Your question implies a central planning of allocation of resources which we know from history results in exactly the hellish abject poverty you were so concerned about. Market economies full of rationally self interested people create the best life outcomes for everyone around. We are ALL better off if we are all in friendly competition to live the best lives possible.

I agree that friendly competition is important. It's the "relative to their peers" part that I find shocking.

Obviously I want my own children to live the best possible life I can give them, but I want their peers to do well, too. It is crazy to me to care only about your children's status in their community, rather than their absolute wellbeing and the wellbeing of the community they are a part of.

You are presenting a false choice. He’s not comparing his children to others, he’s doing the most to do for them in absolute terms

He literally said "relative to their peers". I seems like you have read the comment as you want it to be, not as it is actually worded.