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Joseph
E
.
Keckeissen
The
Calases
off
Third
World
Poverty
INTRODUCTION
It
is
very
important
for
the
leaders
of
our
Third
World
countries
to
understand
the
root
causes
of
our
poverty
,
if
we
are
ever
to
be
able
to
rise
to
the
status
of
prosperous
peoples
.
This
article
attempts
to
summarize
the
reasons
for
our
backwardness
.
There
are
various
aspects
from
which
to
study
the
causes
of
poverty
,
some
of
which
pertain
to
the
field
of
moráis
(
like
the
d^eneration
of
the
family
or
the
addiction
to
drugs
);
others
to
the
required
preconditions
of
legal
maturity
and
domestic
tranquillity
,
which
are
the
realm
of
politics
;
and
still
others
which
are
the
domain
of
economics
.
In
this
essay
we
limit
ourselves
to
the
economic
causes
,
retaining
a
sympathetic
ear
to
the
moralists
,
sociologists
,
and
political
scientists
,
who
deal
with
other
vital
aspects
of
the
problem
of
poverty
.
Joseph
E
.
Keckeissen
,
graduado
de
Columbia
University
(
MBA
)
y
de
New
York
University
(
Ph
.
D
.,
1976
),
fue
durante
muchos
años
catedrático
de
economía
en
la
Universidad
Francisco
Marroquín
,
y
actualmente
enseña
en
la
UFM
—
Extensión
Quetzaltenango
.
But
evaí
in
the
economic
field
there
circuíate
both
"
false
"
causes
,
which
are
those
generally
heralded
in
the
press
and
the
political
dialogue
,
and
"
real
"
causes
,
which
are
most
often
discounted
.
Let
us
begin
enumerating
some
of
the
false
FALSE
CAUSES
OF
POVERTY
Poverty
is
not
caused
by
insuffident
natural
resources
or
limited
national
territory
,
or
by
high
levéis
of
illiteracy
or
lack
of
technical
preparation
.
Ñor
is
the
cause
the
presence
of
multi
-national
companies
that
sdl
powdered
milk
,
cola
formulas
,
or
gasoline
to
worldwide
markets
.
It
is
not
the
fact
that
some
folks
(
or
companies
)
are
rich
that
accounts
for
the
misery
of
the
poor
,
or
that
the
gap
between
them
might
be
widoiing
.
It
is
not
greed
or
speculation
that
is
the
culprit
.
It
is
not
because
govemments
(
either
local
or
remote
)
are
insensitive
to
the
realities
of
poverty
and
have
not
done
the
"
required
macroeconomic
planning
"
or
initiated
sufficient
development
projects
or
funded
huge
sums
of
money
.
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It
is
not
because
of
the
very
unequal
distribution
of
resources
,
that
permits
a
small
handful
of
the
world
population
to
absorb
the
lion's
share
of
its
wealth
,
income
,
production
,
or
whatever
.
It
is
not
because
advanced
countries
consume
too
much
and
distribute
too
httle
.
It
is
not
because
of
the
heavy
burden
of
debt
,
foreign
and
domestic
,
that
saddles
many
a
struggling
nation
,
or
the
déficit
in
its
balance
of
payments
.
Ñor
is
it
because
the
national
curroicy
is
weakened
or
"
attacked
"
or
devalued
.
It
is
not
because
a
govemment
is
insolvoit
,
ñor
is
it
due
to
inefficiency
,
thievery
,
or
whatever
reason
.
It
is
not
even
true
that
rich
countries
get
high
prices
for
their
elabórate
products
and
that
poor
countries
have
to
be
satisfied
with
low
prices
for
their
unelaborated
"
rawmaterials
".
Ñor
could
it
be
true
that
capitalism
is
the
villain
,
especially
in
those
áreas
in
vÁúch
premodem
or
socialist
systems
prevail
.
The
causes
of
poverty
lie
elsewhere
.
There
are
two
,
progress-impeding
economic
structures
and
povertyperpetuating
attitudes
.
If
we
don't
identify
and
then
corred
these
,
little
will
be
accomplished
to
créate
prosperity
,
no
matter
how
much
time
,
resources
,
money
,
preoccupation
,
hand-wringing
,
or
preaching
we
dedicate
to
the
solution
of
the
poverty
problem
.
PROGRESS-IMPEDING
ECONOMIC
STRUCTURES
Poverty
is
the
resultant
of
a
defective
economic
structure
.
The
different
growth-refraining
structures
can
be
listed
as
pre-modemist
,
mercantilist
,
interventionist
,
and
domestic-oriented
.
We
exelude
the
socialist
and
communist
models
from
this
discussion
,
although
the
interventionist
model
usually
contains
many
of
their
retardatory
features
.
