Welcome to Part 3 of the Poverty Story.

We are going to jump back in at “Reverse Engineering Poverty”.

Yes – thanks, Susanna. As I mentioned, Reverse Engineering the System that Profits from Poverty allows us to understand the mechanisms driving poverty.

This is the work completed by Rodney over the past 10 years and is highlighted in his comprehensive sociocultural history of the U.S. called “This Land is Your Land”. This book is available in our Resources Section as an audiobook and PDF. BTW Rodney is our co-founder and my co-CEO.

Let’s have a look at the illustration at the bottom of this section (Part 3 – Illustration 3.1)

This shows up on the website under the Poverty Story - Part 3:

The relevant chapters in “This Land is Your Land”

The Degenerative Cycle is the process by which a society turns people into consumables.
It is the foundation of the “System that Profits from Poverty”.

It includes these 5 steps:

1. Alienation – which identifies people to target for exploitation

2. Rationalization – using social constructs to justify our behavior towards those alienated

3. .Exploitation – The targeted group, through official and unofficial actions, is stripped of value and power

4. .Automation – Creating systems that automate the exploitation of the targeted group which removes the need for human or emotional involvement

5. Socialization – Rewriting the rules of society, including its institutions, culture, and legal structure – to normalize human disregard and social cannibalism.

I assume that many cultures throughout history have used the Degenerative Cycle.

Yes - for sure – historically that’s how empires were built. And the motivation is always some form of power or profit.

The Degenerative Cycle has been in place in the U.S. for hundreds of years and with each revolution, our society is poorer and less sustainable.

In the diagram, I see that the Degenerative Cycle is the foundation of the 5 Tactics that Profit from Poverty.

Yes, the Degenerative Cycle provides a license for systemic poverty to operate. These 5 Tactics are the specific ways the system extracts profit from poverty, and they keep poverty growing under slightly different names generation after generation:

1. Under-compensation - to pay salaries below what it takes for a full-time worker to survive. Includes wage and equity theft, and inequitable benefits.

2. Economic Impairment - using fair-appearing, pseudo-objective barriers to discourage and disqualify less affluent candidates from services that they could use to make their lives more sustainable.

3. Opportunistic Overcharging – Unjustified higher prices, higher interest, and added fees, for the people who can least afford it.

4. Rent-Seeking - is the process of extracting revenue from low-income communities by trapping people in and profiting from debt, and/or removing or controlling ownership opportunities.

5. Social Disinvestment involves moving the cost burden of our collective well-being, for example, education and retirement, by shifting it to individuals, most of whom cannot afford it.

So this is the System that drives poverty today?

Yes. It creates and maintains poverty – and of course, it profits from poverty.

And the lowest rung of society suffers the most.

Yes, the system puts them there – and then justifies how they are treated. But of course, after generations of this, society no longer sees it as justification – instead, it is seen as normal, “it’s just the way things are”.

Obviously then, in this system, we are not all treated equally.

No – not even close. Poor people must deal with economic barriers and arbitrary requirements that block their access to opportunities that many of us take for granted. These often insurmountable barriers enforce and maintain poverty. Poverty forces them to work for the system.

The 5 Tactics that Profit from Poverty consume most working people’s lives – which means they extract the maximum value from all aspects of their work, their financial lives, their cost of living, and basically every penny they earn.

Illustration 3.1