The Solution To Poverty Is Wealth

The Solution To Poverty Is Wealth
In this essay I enquire into why poverty persists in spite of the best efforts of thousands of dedicated people and organisations to eliminate it, and describe a way that ordinary people like you and me could actually succeed where others have failed.

What Is Poverty?
Poverty is the lack of the following human goods:

1. Security
Security is the belief in a bright future; or in other words, the knowledge that bad things are not going to happen to us.

People seek security in many ways, such as: fleeing corrupt governments, getting a steady job, storing up money in a safe place, moving away from crime, having a strong army, police force, and emergency response services, eating healthy and following medical advice, seeking education and career training, voting for incumbents, making smalltalk with neighbors, locking doors and windows, filtering the water, hiding valuables, buying insurance, working hard, planning ahead, maintaining good credit, putting up walls, fences, and barbed wire, and making sure our friends are more powerful than our enemies.

Of course, since security is a belief about the future, it doesn’t really require doing any of those things listed above. Anyone, rich or poor, can believe in a bright future, and feel safe in the knowledge that bad things are not going to happen to them. (If this sounds new to you, I recommend attending a free introduction to the Landmark Forum in a city near you – check out www.landmarkeducation.com). So there doesn’t have to be any correlation between security and government, health, friends, money, privacy, education, career, or housing.

Still, there exist high crime neighborhoods, with unusually high concentrations of people with below average security. These people typically experience higher unemployment and higher turnover at work, as tenants they are more frequently evicted, they are more likely to be laid off, denied employment & housing, attacked, stolen from, injured on or off the job, falsely (or justifiably) accused, arrested, convicted, incarcerated, drafted, and killed.

We can’t blame them for feeling insecure, even though the source of their insecurity is actually their own beliefs about the future. The simplest way to alter their beliefs about the future is to reduce the crime in these neighborhoods, boost the economy, and raise the quality of life. While this may not wholly eliminate insecurity (which exists in safe neighborhoods too), it does eliminate this facet of poverty, by neutralising the abnormally high levels of insecurity in distressed communities.

2. Health
Like security, health is something available to everyone who makes healthy choices. The government, medical associations, and other groups have had much success with advertising and educational programs aimed at raising public health and awareness. Messages about nutrition, dental hygeine, drinking and driving, smoking, and sexually transmitted diseases have successfully altered mass behavior and enhanced the public health.

And yet there are concentrations of people with unhealthier than average lifestyles, which is a condition of poverty. As a group, these people have more frequent and severe health problems, and are less likely to receive adequate medical care. Their nutritional choices are limited, compared to their wealthier neighbors, they are more likely to be injured, and they are more likely to be exposed to hazardous chemicals and extremely unhealthy lifestyles.

The simplest way to eliminate the condition of poverty resulting from a concentration of people making unhealthy choices is to directly target the community with educational and motivational messages which inspire them to make healthier choices. This will be most effective when done alongside the other actions described here.

3. Education
Commonly seen as the way out of poverty, the quality & variety of education available to the poor is lower than that available to other groups.

The solution to this is easier than it might seem, because the system of education used by the majority of wealthy people is itself still rather primitive, compared to what could be made available. What is needed is for someone with an open mind to take an interest in each child, and guide them through a course of study and training that matches his or her natural talents and inclinations. This would necessarily involve exposure to many fields and disciplines, and would produce far superior educational results than what we are used to.

The simplest way to implement such a program is to create a pilot with a handful of new teachers, and select children at random to participate. Publish the methodology along with the results not only to educators, but to every parent. Show them how they can take their kids’ destinies into their own hands.

4. Freedom
Freedom is a belief in possibilities rather than in limitations. While this in fact has nothing to do with money or politics, there is a widespread belief that it does, which is to some extent self-fulfilling.

There are residential concentrations of people who feel disenfranchised, unrepresented, and uninvolved in their government. These people often feel inequipped to stop others from polluting their air, water, land, and soundwaves. They experience less freedom of movement within and across national boundaries. And they are less likely to start their own businesses, pursue their chosen careers, enjoy high quality entertainment, or take advantage of all the transportation options available.

The simplest way to mitigate this situation is to demonstrate to the residents of these neighborhoods the realisation of new possibilities. Virtually anything new will work to inspire people to begin considering change from the status quo. The most effective demonstrations are of things that seem totally out of place in the status quo, such as people voluntarily picking up trash, and residents upgrading their houses and yards in a way not customary in the neighborhood.

