Attitudes Towards Poverty

I know this has nothing to do with technology or media, just bear with me. I read this on the Freakonomics blog on NY Times and I thought it deserved attention! This was kind of a revelation to me, although it’s probably old news for some people. I think it explains a lot.

“At a seminar in Germany last week, a statistical difference illustrated a crucial E.U.-U.S. difference in politico-economic attitudes.  In the U.S., we define the poverty line as absolute: three times the income needed for a minimally nutritious food budget.  In Europe, the poverty line is based on relative income, typically 50 percent of the median income.

This transatlantic difference says something about political/cultural differences.  With our definition, in a growing economy, so long as inequality doesn’t increase too much and food prices don’t increase more than average prices, poverty will eventually disappear.  We will not always have the poor with us in America.  What an optimistic view — and what lack of concern about inequality!  In Europe, even with income growth, unless inequality decreases, the fraction of households in poverty won’t change. How pessimistic, yet how concerned about equality!”

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