How To Eradicate Poverty (Without Doing Charity)

1. The Indian Experiment to Eradicate Poverty

Poverty in India

“Everything that is rewarded grows.”

India had been strafed and divided with the caste system since centuries. The society is divided into 4 sections.

  • Brahmins are the teachers and the priests.
  • Kshatriyas are the warriors.
  • Vaishyas are the merchants.
  • And Shudras are the agriculturists and service providers.

The caste system is hereditary. So who you are depends on who your father is. If you are born in a Shudra family, you couldn’t join the army.

Dalits are a sub-part of Shudras. They are the folks who do all the unwanted jobs like cleaning the streets. They are the people who become the “untouchables.” If someone touches a Dalit, he is expected to go and have a bath immediately. (This may have started out as a means to prevent diseases from spreading and becoming epidemic as Dalits had the worst jobs. But the act of not touching sank its roots deeper until the Indian society broke down.)

Soon, Dalits are banned from being educated or entering places of worship! Thousands of Dalits suffer from centuries of poor treatment. This mistreatment persists even after the caste system is abolished in India.

Indian Constitution Seeks to Change Things

And so, when India gains its independence in 1947, the leaders decide to make things right.

The folks who frame the Indian constitution believe that Dalits are historically oppressed and denied respect and equal opportunity in the society. The quickest way to help them achieve equal status in the society is by educating them.

But many of these Dalits can’t even afford education. So the Indian Government decides to create a schedule caste and schedule tribe quota. 22.5% of all the seats in Government schools and colleges should be reserved for these Dalits. They are to be educated for free!

Situation After 61 Years

After 61 years of independence and quota education system, you would think that there wouldn’t be any person claiming himself to be a Dalit left in India today – right?

But things haven’t worked out that way.

Instead of their numbers going down, their numbers have actually steadily increased every year since independence and gone way up!

In 1991, there are 150 million Indians who claim themselves to be of the schedule caste quota. In 2001, the number rises up to 230 million Indians!

2. Why You Can’t Eradicate Poverty By Giving Away Money

Indian Child With a Slate

Eradicating poverty from the world is a good goal to have. But cutting cheques and providing special favours to the poorest people of the society doesn’t work in eradicating poverty at all!

In fact, all it’ll do is make people find ways in making sure they don’t get too rich – so that they can take advantage of the free welfare cheques and free education!

Because everything that is rewarded grows… if you reward poverty, how can you expect it to wither away?

3. The Smart Charity Philosophy

“Don’t help people who need it, help people who deserve it.”
– Jim Rohn

4. Give a Man a Fish…

Teach Fishing

“Give a man a fish and you feed him for a day. Teach a man how to fish and you feed him for a lifetime.” – Chinese Proverb.

Your job is to teach a man how to fish only when he is willing* to learn. And when he is willing to pay the price to learn.

*But how to build the desire in the hearts of poverty ridden people to raise their hands? To become willing to learn? To become willing to pay the price when they are already poor?

5. The English Experiment to Eradicate Poverty

King Arthur

A millennium ago, England is a small inconsequential island of barbarians, misfits, castoffs and losers. They are no where on the map in world affairs.

But that starts changing because of one Welsh monk: Geoffrey of Monmouth.

To instill pride in his countrymen, Geoffrey writes the book “The History of the Kings of Britain” that chronicles the lives of various British kings spanning close to 2000 years before 7 AD.

In it he narrates how Brutus – a descendant of the Trojan hero Aeneas (of Homer’s Illiad) first settles in Britain. And how Ceasar himself invades Britain. Geoffrey also tells us the tales of King Lear and Cymbeline and a few other Kings.

But perhaps the most well known part of his book is, he tells us the story of the rise and fall of King Arthur.

Then in early 15th century, Thomas Malory – a convict who is rotting in a prison in England – resurrects a few of these stories and writes “LeMorte D’Arthur” – the story of King Arthur and his noble knights of the roundtable!

At the same time, Gutenberg invents his printing press. And because of the printing press, LeMorte D’Arthur spreads and becomes a widely read book!

Soon, the little island of misfits, barbarians and losers start seeing themselves in a new light. They start seeing themselves as coming from a nation with a glorious history.

And then they start making some changes so that their reality reflects their history. They build one of the finest navies in the world. They invent the steam engine. And go on to conquer the world!

But here is the twist: not a word written by Geoffrey of Monmouth – who started the King Arthur craze – is true!

People will change themselves if they believe that they can. If they believe that someone in their position has already achieved great feats.

6. The Rich vs Poor Insight

Say No To TV

“Rich people have large libraries, poor people have large TV’s.”
– Dan Kennedy

Give the poor people heroes they can look up to. And they will model after these heroes and change their lives!

Tell them rags-to-riches stories. And they will surprise you by rising out of poverty in record time!

Gift just one autobiographical rags-to-riches book to just one poor person to read. And see how his life changes.

Action Summary:

  • The worst thing you can do to eradicate poverty is start giving the poor people free rides.
  • The best thing you can do to eradicate poverty is make the poor people believe that there were others in their situation that rose above poverty, worked hard and are rich today.
  • Give the poor people heroes. Tell them rags-to-riches stories. These stories will satisfy their hunger a lot more effectively than any free food programs. Because these stories will empower the poor people to earn their own food instead of relying on charity.
  • Gift just one autobiographical book to one poor person today.


The Bangladeshi Experiment to Eradicate Poverty

Muhammad Yunus

Muhammad Yunus has perhaps done more to eradicate poverty than anyone else in the world. He started an organization in Bangladesh that gave out loans to poor people who wanted to start their own businesses. But he banded the people who wanted loans into groups. So that the group can motivate the members to work harder. And the group can create peer pressure on the members to pay back the loan on time.

Because of this idea of giving out mico-loans to groups, Yunus’s bank had a 98% rate of loan payback (better than most banks out there)!

Today, Kiva has made the concept of mico-loans a lot easier. You can loan money to poor people with business ideas online. These lenders will send you email updates on their progress. And pay the loan back within 6-12 months.

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