What Poverty Is Not
Poverty is Not the condition of having annual income below “the poverty line”. Millions of wealthy individuals have incomes below the poverty line for various reasons (including avoidance of income tax), and many people living in poverty have incomes above the poverty line. Income is not an accurate measure of wealth and is not the determining factor in eliminating poverty.

The Solution
The difference between the amount of wealth people create or bring in and the amount they destroy or consume each day is the factor which determines whether an economic entity such as a neighborhood is getting better or worse.

To reduce poverty we must cause a shift in behavior such that people consistently create more wealth than they destroy or consume. Focusing on anything else besides causing that shift in behavior will not reduce poverty. This is why impressive efforts like those of the Department of Social Services, the St Vincent de Paul Society, United Way, Mother Teresa, and programs like Feed the World, though admirable and in many cases beneficial, have not eradicated poverty.

Now, there are many different ways to change behavior. One of the strongest motivators is the desire to look good (and avoid looking bad) in front of others. This is the primary reason people behave outwardly so well in “nice” neighborhoods (and in theatres, churches, and supermarkets). In distressed neighborhoods, to avoid confrontation, people learn to look the other way, and then those who want to behave badly can do so with no one watching. Those with higher standards of behavior are the first to leave, rather than complain without the support of the community, which creates a vicious cycle.

What is missing is people paying attention. So we do something that grabs their attention; like paint our house bright yellow, introduce ourselves to all the neighbors, and request that they help keep the street clean. As more and more neighbors follow suit and beautify their properties, keeping up appearances becomes a question of pride, and ugly behavior feels more conspicuous.

To do this on a grand scale, we take advantage of the fact that when a neighborhood changes in this way, the quality of life goes up, which causes a rise in the price of real estate. By buying into the neighborhoods we want to work in, we can pay for the whole operation with the appreciation in real estate values which we cause. Thus we are not forced to rely on volunteers, but can hire dedicated employees to systematically transform neighborhoods in such a way that eliminates poverty.

How You Can ParticipateTo be part of this solution, all you have to do is invest in real estate in cooperation with us. There are many ways to do this, from something as simple as buying a bond to something as complicated as purchasing, rehabilitating, and managing investment properties. To learn more, go to www.affinityneighborhoods.com, or email us at info#affinityneighborhoods.com (replace “#” with “@”).

Please respond and tell me your thoughts.

-dav

Creating Wealth By Beautifying Neighborhoods

Introduction
I’m going to start by giving a little background on the company I work for, Affinity Neighborhoods.

Affinity was born of our desire for satisfying and rewarding work. My partners and I had careers like most people, and we were very successful, climbing our corporate ladders and getting paid. Clearly, success and accomplishment are important. But What we succeed at and What we accomplish are important too.

True job satisfaction comes from continually taking on bigger challenges in areas that we really care about; not just solving problems, but solving problems that are worthy of our lives. The catch though, is how to make money doing what we believe in and working on what we care about. Affinity is our solution.

What we care about is the quality of life in neighborhoods where children are growing up. Since we can make money by improving conditions in these neighborhoods, places largely overlooked by society, government, and other investors, we have a wonderful combination, work that is both highly rewarding and deeply connected to our values.

Affinity creates wealth by transforming distressed neighborhoods into beautiful, safe, and vibrant communities.

We define "wealth" as a high quality of life. This includes not only money, but a wide variety of healthy things to spend money on; convenient shopping centers, markets, and entertainment. It includes interesting and satisfying work, and clean, attractive, safe housing.

I can't emphasise this point enough: creating wealth means improving the quality of life in our target neighborhoods. A recurring problem in history is that we define wealth as money, or control, or popularity, rather than quality of life. The story of King Midas illustrates how gold doesn't make us rich. High quality of life requires security, health, supportive relationships, education -- all the things that make life great. To focus only on money is to be a slumlord. It puts us in competition with everyone else. Wealth as Quality of Life is cooperative, mutually beneficial, win-win.

Neighborhood Selection
Now, exactly how do we transform neighborhoods? I’ll give a brief overview of our methodology. Affinity targets neighborhoods based on two criteria. First, the quality of life there must be unacceptable, which is our definition of a distressed neighborhood - conditions in which no child should have to grow up. Second, we have to see a clear opportunity to substantially improve the situation, within our schedule and budget.

To pick our neighborhoods, we research and analyse every zip code in the country, on all the factors which we know affect quality of life. By the way, if you’re interested in working cooperatively with us, we’ll be happy to explain the details of this selection process. We are always looking to share the wealth with people who share our vision. Because we know all the intimate details of real estate investing and property management, we can rank each zip code based on the impact we can have there.

