Absolute vs. Relative Poverty Line

Economists and politicians routinely argue in favor of basing social assistance programs upon relative poverty lines. Such programs have the effect of favoring equalization of income in a country, rather than emphasizing the idea of a safety net for that country’s residents.

Paul Graham has an interesting paragraph in his Mind the Gap article:
If I had a choice of living in a society where I was materially much better off than I am now, but was among the poorest, or in one where I was the richest, but much worse off than I am now, I’d take the first option. If I had children, it would arguably be immoral not to. It’s absolute poverty you want to avoid, not relative poverty. If, as the evidence so far implies, you have to have one or the other in your society, take relative poverty.

In light of this observation, it can be seen that each day, several people from 3rd world countries vote by their feet in favor of absolute poverty lines. They do so by immigrating to more affluent countries. They do so even if they are illegal immigrants. They do so even if they end up being in one of the lowest socioeconomic classes in the affluent country of their choice. They do so because they believe that they and their families would be better off being illegal immigrants in an affluent country rather than be legal and sometimes relatively prosperous in their country of origin.

The most interesting observation for me is that economists and politicians discuss feelings of resentment and discrimination among people who find themselves below relative poverty lines, while ignoring that those people probably value more adequate schooling and medical care for their children, which are better for the poor in affluent countries than for the middle class in 3rd world countries.

One more observation is that humans can be divided into immigrant types and non-immigrant types. The above discussion applies to immigrant types i.e. people who are willing to take a risk, immigrate to an unknown country, try to survive there without the familiar faces and patterns of life – with hope of doing better. Non-immigrant types value more stability and security, and are willing to forego opportunities in favor of this. It is possible that non-immigrants (who are usually the majority in countries without significant percentage of immigrants among their residents) are the ones who favor relative poverty lines.

Author: Omer Zak

I am deaf since birth. I played with big computers which eat punched cards and spew out printouts since age 12. Ever since they became available, I work and play with desktop size computers which eat keyboard keypresses and spew out display pixels. Among other things, I developed software which helped the deaf in Israel use the telephone network, by means of home computers equipped with modems. Several years later, I developed Hebrew localizations for some cellular phones, which helped the deaf in Israel utilize the cellular phone networks. I am interested in entrepreneurship, Science Fiction and making the world more accessible to people with disabilities.