The Parable of the Pauper

"Imagine a pauper who turns to two finance gurus for advice. Not only is he broke, this pauper is poorly educated and lives in a rough neighborhood. The first guru urges, "Earn your first paycheck. Once you start making money, your circumstances will improve, and you will eventually escape poverty." The second guru counsels differently: "Start by doing as my rich clients do: attend college, move to a safe town, and buy health insurance. You can only escape poverty by first creating the prerequisites for wealth." The two gurus mean well, but the advice of both clearly falls short. The first guru provides no clue as to how the pauper might earn his first paycheck, much less how to sustain a stable income. Conversely, the second guru ignores the realities of poverty. If the pauper could afford to, he would have obtained the prerequisites for a better life long ago. Attaining such prerequisites is not the solution to poverty, the difficulty of attaining them is itself the problem. The parable of the pauper and two gurus reflects a fundamental problem of development in the real world." (p. 1)

  • "no particular solution is universally effective or ideal. Particular solutions work only when they fit the needs and resources of particular contexts and the success criteria of the players involved." (p. 16-17)
  • "Whether it is in Western Europe, the United States, East Asia, China, or Nigeria, particular solutions work only when they fit the particular demands of their environments. Therefore, it is futile and even self-defeating to search for one replicable model believed to work always and everywhere." (p. 223)

- Yuen Yuen Ang (2016) How China Escaped the Poverty Trap

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