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Poverty, The Competent Baseline, and Inequality — Medium


Recent innovations: Let’s first note some developments that highlight the evolution that is transforming the economy and culture. Much of the innovation in question is about making traditional transactions far more efficient (eBay, Amazon and other markets; AI, payment systems, fintech, et al). Many other areas are about providing the public powerful, rich, and transforming features, often formerly unavailable at any costs (smart phones, high speed data, AI). Some innovation, such as now well-accepted social friending, communicating, and dating and more recently the Sharing Economy, of various types, is exploring new social and commercial arrangements. Often these ventures are disrupting old social and business norms. These norms were established and solidified in the past to provide security, uniformity, and smooth functioning in the pre-digital days. Now they are being transformed through substitutions of certain social and business expectations with compensating mechanisms to reach at least similar trust, fairness, and quality with more efficiency and often better features. Unnecessary historical quirks are quickly disposed of. New features, easily implemented with new or invented technology, often greatly enhance the transaction, providing and even sharper distinction from legacy products and services.

Progress is inevitable: As Paul and others have noted, the evolutionary pressure to improve has always been there. Change is inevitable, although various accidents of history, cultural stories, and power positions may cause it to flow in many paths and in different speeds in different areas. People are very resilient, at least in the long term; in the face of the Industrial Revolution and now the Technology Revolution, many inflexible adults will be lost even as some do really well. Rather than traditional capital, inheriting money or position, joining the family or community business, consistent success will be based on flexibility, creativity, continuous reinvention, and continuous social education. At the same time, efficiencies have accumulated to provide both a cognitive surplus and a decreasing need for everyone to work. It’s hard to say how this will evolve in the long run, but it seems that some will have increasing leisure while others, engineers in particular, will be increasingly in demand. Perhaps our eventual plateau will be the pervasively surplus world of Star Trek, where people work only because they want to (or to remain mentally healthy); what is the best path to get there? Is it a destination to embrace or somehow avoid or will it solve itself, just like past economic revolutions?

Poverty is the problem: Paul’s central point is to concentrate on eliminating poverty rather than being obsessed with the opposite end of the spectrum. Many of us wonder about some top-end cases: public companies paying CEOs many millions while having legions of front-line employees barely getting by, corporate takeovers with pension raiding and company selloffs, entrepreneurs making millions seemingly overnight. There are too many circumstances to deconstruct and justify (or not) here. We all have opinions on these cases, but none of us has complete information or understand the full implications of more than a tiny subset. What most of us think we know is that open competition, and especially a healthy dynamic of destructive reinvention, is the best indicator of what is efficient. We seem to be in the golden age of reinvention. Whether we decide not to buy from a company, publicly influence, decide not to work for, or help start a competing company, we collectively push this forward.

Efficiency: While efficient doesn’t always mean that things are right and fair, and there are different aspects of efficiency, it is clear that individuals can work together to right a wide range of wrongs. It is not just a matter of creating a me-too competitor, the traditional mid-20th century solution. Everyone is now well aware that it is not just technology that can be reinvented, but also business models, culture, attitudes, regulatory relationships, and the entire memescape.

Defining success: There are a number of ways to define success, but it is unequivocal that it doesn’t involve poverty. And being just above the poverty line isn’t enough: Clearly, there should be a competent baseline (CB) of education, health, peace of mind, opportunity, and reasonable fairness. People should be prepared to some reasonable level for the opportunity to grow into anything, given raw talent and sufficient drive. This doesn’t need to involve a certain amount of money, a certain location, or a build up of stuff. Much of what is important now is digital or otherwise more scalable than it used to be. Some of us are working to disrupt additional areas to more easily empower more people. To a large extent, even for those without many resources (but with the first level of Maslow’s Hierarchy of Needs satisfied), everything is amazing and nobody is happy. It is incumbent on those who are competent to do something to help those that aren’t. This obviously applies to children, the disabled, and the mentally and physically ill. There is less consensus about how to accomplish this in general for, say, a twenty-something that hasn’t yet learned the right skills and motivations or a middle aged person with dwindling demand for their existing skills.

