this article is much more accurate than the ones i've seen on HN about poverty in the past. still doesn't hit the nail on the head, but its a lot closer.
Does anyone here know about the economics of gambling?
It seems like the argument Karelis is making would have strong similarities there. I'd be interested to see if this suggestion is at all valid.
To explain, in gambling (think lottery tickets, not poker) you trade $1 for something that actually has less than $1 worth of economic value. There is obviously another component at work (behavioral, not economic), call it hope. If economists have found a way to quantify hope in this context it seems that they could try the same thing with poverty, the results would certainly be interesting.
I know a little bit. The relationship isn't very close.
Gamblers tend to derive utility from gambling, i.e. the act of gambling gives them a rush. The extreme case of this is video games. I'll never win any money by purchasing a Wii (like the lottery, I lose with probability close/equal to 1). But I will derive more happiness from playing Wii sports than I will from the money I spent on it. Similarly, gamblers enjoy playing the game, and this gives gambling positive utility (for them).
However, the argument Karelis seems to be making is that the marginal utility of increased income is zero (for some income range which constitutes poverty). People don't tend to do actions with zero marginal utility, so they don't try to increase their income. Basically, earning $15k/year doesn't make you any happier than $10k/year, so why bother to increase your income?
(Note: he actually claims that "economics doesn't apply to the poor", which is either stupidity or hyperbole. )
One interesting policy implication of his model (if it is true, which I doubt): taxing the poor is good policy. If a poor person is no happier at 15k/year than at 10k/year, then we should tax all poor people making $15k/year at 33%. It won't make them any more unhappy, whereas taxing a richer person will. It also suggests that any wealth transfers to the poor that dont solve all their problems are wasted (welfare is "all or nothing").
I'm wondering what kind of utility function is needed to make such a strange MU function...
As far as dents on the car are concerned, let me write what conventional microeconomy says. Here is the function to estimate the choices.
U = sum(F(x(t))/(1+r)^t) by t from 1 to infinity (or life expectation), where F(x) is a momentary utility function, r is "perceptual" discounting rate (sorry, don't know the English term), which means that F(x) next year is 1+r times less nice than having it now.
If you don't repair the car, x(t) will be constant, let's say X. If you do, first period it is x(0) = Y < X, but since t=1 x(t) = Z > X.
The problem is that F(Y) has more weight than F(Z)'s. The more r is, the greater the difference and more probable the first choice will win. The problem of poor people is that (1) their r is much more than that of middle class, and they don't value the future, (2) their F(x) (perception of what is good) is different.
I think the authors ideas are less about time discounting, and more about non-linear relations in quantity of problems.
The authors example is a man who's car has many dents. Utility might behave like U(0 dents) = 1, U(1 dent) = 1/2, U(n >= 2 dents)=0. If a car has 5 dents, the marginal utility of repairing one dent is 0 (U(5)=U(4)), so the owner does nothing.
Of course, in real life, most utility functions behave in the opposite way. Going from homeless to a studio apt? Major gains in utility. Going from a studio to 1 bdrm? Nice, but not as fantastic.
The diminishing marginal utility of money would imply that the difference between $10k and $15k is quite large. Much larger than the difference, say, between $100k and $150k.
You are quite right, utility is usually steep near 0, and flattens out toward the top.
I was simply pointing out that if the author is right, the difference between 10k and 15k would be very small (indeed, quite possibly smaller than that between 100k and 150k).
In fact, I'd suggest that diminishing returns explains American "poverty" much better than flat utility curves. 45% of the poor own their own home, 95% are not overcrowded, 75% own a car (30% own 2 cars), nearly all have a TV (25% a big screen). Virtually no one is starving, over 70% of those the USDA classifies as "hungry" are obese. The typical poor family is also supported by 16 hours/week of work. It's quite possible that poverty is explained simply by a low marginal gain from increased work (the poor already hit the point of diminishing returns).