As long as we are a small company, we’ll continue to target the very best zip codes, to ensure a successful project. After each investment cycle, we compare our predictions to national real estate appreciation data, which so far has confirmed our selection process. As we succeed and grow, fewer and fewer neighborhoods will meet the first criteria (that is, distressed), because we revitalise them one by one, and the transformation we cause is self-perpetuating.

At the same time, as we grow, we have more resources to invest, so more neighborhoods meet the second criteria – that we can have a significant impact there. The more properties we can buy in a given area, the more certain our results are, and the more consistent our performance. When every neighborhood in the world is beautiful and safe, and every child is growing up in a place they can be proud of, then we’ll make our final distribution to investors and work on something else -- perhaps transportation, or renewable energy. But for now the priority is clear: children don’t choose to grow up surrounded by drugs, violence, and urban blight. It is unthinkable to allow these conditions to persist when we can get paid to do something about it.

Property Selection
After selecting our target area, we begin the selection process for individual properties, using a detailed comparative analysis of all the properties available for sale (and even some that aren’t). We rank each one and select the best deals. As with neighborhoods, we choose properties on two basic criteria. First, we look for the properties that are "bringing down the neighborhood". Dilapidated buildings, neglected landscaping, piles of debris, building and health code violations, public nuisances, law enforcement problems, drug hangouts -- we see golden opportunities in each one of these, because we ask the question, “How nice would this neighborhood be if that situation were cleaned up?”

Next, we ensure that each transaction is profitable. So the set of properties we buy is the intersection of the ones that are crying out to be fixed up, and the ones that will make the most money for our investors. This set changes constantly, based on market conditions, our purchasing activity (which rapidly eliminates the low end of the market), and our other activities in the neighborhood. So typically we download a complete list of available properties each morning and do the whole analysis over again to determine which ones to bid on that afternoon.

If you've been a home buyer recently, you know what it means when the seller gets multiple offers. Prices tend to go up rapidly. Our persistent bidding on all the most underpriced properties in our target area causes a technical jump in home values. Low priced properties no longer sit on the market for months and months, but are sold within weeks or even days. When new properties come on the market in this environment, they tend to be more aggressively priced, and realtors and investors start to get interested.

Note that, by definition, "underpriced" means that, initially, realtors and investors are not interested in the areas we target. In our neighborhoods, realtors would have to work harder, even risking their lives in many cases, and get paid half as much as in affluent neighborhoods, so it is rare to find any local realtors serving the communities we invest in. As for investors, we are usually the only bidder on the properties we buy, at least until our project gets going. When realtors and investors get interested, money flows in, and the community starts to deal more effectively with its quality of life issues.

Another point to keep in mind is that when home values rise, so does the net worth of homeowners. Even in some of the most distressed neighborhoods homeowners make up a substantial portion of the residents. These owners receive a huge windfall when their home value rises, bringing an influx of money into the local economy. Property tax revenues also rise substantially as properties change hands in a seller's market. Investors who pay more to buy into the neighborhood are more likely to make necessary improvements, and building codes are often enforced as part of the conditions of sale. These are just some of the effects of our buying activity on the local economy.

Negotiating Purchases
When one of our offers is accepted, we begin negotiations with the sellers, agents, appraisers, escrow officers, home inspectors, and all the other services required for closing the deal. In our experience, the fees charged by all these middlemen are wildly variable and difficult to decypher. In the first 50 deals in which we tracked all closing costs, I don't think any two of them even had the same names for the fees, much less amounts. Clearly there is a lot of negotiating latitude here.

Because we use these services over and over, we have hired many of these people on as partners, so we pay low fixed transaction fees or hourly wages rather than commissions. In exchange our agents get a steady stream of work and they participate in the ownership of the company and profit sharing. Hiring local people, who spend their incomes locally, also helps the economy.

Rehabilitiation
Once a property is acquired, we enter what we call the "fix up" phase. First we address all health, safety, and habitability issues, such as broken windows, missing stairway railings, and faulty plumbing or electrical. Next we upgrade the "curb appeal", replacing chain link fences with cute wooden ones, planting flowers and vines, patching stucco, and repainting flaky exteriors.

And finally, we focus on the "walkthrough impression", refinishing wood floors, remodeling kitchens and bathrooms and adding skylights, where cost effective. We pay special attention to everything in the house that humans interact with, such as door handles, faucets, window latches, and light switches. These improvements have a huge impact on the quality of life of the inhabitants, which means we create wealth when we transform the property in this way. Our typical rehabilitation costs range from five to twenty-five thousand dollars, and we typically expect twice that amount back in equity from this portion of the investment.

