Double-entry bookkeeping is an economic technology - invented several times in the 1400’s. Using double-entry bookkeeping to pay a bill requires making two entries.
- Subtract $100 from your account
- Add $100 to the bill’s account
This mind-numbingly boring, yet amazing innovation is the single best technology we’ve invented to prevent embezzlement and corruption. By splitting the transaction between different bookkeepers, they all have to work together to steal from the system. If the accounts don’t match, someone later (an auditor) can know something gone wrong. Such fraud requires a whole different set of books - hence “cooking the books”.
The invention of money started a cascade of technologies to manage it’s use:
- Money (5000bc)
- Interest (5000bc)
- Taxes (3000bc)
- Zero (1700bc)
- Coins (1100bc)
- Fiat currency (1100)
- Compounding interest (1340)
- Double-entry accounting (1400)
- Fractional reserve lending (1600)
- Supply chains (1911)
- Credit cards (1930)
- Shipping containers (1956),
- ATM’s (1967)
- Outsourcing (1990)
- Paypal/Apple/Google Pay (2002)
The purpose of an economy is to move resources and labor around, so that our lives are improved, and we’ve created a variety of ways to do that all still in use today:
- Poverty, Barter, Silent Trade (prehistory)
- Slavery (prehistory)
- Salary (10,000bc)
- Serfdom (332)
- Plantations (1503)
- Indentured Servitude (1630)
- U.S. Migrant Labor (1914)
- Labor Unions (1930)
- H1-Bs (1990)
- The “gig economy” (1999)
Poverty is interesting on this list. Most of the others were as easy as searching “when was x invented”.
But when did poverty start? In the past, surely whole peoples have starved to death. This isn’t as common as it used to be. We live in a modern material abundance.
And, we are a society that punishes poor people and their children with hunger, crime, curable disease, and inadequate education. In the U.S. 20% of kids experience hunger and 15% of people live below the poverty line. We did it yesterday, and we did it today.
There is a moral argument against poverty, just like there is a moral argument against slavery. We need poverty, just like we needed slavery. That need is why we ignore our morality. So this article and blog are written practically, because I believe you can afford your morality.
Practically, when we see other people suffer, we feel that suffering. Not only do we suffer, but our sense of security and empowerment is diminished. It makes me uncomfortable, and I want to ignore it. There is a reason wealthy people don’t want to live near poor people - because poverty causes them to suffer too. Not In My Backyard (NIMBY) is an expression of their psychological suffering.
We justify the inconveniences of morality to children as: “if you do good things, good things will happen to you.” This is statistically true, but not actually true. Bad things can happen to good people because of life’s randomness.
“Karma” for children is Santa Claus checking his list of actions and rewards.
“Karma” for adults translates roughly as “patterns of cause and effect”. Karma isn’t a lesson about distributing the limited goodness of the world - it’s about seeing patterns of cause and effect and making artistic choices for effect. Today, we are the only people in all of human history with choice.
In the U.S. we spend 1461 days getting by, and 1-4 of those days voting to make choices about our society - often as an unpopularity contest of uninspiring candidates. There’s a reason modern democracies spend so much time looking for someone to punch in the face.
But truthfully, the poverty line and the poverty machines have been with us for thousands of years.
15% of my fellow Americans live below the poverty line - they have less than the minimum amount of money needed to provide the necessities of life. A single person who makes less than $11,770/year lives in poverty - raised by $4160 for each dependent family member. Even above the poverty line, this is hard living. It’s worth noting that America’s poor have it worse off than poor people in many other countries.
Why is the poverty line important? Most everyone you know live in relation to poverty.
As many as 75% of Americans live paycheck to paycheck. That means poverty is only ever weeks away. This is the “middle-class poor” that spend everything they make. 15% below the line and 75% circling the drain - this is the pattern of the Poverty Line.
Poverty is a constant reminder of societies threat to you and your family. It’s a reminder your neighbors may someday abandon you to “social services”.
Need something dangerous, repugnant, or unethical job done? Poverty’s purpose is to coerce people into doing things people would rather not do.
For those of my fellow American who don’t live check-to-check - good on you! It takes the self-discipline of knowing who you want to be, instead of buying who advertisers say you’re supposed to be.
“You can’t tell me just who you are. You buy new clothes just to hide those scars. You built that roof to hide those stars.” - Lupe Fiasco - Never Lies
As a young man, this pattern of poverty made me very angry. I was hungry as a kid, and it brought up fountains of rage against the “rich” - even though the rich take great pains to put a distance between us.
Later in life, I noticed the poverty machines.
Imagine an invisible machine - like a mist. That floats over communities and slowly sucks the money out of them. This is a poverty machine.
Trickle-down economics is a beautiful idea, hearkening back to the days when local banks printed their own money and made loans into a community to strengthen the community. The bank couldn’t suck too much money out of the community or it would harm itself. Trickle-down economics only works if the way to get more pie is to make a bigger pie for everyone.
The telegraph, phones, television, and internet changed all that. We call it globalization. Banks and institutions do not need to make a bigger pie for everyone - they are required by law to make the most profit possible for their share-holders - who almost certainly do not live in your community. So thanks to mass marketing distant strangers can slowly suck money out of communities and transfer that money to somewhere else.
These companies simple put are poverty machines. The more profit, and the greater the communities dependency, the more successful they are. If you disagree or don’t understand, get a payday loan and you’ll have a visceral understanding.
Amazon.com is an excellent example. I shop on Amazon all the time - which put local companies out of business in my community. Amazon sucked that money into Seattle but Seattlites can’t afford to live there.
The worst part is we need the poverty machines. They provide modern necessities and most importantly jobs to pay for them. Those who don’t own the machines get by tending them.
Those who do own the machines are hemmed in by poverty just the same! Is their machine the best competitor? Will they make their quarterly earnings? More more more!
Abolishing Poverty isn’t about helping the poor.
Choosing to abolish poverty is about living together in economic human dignity, free from the fear and shame of throwing each other away.