Capitalism for the Poor
Picture provided by courtesy of Martin Burt.

Capitalism for the Poor

Even supporters of capitalism often mistrust freedom when it comes to the economically most disadvantaged. Instead of poverty being managed from above, people need to be empowered to master their own lives.


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Long have we lauded the capitalist economic framework for its ability to improve life for most dwelling beneath its invisible hand – by embracing new ideas, new combinations, and new leaders who innovate to deliver economic growth. Capitalism’s instability is seen as a necessary evil: failure foments innovation and eliminates inefficiency; poverty pushes us to aspire, to self-improve. This dynamic and often turbulent system is founded upon a single doctrinal truth: we believe in the private ownership of the means of producing wealth. This precept is buttressed by our liberal political framework which, above all, prizes the freedom of self-determination for individuals who are equal under the laws by which they consent to be governed.

This intersection between personal liberty and personal wealth is most visible in the vast range of wealth management tools available on the marketplace. While varying in the specifics, these tools all help high net-worth individuals visualize their wealth, define long-term goals, identify weaknesses, track progress, and connect to a network of dedicated support personnel. At their fingertips lies the power to take data-driven, real-time decisions to create a better tomorrow for you and your family.

Yet when it comes to poverty, why are we happy to discard our liberal ideals? Why do we insist on privatizing wealth but nationalizing poverty? At the other end of the income spectrum, there’s an equally vast range of poverty management tools which are not so much used by as applied to poor individuals – typically via one-size-fits-all state welfare programs or charity handouts. What would happen if we gave poverty back to the poor, allowing them to define and manage their poverty with the same freedoms and tools as the wealthy enjoy?

Cynics claim that poverty management is too big and complex a task to be delegated to poor people – perhaps believing they haven’t the skills and sense to succeed. After all, poverty is complex: income is only one of many moving parts, along with individual and structural deficits in security, health, sanitation, education, water and more. Perhaps cynics believe that all our ­anti-poverty efforts to date have been nothing more than tilting at windmills. Or, perhaps they fear that eliminating structural poverty means abandoning capitalism altogether – an unthinkable remedy to many (including myself).

A tool for self-diagnosis

And yet, when has capitalism ever shied away from complexity? Can we find a way to leverage the innovation and creativity inherent in capitalism to experiment with new ideas, and new combinations, to embrace new leaders in the fight against poverty? (Hint: the answer is yes.)

In less than one generation, we can eliminate global poverty. Yes, eliminate. Not reduce it or alleviate its effects. Zero poverty, everywhere and forever. This is no empty pledge – we’re already doing it across 50 countries with 450 organizations.

The app Poverty Stoplight allows those affected by poverty to analyze their situation and decide which challenges they need to address. Image: Poverty Stoplight.

My team at Fundación Paraguaya developed the Poverty Stoplight app, a color-coded tool defining what it means to be very poor (red), poor (yellow) and not poor (green) in 50 indicators across 6 areas: income and employment; health and environment; housing and infrastructure; education and culture, organization and participation; self-reflection and motivation. The…