Top 5 PovertyCure Blogs Post for 2016

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As we close out the year, we want to thank our PovertyCure blog readers for reading and contributing to our blog.  If you’re a new reader we encourage you to catch up by checking out our top 5 most popular posts for 2016:

  1. Three Reasons to Stop Focusing on Children | by Peter Greer

When an organization, particularly a residential care institution, focuses exclusively on providing for children, over-extended parents are more likely to send their children away, assuming that their sons and daughters will have better access to care and opportunities at an institution, rather than in their family’s home. Parents are trying to do what’s best for their children. But studies show a disturbing trend: children in these situations become more, not less, vulnerable. The trauma of being separated from their families and the impersonal attention that they may receive at an institution can make them more likely to experience developmental delays, difficulty forming attachments, exploitation, and abuse.

  1. The Importance of Private Property | by Jonathan Moody

The rights and responsibilities of private property must be supported.  One of the crucial lessons of development economics is that the poor cannot create wealth for themselves and their families without secure property rights.  The Judeo-Christian tradition provides powerful resources for encouraging the property rights of the rich and poor alike.  It shows that private property is not an artifact of greed and possessiveness, as many believe, but rather a legitimate institution rooted in our role as stewards of what God has entrusted to each of us.

  1. Principles of Effective Compassion | by Patrick Oetting

If government were to reduce its role – or at least slow the growth of programs – in the charity sector, churches and private charities could in turn fully assume the role that they were created for – to help those in their community. Some argue that this may result in less money dedicated to the poor. But, I counter that any reduction would be offset by the targeted nature of the benefits. Subsidiarity works because locals have access to specifically local information. So, benefits are designed specifically to address the specific needs of specific people in a specific community. Simply put, local givers give more efficient gifts – especially when compared to the current, bloated, top down approach in which one size is assumed to fit all.

  1. The Question I Hoped I’d Never Hear from Someone Living in Poverty | by Becky Svendsen

One minute, I was alone … and the next, I was overrun. While I was answering emails on the last day of a trip to visit savings groups in India, teenage girls suddenly swarmed into my bedroom unannounced, covering giggles with their hands.

These girls—who lived at the orphanage next to my guesthouse—asked to see my clothes and touch my hair and page through my books. They called me “sister” and showed me how to wear the sari I bought that week, explaining that only married women wore saris. Whoops! They acted shy at first but were soon gently elbowing each other out of the way to have me photograph them by the window.

  1. An Inconvenient Truth about Development Work | by Peter Johnson

Occasionally, development work and development workers can be agents of social justice. Unfortunately, it was my experience both in Paraguay, South America, and later in Senegal, West Africa, that development initiatives often do not foster social justice. In fact, development work sometimes contravenes social justice precisely because the industry buys into the sentimentalized version of the world’s poor.

American Economic Nationalism Hurts Developing Countries | by Kyle Hanby

 Pic by Neil Palmer (CIAT). A farmer at work in Kenya's Mount Kenya region. From Wikipedia, sharing according to the Creative Commons Attribution-ShareAlike 3.0 Unported License https://creativecommons.org/licenses/by-sa/2.0/

The idea that the United States should operate as a self-sustaining nation and non-reliant on the production of goods from foreign countries would not only be disastrous for the United States but could create huge road blocks for developing countries. When the ideas of protectionism and economic nationalism rise to the forefront of public policy discussions within the United States, only the harm or benefit to the United States is mentioned. There is no shortage of commentary from experts and economists that discuss these effects. What is not often discussed is the damage protectionist policies have on the economic growth of developing nations.

Perhaps the reason people rarely ever comment on the effects of American economic nationalism on foreign economies is because that might come across as putting the well-being of another country before the United States. The truth is, when one country works its way through the development stages it does not come at the expense of other countries.

An “America first” approach to our economy is actually harmful. Acton Institute Director of Research Samuel Gregg frequently writes about this. One of his more recent articles at The Stream titled ‘It May Sound Good, But Economic Nationalism Will Not Make America Great’ discusses all the ways that a move toward economic nationalism will only damage the U.S. economy in the long-run. But not only will it hurt the United States, it will also put every developing country that benefits from free trade with the United States in a worse situation. To countries that are still developing, this could be detrimental.

The United States has formal trade relations with more than 75 different countries around the world. A lot of those countries are in Africa and South America and several of them are by no means first world developed countries. What is the best thing the United States can do to help them develop? Trade with them.

There is no doubt about the contributions that free trade has on the development of a country. Ghanaian software entrepreneur Herman Chinery-Hesse stated this fact well in the Acton Institute’s Poverty, Inc. documentary: “I have never heard of a country that developed on aid. If you have heard of one, let me know! I know about countries that developed on trade, and innovation, and business. I don’t know of any country that got so much aid that it suddenly became a first world country. I have never heard of such a country.”

Of the $34 billion of foreign aid that the United States is planning to give out in 2017, $3.6 billion will be earmarked for economic development. It is clear that the U.S. government does not understand Chinery-Hesse’s message.

Free trade generates economic growth and economic growth is the key to the development of any country. This is why developing countries rely on free trade to develop and if the United States decides to withdraw from this trade then we are sending a message to those countries that we do not want to partner with them in their development.

Trade is a mutually beneficial activity and protectionist policies are mutually harmful.  If the United States really wants to help developing countries we should open our markets to them. And as Christians, we should be eager to engage in economic activity with our brothers and sisters across the globe, because when we do, it gives them greater opportunities to flourish.

