Truck and Barter: Even With No Income, My Family is not Poor

My family is not poor.

According to the official U.S. Census definition of annual poverty (cue appropriately stuffy policy directive, and other links), I, my wife, and son stopped being poor some time in April--and we're not given the chance to be poor again until January 1.

That I quit my job in July and have had no income--except Google ads!--since then does not change the (correct) decision that the Census statisticians will make about my family in 2004.

However, my family is poor when looked at on a monthly basis. Granted, it's a strange type of poverty, since our lack of income was planned by me in advance. If we were in the SIPP panel survey, you'd see us as one of those as families who are "poor for six to eight months", or something to that effect.

But in truth, we're not poor.

That's not because we live relatively frugally, or because we saved a considerable sum of previous earnings and have substantial equity in our home. Besides, we're eating those savings now--at just about the expected rate--and will not have to touch the equity.

(You can be rich in assets--like owning outright a quarter million dollar home--and still be "poor", as long as your income from those assets doesn't bump you over the threshold).

Both of those tangible funding sources pale in comparison with my expected future earnings after earning a Ph.D. in economics. In a hyper-efficient market setting, I should be able to borrow against those intangible future earnings; yet nobody except close relatives (from whom I'd never borrow) is willing to loan, at any interest rate. Even though I can't get at those funds, we're still not poor.

We're not poor because I can't accept as poor any person who is able to sip gourmet coffee in a wi-fi cafe while blogging on a new laptop.

Comments

julie putnam wrote:

Noting your comment that in an efficient market setting you would be able to borrow on potential (isn't that what student loans are) I would advise you to look at the position of Grameen bank one of the more successful microloan institutions with literally millions of loans.

http://www.grameen-info.org/bank/GBdifferent.htm

I personally think this is one of the best forms of foreign aid and if you go to the home page you can find the American branch which lends to a variety of countries (not just Bangladesh) but you might also note that there are potentials beyond foreign aid, part of a new develpment of economies.

If microloan philosophies such as Grameens prove successful than as the economies grow, the scale will too. We are talking inventive peole with ideas such as renting beggars mobile phones which are in turn rented as pay phones. Millions of people involved in ideas and connected to the lending institution. A similarity might be Japanese manufacturing where in some companies workers average several suggestions a year and they are taken seriously, whatever the flaws of Japanese economics, manufacturing remains a strength.

However in the third world unlike Japan fundamental structures may be built anew. Flexible dynamic financial systems combined with the portable data access of the cell phone combined with the organizational power of computer nets...

In designing the fundamentals much will be collaborative, yet individualistic. Almost by necessity the poorer countries will be forced to open source software, it's what they can afford. I realioze conservatives oppose this and argue that in the government didn't spread the internet and if uiversities and corporations ddn't donate resources we would have AOL and Compuserve which are ideologically better because private and certainly for a small fee you could even send mail between them, but in terms of actual accomplishment there are real arguments for the "socialist" (or anarchist) net even if it doesn't control content nearkly as well as AOL "boards." It is simply more efficient.

So we may be facing a developed world with not only cheaper labor, but superior forms of organization. Applied to medicine (with a real flexibiltiy plus administrative costs lower that even Europe much less the US with over a third of all payments going to mantain "competition" eg. forms and bureaucrats) transportation (a system where deliveries and taxi service are automatically scheduled by phones, eg.if you need something shipped somewhere someone going by your place and in that direction who wants a bit of payment picks it up...) private currenicies (eg. barter systems built into computers which keep track of resources it may be that in several decades we face competitive systems which obliterate our economic institutions.

The qestion is flexibility. Given the countries reduced capacity to respond to the pressing exegencies of Iraq and provided needed resources quickly, the best and the brightest in what is allegedly a "war" it is possible that we can't adjust. Certainly there are many other examples.

-- October 25, 2004 12:32 PM ∞

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Truck and Barter

Even With No Income, My Family is not Poor

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