The core argument amounts to: -- quote -- "The core of the problem has not been self-discipline or a lack of opportunity," Karelis says. "My argument is that

The core argument amounts to: -- quote -- "The core of the problem has not been self-discipline or a lack of opportunity," Karelis says. "My argument is that the cause of poverty has been poverty." -- end quote -- Being Indian, I have spent a lot of time observing and thinking about poverty from childhood, and in recent years, doing something about it. I believe he has hit the nail on the head with his analysis of the problem, yet I completely disagree with his solution, which is negative income tax i.e direct government cash to the poor. Here is where I believe he is right. Poverty is a "phase transition" effect: there is a point of being too-poor below which you lose all motivation to better yourself, not only because there are too many problems but also because those problems are all interlinked, so solving just one feels utterly pointless. Spend time in any very poor neighborhood and you will see this. That poverty threshold would be different for different people, and you can aggregate these thresholds for a distinctly identifiable group to come up with a "group poverty threshold", which itself is a function of the group's history and culture. Once you are below that threshold, poverty is very hard to escape. You can state that as "poverty is the cause of poverty." Yet, I also completely disagree with his solution - direct cash grant from the government. To prove the absurdity of it, imagine this on a global scale. Is the solution to Indian poverty then massive transfer of resources from the rich world? So what is the solution then? Here is a sketch: the trouble is there are so many interlinked problems it is not even clear where to start. It is utterly chaotic. To overcome it, first create a very small "Zone of Order" (one room, one household, one neighborhood, one small company, one city ... whatever) where you establish clear, orderly systems. China called this the "Special Economic Zone" which they modeled by taking advice from Hong Kong and Taiwan businessmen. Once you prove that working, scale it up. You have to bootstrap from that "Zone of Order", however small that is. At a personal level, it could be just one small corner of your shack or one hour a day of order, and for a country like India, it could be one city. You can generalize this principle: the solution to any self-referential problem ("poverty is the cause of poverty") is bootstrapping from a very small seed. In fact, I believe most intractable problems are self-referential. On a related note, read about "Charter Cities" http://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/8134/ http://www.theatlantic.com/magazine/archive/2010/07/the-poli...