Photo for Acton Announcement

Kyle Hanby is a Liberty@Work Associate at the Acton Institute.  He is a former University Relations Intern at the Charles Koch Institute in Arlington, Virginia.  He holds a bachelor’s degree in economics and finance from Bethel College in Mishawaka, Indiana where he chaired the American Enterprise Institute Executive Council and was a 4 year member of the men’s varsity tennis team.

**Picture by Neil Palmer (CIAT). A farmer at work in Kenya’s Mount Kenya region.  From Wikipedia, sharing according to the Creative Commons Attribution-ShareAlike 3.0 Unported License https://creativecommons.org/licenses/by-sa/2.0/

PovertyCure Issues: Dignity and Capacity of the Poor

The first thing I would say to those who say that we must come and give, otherwise these people are incapable of improving their situation or getting out of their poverty, is to ask them ‘Why?’ – Theodore Dalrymple

 

Inherent Human Dignity

The materially poor are often viewed as inferior in worth and dignity to the materially wealthy. Historically, this has led to neglect, exploitation and enslavement. But a more insidious way that such prejudice manifests itself is when the well-intended view the poor primarily as objects of pity to be saved by gestures of charitable good will. Such a reaction to extreme poverty involves at least a half truth. Our desire to help is rooted in a proper recognition of our human solidarity with those who are suffering. But that sense of solidarity is compromised when we fail to see the capacity of the poor alongside their need.

The Danger of Dependency

In ancient Rome, the impoverished masses were satisfied in their lowly state by the state providing “bread and circuses.” In other words, they were given free food and entertainment rather than economic freedom along with the opportunity to develop and use their natural abilities. This has been a recurring pattern. Political interests often dictate the creation of generous welfare programs and unconditional aid. A sop is easier to provide than a solution. Unfortunately, these programs often have the unintended consequence of undermining the cultural fabric of poor communities, encouraging what psychiatrist and author Theodore Dalrymple refers to as “the underclass,” a subculture marked by despondency, family breakdown and high levels of crime and substance abuse.

While temporary relief programs may genuinely assist the poor, it is important that these programs be designed to avoid fostering dependency and damaging a community’s social fabric. When people are dependent for long periods of time on handouts—whether from the government or from private charity—their ability to provide for themselves by serving others is impaired and their dignity threatened.

The Capacity of the Poor

In light of mounting sociological data underscoring the culturally destructive effects of long-term social welfare for poor communities, many poverty fighters encourage charities to focus on helping the person caught in poverty develop and employ his creative capacities. They warn that such efforts need to be accompanied by humility and a keen awareness that spiritual poverty exists in every class.

At the same time, this call for humility is distinct from a form of relativism that insists that every worldview, every value system, is equal and nobody from one class or culture should try to impart its cultural treasures to another. Instead, the poverty fighters who emphasize the role of enterprise and capacity development seek to match a humble partnership approach with efforts at spiritual and cultural formation, education and, where needed, training in good work habits and skills. They also tend to emphasize that such efforts need to be shaped by the principle of subsidiarity, which emphasizes the importance of local knowledge and face-to-face compassion. In this way, those seeking to help the poor are better able to identify what the poor actually need, as opposed to what we perceive from afar that they need.

From Paternalism to Partnerships

Doug Seebeck, the founder of Partners Worldwide, tells the story of getting a job as a young agricultural consultant in Bangladesh. As he explained in his interview for the PovertyCure initiative, he went over expecting to teach advanced farming techniques, but as he worked with them face to face, he quickly realized that they were excellent farmers, wringing from their small plots of land an enormous harvest given their resources. So finally he asked them what they thought they needed to boost productivity. They said that it would be great if they could have water in the dry season, since—except for the lack of water—the conditions were far better for farming at that time of the year. There were reserves of fresh water near enough to make this feasible; the problem was that the farmers were too poor and lacking in connections to invest in an irrigation system. Seebeck went to work with them on bringing fresh water to their farms in the dry season, and in this way they were able leverage the agricultural skills that these poor farmers already possessed.

Christian Charity and the Dignity and Capacity of the Poor

Among Christian communities, the power of the poor also can be cultivated and encouraged by remembering that the biblical call to be generous extends to rich and poor alike. This is the core message of International Steward, a non-profit organization begun by Brett Elder to encourage churches in poor regions of the world to practice generosity. Elder points to the Gospel story of Jesus praising the poor widow who gave to God her last two pennies as emblematic of what materially wealth Christians all too often forget: The poor also have a calling and capacity to be generous stewards of the things God has entrusted to them. Often rich Christians see Christians in extreme poverty and, in a rush to help, they forget that the poor also have stewardship capacity, even in conditions that would seem to disallow saving and giving.

When International Steward delivered this message to a church in Nairobi, Kenya, its Sunday collections increased from an average of $188 per week to more than $400. In another case in Uganda, Bishop Hannington Bahemuka took the message of International Steward and, working with his congregation, transformed their war-torn village from one of dependency to one of generosity and a growing independence marked by a successful effort to build their own church and care for war orphans. As they recognized their own dignity and capacity, they began to flourish in ways that before would have seemed impossible.


