How? I'm corrupt, and their are scavengers rummaging through the alley that runs behind the office. How do I leverage this poverty to make some sweet green? I've watched them dig through the trash, and they don't have anything, and they are just collecting bottles and cans for recycling. How do I profit from this?
Payday lending and rent-to-own are two legal, and rather corrupt* ways to scam money from poor people.
* In general these businesses do not make their lives better; they're worse off than if they hadn't done business with them in the first place. In general ... ymmv
So you're saying if someone need $100 right now and has terrible credit, that's it's better that they can't get the $100 at all, rather than pay a high interest rate?
That's not really the problem, though. The issue comes when those loans can be rolled over, and when the borrower ends up with multiple stacked payday loans, and can't make any headway into the capital because an increasingly large proportion of their income is taken up by interest payments. It's literally usury, and close to loan-sharking.
No I understand that, but the point remains, if you got rid of payday loans, you'd leave a lot of people with no options. It's not like they can walk into a bank and get a line of credit.
Assuming that they are poor though otherwise functional (capable of work), then in order to make money from them you take advantage of them, knowing that poor people desperate for money to support their families will put up with more shit.
Have a "recycling" company and need somebody to man one of the electronics burning pits? Get one of those poor guys in they alley to do it. What are his other options?
You may need to bribe others to get away with this, but if those people are also relatively poor, the bribes should be affordable.
My preferred way to make money from poverty is that tiny investments can produce huge returns. There are also high search costs.
If you can find poor people who are really smart and haven't been permanently damaged by their experience (i.e. internalized failure, still believe success is possible, etc.), you can find some really amazing employees, partners, etc. People for whom "find a place to stay in California for a few weeks while looking for a job" is basically impossible.
Oh, my argument is that corruption (by other people) causes innocent/good people to be poor, and then other people who are self-interested (at least) and potentially altruistic can help those poor people.
Although generally my preferred form of helping would involve the corrupt people and some rope; much more efficient.
I think the Chinese govt. is roughly on the same page as you re rope, though I don't know how much of that is actually just a weapon to be wielded against opponents. I wonder how well that's been working at reducing corruption.
Unless it's all a shame, a lot of what the central Chinese government does seems great for China and neutral to good for everyone in the world. Most of the stupidity in China seems to come from provincial or local governments.
Perhaps, but you are assuming their labor is worth more than a trivial amount in the first place. If it was, then they wouldn't be unemployed or poor to begin with. And regardless, that has little to do with corruption. It's just underpaying an employee.