It
is
to
be
noted
al
so
that
all
modem
structures
contain
mixtures
of
the
various
types
;
no
single
model
is
exclusive
in
any
country
.
Improving
some
of
the
above
factors
might
make
things
a
little
better
but
,
in
some
cases
,
might
even
worsen
them
.
The
truth
is
that
the
practical
solution
to
poverty
does
not
rest
with
patemalistic
employers
,
victorious
unions
,
govemment
fimding
,
land
redistribution
,
supertechnology
,
universal
education
,
UN
.
supervised
democratic
elections
,
populist
politicians
,
debt
forgiveness
,
Worid
Bank
grants
,
or
intemational
summits
.
It
has
nothing
to
do
with
sensitivity
or
largesse
.
Ñor
with
the
people's
struggle
for
anything
.
It
does
not
result
from
bearing
grave
fínancial
sacrifíces
.
Ñor
does
it
depend
upon
just
plain
good
luck
.
Pre-modernist
Structure
The
pre-modemist
or
semi-feudalist
structure
hearkens
back
to
the
Middle
Ages
,
wh
«
i
Ufe
was
considered
a
continuously
repetitive
struggle
,
and
there
was
little
or
no
notion
of
progress
.
It
is
characteristic
of
labor-intensive
agricultural
production
that
has
little
división
of
labor
.
It
can
consist
either
of
small
pareéis
,
where
individual
families
produce
traditional
crops
for
self-
consumption
and
for
local
markets
,
without
modem
technology
and
equipment
,
and
often
with
the
obligation
of
paying
some
form
of
tithe
to
fíef
or
landlord
.
Or
it
can
consist
,
as
in
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the
colonial
epodi
,
of
large
plantation-type
agriculture
,
producing
crops
for
intemational
markets
under
conditions
reminisc
«
it
of
slave
labor
.
In
either
case
,
the
workers
are
practically
wedded
to
the
local
soil
,
in
isolation
from
modem
industry
and
the
amaiities
available
in
world
markets
.
Theirs
is
a
monotonous
existence
that
afFords
little
incentive
for
self-betterment
and
promotes
the
continuous
emigration
of
illiterate
serfs
from
the
rural
communities
to
the
capital
cities
and
the
outside
world
.
A
very
high
rqjroductive
rate
usually
exacerbates
these
effects
.
Puré
feudalism
does
not
exist
as
such
and
is
gradually
disappearing
.
However
,
its
vestiges
still
remain
and
serve
to
in^ede
the
agricultural
prosperty
that
is
so
necessary
for
third-world
progress
.
Some
factors
causing
the
feudalist
structure
to
disappear
and
to
converge
into
modem
structures
are
,
briefly
:
in
the
case
of
the
small
agriculturist
,
the
direct
access
of
cash
crops
to
intemational
markets
and
to
capital
and
technology
improvements
(
like
fertilizers
,
irrigation
,
pickup
trucks
);
in
the
case
of
the
plantations
,
modemization
results
from
the
creation
of
processing
plants
that
refine
the
agricultural
produce
into
forms
saleable
in
world
wholesale
and
consumer
markets
,
the
consequent
technification
and
specialization
of
the
workers
,
and
incaitive-creating
systems
of
remuneration
,
which
are
directly
geared
to
output
production
.
All
of
the
above
signal
gradual
exodus
from
poverty
status
and
admittance
into
a
more
humane
mode
of
modem
existence
.
Mercantilist
Structure
The
oíd
mercantilism
(
1600's
to
1700's
)
was
characterized
by
the
practice
of
the
newly
emerging
centralized
states
(
England
,
Spain
,
France
,
Holland
)
to
control
their
national
industry
and
commerce
.
They
did
this
by
granting
unique
privileges
to
individual
companies
to
produce
and
distribute
specified
products
.
And
they
attempted
to
protect
these
companies
by
every
sort
of
exclusión
,
tarifiF
,
and
subsidy
.
The
continuation
of
many
mercantilist
practices
dominates
the
industrial
and
commercial
structure
of
many
underdeveloped
countries
.
Exclusivism
and
privilege
limit
entrance
to
many
markets
,
thus
preventing
the
growth
of
cost-cutting
competition
.
The
law
shelters
these
artificial
monopolies
from
intrusión
by
others
.
The
result
is
markets
serving
a
limited
number
of
high-priced
products
to
a
very
reduced
diéntele
,
thus
favoring
only
the
already
well-to-do
sectors
and
eliminating
the
masses
from
participation
in
the
benefits
(
quality
and
price
)
of
world
commerce
.