Key Voices

Robert Woodson on Mischaracterizing the Poor

“The idea of empowering neighborhood people is a radical idea because it’s not something that’s understood on either the left or the right of the political center. I think Bill Bennet, the former secretary of education, summarized it beautifully. He said ‘When liberals look at poor people they see a sea of victims and when conservatives look at poor people they see a sea of aliens.'”

Damian Von Stauffenberg on the Role and the Limits of Charity

“Charity has its place in emergency situations.… A life that is lived on as a recipient of charity is a miserable life. I think, in our DNA, the way God made us, we are made as co-creators. God wants us to perfect and to really finish His creation. And if you’re simply a recipient of charity, you’re not doing that; you’re not fulfilling your real destiny, which is this creative capacity that God has endowed us with, we’re letting that creative capacity sit idle. I think that’s—at probably at the deepest level that I can reach—what’s so inadequate about the traditional response to poverty.”

Damian Von Stauffenberg on the Power of the Poor

“They can create wealth for themselves. They can become productive. The poor become productive and that’s how you create rich countries. That’s how a small, poor agricultural economy like Switzerland becomes what you have seen when you studied in Geneva. It’s that process. And that’s the answer to development.”

Rev. Robert A. Sirico on Overlooking the Capacity of the Poor

It’s so often the case that when people come from the developed world to the developing world and they see the wretchedness of poverty in such close proximity, they experience a kind of a guilt about their own prosperity and translate that guilt into policies that fail to recognize that these people are made of the same stuff as the people in the first world, that they have the same capacity that enabled the developed world to be so prosperous in the first place.

Eric Kacou on the Role of Individuals

I believe that individuals are critical in the prosperity creation process inasmuch as they are the ones that are at the beginning and the middle and at the end of the prosperity creation process. As it relates to assets, there has been a focus in developing countries mostly on physical assets, on financial resources, on infrastructure, on natural resources. What is really required is an understanding that all those resources are just wealth in potential.

Kim Tan on the Dignity of the Poor

I think what people want if you ask the poor, if given a choice between a handout or a hand up that helps them really to have a sense of dignity and independence, to be able to put food on their table by themselves through their own effort. They all want to be able to do that. You know, that is, that is a part of the human aspiration and I think we need to find ways of doing that and it’s enterprise that can really help people do that.

C. Neal Johnson on Our God-Given Creativity

God is an incredibly creative individual, and He said that I’m making men and women in my own image. He made us to be creative individuals … He gave a number of things to humanity and to mankind and said, ‘Look, this is who I want you to be. This is who I’ve made you to be. I want you to take dominion. I want you to exercise your creative gifts.’

C. Neal Johnson on Handouts vs. Paychecks

It’s easier to write a check than it is to give of yourself.… All too often that’s what the people in the pews have done and the churches have told us, that the NGOs have told us – that’s all they need, they want our money … But when you go to find people in these countries, and they don’t have jobs and you realize what they need is not just a check, but they need a job, they need meaningful work. God made us creative, he made us to work—what they need is the kind of dignity that comes with a paycheck that says, ‘Somebody values my services, somebody values my life, and that I have dignity.’

Rudy Carrasco on Capacity and Responsibility

Every single person on the face of the planet is created in God’s image. Everybody has the same heavenly Father. Everybody has capacity, talent, and ability. Everybody has responsibility. Everybody has stewardship responsibility. I don’t care what dirt hovel you’re living in, in Brazil or Mexico City or Manila. You have a responsibility to be a steward of the resources under your control because you have a heavenly Father who has put great things inside of you and that’s waiting to be called out and developed and extracted.

Carroll Ríos de Rodríguez on Poverty in Guatemala

Poverty is a very important aspect of life in Guatemala. It’s all around us. And you cannot grow up, not seeing poverty around you. You have to be very callous not to care or not to reflect on it. The president of the University Francisco Marroquin actually, that was his turning point. He was thinking, how do I alleviate poverty? What is it that we should do to alleviate poverty? And the response was not through charity or through handouts because he realized that that was temporary relief and that there was something more that had to be done in order to alleviate poverty.

Ismael Hernandez on Capacity of the Poor

A lot of things are being done, but we don’t sit down to think about, “What are the principles of the free society?” How can we help and elevate people to realize that they are made in the image and likeness of God? And they have the inner capacity, the moral strength. They are made in the image of God, which means they have the capacity of knowing the truth, reason, and doing the good. They are the answer. That is the problem. We have always seen external, external reasons of our problem, white people, capitalism, America itself. In reality, we are the problem. But we are the solution. And when we realize that, an horizon of opportunity just opens up immediately. And that’s what we are trying to do with the Freedom and Virtue Institute.

Marcos Hilding Ohlsson on Creating Wealth and Developing Incentives to Progress

The solution to poverty? We should ask ourselves how we can create wealth. And especially in these neighborhoods, we can look at how can people flourish or work in society or in families or in small communities to be able to create wealth, to be able to create value. And actually I think that there is, there’s two parts of it. One is a mental structure, that they start to believe in themselves and that they have something to give to society, that they’ve got something to offer. And that will encourage them to be able to create something or to give something. And on the other side, we need a proper place where they can develop these incentives. Like, we have to create incentives for them to work. I think in that sense we should reduce incentives for people not to work. For example, now they receive a social welfare if you don’t work.

Juan José Daboub on Using our God-Given Talents

There is one parable in the Bible that I really love and I think captures part of what I am trying to say, and that’s the Parable of the Talents. You know, we all were given certain gifts by God. It is our job to multiply them.

