Curing Poverty Chapter 1: The goal

I'm currently reading The Poverty of Nations by Wayne Grudem and Barry Asmus that was published about a year ago.  It was on my reading list, and my daughter bought it for me for Christmas.  I've begun to read it and will give a summary as I go.  In the last post I introduced the book.

Chapter 1
Per capita income must increase for a nation to become wealthier.  More goods and services need to be created.  That is, goods that have a monetary value must increase in number.  If people bake bread at home and eat it, per capita income does not increase.

This measure does not give any indication of how well the wealth is distributed in a country, however.  We do not know whether the wealth is in the hands of a few, or in many hands.  For a nation to become more wealthy, the wealth needs to benefit many people.

Wealthier nations are able to afford cleaner water, air and better medical care.  So while more wealth is not the only answer to better lives, it is a necessary starting point.

The rest of the book is a description of how the GDP (gross domestic product) can be increased.   But in summary, a country needs to continually produce more goods and services each year.  The country will have to figure out for itself what those goods and services need to be.

The authors interact with other goals that have been suggested about how to eliminate poverty.  These include more aid, more equal distribution of wealth, discovering new natural resources, debt forgiveness, better trade terms, more fair trade goods, and restraining multinational corporations.  the authors show briefly why these are not adequate for lifting a nation out of poverty.  More substantial objections will be explored later in the book.

Of particular interest in terms of current American cultural and political thought is the morality of profit.  The Occupy Wallstreet movement is in the recent past, and many in America have recently begun to think that profits are evil.  The authors point out (p. 53) that ". . . profit is not immoral, but is a measure of morally positive value that has been added to the nation."  When two or more parties agree mutually to buy and sell and one makes a profit, then the other has agreed that the value is fair and that they are willing to pay it.  Profits then reflect an increase in value over raw materials because of human talent, training, and hard work.

How then can a nation increase the amount of goods and services that it produces?  How can more garments be produced?  More food, refrigerators, or whatever?  This will be dealt with in the rest of the book.

Grudem and Asmus point out several historical examples of nations that have become more wealthy.  Britain, Japan, Hong Kong, and South Korea, all come to mind.  They mention the Industrial Revolution and how it eventually benefited England, but they don't mention the social destruction that went along with it as well.  I hope that they address these factors as the book unfolds.

Biblically, the authors point to the wife of Proverbs 31 who seems to be an entrepreneurial capitalist.  They also point to the Creation mandate of Genesis 1 where Adam and Eve are commanded to subdue the earth and implies that they were to use the resources of nature for their own benefits.  The New Testament also points to the importance of working.

Chapter two: Wrong Goals:  What won't work