Re: Capitalism & Wealth

Erik Moeller (
Wed, 07 May 1997 21:02:26 +0200

Perry E. Metzger wrote:

> > I can't talk for Extropians, but I can talk for myself. And I know that
> > economy and free markets is what makes those people poor. Liberating
> > markets even more would replace one system of injustice with another one
> > much worse.

> Much worse?
> Joy.

Join the joyride.

> About 120 years ago, India and Japan were both profoundly poor
> countries with extraordinarily underdeveloped agrarian economies. One
> of those countries chose socialism. One chose the free market. Can you
> guess which was which?

Japan is my dream-economy. They have a relatively high state
intervention and they spend money on sustainable investments.

> About 50 years ago, on the Korean peninsula, a controlled experiment
> was done. A uniformly shattered economy was divided in two. Half the
> country got a largely capitalist free market economy. Half got a
> Maoist local version of communisim called "Juche". Which half is now
> starving?

Which half doesn't have any mentionable economic relationships to other
countries anymore? After the downfall of the UdSSR this was expectable.
Imagine an isolated Japan.

Countries like Cuba are isolated by politicians (lobbied by big
enterprises). The Helms-Burton law is the best example. Send enough
planes over there and wait 'til they shoot one. The Helms-Burton law is
one of the strongest economic restrictions world-wide, passed by a
"free" country.

They even gave Castro the direct choice to cancel any sanctionations if
he would give up socialism. Of course he didn't. Still Cuba has a low
rate of child mortality and is quite healthy. Compare it to other
non-socialist countries in Latin America and draw your conclusions.

> Around the world, pure idiots think that they know "better" than the
> market, that they can redirect resources better than a pareto optimal
> free exchange of goods between free people could. Over and over again,
> the experiment is done, the people suffer, but the idiots, being pure
> in their lack of mentation, never seem to draw the obvious conclusion
> the facts lead to -- which is that the freer the economy, the
> wealthier the people -- even the poorest 10% of the U.S. population
> look rich compared to the average North Korean, the average Albanian
> or the average Cuban.

Of course they don't. Poor US citizens suffer from diseases, hunger and
criminality, much worse than anywhere in Cuba. Albania is another
"reform" country.

> What he "knows" just isn't so, and hasn't even the slightest crumb of evidence > holding it up.

We'll see...


Child and youth poverty exacerbates the risk behaviors of
adolescents, and poverty is a growing problem for America's youth
(Huston, 1992; Lerner, 1993a). By the end of the 1980s
approximately 20% of America's children and adolescents were poor
(Committee on Ways and Means, U.S. House of Representatives,
1991; Davidson, 1994; Hernandez, 1993; Huston, 1992; Huston, et
al., in press; Simons, Finlay, & Yang, 1991). Moreover, data in
the 1992 Kids Count Data Book indicate that across the 1980s the
percentage of children living in poverty in the United States
increased by 22%. Indeed, this national trend was present in 40
states, and continues to increase across the nation (Huston,
1992). Furthermore, of the 12 million American children under the
age of three years, 25% live in poor families (Carnegie
Corporation of New York, 1994). In addition, whereas the number
of children under age six years decreased by 10% between 1971 and
1991, the number of poor children in this age group increased by
60% (Carnegie Corporation of New York, 1994).

Child poverty occurs in all geographic regions of America. In
fact, the rates of poverty in rural areas of the Unites States
are as high as those in the inner cities (Huston, 1992; Jensen,
1988). Furthermore, the poverty rates were higher in 1989 in
rural areas than metropolitan areas for every race
classification, and poverty rates for rural blacks and Hispanics
exceeded rates for their central city counterparts. The higher
rural poverty rate exists despite the fact that the rural poor
tend to be comprised of two-parent families (slightly more than
half) where at least one of the parents works (67%), as compared
to metropolitan poor families (25% twoparent families; 56% with
at least one parent employed; Committee on Ways and Means,1991);
moreover, poor families in rural areas receive fewer welfare
benefits and are less likely to live in states that provide Aid
to Families with Dependent Children (AFDC) (Huston, 1992; Jensen,

However, it must be stressed that the probability of being a poor
child is not equal across racial or ethnic groups. According to
the 1993 Kids Count Data Book, across the 1987-1991 period the
average percentage of European American, African American, and
Latino children who were poor was 11.4%, 44.1%, and 37.9%,
respectively. Moreover, among Latino groups, Puerto Rican
children experienced the highest rate of poverty (40.4%) and
Cuban children experienced the lowest rate (19.7%) (U. S. Bureau
of the Census, 1991). In addition, it should be noted that, as
reported in 1991 by the U.S. Bureau of the Census, Asian children
and Native American children experienced rates of poverty of
16.7% and 24.9%, respectively.