 

 


Sources:

  1. Gilbert Meilaender, Neither Beast nor God: The Dignity of the Human Person (Encounter Books, 2009).
  2. The History Guide, Lectures on Ancient and Medieval History: A Brief Social History of the Roman Empire

 

Stewardship – What is in our Hands? | by Jonathan A. Moody

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“Every single person on the face on the planet is created in God’s image.  Everybody has capacity, talent, and ability…  Everybody has stewardship responsibility.”
– Rudy Carrasco, Effective Stewardship

I love this quote from Rudy Carrasco.  It reminds me God has gifted us with his image.  And innate in that privilege is a responsibility to bear it well – to use it the same way He does.  It’s true that each of us is in a different season of life.  Each has enjoyed, or endured, different experiences.  Each has been entrusted with a unique combination of time, talent and treasure.  But, essentially, we are all stewards – overseers of a great gift.

The Merriam Webster dictionary defines stewardship as “the careful and responsible management of something entrusted to one’s care.”  However, we often underestimate the value of the life and influence God entrusts to our care.  Ultimately, the gift-giver will want to know what we did with His generous present.  With that in mind I ask, do we see everything in our hands as a seeds of hope and potential?  If so, are we planting those seeds in expectation of a fruitful life?

Not that it is always easy.  For instance, my current season of life includes stewarding my two young children: David, 4, and Ruby, who isn’t quite 2 years old.  They’re undoubtedly amazing – easily my favorite people.  However, they are still normal kids.  And, of course, in many ways I’m a normal parent.  So, amid the shrillest screams and most piercing cries I need to remind myself of the unfathomable promise that lays in their young lives.  I have to see beyond their temporary normalcy, past my own even, and remember that I’m a steward called to take care of their childhood in a manner that bears fruit for their adulthood.

A stewardship approach to life requires a shift in perspective.  A steward focuses on what he or she has rather than what they don’t have.  As a dad I could focus on not having two grown children who have great jobs and bring me chocolates on the weekend.  Ironically, if I did so, the two children I actual have would have a smaller chance of growing into those future adults.  If I want to see growth, I have to focus on David and Ruby exactly where they are, as they are.

This concept is deeply rooted in the Judeo-Christian worldview. Exodus 4 gives us a clear example of the concept.  Moses was on the lam, hiding in the desert while the children of Israel toiled as slaves to Pharaoh.  Though God could have acted on his own in the situation, He chose to partner with his steward, Moses.  And God started the process of Isreal’s rescue with a simple question: “Then the Lord said to him, ‘What is that in your hand?’ (Exodus 4:2, NIV)”

This is the basic concept of “asset based development,” a philosophy that encourages us to when we approach development with a focus on the assets rather than the needs of a community.  The essence of the PovertyCure message is that when an individual is free to steward what he or she has in their hands, they will see it grow.  As our statement of principles puts it,

We are stewards of creation with freedom and responsibility.  The earth is a gift to be developed responsibly.  The stewardship approach to creation encourages holistic and sustainable development.  Stewardship theology cautions us against crass and hedonistic exploitation of the natural realm.  Likewise, it warns us away from viewing nature as divine, or the earth as a sanctuary to be left undeveloped.

Pastor Erissa Mutabazi, the Rwanda Country Director for Hope International, makes this point succinctly in a video devotional entitled “What’s in Your Hands?”.  In it, Pastor Mutabazi states, “We can’t help but ask, what will happen if, instead of focusing on what we don’t have, we consider what God has already given us… our talents, our dreams, our motivations, and offer them back to him as an act of worship.”

God has called us to be stewards of his creation and to not underestimate what we have in our hands.   In an effort to apply that truth more deliberately, I recently went through the exercise of writing a life plan based off the book, Living Forward, by Michael Hyatt and Daniel Harkavy.  I cant’ recommend it highly enough.

Another excellent resource is Effective StewardshipIn this five-session video study, hosted by Dave Stotts, you will learn how to think critically and biblically about the areas of responsibility that God has entrusted to you.

Again, as Pastor Mutabazi says, “God has given each one of us gifts and he invites us to use them, no matter how small they may seem.  We serve a God who fed thousands on five loaves and two fish, … imagine what might happen if a movement of Christ followers use the gifts God has given to bring healing into a broken world.”

So, what do you have in your hands that you will accept the challenge to be a better steward of?  Let us know in the comments to be entered to win this week’s prize!

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Jonathan A. Moody is the Managing Director of PovertyCure, an Acton Institute Initiative.  

Building Businesses and Flourishing Communities with Spring GR | by Chris Robertson

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PovertyCure  exists to facilitate a global conversation on poverty and equip its participants with resources that promote lasting, enterprise-based solutions that affirm the role of individuals and families in turning around their situations.  We would like to introduce you to an organization today that is living out these principles here in Grand Rapids, Michigan. I believe that there are principles within this organization that can easily be used in cities around the world where there are individuals who want to train entrepreneurs to serve unserved areas.

Attah Obande works as Hub Coordinator and Business Coach for Spring GR. This organization provides entrepreneurship training in underserved communities. They accomplish this goal through cultivating entrepreneurs’ business ideas, consulting with program participants to build their business, and connecting them throughout the community to provide ongoing training.