But the larger impact (and much of our job satisfaction) comes from the reaction of the local community to the visible work we do. When we proactively clean up piles of trash that have been sitting there for years, people’s attitudes change. Neighbors start to clean up their yards and fix their fences. People outside maintaining and beautifying their properties becomes a common sight. Each small visible improvement spawns a series of similar actions. This is why we don’t have to buy every property. A certain amount of care and attention is required to tip the neighborhood over the edge, toward becoming a sustainable community. Catalysing this process is far less effort than actually doing all the work involved, because the number of people affected by each change is enormous, particularly when we are focusing on visible beautification and the neutralisation of eyesores.

Rentals
When we advertise a property for rent, we select for tenants who are optimistic about the neighborhood and interested in getting involved and doing something positive. Our rental agreements mandate a high standard of property maintenance and ongoing litter cleanup, and of course we have zero tolerance for any behaviors that might lower our neighbor’s quality of life. We encourage tenants to become buyers and investors, and we educate and support them in this process. We’ve prompted just about everyone we know to purchase their first and second homes, many of whom had thought this was utterly impossible before they talked to us.

Conclusion
Of course, there are always obstacles to overcome. We get a huge boost when a city wakes up the way Oakland did in 1997, or like Long Beach in 2001. We are eagerly awaiting this in Compton and Los Angeles, when the government starts investing strategically in their infrastructure and other quality of life issues. But effective government arises from an engaged populace.

Our strategy is to empower the people to create wealth and show them what is possible, even if it means in some cases doing the government’s job for a while. We plant and maintain hundreds of trees, paint over graffiti, haul away trash, and beautify public spaces, especially those visible from our properties. We even landscape the neighbor’s property and replace their falling down fences if necessary. Remember, we’re being paid to do this, because it causes our properties to rise in value. Wouldn’t it be nice if the government were paid this same way? We’re treated with respect by our neighbors, (including drug dealers and gang members) because our mission is to improve their quality of life, and this shows.

Given our commitment to improving the quality of life in our target area, I’m sure you can imagine the sorts of schemes and programs we experiment with; some work and we expand those; others don’t and we scrap them. Our results speak for themselves. Consistent net investment returns of over 20% annualised in project after project, year after year, accompanied by a precipitous drop in crime in places most people wouldn't have dared to get out of their car. Now those places have been transformed into attractive, peaceful destinations. That’s what we call creating wealth.

Don't like gangs? Join one!

Gangs are credited (or is it debited?) with most of the crime in our inner cities. But let's not forget that gangs also created baseball, basketball, hockey, soccer, and virtually every other team sport. Gangs -- that is, groups of friends with a common identity who like to hang out together -- created polyphonic music, jazz, rock & roll, the stock exchange, the industrial revolution, and the US Constitution. Gangs of euro-american settlers took on gangs of native americans in the Old West.

At the end of the day, every group we belong to is a gang. The question is, why don't we belong to the gangs that get blamed for the state of things in our inner cities. Why have we removed ourselves and our influence from the lives of the young people growing up in the hood?

Well, I'm sure we had our reasons. But now it's time to put ourselves back into their lives. It's time to get involved in the neighborhoods on the other side of the tracks. It's time to wake up to the amazing potential that each child and young adult is, regardless of where they were born or how their parents behaved.

Affinity Neighborhoods is a gang of socially conscious investors who buy underpriced houses and apartment buildings in distressed neighborhoods, fix them up, and sponsor events aimed at catalysing neighborhood revitalisation. The key ingredient is PRESENCE. Be there. The inner cities got the way they are through neglect. They will blossom again when we take care of them.

What should be taught in school

I think there's two kinds of subjects that should be taught in school.

1. Specific Skills useful in jobs and survival.
A) Basic Math
B) Reading & Writing
C) Library & Secretarial skills
D) Computer skills
E) The Law
F) How to Have Satisfying Relationships
G) How to Get 100 Jobs (from Burger Flipper to Movie Star to CEO of IBM)
H) How to Make and Invest Money
I) How to Start a Successful Business
J) How to Grow Food
K) How to Survive in 100 Different Environments (from cities to deserts to rain forests)
L) Cooking
M) First Aid & CPR
N) Home Maintenance & Repair
O) Addiction & Recovery
P) Foreign Languages (Everyone should speak 4 languages fluently)
Q) Mastery of 100 Popular Sports & Games
R) Music & Rhythm
S) Art & Photography
T) Drama & Dance
U) Leadership, Management, & Teamwork

2. Whatever the kid is interested in.
Just go to the library and let the kid pick subjects they like.

Why I think the Failing Powerfully class would be awesome

Ask yourself, how many people are failing powerfully at bringing about peace in the middle east?
In other words, how many people could tell you stories about the incredible efforts they put into it, how many would impress you with their persistence and determination in accomplishing that?