The percentages of children in poverty across the 1987-1991
period represent increases in the rates of poverty over the last
10 years for all racial/ethnic groups. For example, from 19791989
child poverty grew worse by 9% for European Americans, by 5% for
African Americans, and by 25% for Latinos, respectively (Center
for the Study of Social Policy, 1993). In terms of absolute
numbers, data from the 1990 Census indicate that 5.9 million
European-American children lived in poverty, whereas the
corresponding numbers of AfricanAmericans, Asian-Americans,
Native-Americans, and Latinos were 3.7 million, 346,000, 260,000,
and 2.4 million, respectively (Children's Defense Fund, 1992).

Given the differential probability that different racial/ethnic
groups will be poor, it seems clear that policies and programs
must be culturally sensitive in order to effect change. In other
words, both policies and the programs associated with them must
be culturally competent (Lerner, 1995); they must be able to deal
effectively with the specific history, culture, values, mores,
and meaning systems of the youth and families embedded in

Indeed, the focus on diversity is crucial because, as noted by
Huston (1992), race is the most striking and disturbing
distinction between children whose poverty is chronic and
children for whom poverty is transitory. For instance, Duncan
(1992) reports data from the Panel Study on Income Dynamics
indicating that the average African American child in the study
spent 5.5 years in poverty; in turn, the average non-African
American child in the study spent only 0.9 years in poverty.
Furthermore, as with race and ethnicity, poverty is not equally
distributed across age groups. In 1989, about 20% of children
younger than age 6 years were poor, and the corresponding rate of
poverty for 6- to 17-year-olds was about 17%. In turn, the rates
for Americans aged 18 to 64 years, or aged 65 years or older,
were about 11% and 13%, respectively (Children's Defense Fund,

The sequelae of poverty for children and adolescents are
devastating. Indeed, as Hamburg (1992, p. 48) notes:

. . . almost every form of childhood damage is far more
prevalent among the poor--from increased infant
mortality, gross malnutrition, recurrent and untreated
health problems, and child abuse in the early years, to
education disability, low achievement, delinquency,
early pregnancy, alcohol and drug abuse, and failure to
become economically self-sufficient.

Similarly, as Schorr (1988) stresses, poverty creates several
"rotten outcomes" of youth development. For example, poverty is
associated with early school failure, with unemployability, with
long-term welfare dependency, with violent crime, and with
feelings of hopelessness and despair (McLoyd & Wilson, 1992;
Schorr, 1988, 1992). Furthermore, McLoyd and Wilson (1992) and
Klerman (1992) find that poor children live at high risk for low
self-confidence, conduct problems, depression, and peer conflict.
In addition, poor children are at risk for encountering severe
health problems, e.g., infant mortality, lack of immunization
against common childhood diseases, and physical abuse, neglect,
and unintended injury (Carnegie Corporation of New York, 1994;
McLoyd & Wilson, 1992).

Moreover, as compared to their nonpoor age-mates, poor youth: Are
50% more likely to have physical or mental disability; are almost
twice as likely to have not visited a doctor or dentist in the
most recent two years of their lives; are 300% more likely to be
high school dropouts; and are significantly more likely to be
victims of violence (Simons, et al., 1991). In addition, several
familial risk factors are associated both with child poverty and
with a key covariate of poverty--poor school achievement.

To illustrate, there are three maternal risk factors associated
with a child's living in poverty and, as well, with him or her
being in the lower half of his or her school class. These risk
factors are: (1) The mother has fewer than 12 years of schooling;
(2) The mother is not married to the child's father; and (3) The
mother was less than 20 years old when she had her first child.
These risk factors affect family life and child development. This
linkage can be illustrated by reference to other 1993 Kids Count
Data Book information linking these three risk factors to child
poverty and to school achievement. Among all 7 to 12 year-old
children living in America, there was a probability of .79 that
the child would be poor if all three risk factors were present.
Similarly, the probability of being in the lower half of one's
school class was .58 if all these three factors were present. In
turn, when any two of these risk factors were present the
probability of being poor or of being in the bottom half of one's
school class was .48 and .53, respectively. The corresponding
probabilities involving the presence of only one risk factor were
.26 and .47 respectively. Finally, when none of these risk
factors were present the probability of 7- to 12-year old
children being poor or being in the lower half of their class was
.08 and .30, respectively.

Across the 1980s, the probability increased that there would be a
link between child poverty and the presence of maternal risk
factors. That is, as the poverty rates of America's children
worsen, exceeding now all other major industrialized nations
(Huston, 1992), the structure of the family is also changing in
ways that have placed poor children and parents at greater risk
of problems of family life and individual development. For
instance, during the 1980s there was a 13% increase in the number
of children living in single-parent families, a trend present in
44 states. Thus, during 1987-1991 period, 18.1%, 30% and 56.7% of
European-American, Latino, and African-American children,
respectively, lived in single-parent households (Center for the
Study of Social Policy, 1992). Overall, approximately 25% of
America's youth live in single parent (and, typically,
female-headed) families, and poverty rates among female-headed,
single parent or male-headed, single parent families are much
higher (46.8% and 23.2%, respectively) than among two-parent
families (9.0%) (Center for the Study of Social Policy, 1993;
Hernandez, 1993). Indeed, the poverty rates in singleparent
households were, by the beginning of the 1990s, 29.8% for
European American families, 50.6% for African American families,
and 53% for Latino families (U.S. Department of Commerce, 1991).
Since the income of female-headed, single-parent households is
often three or more times lower than two parent households, and
is also lower than single parent, male-headed households, the
fact that increasing numbers of children live in these family
structures means that the financial resources to support
parenting are less likely to be available (Center for the Study
of Social Policy, 1993).