Spring GR was launched in 2014 when a group of individuals came together to form an organization addressing the need for entrepreneur training at a grassroots level in Grand Rapids. A national search was done at that time to see if such an organization existed that they could model themselves after. Launch Chattanooga was found and it was determined to be a good model to follow.

Spring GR started in 2014 with a pilot entrepreneurship training class offered at Restorers, Inc. Attah came on board as business coach in this training because of his experience in working with small business  during his career as a banking Branch Manager. Attah met with programs participants regularly to help with their business plans as well as running his business AGO Design Group. This is a speaking, coaching, and consulting firm that seeks to empower individuals to realize their full potential, design, and live the lives they were created to live. 19 individuals were a part of this first training class.

Six weeks into this program Attah was meeting with one of the program participants to go over her business numbers. This entrepreneur realized she was now past her initial fears related to starting a business and now felt that this business could actually work. This reaction on the part of the entrepreneur caused Attah to realize this work at Spring GR was more than just teaching people some business principles. He felt it empowered the participants and encouraged the freedom to dream again. His heart was really in this work and as a result he took on more and more responsibility. He believes in the work of Spring GR and wants to see the effect it could have on our community.

Spring GR is connected with other like-minded organizations in Grand Rapids such as Partners Worldwide. While Attah argues that the training that Spring GR offers is important, he says that it is not the “end all.” Entrepreneurs can build on the foundation they have built with Spring GR with other organizations in the city and Attah diligently works to connect Spring GR alumni with those programs to continue their learning.

I asked Attah to dream a bit and describe what he sees on the horizon for the next three to five years.   He wants to see the number of entrepreneurs and businesses grow exponentially so the possibility of creating a business in underserved areas of Grand Rapids could be seen as normative. Attah stated that “As human beings, we aspire toward things that we see. If individuals see entrepreneurs grow from within their community, it gives them something to aspire to as well.” He desires to see the “snowball effect” of people aspiring to create businesses that resulting in the community’s thriving.

In addition, he would like to increase the availability to three kinds of capital: knowledge, social, and financial. Increased access to these kinds of capital will result in an environment very friendly to the creation of businesses. Attah says Spring GR exists because there are a great number of potential entrepreneurs in underserved areas of our city who have products and services they want to offer. The issue is that they do not have the skills and business acumen to create a sustainable business themselves. Spring GR’s goal is to equip these entrepreneurs with the skills, connections, and resources to create thriving businesses. Attah argues that people must help themselves, but sometimes they do not know where to go in order to help themselves. In addition, they may not have the confidence to create their own business. In a sense, they need to be able to draw these ideas out of themselves. This is where Spring GR comes in.

I asked Attah to share a story of an alumni who is now successfully operating a business. Attah told me about an entrepreneur named Nancy. She has a business in Grand Rapids where she sells clothing and jewelry made by her mother and sister in Mexico. She had been in business for a couple years prior to her taking Spring GR’s entrepreneurship course. The opportunities she pursued to sell her products were limited prior to this course. She would only sell products at an annual Hispanic festival and some other smaller venues. After taking this course and learning how to market herself and her business, she has grown her business significantly over the last six months. She now sells products online. She has made a number of other small tweaks to her business that she learned in the course that have brought increased exposure and sales. She’s looking into getting a storefront at the local mall. This broader vision for her business is the result of the entrepreneurship course she took and the investment Attah has made.

Attah is frequently asked “What does success look like for Spring GR?” Spring GR measures success in three different ways. First, the entrepreneur who starts the class but drops out. It may seem counterintuitive, but this individual realizes they should not be an entrepreneur. They’re better as employees than employers. Second, the entrepreneur who starts the business and realizes some financial gain. The business is a side thing that allows them to make a better living, put some money away, and spend more time with their family. Third, the business that grows into an enterprise that hires others. Spring GR desires to support all of these business to build their communities.

I’m excited about the vision and good work Spring GR is doing in Grand Rapids. I would encourage you to connect with Spring GR.

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Chris Robertson is the Program Outreach Coordinator for the Acton Institute. Chris Robertson earned his Bachelor of Science in Bible from Cornerstone University. Prior to coming to Acton, Chris worked in project management, eCommunications, and public relations for different non-profits in Grand Rapids, MI.  As Program Outreach Coordinator with Acton Institute, Chris networks with different universities, seminaries, and organizations throughout the evangelical space bringing Acton’s message of faith and economics through events, learning communities, curricula, and published resources.

Occupational licensing, cronyism, & their effect on the poor | by Kyle Hanby

Occupational licensing, cronyism, and their effect on the poor

“The free market is the greatest producer of wealth in history — it has lifted billions of people out of poverty.” – President Barack Obama at a panel discussion on poverty in May 2015.

The United States ranks as the 11th most economically free country in the world according to the Heritage Freedom Index, and has a history of embracing free-markets yet the rate of poverty still stands at a poignant 14.8 percent.

Why is this the case? While the U.S. has historically embraced free-markets, it has not been able to escape a streak of deep seeded cronyism.  Cronyism is one of the biggest threats to the free-market that nearly every country faces – especially in countries where the regulatory state has grown beyond its intended reach and the federal government exercises nearly unlimited control.

Cronyism is a broad topic that can range from corporate welfare to agricultural subsidies but one form of cronyism that often gets overlooked despite having the biggest impact on the poor is occupational licensing.

