Sunday, 1 May 2011

Poor Economics

In a world with the existence of a hypothetically perfect credit market, it doesn't matter if Joe is wealthy or not. As long as he has the required skills and capabilities, he can always borrow from the market and start his small business, or whatever.

Now, if Joe were born in a poor family, in a slum somewhere in India, or Latin America or anywhere for that matter. What about his opportunity to be enrolled in a good school? When his parents have to think twice about what to eat for today?

I find this to be fairly disturbing. The already well-endowed people has greater opportunity to become even better, and the unfortunate poor folks are more likely to stay the way they are. They lack the necessary tools to get themselves out from the poverty trap. Inequality breeds more inequality, this is just not right. It is plain wrong. :(

"The children of the rich go to schools that not only teach more and teach better, but where they are treated with compassion and helped to reach their true potential. The poor end up in schools that make it very clear quite early that they are not wanted unless they show some exceptional gifts, and they are in fact expected to suffer in silence until they drop out."

   Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty,
by Abhijit Banerjee & Esther Duflo

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