Moreover, in 1990, 90.3% of children were living with their
parents, 7.3% were living with other relatives, and 2.3% were
living outside of the family (Center for the Study of Social
Policy, 1992). However, only 41.9% of African American children,
67.7% of Latino children, and 78.5% of European American children
between the ages of 10 and 14 lived with both their parents
(Simons, Finlay, & Yang, 1991). In turn, between the ages of 15
and 17, only 41% , 63%, and 76% of African-American, Latino, and
European American children, respectively, lived in two-parent
households (Simons, et al., 1991).

As a means to summarize the costs--not only to youth but, as
well, to all of America--of pervasive child and adolescent
poverty, we may note Hamburg's (1992, p. 10) view that:

Not only are many more children growing up in poverty
than was the case a decade or two ago, but many more
are mired in persistent, intractable poverty with no
realistic hope of escape. They are profoundly lacking
in constructively oriented social-support networks to
promote their education and health. They have very few
models of competence. They are bereft of visible
economic opportunity. The fate of these young people is
not merely a tragedy for them, but for the entire
nation: A growing fraction of our potential work force
consists of seriously disadvantaged people who will
have little if any prospect of acquiring the necessary
competence to revitalize the economy. If we cannot
bring ourselves to feel compassion for these young
people on a personal level, we must at least recognize
that our economy and our society will suffer along with
them. Their loss is our loss.

Other Topics on Child and Youth Poverty

* Addressing the Crisis of America's Children
through Innovative Welfare Reform Coupled with Creative and
Integrative Programming


Addressing the Crisis of America's Children through Innovative Welfare
Reform Coupled with Creative and Integrative Programming


Given the number of children and families that today are at such
profound levels of risk, we are faced as a society with a crisis
so broad that the entire fabric of American society is in serious
jeopardy (Simons, et al., 1991). With so many of our nation's
communities facing the likelihood of losing much of their next
generation to one or more of the several high risk behaviors
increasingly present among our nation's youth, all of our
children, whether or not they themselves engage in given risk
behaviors, nevertheless in effect live in risk--of experiencing
the adverse economic and employment conditions associated with
living in a nation that is increasingly globally uncompetitive,
has a diminished pool of future leaders, offers lowered standards
of living, requires lower expectations about life chances and, in
fact, provides fewer and fewer opportunities for healthy and
wholesome development (Lerner,1993a).

Simply, America is wasting its most precious resource: The human
capital represented by its children (Hamburg, 1992; Lerner,
1993a, 1993b; Lerner & Miller, 1993). And this destruction of
human capital is a problem that cuts across race, ethnicity,
gender, and rural or urban environments (Center for the Study of
Social Policy, 1992, 1993; Simons, Finlay, & Yang, 1991).
Accordingly, all of us, all Americans, and certainly all of our
children and adolescents, are now and for the foreseeable future
confronted by this crisis of youth development. Of course, the
pervasiveness of this crisis does not diminish the need to
prioritize our efforts, In fact, results of evaluation studies of
preventive interventions indicate that great success can occur
with programs directed to youth and families most in need
(Dryfoos, 1990, 1994, in press; Hamburg, 1992; Schorr, 1988).
Nevertheless, the breadth of the problems affecting our nation's
youth requires that we see the issues we face as pertaining to
all of us, and not to only a segment or a subgroup of America.

Unfortunately, however, current public policies, and the programs
associated with them, have proven insufficient to eradicate the
growth of behavioral risks and of poverty and its sequelae; as
such, unless effective policy innovations and new programs are
introduced American will lose both much of its current generation
of adults and an even larger proportion of the next generation.
Given the economic and social calamity that such loss will
engender, it is clear that public policies pertinent to poor
people must be reconceptualized and redesigned, and that
innovative and effective youth- and family-serving programs must
be coupled with these policy changes in order to create and
sustain the changes in youth and families that will be requisite
if America is not to fall over the precipice of generational

Thus, welfare reform and creative programming must be seamlessly
combined to address this urgent national problem. As such, we now
discuss the key policy issues to which welfare reform must speak
and to delineate the ways in which Extension--with its existing
youth- and family-serving programs or with new programming
initiatives it will undertake--possesses the capacity to be the
outreach arm of reformed welfare policies focused on the diverse
needs of our nations children and families.