Occupational licensing is essentially any form of barrier that prevents someone from entering a certain field of work.

Some forms of occupational licensing make logical sense, such as a medical doctor being required to complete a certain education and pass a rigorous test before being able to prescribe medications or operate on patients.

But, there are other forms of occupational licensing that are created to exclude hard-working individuals from entering into a specific line of work.  This form of cronyism fights the free-market and serves as a barrier to lifting people out of poverty.

One example of occupational licensing that often excludes poor people from earning an honest wage for their work is hair braiding, and more specifically a type of hair braiding that is only passed on from generation to generation within the African-American community.  Although we are beginning to see these restrictions loosened, many states either have or have had laws that forbade people from braiding hair for money without a license.  If one wanted to obtain a license, they would need to attend a cosmetology school (where specific styles of hair braiding are not taught), gain many hours of experience, and usually pass a test.   It’s silly for someone to go to school to obtain a license so that they can practice a certain kind of hair braiding that they were not even taught in that school in order to earn a living.  Check out Melony Armstrong’s story on the Acton PowerBlog.

Often times, when policy makers create occupational licensing laws, they think they are protecting the consumer from purchasing a harmful service.  In this case, the only people that are being protected are those that can afford and have the time to go to cosmetology school.  The opportunity cost to give up whatever work someone has in order to attend school is far greater for individuals living in poverty than those who are well off.  Occupational licensing barriers limit the field of competition so that the poor are excluded from earning an honest wage.

Hair braiding is the most popular example that many turn to in order to show the negative effects of occupational licensing, but this form of cronyism runs rampant in other sectors of the work force.  Take a look at the Institute for Justice’s page of occupational licensing cases that they have taken up and you will see that it’s far more than just hair braiding.

The Illinois Policy Institute recently highlighted the story of a woman who served a year in prison and when she was released she turned her life around but was never able to achieve her dream of becoming a nurse because of her criminal history. Maybe it makes sense to prevent people with certain criminal backgrounds from holding certain jobs but is it prudent to prevent a single mother of three who has turned her life around from pursuing a dignified career as a nurse?

President Obama was correct when he made his comments on poverty and the market.  The power of the free-market is greater than any governmental regulation program.  As Christians, it is imperative that we do not lose the heart of our message.  We are not simply fighting against a regulatory state because we don’t like it or because we think it’s annoying.   We are fighting for the conditions that cultivate human flourishing.  If we care about poverty alleviation then we must care about giving individuals the liberty that empowers them to create value in society.

Photo for Acton Announcement

 

Kyle Hanby is a Liberty@Work Associate at the Acton Institute.  He recently graduated with a degree in economics and finance from Bethel College in Mishawaka, Indiana, where he chaired the American Enterprise Institute Executive Council and was the University Relations Intern at the Charles Koch Foundation.

*Photo is CC Image courtesy of John Atherton on Flickr.  This post was originally posted on the Acton Institute Power Blog.

A Culture of Trust | by Jonathan A. Moody

Culture-of-Trust Jonathan Moody

I traveled to Washington DC with my family last month. Rather than check into an obscenely expensive hotel, I used Airbnb.com to rent out a personally owned basement apartment from Daniel – a nice guy who was, up to that point, a complete stranger.  On that same trip I used the Uber app on my iPhone to order a ride across town.  Within minutes, Bereket, another complete stranger, arrived.  For a few dollars he drove me from my AirBnB to my meeting in his personally owned Toyota Rav4.

Now, Uber even offers a service called Uber Pool that allows you to share a ride with yet another complete stranger who happens to be headed in the same direction.  Both passengers pay even less and the driver makes even more.

So, why would I stay in a home owned by a complete stranger and then get in a car with a complete stranger (or two)?

Simply put, I trust them.

AirBnB, Uber, Amazon and dozens of other mostly-online services trade on an emerging culture of consumer trust bolstered by customer ratings, feedback and word of mouth spread via social media platforms.

Then again, in some ways this is nothing new.  After all, I was staying next door to complete strangers when I was overpaying for a hotel room.  And I never took a cab with a driver I new in advance.  By and large, the US enjoys a culture of trust.  These new web-based companies simply make it easier to engage with it.

After reading the reviews, I trusted Daniel to provide us with a safe and clean place to sleep for a few nights at a reasonable rate.  Likewise, after checking out Bereket’s stats, I felt comfortable hoping in his Rav4 for a cross-town trip.  In both cases, my trust was validated.

I write all of this for you now because it exemplifies a key tenant from the PovertyCure Statement of Principles:

The state of our culture matters:  Christianity reminds us that poverty alleviation is not primarily a resource problem.  Like all human endeavors, wealth creation takes place within a cultural context… Societies that enable human flourishing require cultures that promote trust, honesty, reasoned discourse, and respect for the dignity of the person.

We all want to see people flourish.  We want to see healthy, thriving communities – from Chicago, IL and Ferguson, MO to Kigali, Rwanda, and the Cite Soleil neighborhood of Port-au-Prince, Haiti.  The PovertyCure conversation exists to help us all ask ourselves the tough questions: How can we help individuals get on a true path out of poverty?  How will they sustain prosperity?  How do we promote self-sufficiency rather than dependency?

It doesn’t take long to realize that any rational answer to these questions requires a level of trust between people if it going to be successfully implemented.  And that trust has to extend beyond aid organizations and recipients on the ground.  The individuals that comprise communities in need must enter into voluntary, trust-based collaborations with each other.