Well, I don't know any people with those kinds of stories to tell. We all want peace in the middle east, and up to this point we have all failed, but none of us failed powerfully. No applause from the class.

I'm not saying you should quit your job and work on peace in the middle east. But what would be wrong with some high school students really working their butts off on that?
And the amazing thing that happens when people stop avoiding failure is: They succeed!
Not necessarily at the BIG goal they were going for, but one's successes certainly get bigger when one's failures get bigger. That's unavoidable.
So, whereas now highschool kids (and the rest of us) often feel like they can't really make a big difference in the world, the kids in this class would be succeeding at bigger things than they ever thought possible, while failing powerfully at things even bigger than that.

Educational Idea

Here's an idea I had for a new highschool class. This class would be mandatory for freshmen.

Course Title: FAIL POWERFULLY!

Description:
Over the centuries, failure has gotten a bum rap. Most people seem to think that failure is a negative thing, something you are not supposed to do.
Whereas in reality, ALL successful people fail constantly. In fact, the frequency and size of a persons failures is a reasonable measure of how successful that person is. People who avoid failure may succeed, but not at big things.
This course is an exploration of how big you can be. Success is great but each time you succeed, you are left with the question about whether you could have taken on something bigger. The only way to find your limits is to fail. Of course, you don't learn anything if you fail due to lack of effort or commitment -- sitting on the sidelines is not an option. In this course you will practice failing POWERFULLY. That means you give it your all, you put every ounce of everything you have into the endeavor.

Course Assignments:
Each week, choose one from the following list of assignments. You may choose the same one week after week, but you are responsible for reporting new and bigger failures each week.
1. Bring about a lasting peace agreement between Israel and Palestine.
2. Eliminate the smog over Mexico City, Tokyo, or Los Angeles.
3. Increase the worldwide cancer survival rate to at least 90% for 5 years.
4. Write a book, get it published, and have it be a best seller.
5. Win a Nobel Prize.
6. Earn $10 million in business.
7. Reforest a large enough area to offset the forests destroyed in the past century.
8. Set up a successful resort and spa in Liberia or Sudan.
9. Eliminate starvation.
10. Win a decathalon.
11. Write and perform a musical number that tops the charts.
12. Win a national beauty contest.
13. Get accepted with full scholarship to an Ivy League university.
14. Make a list of every person you know, and tell each one what you think about them and how you feel about them, and listen to them tell you what they think and feel about you, AND have each one of them sign an affidavit that they were honest and complete, they believed you were honest and complete, and it was a fully satisfying interaction.
15. Meet and talk with all your elected representatives, starting with city councilmembers, on up to the president of the USA. Tell each of them what you think about their policies, offer advice, and make a specific request of them as their constituent.
16. Release a motion picture which is a box office success.
17. Successfully market an electric car.
18. Create an operating system more popular than Microsoft Windows.
19. Make a fast food restaurant that serves only healthy food and make it more popular than McDonalds.
[More choices will be added before the course begins.]

Course Rules:
1. You are prohibited from doing anything immoral, illegal, unhealthy, or unethical in this course. Furthermore, you must create more wealth than you destroy.
2. You will be graded not only on your own failures, but also on the size and frequency of your classmates' failures. If you succeed at failing big, but your classmates fail small, then you fail small too. For anyone in the class to get an "A", everyone in the class must fail big.
3. When students report their failures to the class each day, the class will applaud correspondingly to how big the failure was.

Where does the notion of fairness come from?

"Life is not fair." That's what my 7th grade teacher told me, whenever I complained to her -- ooh, she made me so mad. I was actually flunking 7th grade; I was so mad at Mrs. Weber that I routinely sabotaged my own assignments to get back at her.

I remember an art project where I made a rather meticulous color drawing of an advent wreath, and then when the class was finishing, I don't remember what triggered it but I felt the uncontrollable urge to spite the teacher -- I crumpled my drawing and then scribbled all over it in black marker and showed it to her. She didn't react at all, which was kind of funny in its own way, and the drawing went up on the wall along with those of all the other students, for the parents to see on open house night. It was a little creepy, all these nice 7th grade drawings and then the one that looked like Eddie Munster did it. I could see the parents looking at it rather odd too, but I guess they all had 7th graders at home so they probably took it in stride.

