tropical diseases,
especially malaria, are a serious obstacle to economic development. But
there are obvious exceptions. Singapore and Malaysia have developed
remarkably in recent years, despite being tropical countries. Climate is
not an insuperable obstacle.
5) Corruption has to be considered a factor in the poverty of some
countries. Consider the billions of dollars stolen by President Marcos
of the Philippines and President Suharto of Indonesia.
6) Some more honest text books of economics give due space to the long
term effects of colonialism. India for example, was one of the
wealthiest countries in the world until the British arrived to plunder
it.
7) Neo-colonialism is just an extension of colonialism to modern times
using different techniques to extract wealth. The WTO and the IMF are
the global institutions that administer neo-colonialism. Standard
economics text books studied in Western countries do not generally even
mention neo-colonialism as a cause of poverty.

From a Prout perspective, we need to be aware of the dynamics of poverty

at all levels, global, national and local.

Over the last few centuries the movement of wealth has been from the
mostly southern hemisphere countries to the two centres of imperial
power in the world today, Europe and the USA. In an analysis of
imperialism, the relevant terminology is "the centre" to describe the
central seat of power of an empire, and "the periphery" to describe the
countries from which wealth is extracted. Neo-colonialism is the modern
practice of imperialism and the dominant empire in the world today is
the USA. These concepts are required in order to understand the
distribution of poverty around the world.

At the national level, the movement of wealth from rural areas into
cities is a common problem in all countries, even rich countries such as
a Australia. Here the cities may be considered "centres" of power to
which wealth is concentrated, and the surrounding rural areas are the
"periphery". Rural poverty has become an increasing problem in Australia
over recent years, particularly since the introduction of neo-liberal
economic policies over the last 20 years.

Even within cities we observe the flight of wealth from poorer suburbs
into the elite suburbs - localism. In Sydney, Australia, the elite
suburbs enjoy ocean views and fresh sea breezes. The poorer areas of
Penrith, Blacktown and Bankstown are known for lower education and
health standards, crime and gang warfare. While it is natural that the
more desirable inner suburbs will attract richer families, in recent
years this concentration of wealth in desirable suburbs has been
unnecessarily exacerbated by government policy. For example, increasing
resources diverted to wealthy private schools and private hospitals in
Australia.

The common factor at each of the three levels, global, national and
local, is the bleeding of wealth. We may define bleeding of wealth as
the wastage or removal of wealth from a locality so that it is
impossible to maintain the capital base required for further
development. Clearly the bleeding of wealth from a locality must be
checked if poverty is to be solved. But we must consider the three types
of capital, physical, human and social. Another way of thinking about
the bleeding of wealth is to consider its flip side - the concentration
of wealth. The extreme concentration of wealth and poverty go hand in
hand.

The levels of income inequality in countries of the world reflects a

huge social and economic disparity, eg South America. Income inequality
is a mechanism of wealth concentration within a nation, the flip side of
which is poverty. The ratio used to measure income inequality is the
aggregate income of the highest 10% of income earners divided by the
aggregate income of the lowest 10%. These ratios are a measure of the
poverty gap, or the gap between rich and poor. Note that the ratios in
South America are very high compared to a wealthy developed country such
as Norway. In New Zealand, the income ratio increased markedly after the
introduction of neo-liberal economic policies - compare the figures for
New Zealand in 1986 and 2000. This increase was sufficiently noticeably
that it became an election issue. When the New Zealand figures are
compared with the South American countries, it is not hard to understand
widespread poverty in South America.

On the global scale it is considered that imperialism is a technique of

wealth concentration. The basic methods of imperialism have not changed
much over 2000 years - but they have become more subtle and more
psychological! The Roman empire simply plundered peripheral countries
using military power. It also received tributes and taxes through
compliant local administrators selected by Rome. And of course slavery
was a significant factor in the building of the Roman empire.
Using India as an example of British imperialism, the initial plundering
was done by Lord Clive in India. Once a British administration was set
up, the agricultural lands were turned over to the growing of crops such
as cotton which was exported to England. Local food crops were relegated
to marginal lands - consequently serious famines broke out when the
weather was not kind. India was forced to import textiles back from
England. Any Indian who attempted to set up a local loom would have
his/her hands cut off. Wealth concentration using forced trading and
harsh penalties.

Today the USA maintains its imperial status by capturing the democratic
institutions of peripheral countries (just as Rome used to install
compliant administrators), by establishing global but unelected
institutions such as the IMF and WTO and by a system of trade that
depends on the US dollar. Under this system, the US imports much
physical wealth in exchange for paper wealth, that is dollar notes and
US govt bonds. No wonder the USA is the richest nation in the world! The
think tanks and strategists behind President Bush (2000 - 2008) see
themselves as administering an empire.

The following authors offer interesting insights on imperial practice:

CAIN & HOPKINS: The decline of the British empire was due to resource
wars - especially the Boer War and WW1. Also colonialism lead to the
loss of manufacturing in the centre (England) due to cheaper labour in
the colonies. There was also an excessive rise of the rent-taking
service sector. The financial sector became independent and often acted
against the interests of the empire. There are interesting parallels
with the American empire of today.
DAVIS: The British established the first concentration camp in India
late in the 19th century. The daily food ration was less than for
Auswitz. The great famines in India that killed 50 million people, were
caused by an inability to respond to droughts because the British had
destroyed the country's food production capacity. Furthermore, available
stores were not released.
KORTEN: Major thesis - the multinational corporation are gradually
accumulating more economic and political power than individual nations.
MNCs are becoming the new empires.

Any attempt to eliminate poverty must attend to the bleeding of wealth

from local communities as the starting point. Clearly it must attend to
the different mechanisms of wealth concentration at the global, national
and local levels. But it must also attend to the different types of
wealth, physical and financial wealth, intellectual and human wealth and
social capital in the form of community solidarity, ethical standards
and so on.

Society must move from economic disparity to economic parity. The

wealth of the world is the common patrimony of all. To achieve parity
(as equality will never requires rational distribution and maximum
utilization of wealth. This is a principle of Prout.