Interpersonal trust is an essential element of every transaction – every financial and cultural decision that creates and spreads wealth.  If I trust you, I can buy from you.  If I buy from you, you’ll have money to meet your needs and eventually reinvest so that your endeavors will grow.  So, that small step of trust is the first motion toward a virtuous cycle that can, overtime, upend generations of lack.

Early this year I had the chance to learn from some of our PovertyCure partners in Guatemala.  While there I was amazed by the impact of a local company called Ecofiltro.  They make organic clay pots that filter out the disease causing microbes from water.  A family that owns one of these amazing devices has access to unlimited, clean drinking water.

Equally as impressive is their business model.  Before entering a new area Ecofiltro identifies someone in that community who is highly trusted by their fellow-residents. They build a relationship with him or her and earn their confidence in both the product and the organization.  Once they have a strong relationship, they employ that person as a “community entrepreneur” to represent Ecofiltro to the friends and neighbors who already know and trust them.

When it comes time to sell the product, the customers rarely hesitate.  They trust their neighbor.  If he or she says Ecofiltro is a great company with a life-saving product, well, their word is as good as gold.  As a result, a local company, employing locals, turns a profit selling a product that the community desperately needed anyway.  It’s a true win/win.

Trust requires more than mere information.  It requires first-hand knowledge about a person or organization.  Thus, trust is not built overnight, but over time.  We can’t just show up with a box of free t-shirts and a water pump and expect lasting change.  If we’re going to make a long-term difference, we need to prayerfully pursue long-term relationships that value local knowledge and foster local trust.

I encourage you to take some time this week and think of at least one way you can strengthen a culture of trust in your home, workplace, church or community.  You can trust me when I tell you; it’s worth the effort.

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Jonathan A. Moody is the Managing Director of PovertyCure, an Acton Institute Initiative.  

From the Margins to the Center: Being With the Poor Who Are With You Always | by Dan Hugger

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“The poor you will always have with you, and whenever you wish you can do good to them, but you will not always have me.” – Mark 14:7 (NABRE)

Poverty is deeply disturbing. We see others who lack, others in need, and we feel that in a better world this wouldn’t be so. Christ points out, as is his habit, an uncomfortable truth. The poor will always be with us and, by extension, that poverty is an insoluble problem. Judas, as was his wont, was not pleased.

Poverty is an insoluble problem because it is a human problem, a social problem, and, as with all social problems, the result of our individual and collective ignorance, neglect, and sin:

Well this side of Paradise! … There’s little comfort in the wise.

In The Wealth of Nations Adam Smith puts his finger on the fundamentally social nature of the problem of human need which is made of, “not only the commodities which are indispensably necessary for the support of life but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.”

Many economists attempt to distinguish absolute and relative poverty and this has merit in some contexts (e.g. tracking the effects of public and private reform initiatives), but our concern for the poor is not abstract and strictly material but concrete and relational. As St. John Paul II in Sollicitudo Rei Socialis explains,

We should add here that in today’s world there are many other forms of poverty. The denial or the limitation of human rights as, for example, the right to religious freedom, the right to share in the building of society, the freedom to organize and to form unions, or to take initiatives in economic matters do these not impoverish the human person as much as, if not more than, the deprivation of material goods? And is development which does not take into account the full affirmation of these rights really development on the human level?

Poverty means existing on the margins of a community be it in economic, educational, ethnic, familial, national, or religious spheres. And just as there must always be a center to society so must there be margins. Civilization itself produces its discontents. The poor are with us always. Economic development can, has, and will continue to occur when and where the habits, institutions, and traditions of free societies put down roots but there will be many for whom higher standards of living come more slowly and gradually than those at the centers of development.

This is why the preferential option for the poor is needed. It centers our concern on the human person irrespective of privilege. As Christ tells us:

“Blessed are you who are poor, for the kingdom of God is yours.” (Luke 6:20b NABRE)

This is why Pope Francis tells us in Evangelii gaudium:

Our commitment does not consist exclusively in activities or programmes of promotion and assistance; what the Holy Spirit mobilizes is not an unruly activism, but above all an attentiveness which considers the other “in a certain sense as one with ourselves”. This loving attentiveness is the beginning of a true concern for their person which inspires me effectively to seek their good. This entails appreciating the poor in their goodness, in their experience of life, in their culture, and in their ways of living the faith.

The poor are not a problem to be solved but persons to whom we are called to solidarity. And if this is true of the poor what does this mean for poverty? First, it means that poverty does not compromise the dignity of persons and should not be the measure of men and women. Pope Leo XIII in Rerum novarum rightly observed,

True dignity and excellence in men resides in moral living, that is, in virtue; virtue is the common inheritance of man, attainable equally by the humblest and the mightiest, by the rich and the poor…

Second, it means poverty is best addressed not by planned programs of assistance and development but by breaking down barriers between marginalized groups and peoples and opportunities for personal and social development; shrinking the distance from the margins to the center. St. John Paul II provides both a cautionary tale and an excellent example in Centesimus Annus:

The fact is that many people, perhaps the majority today, do not have the means which would enable them to take their place in an effective and humanly dignified way within a productive system in which work is truly central… Even in recent years it was thought that the poorest countries would develop by isolating themselves from the world market and by depending only on their own resources. Recent experience has shown that countries which did this have suffered stagnation and recession, while the countries which experienced development were those which succeeded in taking part in the general interrelated economic activities at the international level.