One way to explain lottery tickets is to hypothesize that people don't typically process small probabilities well. So Radon looks like terrorist attacks looks like lightening. What people seem to do in practice is to lump all small probabilities into either one quantity that means "small but worth paying paying attention to" and zero.
This decision making process works pretty well for day-to-day life, but it can get frustrated when the outcomes are very large, usually dying and big money. So some lottery players approximate the chances of winning to be zero and don't buy; others approximate small probability and get a large expected value of a ticket and buy many.
On the topic of terrorism and small probabilities, over 40,000 people die in car crashes per year in this country. It's essentially as if 9/11 has been happening every month for decades on our roads. But which do people care more about?
I am sure that most people don't get the probabilities right, but maybe there is also something else: if you factor the utility into the equation, the probabilities might not be so bad? E(money) < 0, but E(utility) > 0? As the other reply sad, people get a rush out of gambling, among other things.
The whole article could have been shortened to this one paragraph:
In the early 1970s, a large-scale study gave poor people in four cities a so-called "negative income tax," a no-strings-attached payment based on how little money they made. The conclusion: the aid tended to discourage work.
Yeah, that's right. The obvious occurred, as usual. All such theories, and all such fawning articles, rely upon one unalterable precondition: Nobody involved has actually lived among the destitute, while destitute.
Actually, that's the opposite of what the article is arguing (or to be more accurate, what the guy who the article is about is arguing).
Direct quote:
Reducing the number of economic hardships that the poor have to deal with actually make them more, not less, likely to work, just as repairing most of the dents on a car makes the owner more likely to fix the last couple on his own. Simply giving the poor money with no strings attached, rather than using it, as federal and state governments do now, to try to encourage specific behaviors - food stamps to make sure money doesn't get spent on drugs or non-necessities, education grants to encourage schooling, time limits on benefits to encourage recipients to look for work - would be just as effective, and with far less bureaucracy.
What you quoted was a common rebuttal to the argument above, which the guy in the article counters with:
Karelis responds that the data from that experiment is in fact quite ambiguous, and there has been debate among economists over how to interpret the results. But ultimately, he believes, the strength of his arguments is less in how they fit with the economic work that's been done to date on poverty - much of which he is suspicious of anyway - but in how familiar they feel to all of us, rich or poor.
* Edit: Formatted quotes, thought I could use Markdown.
that's the opposite of what the article is arguing
Exactly. If I wanted to summarize the argument of the article I would translate from newspeak to English:
We want to pay right-thinking, liberal arts majors middle class salaries for them to administer money distributions from functional people to dysfunctional people. We have no data to suggest this will help anyone, but we are pretty sure it will help ourselves.
"Dysfunctional" people are poor because they deserve it, because they are dysfunctional and have not earned anything. "Functional" people are wealthy because they are functional and have earned their wealth.
Let's take a look at a time in one's life before anything can be earned or deserved: At birth, does one newborn somehow deserve better education, improved nutrition, and a life that will offer far more opportunities and fewer hardships than some other child?
No, of course not: By your own ethos, you only deserve what you have earned. There is no way to make a moral argument that newborns deserve anything other than equal circumstances to begin to create a life for themselves. (Unless you are the sort who believes you chose your parents well and deserve the just rewards of that choice....)
Even for the Ayn-Rand libertarian there's a pretty compelling case to be made for widespread welfare efforts: not for the poor, who may have earned their own hardships, but for their children who will suffer without having done a thing to deserve it.
Strawman. Sufficiently so that I won't comment further than to say that I was translating what I perceive them to believe--"them" being the class of people who thrive on dysfunctional populations.
Well, crux_ misrepresented my views, and that's that.
But fine:
At birth, does one newborn somehow deserve better education, improved nutrition, and a life that will offer far more opportunities and fewer hardships than some other child?
In fact, parents are responsible for their own children. I am not responsible for other people's children. That is a hard, cold fact. The only way to force equality is just that: To force it. People who are careful with their finances, with their vocations, with their reproductive activity inevitably wind up supporting other people's children. Think what you will about that. To me, it is disgustingly criminal.
