July 03, 2019

The causes and cures of poverty

Most poverty is behavioral

The Left talk about poverty incessantly but their only diagnosis of it seems to be that it is because of evil men who have somehow grabbed all the wealth. So it is about time that someone gave the matter some reality-based thought.

If you are a poor Indian farmer, your big problem is definitely a lack of money.  But in the Western world it is not.  If you are poor in the Western world your poverty is usually a result of bad  decisions.

I was born into a poor family myself so I have seen a lot of it.  The poor decisions vary, from a lack of frugality -- foolish spending -- to a woman who gets her legs up for a man who will be unwilling or unable to support her through a pregnancy and child rearing. Most of the really poor are single mothers who have loaded the dice against themselves. Babies are expensive and demand a lot of time.

I once ran a boarding house in a poor area and the sort of thing I often saw was a tenant who would buy a packet of chips for a snack from a nearby service station when the same product could be had for half the price from the supermarket just a little further down the road.  Such people will always be poor.

And there are of course many these days who spend big on drugs and alcohol, not to mention cigarettes and various sorts of entertainment.  It's a rare person who indulges in much of those things who can save.

But saving is the key to not being needy. Even when people have a windfall of some sort -- as in a lottery win or when a rich uncle dies and leaves you a legacy, the benefited person soon returns to poverty in the absence of frugal habits.

So I think there is no doubt that most poverty these days is self-inflicted. Frugality obviously does not come easily to everyone and to some it never will.

But I do not like to be totally negative so I want to go on to setting out some ways of being frugal, in case there is someone reading this who needs encouragement in that direction.

So I reproduce initially below Sean Gabb's account of how he saves money. He emphasizes how well you can do by buying secondhand. Sean is an English libertarian.  The account below is long but that enables Sean to go into details

After Sean's account I add a few notes from my own life which might also be of some help:

The Joys of Buying Second-Hand

Sean Gabb

Though not at all rich in terms of income, I think my net wealth is somewhat above the average for men of my age. I have achieved this by spending less than I earn and by avoiding debt. Of course, I wish I could earn more than I do. A newer car than the one I have driven for ten years would be nice. On the other hand, I have not had a conventional job since I resigned in 1990, and I have spent the past generation mostly doing things that I enjoyed or that contributed to less immediate enjoyment. In this essay, I plan to make one explicitly political point. For the rest, I will explain one of the strategies by which my women and I live well and within our means.

Briefly explained, this strategy is hardly ever to buy new electronic equipment. It is not an invariable strategy. Earlier this month, we spent £3,500 on a new piano for our daughter – a Yamaha Clavinova CLP685. Since last September, she has passed the Kent and Dover Tests with impressive scores, being offered a place at the best secondary school in the area; she has passed examinations in the piano, in singing and in the guitar; she has played in several concerts; she has the leading part in the leaving play at her primary school; she has published her second novel and is working on a third. For doing less than this, other children have been given expensive telephones and gaming toys, and been taken on visits to Disneyland in France or America. She deserved that piano, and it was nice to see her face light up when I handed over my debit card in the showroom and arranged for immediate delivery.

But this was the exception. The general rule is not to buy new. I give two reasons which support the saving of money. First, most consumer technology has not significantly improved since about 2010. Things are smaller and sometimes prettier. They are not much better in terms of the uses my women and I have for them. Older things still work and do all that we reasonably want of them, and they sell on E-Bay or Facebook Marketplace at ten or twenty pence in the pound. Second, buying new gives money to corporations that undeniably make nice things, but also spend their profits on political enslavement and cultural degeneracy. Buying new also generates tax revenue for a state that at least should not be encouraged.

And so we avoid buying new. We save the money, or spend it elsewhere, or are freed from the trouble of earning it. We still have shiny electronic toys – but we make do with older shiny electronic toys, and we hardly ever feel the difference.

Computing

Now, to some of my more notable savings. I will begin with our main computer. We have two notebook computers, both of which I regret having bought new, but which I have kept going beyond their normal time by mending as required. We also have a desktop computer in the office. My last-but-one upgrade for this was in October 2009. Haunting E-Bay for a week, I bought an Asus P5Q3 motherboard and a Socket 775 Intel Q9650 processor, plus an Nvidia GeForce GF9500GT graphics card and 8Gb DDR. All second-hand, it cost about £160, and I put it together just in time for an almost free upgrade to Windows 7. Except I replaced power supplies and hard disks now and again, and took advantage of the free upgrade to Windows 10, this ran without trouble for ten years. It began life on the edge of obsolete. It was soon comically obsolete. But it did everything asked of it – mostly running web browsers and Office software, and the occasional burst of video-editing. Otherwise, it served as a unified repository for about 4Tb of data.

