3 Reasons Why Many “Third World” People Are Not As Poor As You Think

If you look at the numbers, people living in the West are clearly richer: the per capita income clearly shows this. The median income in the U.S. Is much higher than, say, the median income in Honduras. On paper, people in the anglophone and Western European countries are richer. On paper this is indeed the case. But is this the whole story? I don't think so. What I have seen living abroad suggests to me that the average “third world” person is not as poor as you think. Consider these 3 points...

1.Grey Markets

In the West, we're accustomed to the term “black market.” (Let's call its opposite the “white market,” though I can't recall actually hearing this term.) The black market is the underground economy – illegal stuff. The white market is the normal economy – the official economy. And as Westerners we just think in this black-and-white way. Nowadays – especially with so much regulation foisted upon the backs of the Little Guy – it's hard for Westerners to think beyond this binary idea. But people in third world countries don't have such a limitation. In addition to the white markets and black markets, they also have grey markets.

What is a grey market? I will define it thus: a grey market is commerce or employment that is legal, but is off-the-books OR is not official in some way. (Ex: a person working for someone else in some capacity, but is not an employee, though making real money.) Grey markets can also include very small businesses. Think street food carts, or street vendors. In many countries, these people are not official – you just go out and sell what you want to sell – and aren't regulated, but are actual businesses. Many third world people are not employed, but have successful businesses doing whatever it is that they do. Entire families can do quite well without employment.

In the West, our options are typically limited to working for a corporation or the government. Any business we start must be official because of regulation. This limits options and freedom for the common man – by design, of course. We don't have grey markets – things are either expressly allowed or are illegal. Many would-be business starters get choked by the costs incurred from regulations. The grey markets of third world countries are all possible because of...

2. Little to No Regulation

Governments of third world countries are often unwilling or unable to regulate what people can do. Even if they could regulate their lives, they wouldn't because it would mean many millions of people would suddenly lose their livelihoods – not good for social stability. In the West, it's reversed: the government gives out various forms of welfare to people who can't exist in the official economy – a system which has many problems compared to the third world way, though I won't get into that here.

As a result of having little to no regulations, people are free to do what they can for work, business, and other forms of money making. One of my friends here in China recruits English teachers. She works for a company, but also does her own work on the side. She also mentioned how much money she had made that month from her “part time job”: 18,000 RMB (about $3000.) None of this was official. It was something she had learned how to do and did what anyone with economic freedom would do: use it to make money.

Another good example here in China is how public school teachers will often hold extra side classes that have vital information for passing their exams. If the parents don't pay the fee to attend, their kid gets left out and likely won't pass the exams. Remember that these are public school teachers doing this. It's a very common practice, and it is allowed. Right now, some of you reading this are saying, “Wow, they're very free to hustle there!” while others reading this are saying, “Wow, there is no protection from being ripped off like that!” Both lines of thought are at least worth discussing, but the simple fact is that these grey market ways of making money open up a lot of avenues for people to make money, and that these ways are impossible with government regulation. This lack of regulation allows virtually everyone to at least have a shot at things. In the West, you have to follow a very specific sequence of steps in addition to being lucky and/or well-connected in order to have your chance at making money. This is why: the state is saying you can't do things a different way. (Which benefits the corporations and screws over the people.)

3. They Aren't Charged a Fortune Merely to Exist

I know this has been discussed before, but it bears repeating because without this point, the rest of it wouldn't matter. If the cost-of-living is so high that no one can have kids and form families, then what is the point of that society? (Hint: it involves the words “enriching” and “corporations.”) Low cost of living is inseparable with the concept of the third world. Why? Without as much money in the official economy, the government can't start building all these circles-within-circles of regulation. Without regulation, the people have more options, poorer though they are. That means fewer safety nets, but also means the safety nets you have to pay for are much more affordable for the average person of a given country.

I'm hitting on a much bigger truth here – most countries are countries first and foremost, whereas the West is something else. What do I mean by saying “most countries are countries”? Most countries consist of a people with a shared identity, a language native to that land, a physical land lived in by those people for perhaps hundreds or thousands of years...the country is all of those things and more. And those things come first. China has done quite a few things, but when you think of China, you think of the Chinese language, rice and noodles and tofu, a certain image of a Chinese person forms in your thoughts, and perhaps music that has been around for many eras fills your head. It has a core essence that extends from food to language to music to...everything in that country. When you think of the U.S., perhaps you think of some major company and its product. Is not the iPhone America these days? Or Coca Cola? Or Wal-Mart? Whatever it is changes, but it usually revolves around a corporate product. This is no science, nor am I presenting it as such. Some readers may say, “No, when I think of America, I think of moon landings. Winning World War II. Baseball and apple pie.” Those notions have merit too. (Or had merit...) That said, the U.S. And its ways are based around corporate commerce. Those this was once probably well-intentioned and beneficial, it no longer is. And this is my point: whereas most countries are countries, the Western countries are really corporations. (Given that they are run as corporations, I think this is a fair way to state it.) Here is the underlying philosophy that has given us the modern day result of corporations running Western civilization.

A corporation has regulations. A country does not. This idea permeates all parts of a society, and will tell you if a society has real freedom or a system that must be obeyed at all costs. Westerners are becoming poorer and poorer from having to follow this system no matter the true price. Meanwhile, billions more people around the world have options that “rich” Westerners will never have.