That’s not a responsibility to society. That’s a rejection of society. Which is to say, in your eagerness to repeat your previous point again, you’re deliberately avoiding the question asked of you. If the answer is “no”, you shouldn’t be afraid to say so.
> inevitably wind up supporting other people's children. Think what you will about that. To me, it is disgustingly criminal.
Leaving those children hanging out to dry would be what I'd consider disgustingly criminal. I'm not sure I can get my bile to rise to that level for helping them.
Being taxed to help children is about the last thing I'd fight against, as a matter of priority. First I'd go after the actual wasting of tax dollars, which helping children certainly is not. In fact, it's essential if you care about society even from a _self-interested_ standpoint.
It's similar to health insurance. Is it "fair" that if you don't need to use it, you end up paying for other people who aren't so fortunate? If you live long enough, the probability approaches 1 that you'll need it. And it may cover more in hospital bills for you than you paid into the system.
I think the essential basis of your objection is that life is a competition and that if you're winning, you should be able to press your advantage instead of having your lead reduced by outside interference.
By contrast, those of us in the "cooperation" camp think instead of fighting over who gets the bigger piece of a smaller pie, we can make the whole pie bigger. And taking a broader view, even eliminate competition altogether by providing computational resources to each individual that will maximize hir experience of life (via completely convincing VR), given what our limited brains are even capable of and how it pales in comparison to the possibilities of nonbiological intelligence.
Still, crux_ is playing the straw man, and it's risky to legitimise such comments. He is twisting his parent through bad interpretation to be a comment about what people 'deserve', and then develops this theme. So let me attempt to deal with that idea of 'deserving'.
What people 'deserve' is arbitrary, and extremely position sensitive. For instance - what if you were to phrase the education issue in terms of "if somebody works part time and wants to pay to attend university to do extra subjects that are not provided under government university sponsorship, do they deserve to be allowed to do so?" Or "if somebody works hard and drives an old bomb of a car in order to save money to pay for a particular education for their children, do they deserve to be allowed to make that choice?" Or, "if somebody wants to spend five years sitting around smoking marijuana and collecting government benefits while failing to make any progress on the degree they're supposed to be doing, do they deserve government funding for this, when the opportunity cost for that choice hits poor people who have no interest in a university education but who can't get jobs due to the correspondingly higher levels of taxation required to fund such university places?"
The idea of what people 'deserve' is completely arbitrary. Ideas like 'deserve' and 'fairness' don't belong in public policy, except in reference to:
* direct application of the rule of law
* formation and honouring of private contracts
* ownership of private property (and that excludes anti-rights that are often mislabeled as property, such as "copyright")
These rules extend from the idea that you should be allowed to do what you like so long as you are not impinging on your neighbour. As 'mynameishere' says in the existing reply to this comment, the only way to guarantee other equality on other levels is to force some individuals to give up something for the benefit of expense of others.
And one of the side-effects of that sort of thinking is policy that acts against even the common interest. If you ban private schools so that everyone can be equal, that means people who would have put extra money into education (creating spaces in private schools and thereby removing demand form the public sector) instead spend it on improvements to their house or funding a more luxurious lifestyle. People who to improve education standards for poor people by abolishing private education need to think harder. And people who want to make everyone equal regardless of relative outcome need to have a look at Cambodia.
I'd like to return to another part of mynameishere's previous comment: "We want to pay right-thinking, liberal arts majors middle class salaries for them to administer money distributions from functional people to dysfunctional people". Governments tend to grow in a way that gives more work and power to the decision makers. This process is the enemy of individual freedom, and - as a general measure - fails on a utilitarian basis, also. If they don't have unambiguous facts to support what they're doing then they need to be blocked.
I agree that I was exaggerating things somewhat with usage of "deserve". But that is rather inessential to the core of my argument, which isn't so much about fairness or even public policy:
If it is wrong to force some individuals to give up opportunities and wealth in order to benefit others; is it not then also wrong for a child to be equally or more deprived by the circumstances of their birth?