Seventh grade was when I first started catching my teacher in all sorts of errors, which of course didn't endear me to her. I felt so superior, like Raskolnikov in "Crime & Punishment". I was constantly arguing with her about test and quiz answers; and in most cases I was technically in the right, but the official rules in academia aren't always the ones that apply. Hence my teacher's relish at pointing out life's fundamental inequitability.

Seeing that I was failing, my parents eventually intervened and took me to a shrink, who said I was plenty smart and good natured, and all that was needed was for someone to clean out my room of all the junk. I collected every kind of junk, I have a talent for seeing the usefulness in everything. The dump was my very favorite place in the world, back then when scavenging was allowed. My dad would unload rocks and debris from our yard, and I would want to fill the trailer up again with cool things that other people had discarded. Anyway, they cleaned out my room and then I got along fine in school from then on. (I still don't quite understand why that worked. :)

Ever since then, I pondered the notion of "fairness". It's a little like religion. It seems like the utility of the concept is primarily to discourage individuals from seeking to benefit themselves at the expense of the group. Individuals may lose their motivation to cooperate if they feel that someone may engage preemptively in competitive behavior and take advantage of their cooperative stance.

For example, if a baseball coach picks his lineup based on his feelings about the kids' parents, this could demotivate the players stuck in the outfield or sitting on the bench. Whereas if the coach bases his choices on reasonable tests of capability and performance, the players will see that their skills and hard work can pay off.

It makes sense for society to want us to base employment or academic decisions on merit. And people are often tempted to base decisions on other things -- our coach might expect some quid pro quo from the pitcher's father, for instance, that he'd miss out on if he put the kid where he belonged, in right field. Hence the need for a morality of fairness.

But nature isn't fair. Some kids are born with incredible talent, while other kids might work harder and still come up short, at least in a particular area, such as sports, music, math, language skills, or good looks. In most situations, society wants us to base decisions on merit, but there are times when we are expected to factor out innate abilities and base decisions on effort, or time on task, or progress.

The most common of these is tracking people by age (as in school), gender (volleyball), weight (boxing, and contrariwise in airfare or theatre seating), income (taxes), parental educational achievement (financial aid for college), and mental soundness (cf. the insanity defense in criminal cases).

Weight is a good example. Bigger people eat more, and so they have to pay more for food. On the other hand, XXL clothes require much more cloth but cost the same as size S. Their cars use more fuel and wear out faster, but their plane tickets cost the same. There are thousands of situations in which being bigger costs more, which seems fair, and thousands of situations in which being bigger doesn't cost more, which also seems fair. If we reversed all those situations, or made them all one way or the other it would arguably still be fair.

What we call "fair" is just that, what we call "fair". There is no external reality called "fair". There are no level playing fields in real life. However, we have the ability to declare a playing field level, and we do this all the time. Some people feel that racial quotas are fair, other people feel that discrimination is fair. Actually, everyone feels each of these things in different situations, we just disagree on which situations. How can we judge who is right?

Well, our goal is that every human being has a high quality of life. So I declare everything that leads to that FAIR, and everything that goes the other way UNFAIR. This might frighten some people. Hitler and Stalin and Mao made this kind of statement, and decided it was OK to kill millions of people. But what was the result? Higher quality of life for everyone? I don't think so. The basis of my condemnation of those actions is that it lowered (or ended) quality of life for millions of people. There may have been a rise in quality of life for some, but not for all.

Another important note I want to make on fairness. Triage is fair. If you want to have a large positive impact on the world, you have to start somewhere. The best place to start is the place you can do the most good (raising quality of life for the most people) the fastest. This is not always the place in the most need. There is an order to the operations that results in the largest benefit, and that is the order we should follow. In my opinion.

How to get wealth producers to come back to a poor neighborhood

There are behaviors that produce wealth, and behaviors that destroy wealth. By "wealth" I mean "factors leading to high quality of life" -- so it isn't just money and property; wealth includes education, harmonious relationships, a satisfying career, clean air to breathe, a variety of entertainment options, etc.

Planting trees produces wealth -- unless you plant them right next to the foundation of your house, in which case it may destroy wealth. Cutting down a tree and turning it into lumber produces wealth, unless you cut them down faster than they are growing back, and destroy forests. Going to work produces wealth, unless your job ruins your health, in which case the net effect of working might be to lower your quality of life instead of raise it.