The poor may always be with us and poverty may be an insoluble problem but, “whenever we wish we can do good to them” by attentiveness to and solidarity with their struggles. From that place we can seek their good by doing what we can to bring them towards the center of our social and economic lives. Encounter by encounter. Likewise, we can examine our institutions to remove obstacles we’ve erected intentionally or accidentally which keep people at the margins of our society, and bring many closer to the center of our society.

Dan Hugger

Dan Hugger is head librarian at the Acton Institute for the Study of Religion & Liberty

Principles of Effective Compassion | by Patrick Oetting

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Historically, the less fortunate in the United States have depended on their neighbors, local churches and civic institutions for the extra care needed to make ends meet. This approach embodies the notion of subsidiarity, which the Cambridge English Dictionary defines as, “the ​principle that ​decisions should always be taken at the ​lowest ​possible ​level or ​closest to where they will have ​their ​effect, for ​example in a ​local ​area ​rather than for a ​whole ​country.” Alexis de Tocqueville saw this strong civil society present in American culture when he first visited the United States in 1831. He rightly pointed out then that it is precisely what made America exceptional.

However, over the past century our society has traded these communal social-ties in favor of a welfare system that requires heavy state involvement. The correlation between government involvement in the welfare system and the decline of civil society is no coincidence. As central authorities, characterized by a striking lack of local knowledge, hand down aid, the need for community involvement decreases. As a result, charity becomes less and less personal.

And, government intervention is not the only problem. Private giving has also become less effective over the past half a century. Marvin Olasky states, “The crisis of the modern welfare state is a crisis of government, but it is more than that. Too many private charities and foundations dispense aid on the basis of what feels good rather than what works; they end up providing, instead of points of light, alternative shades of darkness.”

A century ago, charities used to practice a high amount of discernment. Inherent knowledge of local situations afforded them the wherewithal to resist imposing blanket solutions on unique problems. I love these two quotes from the New Orleans Charity Organization Society: “Intelligent giving and intelligent withholding are alike true charity,” and “If drink has made a man poor, money will feed him not, but his drunkenness.”

Though both of these statements were made in 1899, we have much to learn from them today.  They remind us that if we do not dispense our charity carefully, we could very easily perpetuate, or worse exacerbate, our social problems.

I offer that the only way to reduce this trend, and thus break systemic cycles of poverty, is to reduce the role of the state and return to the principle that still works as well as it did in 1831: subsidiarity. That is, let those closest to the issue, such as churches and private charities, determine the needs in their community before we allow state involvement.

Currently, we have a federal government that has largely crowded out private charities. As Russell Roberts states, “…with the dramatic increase in public aid during the Great Depression, which began in late 1929, private charities were ‘crowded out.’ They could no longer successfully compete for donations with a federal government that could compel ‘donations’ via the tax system.”

If government were to reduce its role – or at least slow the growth of programs – in the charity sector, churches and private charities could in turn fully assume the role that they were created for – to help those in their community. Some argue that this may result in less money dedicated to the poor. But, I counter that any reduction would be offset by the targeted nature of the benefits. Subsidiarity works because locals have access to specifically local information. So, benefits are designed specifically to address the specific needs of specific people in a specific community. Simply put, local givers give more efficient gifts – especially when compared to the current, bloated, top down approach in which one size is assumed to fit all.

In addition, it’s harder to fool your neighbor than a stranger you’ll never see again.  Thus, subsidiarity provides fewer chances for fraud and/or abuse. This alone would save tremendous costs as many layers of state and federal bureaucracy, which serve only to identify and prosecute fraud, could be dramatically diminished.

Robert Woodson, founder of the Center for Neighborhood Enterprise (CNE), has developed an innovative approach to identifying potential “change-agents” already embedded in poverty-stricken communities. I like to call his method, subsidiarity in practice.

When CNE enters a community they invert the questions commonly asked by scholars, government employees and many professional non-profiteers. Rather than ask, “how many children have dropped out of school, committed a crime, or succumb to drug addiction?” they ask, “who has raised children who have not dropped out of school, committed crime or succumb to drug addiction?” Once they identify these families they educate and train them so they can take a leadership role and positively influence their community. The result is true and lasting community transformation from the inside out.

When individuals take control of their own development – serve as protagonists in their own story – lives will be changed for the better. But, for this sort of development to take hold, we need to ensure that our charity and aid efforts are supporting, rather than undermining local institutions. We need to place our social focus on subsidiarity.

Are we satisfied with our current welfare system, with the allocation of large sums to projects that promise results they almost never deliver? Are we satisfied with giving over our right to help our neighbor to a government that has seen very, very little change in the number of fellow-Americans living in poverty? I believe the majority would say no. The majority recognizes that the US poverty rate has not declined since Lyndon B. Johnson started the war on poverty more than 5 decades ago. The majority recognizes that far away efforts have failed where local initiative once succeeded. We need to move away from a government that engages in paternalistic giving, and back toward a system that puts the power in the hands of those closest to the problem. Just as Robert Woodson is putting into practice in communities around the U.S., I’m confident that lives will be transformed, but only if we get out of our own way.

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Patrick Oetting is the Strategy and Engagement Manager of PovertyCure, an Acton Institute Initiative.  

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