The two are not identical but they have enough in common to make it a very valid question. Rephrased: An irresponsible parent is stealing their child's future away, just as the state might steal from you to pay for their meals. It is easy to agree that both are wrong... but I think it will take some fancy dancing to justify the second as wrong while the first is okay.
Both yourself and mynameishere have made the same leap of judgment to condemn one possible solution (widely applied), but that's missing the point: either deprivation due to circumstances of birth is wrong or it is not -- regardless of whether the possible solution of wealth distribution might be itself wrong.
I don't have a problem with debating these solutions -- I find estate taxes an elegant compromise, for example -- but what I do have a problem with is those who pretend that poverty & inequality as it exists today is a just part of the natural order and praise that all is as it ought to be: That is self-justifying sanctimonious BS of the first order.
If it is wrong to force some individuals to give up
opportunities and wealth in order to benefit others;
is it not then also wrong for a child to be equally
or more deprived by the circumstances of their birth?
In the situation of the former, an individual has had something and then that has been taken away from them. In the situation of the latter, it is a case of the child having not had something given to them that you judge to be fundamental.
The word 'deprived' is interesting. "Lacking in advantage, opportunity or experience." The child is deprived because they have not been given one of those three things.
Thus, these scenarios do not correspond.
The two are not identical but they have enough in common
to make it a very valid question.
They're fundamentally different. The uncomfortable feeling you got that caused you to write the above sentence might have been used to better effect.
An irresponsible parent is stealing their child's
future away
You're deliberately being sloppy with the language to further a broken conclusion. Stealing implies property that has been taken away. That's not what's happening here.
The dancing is all yours, and this is the second post in a row where. Semantic tricks do not thrust an argument beyond logical barriers.
either deprivation due to circumstances of birth is
wrong or it is not -- regardless of whether the
possible solution of wealth distribution might be
itself wrong
I don't have a problem with debating these
solutions -- I find estate taxes an elegant
compromise
No. It is not your place to steal from people, nor to get the government to do it on your behalf and then pretend it's any different.
That is self-justifying sanctimonious BS of the first
order.
It's very easy to throw nasty names around.
Your frustration at seeing potential gain go to waste (the child) and consequential suffering on the part of that person is clear. Please - try to see where I'm coming from.
I want a situation where as many people get good education, health care and moral guidance. However, government is a mechanism that is both poor and dangerous when it is given charge of these things. Poor because it is not subject to the brutal honesty of market forces to keep it in check, and dangerous because it uses every bit of power that it is granted to (in some measure) line the pockets of the people involved in its running and self-perpetuate at the expense of our freedoms.
Government creates dependance on itself, steals our liberty, and poisons minds such that when good people identify a problem they wrong assume that it's the government's responsibility to fix it rather than their own. It's not.
If you want to improve the lot of a particular grouping of people, then there are things you can do like finding ways to sponsor people, finding charities that actually make a difference in things and supporting them, or getting involved in things that make a difference yourself.
But actually, in order to do good you don't even need to go that far. If we go out into the world, be effective in our careers, have a family and raise them well enough that we are improving on the contribution of ourselves and our spouses, that will actually make a positive difference because we'll be growing a better next generation and creating opportunities for others through our economic activity.
Powerful government is the enemy. It is wasteful, inherently corrupt and hampers the ability of honest people to do what I describe in the above paragraph.
In the situation of the former, an individual has had something
and then that has been taken away from them. In the situation of
the latter, it is a case of the child having not had something given
to them that you judge to be fundamental.
Let me see if I have your logic correct here by extending it a bit into hypothetical-land. Suppose you have blue eyes, and suppose further that the culture of the world is such that those with blue eyes are never chosen for white-collar jobs: only for lower paying blue-collar ones. There is nothing intrinsic about blue-eyed people that makes them poorer workers -- with the proper training and experience they would do equally as well as their hazel-eyed brothers and sisters; that they are never trained and chosen for the good jobs is just how the world happens to be.