It would be running still, had the motherboard not died last month. Back I went to E-Bay. After much thought, I laid out £30 on an Intel DQ670W motherboard and an Intel i3-2100@3 processor. I reused the existing RAM and hard disks, though I did spend an additional £35 for a Yucun 480GB SSD. I cloned the old boot disk, and switched everything on. After a frenzy of driver updates, the system started. A word next with a helpful young man in India, and my free Windows 10 upgrade was reactivated. It all runs very fast. I suppose the integrated graphics are an improvement on the 2006 graphics card I had been using. Total cost: £65. Take away the cost of the solid state drive, which I had planned to buy in any event. Take off also the £60 had from selling the unwanted but useable parts of the old system on E-Bay. You tell me the i3 runs slower than the i7, or that I am missing out on USB3. Well, if your taste is for playing Killer Krabs 5 in 3D, the system I have described will never suit. But our tastes are different, and what we have suits us. We have a newer system than we had. It runs as fast as we need. We made a profit of £25 on the upgrade. The only taxable events were a few E-Bay commissions – and I believe the E-Bay accountants have very sharp noses. The British State can go jump. Intel must look elsewhere to pay the salaries of its Diversity Directorate.

Then there is the printer. Last year, I decided we were in need of a colour printer. So I looked on the local freebie pages on Facebook. I found an Epson BX305 in Folkestone. This was old, but was said to be in good condition. What interested me most, colour and the round price of zero aside, was the integrated scanner and document feeder. I picked it up on my way to one of my lectures in Canterbury. The main cost of running an inkjet printer is the ink cartridges. Even refilled, these are luxury goods. My solution was to buy a continuous ink supply for £20 on Amazon. I top this up every few weeks from large bottles that I buy from Ink Express in Wolverhampton – you should never economise on the quality of printer ink: good stuff is still cheap, and poor will ruin the printing heads. In the past year, I have gone through twenty reams of paper, many pages reused on the clean side. My total running costs have been about £20 to that firm in Wolverhampton. Another win, I think, for economy.

Entertainment

In February, I got sick of the broken-down music system I had kept going for a decade. I mostly used it for playing MP3 files through a Bluetooth interface from Jongo. But the sound quality was poor. I looked on the Facebook Marketplace. I found a Denon M38 integrated system in Ramsgate. The seller was asking £25, plus £10 for delivery if wanted. No speakers or remote control. Having no business at the time in Ramsgate, I decided to pay for delivery. It came that evening. In 2010, this cost about £400. It won several awards. The modern upgrades do nothing to improve sound that was already excellent, but only add wireless and Bluetooth – which I already had with that interface. I bought a generic remote on E-Bay for £8, and then a pair of Wharfdale Diamond 9.1 speakers for £15, which I collected from a man who turned out to live just round the corner from me. The new system plays Wagner with a bang. I gave the old system to one of my students. He says he is happy with it. I was happy to see the back of it.

Then there is the television. For obvious reasons, my women and I watch little of this. But we do watch recorded films and documentaries, and DVDs which I always make sure to buy for a pound in the local charity shops: no copyright payments to the Enemy. We bought a Sony Trinitron in 2000. It had a 28-inch flat screen and cost £997 – we were feeling rich at the time from an insurance pay-out. It weighed a hundred pounds and took up about the same space as a cooking stove. Until last week, it sat in a corner of one of our living rooms. It had paint splashed on it from some redecorating we did without dustsheets in 2003. It had a dark patch on the screen. It stopped receiving in 2007, when the UHF channels were turned off. It still worked well enough with the Panasonic DMR EX79 Freeview recorder we bought on special offer in 2010.

However, we had part of the house rebuilt in 2014. While the scaffolding was up, we had a satellite dish installed, but never felt the need to buy a satellite receiver. There things remained until last week, when a casual look on Facebook Marketplace turned up a Humax Foxsat-HDR recorder for £30. This dated from 2011, when it sold for about £600. Its main difference from the modern upgrades is that it has no easy connection to the Internet – but I will think about that next year or the year after. I collected the receiver the same evening from outside Dover.

I now realised that the television was past it even by my standards, and might not be showing things to their best effect. So I looked on E-Bay. I found a Samsung LE40M8 40-inch LCD television with a starting bid of £19.90. There were no bidders. I did some research. It dated from 2010, when it cost nearly £800. I contacted the seller, who confirmed it was in good condition. I asked if she would end the auction early for £25 and a promise of instant collection from Sandwich. We closed the deal, and had the telly before bedtime. The next day, Amazon delivered the universal stand I had ordered – £50.

I now remembered – one thing invariably leads to another until you decide otherwise – that the Freeview recorder played only lowish-resolution avi files from USB stick. So I picked up an LG BP135 DVD player for £5 – from a council flat in Dover. This plays every format, and in high-definition.