In every situation you find yourself in, you can produce wealth or destroy wealth. Some people produce wealth everywhere they go. They focus constantly on improving their quality of life, and work persistently at it. At the other end of the spectrum, some people are incredibly destructive. Most of us are somewhere in the middle, we produce wealth in some situations, and destroy it in others.

People generally earn more money at their jobs than they spend each day. Likewise, the employer produces more wealth from the employee than the value of their paycheck. Both the employer and the employee are getting richer every day the employee works. This is a wealth producing relationship.

But the employee probably drives a car to work, spewing toxins into the air. The smog and acid rain lower our quality of life. So while driving to work, they destroy wealth, whereas at work, they create wealth. It's like that with just about everything we do. Wealth is created and destroyed at every step of the food growing, packaging, and distribution process. By purchasing a loaf of bread, we are paying for the whole process, from the manufacturing of the plastic wrapper, to the heating of the oven, to the refining of the diesel fuel that powers the delivery truck and also the tractor used to harvest the wheat.

But when was the last time we considered all of that before making a purchase? It's an enormous tangled web of transactions. This is behind the mystery of poverty in rich countries. Most people are going about their business, creating vast quantities of wealth and destroying vast quantities of wealth, without even realising it.

In some neighborhoods, the balance is positive; the quality of life keeps going up and up. In other neighborhoods, the balance is negative, and the quality of life keeps going down. It doesn't help to blame the people who are there. My goal is to turn this situation around.

Neighborhoods go downhill when wealth-producing people leave. When neighborhood crime rises, the small retail businesses tend to disappear, and storefronts get boarded up. Wealth producing people tend to want to be around other wealth producing people, so when the highest producers leave, it makes the neighborhood less attractive for the medium wealth producing people. Eventually, as happened in Oakland, Long Beach, Compton, and Los Angeles, certain neighborhoods wind up with a negative wealth flow.

To turn that around, we need to get wealth producing people to come back to the neighborhood. Even just making an appearance there makes a difference. People who produce more wealth than they destroy exhibit behaviors that young people instinctively want to emulate.

It's tricky to get high wealth producing people to come to a place where all the high wealth producing people already left. But one way to start is to be a high wealth producing person and go there first. Other people feel more comfortable going there too when they see me there. Another way is to buy into the community and tie our own financial success with the quality of life in the community. High wealth producers like to produce wealth, and it is relatively easy in places where the real estate is underpriced.

Note that I said "produce wealth" and not "make money". Slumlords make money but destroy wealth. Because they are destroying wealth, by allowing their buildings to fall apart and allowing their tenants to break the laws and sell drugs and annoy their neighbors, they limit the amount of money they can make, because the value of their property doesn't rise, but it still seems like a good deal to them to make a short term profit on rent. And eventually someone like me comes along and creates wealth in the community, which results in the slumlords making huge profits too.

But slumlords are not my concern. My point is that when we buy up underpriced properties in a run down neighborhood, and improve them and improve the neighborhood, we create wealth, which attracts other wealth producing people, and it also attracts copycats among the residents, who would have been high wealth producers if they had any examples to follow, but because they grew up in a run down neighborhood, most of what they saw was people collecting welfare and destroying more wealth than they produced.

The cool thing about this is that when the neighborhood turns around, we make lots of money. I have done this over and over now, so I have a long track record of successes. When high wealth producers see that, they realise they can create wealth and make money at the same time, while reducing crime and urban blight. It's an enticing formula.

But aren't you just yuppifying poor neighborhoods and kicking the people out?

I will answer this question in my next post.

The order of operations

There's a saying "Timing is everything". In chess, cooking, computer programming, dating, education, music, indeed in every human activity, the order in which we do things has a decisive impact on the outcome. It's the same way with raising people's standard of living. To succeed we need to pay close attention to the order of operations.

The first step is to see and acknowledge the incredible wealth that the people have, and their desire and willingness to better their situation. You don't start with what the people lack, you start with what they have. Build from strength.

One thing that people in every big city have is a lot of neighbors. This is important, and is the key to raising the quality of life there. The big difference between cities and rural areas is that when you do something out of doors in the city, lots of people see it. Everything you do outside is like instant advertising.