This situation is morally acceptable because nothing has been forcibly taken away from them. If we were running around stealing food from the mouths of those with blue eyes, then it would be wrong because it would be violating their property. However, as they never had a good job in the first place, there is nothing wrong with a world that denies them the opportunity to aspire to one.
Do I have that right? (I'm pretty sure I do, as you can substitute "poor parents" for "blue eyes" above, and my second paragraph is a very close paraphrase of your counterargument.) If so it's an odd place for a line in the sand: Taking what you have now is morally wrong, yet arbitrarily* removing opportunities for what you may have in the future is perfectly acceptable. (* Arbitrarily as in: without regard to your capabilities or to your past choices.)
You have a very long and loud argument against government, largely on moral grounds... But I'm not talking about government, I'm talking about the morality of poverty itself, specifically in children who have no responsibility for their situation.
It is perfectly possible talk about whether their situation is just or not without invoking government: Suppose you had access to a magic button, and pressing it will -- at no cost to anyone -- give every child a fair start, where their life's success will solely be the product of the wisdom of their choices. Is there a moral imperative to press that button? Would it be wrong, in the way that theft is wrong, to turn your back on it?
If yes, then what we end up with is a debate along utilitarian lines: At what cost must we address the wrongs done to those born into poverty?
If no, well, that is where I throw the 'nasty names' around.
p.s. : A total side issue, but I don't see that taking stuff off a dead person is "stealing" from anyone. ;)
The original situation we're discussing is straight-forward and there's no need to delve into bizarre hypotheticals and risk confusing things further.
yet arbitrarily* removing opportunities for what you may
have in the future is perfectly acceptable
You talk about removing opportunities from people and this is mistaken. In the child situation, nobody has removed opportunity from the child. You have again tried to twist things so as to describe the natural order as being one where all charity options available to help a poor person realise all opportunities are exhausted. You then use the word 'stealing' to describe failure to reach that point. It's flawed and you don't win points for being original in trying it on. [1]
I'm not talking about government, I'm talking about
the morality of poverty itself, specifically in
children who have no responsibility for their situation.
But you are, because you're talking about rights, and the idea of a right that cannot be realised is invalid. There are some philosophers who are of the opinion that there is such a thing as a right but where there is no moral obligation upon anything else to guarantee that right. For example - the right to work. In contrast, my opinion is that if philosophers want to masturbate then they should do so in the privacy of their own home and avoid staining their work with it. If there is a right, then it is to be enforced, and if something should not be defended then it is not a right.
Suppose you had access to a magic button, and
pressing it will -- at no cost to anyone -- give
every child a fair start, where their life's success
will solely be the product of the wisdom of their
choices. Is there a moral imperative to press that
button? Would it be wrong, in the way that theft is
wrong, to turn your back on it?
What you're generally asking is an interesting question, but it's not pertinent to this discussion for these reasons:
* You've used the word 'fair' and I've already explained that as a worse-than-useless word in a conversation about public policy.
* You've mentioned "at no cost to anyone" and that's not what we're talking about here and it is a crucial part of the discussion.
If yes, then what we end up with is a debate along
utilitarian lines: At what cost must we address the
wrongs done to those born into poverty?
Sure enough - after having claimed that you're not talking about the bridge into coercion through government - you come clean and admit that actually that's exactly what you're doing.
If no, well, that is where I throw the 'nasty names'
around.
I suspect that this conversation will end in value incompatibility which is a shame, because I suspect if it does then at least one of us is not being entirely honest with self - we seem to both be broadly utilitarian. I think nasty names (which I fall to sometimes as well) are a temptation in two scenarios:
* Value clash with the other person, you make a last ditch effort to shame them into converting to your values.