It took an hour to put everything together. It looks lush. It looks even better, now I have used one of the Facebook freebie pages to get the Sony out of the house. If you compare the television we have with new models in the shops, there may be slightly less definition, and the blacks will be less intense. But these are things the eye barely notices. I say again – consumer technology has progressed in the past decade, but not in the radical ways it progressed in the previous decade. Older stuff still does a fine job, and at a fraction of the price. Treated well, it lasts a long time.

My Camera

I have always bought second-hand cameras – always good ones from a few years before. In 2017, I felt the need of a very good camera. I did my research, and decided on a Canon G1X MkII. This had a 1.5 inch sensor and did almost everything that a really expensive camera did. It cost over a thousand in 2013. It still sells new for £490 on Amazon. I got one second-hand on E-Bay for £260. Two years on, it takes lovely pictures.

I could continue. Antique furniture pulled from skips. Floorboards reused from a demolished out-building. Coupon-clipping. A weekly trawl of the charity shops – clothes if someone your size has died, pictures occasionally, books all the time. Food bought in bulk. Home cooking. But I think you get the idea. We make do and mend. Mrs Gabb is good with a paintbrush, I with a soldering iron, and with all things electrical, plumbing and legal. We buy second-hand. Where possible, we get for free. The result is that everyone who visits leaves with the idea that we are rich. In a sense, we are rich. We live as we please. We have most of the things we want. We have money for treats like that wonderful new piano. We pay little tax. We contribute little to the profits of companies we despise.

Everyone else could do the same. If more of us did the same, the world would be a richer and a freer place. It would be richer, because there are opportunity costs in bringing new products to market that are functionally equivalent to what was on sale in 2014, and hardly better than the 2010 models. It would be freer, because people who live within their means have less reason to be afraid of overbearing authority. Though not inclined to follow their example, I feel some respect for people who grow their own food and make their own clothes. I have none for people, already awash in mortgage debt, who max out what remains of their credit on the latest 75-inch television from Curry’s. They are fools riding for a fall – often fools who grumble that the Gabbs are rolling in it.

>>>>>>>>>>>>>>>>>>>>>>>>>>

Buying cheap - by JR

Savings (frugality) is the key to having money when you need it

My own experiences are dissimlar to Sean's in detail but similar in effect.  So it might be helpful if I outlined some of my experiences with frugality -- spending less than you earn -- as a supplement to Sean's narrative.

I have been frugal from childhood.  Frugality was preached to me at my Presbyterian Sunday school and I took to it like a duck to water. So as a kid I saved my 2/- per week pocket money rather than spending it on confectionry  -- which is what most of my peers did.  Though I would always buy the latest "Phantom" comics. But every now and again, my mother would borrow the money in my money box to buy family needs.  How poor can you be when you have to borrow the money in your kid's money box in order to put dinner on the table? My mother's purchases were almost all from convenience stores so she just did not have a frugal mind.

So I have always lived simply and very economically, which has left me in a very comfortable situation in my old age.

The high point of my frugality came during my student days, when I lived on skim milk plus a few vitamins for around six months.  I bought the skim milk from the local dairy factory in the form of a 56lb paper sack of dried skim milk, which was almost a give-away product at that time but was very nutritious all the same.  So in modern terms my food bill was something like $5 per week.  It was ridiculously small.  As the recipient of a government scholarship to go to university I had a small living allowance and I saved virtually the whole of my allowance at that time -- and also remained in perfect health.

With my savings much reinforced, I gave that up after a while,  and moved back on to a more normal but still economical diet featuring a lot of cheese sandwiches.  I still like a slab of cheese on a fresh bread roll. Did you know that a dollop of plum jam on top of the cheese in your cheese sandwich really lifts it?  Plum jam has always been the cheapest jam.

There are many ways you can have a good and healthy diet for a small cost -- with anything featuring eggs being high on the list.  A 3-egg omelette makes a very good breakfast, with the eggs costing you a total of around one dollar only. And oats for making porridge are also very cheap. I still like a nice plate of porridge on occasions.  And you can often get day-old bread for a song.  It makes great toast.

These days my frugality consists of buying most of my groceries as "specials" and "markdowns" from my local supermarket.  And I buy most of my alcohol in the form of Vodka, which is generally the cheapest of spirits. And if I eat out, I eat at ethnic restaurants, which often give me amazingly good dinners for a very modest price.

And I am not seized with the vice of old age:  Travel.  Travel can be very expensive but I did all I want of that when I was younger and highly paid.

Unlike Sean, I am not remotely a electronics technician.  But my son is.  So he takes care of any computer needs I have, giving me equipment that is far in excess of what I need.  Most people probably have a friend or relative who could help in that way.

So I now spend very little on myself and give about half of my income away to friends, relatives and conservative causes.





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