Competent baseline goals & taxes: There are many questions and differences of opinion about how to consistently and broadly ensure the elimination of poverty, i.e. reaching some degree of a competent baseline for everyone. Many feel that we can tax our way to this goal. There are certain people I would like to be heavily taxed, for various reasons. But, more importantly, there are others that are doing spectacularly well with their startup-derived resources, very likely better than any other person, group, or government. Perhaps you think my hero is a villain and vice versa. The problem is, hobbling a true hero is far worse than docking others: The loss of what would have been, which you won’t be able to predict, can be incalculable. Even 100% taxation of startup entrepreneurs won’t solve it if you don’t fix the real problem and those startup entrepreneurs could be your best chance. It isn’t the current capital that’s important, it is the continual benefit and constant renewal not just of financial flow, but of valuable ideas. Kill that, or even slow it down significantly, and you quickly sap all value and progress.

Who should be making decisions about the future?: The selection process of starting and successfully running and growing a startup likely tends to produce more capable and, in the current culture of Silicon Valley at least, more constructively thoughtful viewpoints than any other. These entrepreneurs, groups of polymaths with technical, management, financial, and product strengths, work together to form a rapidly evolving consensus. The skills of a typical corporate executive, politician, civil servant, or wall street trader are all heavily influenced by what it takes to reach their level, be successful in terms of money or power or influence, not in the agile creative futurism, the age of info-topian optimism that leads to real change. That is the realm of teams of entrepreneurs who are dedicating all of their skill and attention, and their savvy visionary investors, who are very often successful entrepreneurs themselves. There are those in academia, government, and elsewhere who play key roles, but their impact would be very limited without entrepreneurs. For instance, DARPA’s track record is amazing.

Real Estate: I’ve said for years that real estate, directly or indirectly, is one of the real problems putting people in poverty. Even relatively rich people are often effectively poor due to real estate distortions. People commuting long hours, seeking less expensive housing, are still poor in time and quality of life. The sharing economy can only help this so much. Largely, this is a problem created not by plutocrats, but the general population in an area like San Francisco making myopically selfish choices that run against everyone’s interests in the long term. San Francisco residents have effectively ruled that the city is full, even though that is far from reality: there is no such thing as a city that has run out of room. Income inequality may be more about housing than capital, tech startups, or Wall Street. The big question is whether San Francisco, and other areas, will realize their mistake and start building housing with less scarcity based pricing. In other areas of the country, and world, land and housing are often inexpensive, but they can’t attract a critical mass of companies and workforce. In a future post, I will describe some possible solutions.

Poverty, the Competent Baseline, and Inequality:

Thinking about solutions: There are many ways that poverty could be addressed through traditional channels, NGOs, startups, and more local and decentralized methods. While wide income disparities remind us some are succeeding, the most pressing problem is poverty. Sometimes, economic inequality contributes to this and appropriate pressure may be needed. Often, real estate (including rent, required commute, etc.), lack of education and opportunities, problems with local culture, and other issues hold people back. In the face of changes that require a better trained, potentially smaller workforce, we need to aggressively educate and prepare, in some as yet determined way, with the likelihood that not everyone will find paying jobs. Communities outside current hyper-successful zones should find ways to grow. New patterns should be created to organize cognitive surplus, potentially creating decentralized solutions. The primary way that people escape poverty on a success trajectory is effective education along with effective cultural understanding, habits, and optimism.

Our Contribution: At Change My Path, our goal is to make people’s lives better by disruptively and inexpensively providing access to the education that people need to get better work and live happier lives. We are creating an entertaining and educational collaborative authoring and publishing platform, initially targeting adult job skills. We have an innovative way of allowing anyone to quickly capture knowledge using new methods, then mapping to immediately playable games, simulations, and other entertainment forms, published immediately on our marketplace. We are providing a low-barrier, always available achievement-oriented learning experience that is fun, easy, and interactive. Our web presence is still a bit stealthy: If you are interested in hearing more, please contact me:

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sdw, I like this. Is the key to target the education?

There should be a competent baseline (CB) of education, health, peace of mind, opportunity, and reasonable fairness. People should be prepared to some reasonable level for the opportunity to grow into anything, given raw talent and sufficient drive.

We think so!  It has been our experience that education, autodidactic or formal or on the job, is the key to all real, lasting success.  There are several components that are key to achieving that education.  Change My Path is designed to assist with as many of those components as possible.

Sounds like you're working to make education more pragmatic, too.

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