Your A B C and 1 2 3 of Political Economic Part 16: Wealth Creation and Poverty

Reads 3062 times.


Having to share the national wealth into equal portion for each member of society when everyone is not contributing to creation of that wealth by equal commitment will not be fairest deal. 

Rich and poor have their different challenges. Those with larger share of the collective wealth strive to keep the balance for longest time. The poor on their part have no fear of fall. They need daily meals and simple smile on the face some of us may take for granted.

Cashflow moving one direction ends up in the hands of those running fast enough to catch pace with speed beyond flying objects.

Minting more coins and printing additional bank notes is no quick solution to free the rest of us from the cash trap battering saints and sinners in a society of diverse interests.

Money may not be growing on roof top of tallest buildings. Yet we see men and women operating on big wings chasing the cashflow only few of them control. 

How few people control more wealth in society

Given the choice, everyone prefers having abundant cash reserve to pay for whatever brings good life. The logic of keeping cashflow in limited supply is to create a situation of unequal possession. That situation invites the occasion where many continue to chase the cash supply in circulation but only few catch enough or more.

Communist principle of income and wealth distribution states “from each according to his ability to each according to his need.” Carefully considered this communist concept of wealth creation and distribution encourages capitalist drive for exclusive possession without calling it that name.

Not everyone contributes to wealth creation by equal measure. Therefore, distribution of gains on equal share basis will impose constraints for those who contribute the most.

People differ by account of personal resourcefulness. That difference is what pays the extra dividend. Some people are optimistic and make optimal contribution with high yield resourceful productivity. Other people are pessimistic and make least contribution to wealth creation that society banks on.

Those who set higher targets are driven by achievement motivation gears in operation. They are limited in number and not afraid of risk leading to success or failure. These are our higher achievement motivated enterprising persons who do business or venture into other wealth creation engagements. They have big wings to fly high and capable of lifting others on the journey to success.

Middle ground is occupied by another sector of the social divide. That is the lot who are aware of wealth creation and prepared to commit some efforts moving goods and services from point of production to the end user compact majority waiting to be served.

Third layer of the social fabric consists of those who risk least for fear of failure. In their majority they prefer taking whatever comes their way with least inclination for making efforts. They easily settle for third place in the race.

Social fabric is peopled by most productive and least resourceful with middle class. The irony is that producers of what we all require depend on the lack of resourcefulness in others to create and build their valued stock.

In the eyes of those unable to see full picture of economic reality, the rest of us depend on few capable hands that deliver goods and services being paid for as matter of need. If you pay rent, shop around, use public transport or own means of mobility any time, your contribution to wealth creation sets the clock ticking. You simply contribute in creating wealth for others to enjoy.

Social Capital Development and Growth

Value adding contributors to the national wealth can be identified as bankable social capital resources. From household level and extending to wider population, building resourceful social capital is high priority felt-need.

Bankable social capital is no free-gift descending from thin air. Creative awareness is capable of high yield productive gains.

Parenting at the household level provides the primary raw material and first step in building social capital. Task of further advancement in social capital growth rests on the state as enabler.

Government has responsibility to create enabling economic policy instruments and robust operating environment.

Creating the operating environment for development and growth of social capital is not enough. Social thinking patterns require shifts in gear engagement.  The economy is driven by a mindset not based on crude social values. It takes enterprise culture, social responsibility, and economic development focus from personal to national driveways in building social capital.

Economic superstructure that creates the environment for businesses to flourish is sustained by clearly mapped road links where short cuts may not be readily viable.

Social capital is developed and grown for enhancing wealth creation through entrepreneurship. Enterprise culture makes that to be achieved better.

Being enterprising goes beyond ordinary conventional wisdom. Entrepreneurship is fuelled by high spirit of achievement motivation. It is a combination of goal scoring attributes where even the occasion of failed attempts becomes a motivation for greater success. Every successful person will tell you their story of failed attempts which provides motivation to beat failure for success at last.

Enhanced productivity in social capital development and growth requires good planning by government while encouraging the population to be enterprising. Further commitment on part of the government is by instrumental policy provisions and the will to achieve realistic goals.

Deprived, Hard-to-reach and Marginalised Communities

Tell those in least developed societies that poverty and deprivation inflict same deep cut wounds on the city poor. They will think you are making up to give them comfort. Even in the least developed nations, those who control resources enjoy relatively better living standards than the rest.

