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Economic Poverty,
profit is the key.
 
The science of wealth and poverty is called Economics. But on the key question of whether human progress tends to reduce world poverty, tends to increase world poverty, or tends to leave world poverty unchanged, different economists have reached very different conclusions. And their different conclusions have impacted strongly on how governments and others approach poverty, and on how poverty is dealt with or not dealt with.

1. Unchanging Poverty.

Economists concluding that world poverty must tend to continue on average to the same extent, include Thomas Malthus (1766-1834) who supported basically an eternal misery law of biological poverty. Basically, he concluded that whatever human progress is made in producing more food and other goods will always give a matching increase in population, so holding poverty steady always.
 
In the economics of Malthus, if food production is steady then population will be steady - though progress may tend to increase food production and give a matching growth in population that holds poverty steady.

2. Increasing Poverty.

Some other economists concluding that world poverty must tend to increase on average, include David Ricardo (1772-1823) who concluded that business profit rates must tend to fall because the worlds resources like land are limited - so increasing food and goods production would over time involve increasing marginal costs and falling marginal returns and profit rates. He concluded that resource-exploitation limits meant that investment in business must tend to fall, though he thought that it could be delayed for some time by investment in and exploitation of the resources of poorer countries. Ricardo concluded that world poverty overall must tend to increase, and the rich end up unable to benefit from exploiting resources.
 
Ricardo's economics saw employer demand for labour as tending to increase and that as chiefly increasing population which then requires increased food and goods production - and Adam Smith and Karl Marx basically agreed with that.

3. Decreasing Poverty.

Other economists concluding that world poverty must tend to decrease on average, include both Adam Smith (1723-1790) and Karl Marx (1818-1883) though their economics are very different. Hence Smith saw human economic progress as chiefly in individual productivity improvement, and Marx as chiefly in social productivity improvement in the mode of production from primitive to feudal to capitalist to communist.
 
In Smith's economics, progress meant individual productivity increase creating wealth so that the rich did not basically need a poor to exploit - and wealth would generally tend to increase and eliminate poverty. But in Marx's economics, the rich generally necessarily used both productivity increase and poor-worker exploitation to maximise their profits - but the world could and would choose to develop a society without worker exploitation and so without poverty.
 
Some more recent economists like John Maynard Keynes (1883-1946) have also concluded that poverty can be reduced by appropriate government policies.
 
4. Conclusion.

Malthus biological poverty is probably right for primitive human societies, as it is for wild plants and animals. But certainly not for more modern human societies, or for domesticated plants and animals. Then other things certainly affect human population growth and poverty.
 
Ricardo's resource limitations are real but often do not have to give increasing marginal costs as alternatives can be developed - as with land shortage giving skyscraper building. Yet some alternatives are problematic as with falling fossil fuel resources giving increased nuclear power and switching food production to ethanol fuel production. And it can also be noted that over time productivity increase lowers the real prices of goods, so that handling the really lower money values involved will tend to involve an increasing marginal cost. Society has to support a growing finance and banking sector, but lower goods costs can also allow business to make more use of free gifts and suggests a move towards a some-pay-goods and some-free-goods mixed economy ?

However, to date the world does overall seem to be supporting an increased proportion of its population outside poverty so that the evidence does seem to favour the economists who consider that it is possible to reduce world poverty. Ricardo's claimed benefit of having a poor class or poor countries to exploit is false in that this in fact chiefly aids exploiter low productivity and inefficiency. Of course a majority of the people in the world now do remain in poverty still, and world governments overall do not seem to have plans that can improve the situation quickly.
 
# Surprisingly maybe, one of the biggest causes of world poverty now is undoubtedly low world food price terms of trade, often helped by farm-subsidies in rich countries and free-food aid and other food dumping in poor countries. The large number of poor small-farm families in poor countries need somewhat lowered farmer costs or raised food prices - with money or food stamps for the poor to buy food at market prices rather than free-food aid, see Poverty Farming, FAO pdf 706 kb


 
 
PS. You may like to read below an economics essay covering these issues, done in 1986 for the City University, London ;
 
( if the essay print here is small, see the same essay at Wilmots Ricardo )
 
On David Ricardo and The Falling Rate of Profit,
 
ricardo essay page 1
 
ricardo essay page 2
ricardo essay page 3
ricardo essay page 4
ricardo essay page 5
ricardo essay page 6
 

 
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© World Poverty, 2013