This isn't always obvious. When I started picking up the trash on my street in Oakland, I never saw that anyone noticed. But after a few weeks it was common knowledge that I was doing this. I was approached by strangers in the supermarket and at the bus station, "Aren't you the guy who picks up the trash on the street?" I was amazed. I was even more amazed when other people started doing it too. I only witnessed a couple people actually in the act of picking up litter, but I noticed that my street and the park at the end of the block mysteriously got much cleaner. Another effect of a cleaner street is that it makes people less likely to litter. For every person who picked up litter, there might have been half a dozen litterbugs who cleaned up their act, which has an even bigger impact.

It was the same way with landscaping and fixing up the front of the house. Other people started doing the same. Creating wealth and improving one's standard of living are highly contagious activities. And each time an eyesore is removed it makes all the other eyesores stick out more, and the motivation to deal with them becomes greater at the same time as the community's self awareness and power is increasing. People start to spontaneously complain (and take action) about things that were previously accepted as just innevitable facts of life. It's a wonderful process to participate in.

In my next post I will discuss why, if raising the standard of living in distressed neighborhoods is so easy and fun, everyone isn't already doing it. And how we can sustainably grow this activity.

The paradox of poor people in rich countries

For the past century we have been faced with an odd paradox.

There is enough wealth in the world to afford every person a decent standard of living right now, and enough energy to distribute the goods and information to where it is needed. Furthermore, there is widespread agreement, particularly among the wealthy, that no person should be deprived of a decent standard of living.

And yet, even in the richest and most politically liberated countries, there are still millions of people lacking basic necessities.

I am sure every reader has puzzled over this dilemma at some point in their life. When we think of the desparately poor in third world countries, most of us conclude that politics and oppression are to blame. Corrupt governments are keeping the poor down, and preventing outsiders from helping. But what about in rich countries?

Many feel that poor people are themselves to blame; after all, plenty of them do eventually succeed through discipline and hard work. Many of them raise their standard of living and move up, even becoming rich or middle class. So perhaps the ones left behind are simply lazy, unmotivated, or addicted to drugs. There certainly do exist people who are poor by choice. And there are some who are mentally or physically impaired.

However, in my experience in low income, high crime neighborhoods, I have also met and worked with healthy people who are truly victims of circumstance. I hate to use the word "victim", but in this case it truly describes what is going on. I DON'T MEAN they aren't responsible for their situation and life. My point is that many of them are indeed hard working and motivated, and that isn't always enough.

Their quality of life remains unacceptable, in spite of their efforts. What is missing is the coordination of their efforts with their surroundings to produce a higher quality of life. You might call this "adapting to one's environment", or "blooming where you are planted". The fact is, very few people will bloom just anywhere. All of us (relatively) rich and successful people were nurtured, guided, educated, assisted, supported, and protected by well meaning people, on thousands of occasions throughout our lives, and it's difficult to say what would've happened if we had missed out on any or all of that support. Some of us might have committed suicide, others might have ended up in prison, others might have died in accidents or caught some deadly disease.

The fact is, we depend on a certain fit between ourselves and our environment in order to thrive. Just consider the rate at which we leave home. Why do we not remain where we were born? Clearly because we find another environment more suitable for raising our personal quality of life, whether that means lower rent, a better job, more privacy, better weather, whatever. For one person (e.g. my father, the engineer) moving to Los Angeles was a dream come true, for another (e.g. my brother, the poet), moving AWAY from Southern California was the ultimate liberation. Each of them was introduced to a place they liked better than where they were, allowing them to raise their quality of life simply by moving.

Now, what does this have to do with our paradox? Well, the reason there is still poverty in rich countries, after decades of unprecedented philanthropy, is that the philanthropists have failed to fully acknowledge that people come in a variety of flavors. There are some who simply need to be taught to read, and they will earn a PhD on their own at the public library. There are others who only need to be taught to sew, and they will design clothes that are worn by the stars. But how many charitable organisations actually study how best to raise the quality of life of each individual they serve? Would they have recommended that my father move to Los Angeles?

There are some (rich and poor) who will become alcoholics after their first beer, and others with alcoholic parents and drug dealer neighbors who remain clean and sober.

This is not due solely to strength of will. I enjoy having a bowl full of candy on my desk, eating one piece each day. Most of the people I have lived and worked with cannot do this (and with some of them I have to hide the candy or I don't get any). Whereas, I have great difficulty forcing myself to write appointments in my calendar, while others don't seem to mind this. We each have our strengths and weaknesses, and we each succeed and fail in different circumstances.

The key to making an entire group of people, such as the residents of a low income, high crime neighborhood, more successful, is to change the circumstances such that a larger variety of quality of life enhancing opportunities exist. Just how we can do that will be the subject of my next post.