Governments all over the world suffer chronic guilt for not doing good enough to salvage marginalised and hard-to reach sectors of society.

Deprived, hard-to-reach, and marginalised communities in one part of the world share the same fate as those in other parts of the world. You do not need to be blessed for believing without seeing.

Governments in least developed like industrial nations have no enough storage room to hide the ugly deep cuts of hardship suffered by deprived and marginalised social divide.

What any curious observer finds an interesting contrast is that industrial nations with all resources at hand are still coping with the guilt of deprivation suffered by marginalised communities.

Although there is visible presence of poverty and deprivation even in developed nations, that does not provide the occasion for least developed nations to keep increasing their stock of resource poor persons with untapped wealth creation potential.

Poor, deprived and marginalised sectors of the social divide deserve better and to alleviate that biting situation demands responsibility from governments at their front gate. Whole communities succumb to deep biting pains of poverty and deprivation for generations. Poverty alleviation remains one unresolved economic challenge for politicians around the world.

Even when marginalised sectors of society work hard enough to raise their income levels, they still pay for living costs at prohibitive prices. Governments are good at setting up revenue generating tracks for national wealth creation although that does not translate in poverty alleviation.

Hand to mouth survival is universal identity mark for low income sectors of society around the world. The good life that excess income provides is one big dream for marginalised sectors of the social divide. Low income equates to weak purchasing power. Price levels and other costs rise to blow off rooftops.

Pro poor slogans are heard loud enough during political debates. With the poor not always present during such talks, they are being talked about and not effectively engaged.

Dependence syndrome in society is a condition that fuels poverty. Making people believe that it takes the power and resources of others to create better living for them encourages a cycle of dependence. Depending on others means a person or community waits to be provided for.

Such dependent communities and individuals deserve improved living beyond hand-to-mouth. They need the capacity to create wealth as bankable source of revenue over longest run.

Income Generation and Wealth Creation

Small and Medium Enterprises also known as SMEs have long been recognised as prime drivers of national development with prospects of income generating activities as source of wealth creation.

In addition to propelling the informal sector business, SMEs are source of taxable revenue required for economic regeneration and growth.

By development and promotion of entrepreneurship, the potential for economic growth has sustainable prospects. Spending increases with addition in disposable income. When productivity is boosted there is increased spending.

An enhanced enterprising population invariably translates into increased productive hands lifting the economy higher up.

This does not suggest that with more enterprising engagement in society, poverty melts away so easily. Business in general fuels the economy with income generation and wealth creation propelling growth.

London in United Kingdom which first settled as cluster of villages is now being talked about as commercial capital of Europe. Some of the villages that make up London into the city of commerce we hear about still maintain their identity and character.

With income generation and wealth creation set in right gears, growth potential rises higher. Taking London UK as an example, there is no doubt that income generation and wealth creation serve as key to growth.

When London settled as a village, there was no anticipation for high volume traffic, so much the reason why some roads remain narrow and one-way traffic. The London Underground emerged out of necessity thanks to increased commerce and trade. In later years, the city introduced Congestion Charges as traffic curbing mechanism.

 Poverty Alleviation through Small and Medium Enterprises SMEs

Empowering the poor goes beyond the granting of political freedom to criticise and blame government.

Economic freedom entails enhancing the capacity of people and communities to live sustainable better conditions without recourse to gifts and aids.

Promotion and development of enterprise culture is viable poverty reduction strategic intervention that worked for number of countries.

Overall orientation and strategic focus of developing Small and Medium Enterprises SMEs is for economic transformation. Individuals and communities are not only salvaged from deprivation. They are transformed to economic saviours.

In practice, when poor communities and individuals take calculated risk to invest in business, they are paving the way to wealth creation through enterprise engagement for economic regeneration.

Further gains include their contribution to national wealth creation as generators of taxable income. Poverty is not a choice and those caught up in the trap deserve an enhancing platform to alleviate their condition.

Motivated by enterprise culture, small and small enterprises have greater potential as poverty alleviation strategy on the journey towards sustainable livelihood.

Good governance also requires provision of the enabling economic environment that gives people choices as value adding contributors in national wealth creation.