In
the
domestic
market
the
national
entrepreneurs
can
raise
the
prices
of
their
tariff-protected
products
,
and
thus
can
sell
inferior
substitute
goods
at
higher
than
worid
cost
;
but
these
same
high
costs
serve
to
bar
them
from
participating
in
world
commerce
.
Interventionist
Structure
The
growth
of
govemment
interventionism
is
one
of
the
great
causes
of
poverty
.
Interventionism
is
responsible
for
the
many
poverty-creating
structures
set
up
within
govemment
,
in
the
form
of
múltiple
ministries
and
departments
with
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seemingly
unlimited
agenda
.
These
are
directed
by
well-intended
but
inefficient
bureaucrats
,
who
are
responsible
for
imposing
an
infinite
array
of
complicated
and
overlapping
programs
,
regulations
,
eligibility
requirements
,
prohibitions
,
reporting
rules
,
accounting
burdens
,
and
arbitrary
decisions
upon
the
citizairy
and
upon
the
productive
enterprises
of
a
nation
.
The
administrative
cost
of
this
regulative
burden
cx
)
ntributes
enormously
to
the
countrys
uncontrolled
déficit
,
and
results
,
as
often
as
not
,
in
most
dubious
benefits
to
the
hamstrung
public
,
that
is
forced
,
under
pain
of
fine
or
imprisonment
,
either
to
comply
or
to
make
the
illegal
payofFs
that
some
unscrupulous
public
servants
extort
.
The
underground
market
,
which
enjoys
no
legal
sanction
or
protection
,
arises
because
of
the
inability
of
most
small
producers
to
comply
with
the
multiplicity
of
arbitrary
requirements
and
payoffs
the
law
imposes
upon
them
.
The
conviction
that
govemment
should
be
unlimited
in
its
obligations
towards
its
citizens
,
and
thus
directly
responsible
for
their
health
,
education
,
housing
,
oíd
age
,
and
even
recreation
,
has
contributed
greatly
to
this
problem
of
intervaitionism
.
Very
few
services
escape
this
direct
tutelage
.
The
state
bureaucracy
has
added
greatly
to
the
inefficiency
and
high
cost
of
the
most
essential
services
and
is
responsible
for
the
dq
)
lorable
unavailability
of
the
latter
.
The
bottom
line
is
that
,
even
after
the
outlay
of
huge
social
expenditures
,
the
population
never
seems
to
be
able
to
surmount
the
poverty
of
the
past
and
the
demoralization
the
system
often
creates
.
The
further
conviction
that
govemmait
has
immediate
r^ulatory
responsibility
over
prívate
business
and
banking
activity
has
produced
an
unsupportable
restraint
upon
the
productivity
of
a
nation
.
The
notion
that
it
is
the
duty
of
the
govemment
to
intervene
for
the
protection
of
consumers
,
workers
,
and
investors
,
that
it
must
r^ulate
in
detail
pnces
,
wages
,
and
interest
rates
,
that
it
must
be
the
first-line
policeman
of
all
market
activity
,
has
created
an
overbearing
(
and
inefFective
)
supercontrol
that
tends
to
shackle
business
initiative
and
efficiaicy
,
and
impede
the
consequent
eamings
that
foster
economic
growth
.
It
impoveríshes
much
more
than
it
protects
.
It
creates
insecurity
rather
than
prosperity
.
It
refrains
rather
than
stimulates
.
In
addition
,
the
mercantilist
countríes
generally
intervaie
to
nationalize
the
industries
most
essential
for
growth
,
like
Communications
,
aiergy
,
transportation
.
Most
of
them
have
only
one
nationalized
airline
,
telqahone
company
,
electric
company
,
among
others
.
The
result
is
even
more
bureaucratic
inefficiency
,
waste
,
and
enrichment
of
public
servants
,
with
the
corresponding
déficits
and
debt
.
Central
America
,
for
example
,
urgently
needs
millions
of
more
telephones
,
which
the
nationalized
companies
are
incapable
of
providing
and
servicing
.
Another
diaracteristic
of
interventionism
lies
in
the
attempt
of
a
nation
to
control
its
monetary
unit
by
means
of
a
variety
of
policies
directed
by
its
central
bank
.
The
latter
is
considered
the
guardián
of
the
currency
.
But
in
the
ftitile
attempt
to
finance
excessive
govemmoit
expenditures
,
to
amass
intemational
reserves
,
to
regúlate
prices
,
and
to
protect
the
overvalued
national
currency
,
the
bank
destroys
the
monetary
unit
,
distorts
the
economy
,
and
incurs
sizeable
déficits
.
This
is
most
often
due
to
the
lack
of
a
sound
monetary
discipline
and
the
political
tampering
with
the
money
creation
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