* Situation in which you feel yourself having cause to abandon something you hold dearly due to internal incompatibility (e.g. someone who is a both religious and a white supremacist is having trouble reconciling parts of the bible's teaching with the fulfilling feelings they associate with Friday night ceremonies), and you want to pretend that there's a value clash to allow for an easy exit out of the conversation and being able to escape the need to reconcile the incompatibility.
p.s. : A total side issue, but I don't see that
taking stuff off a dead person is "stealing" from
anyone. ;)
The property belongs to them. They leave instructions on what is to be done with it. It is not unowned property, nor is there any doubt about the wishes of the owner in the presence of a will. Therefore doing other with it is stealing. In the absence ...
You've taken one small part of the article - the part that has the least to do with any of the rest of it, and which was given by the author as a counterpoint, not a supporting point - and tried to pass it off as the crux of the whole article. Shame on you.
You are right in that the article (or the mentioned book) does not provide any evidence at all for the radical suggestions being made. In fact, counter-evidence is discarded with a very strange "it was ambigous" hand-wave.
Although, I am unwilling to believe that people who have never been destitute cannot come up with a solution - it's harder, but saying that it is impossible is like saying we just don't have imagination.
[Edit: no-idea why you are being heavily down-modded. I had that knee-jerk reaction when I first read your response (probably because I tend to go leftist), but when I actually read the article in detail, yours is a very valid response.]
He’s being downmodded because the article most certainly can’t be summarized like that. He is summarily rejecting its whole argument, with a flip remark that adds little to the discussion.
"By the way, vice in any form is self-reinforcing, as he suggests. Ancient moralists realized it; modern “mental health” professionals do, too. The behavior of poor people is often that of simple vice. It is not new, nor are the traps involved.
Example? Think of becoming fat: the fatter you get, the harder it is to exercise, the less incentive you have to exercise; the less you exercise, the fatter you get. You get caught in a feedback loop that spirals into imbalance and self-destruction. Sloth and gluttony (the old terms for two major causes of being overweight) are not new nor are they hard to understand."
(Please note that I am not agreeing with or endorsing this opinion, merely providing a link)
Classifying poverty as vice is worthwhile to a point, but works well only in very general ways (I know it wasn't your opinion, it's just worth discussing). The main problem that I see with that view, however, is this:
Take a 12-year-old kid in middle school. Let's assume he is bright enough to do well, if he did the homework, etc. He goes home every day to a dirty house, where he spends hours by himself playing video games. His mother is at work earning an hourly wage, and when she gets home, she is bitter and sarcastic. His father is gone. There isn't enough money to pay the bills, so the phone, tv, etc. are constantly being turned on and off (i.e., general chaos).
At his suburban middle school, he has to endure the humiliation of being pushed toward lower-status "vocational" programs despite his (at least average) ability, because of his poor attitude, laziness and the fact that his family is known in his hometown as being somewhat "troubled."
It is only natural that a young person in such a situation might become disinclined to work hard, because he doesn't know what the point of "working hard" is. In his world, and the world of his family, "working hard" just means putting in more hours that enrich someone else. He hasn't been exposed to any other ways of life, and the well-to-do telling him that he's "lazy" probably won't serve to motivate.
Having said all that, there is nothing stopping this person from realizing the error of his ways as an adult and acting accordingly. Luckily, we have many examples of successful "late bloomers" available to us these days, but I think for many kids the damage will have been permanent.
"In challenging decades of poverty research, Karelis draws on some economic data and some sociological research. But, more than that, he makes his case as a philosopher, arguing by analogy and induction."
This, for me, is the biggest problem with the article.
The article does have a little empirical data (towards the end):
>In the early 1970s, a large-scale study gave poor people in four cities a so-called "negative income tax," a no-strings-attached payment based on how little money they made. The conclusion: the aid tended to discourage work.
we need to stop all aid to third world countries. not only is the vast majority of the money absorbed by corruption and armed conflict, even the money that gets through doesn't help.
of course, this fails to account for the fact that we want those countries in armed conflict and hanging on our every welfare check because it means we can take their resources for way below market value. can you imagine how expensive things would be if the african nations were organized enough to have business infrastructure?
Perhaps induction and deduction? In any case, this is the basis behind economics as I understand it; taking data and then reasoning from there to more generalized models. Then those models can be used in future studies as a means to both reconcile the data, and to improve upon the models. There are several schools of thought, each with their own models, and each arguing that the other models are wrong due to particular reasons. This is not much unlike philosophy, except it deals with money instead of ethics and motivations.
Poverty as it exists in America today is mostly a matter of breeding and culture. A thousand words on poverty and no mention of heritability? Drake either has his head up his ass or his PC blinders on too tight.
Ok, why don't you enlighten us all on how "breeding" causes poverty.
You might want to check out something like "Guns, Germs, and Steel", which is one of the latest works to effectively debunk your assertion, pointing out, as the article does, how poverty leads to poverty.
Guns, germs, and steel actually points out how centuries of being bred in the presence of prevalent disease due to living in close quarters with domesticated animals was a huge key in keeping Europe out of poverty and helping them ruthlessly dominate the Americas.
The article makes a very good point. I like the dents-in-the-car metaphor. I don't, however, agree with how he interpreted it. If I have a car with, say, ten dents in it, and I get one more, no, I am not inclined to try to fix it. And let us follow his story, and say that someone comes along and fixes all but two of those dents for me.
The question is, does the fact that I have fewer dents in my car make me more likely to fix the others? If someone comes along and does almost all of my dishes for me, am I more likely to wash the last few myself?
I believe the answer to that is not, as Bennett suggests, "Yes."
If someone comes along and fixes most of my car for me, or cleans most of my dishes, when I had no inclination of doing it myself, why would I stop them? If someone is going to come and fix my problems for me, why do it myself? All you have to do is wait long enough, and, like magic it's done for you!
So while it is an interesting theory, the problem is, people become set in their habits fairly quickly. If I do not wash my dishes one day, I am not really more inclined to wash them the next. Indeed, why should I? There is suddenly an almost empty sink in which to store the dirty ones.
You could try it: go to a friend's home that has his sink full of dishes all the time.
Wash them all but two.
Go there a couple hours later and see what happened.
That would only be a sample of one though. The experiment may be worth just to make you realize how powerful the mixture of gratitude, self-hate, the willingness to help oneself, greediness and generosity is.
Haha, I already know the result. I live in a house with four other girls, and the sink is usually filled with any number of dishes. Once it becomes completely piled up (as we don't eat together, and most of us cook real meals, this usually happens about every other day), one of us will become disgusted with the others and empty the dishwasher, fill it with dirty dishes, and clean most of the dishes left in the sink.
Do the remaining two pans and glass get cleaned by anyone else?
Of course not; they are the base dishes that we pile everything else on top of that day.
Why clean the remaining two dishes, there was originally an entire sink full of them! Comparatively, it's almost spotless!
As usual, the truth is probably somewhere in between. There will be people who freeload, and there will be people who seize the opportunity to get themselves out of poverty. There are surely hard working people who can't improve their situation because they are working two jobs just to support their family and can't get a better education, just as surely as there are people who would take the handout and buy booze.
In my native Sweden, which has a much more generous social network than the US, it's clear that there are people who don't bother getting a job because they can live off unemployment. But social mobility is also higher than in the US; the correlation between income and parental income is weaker.
It boils down to the question of how many freeloaders you are willing to accept for each person that these policies help become self-sufficient. One way is to try to calculate the minimum cost to society in the long run (based on policy cost, positive contribution of those who succeed, as well as external factors such as cost of crime). Another way is to make a judgement based on moral grounds (either that people should not be given handouts by society or that it is morally wrong to have people living in poverty.)
The example in the article is flawed. I find it easy to care of big problems rather than perfecting a single small one. I wear clean clothes every day, but find it hard to care of a single small spot or a few grease or dust on my trouses or shoes. BUT if they become noteable dirty or very dirty and I'm in the office and still have to work half a day, I'd rather clean then, or go home and change, not give up. Easier to solve many problems than to be a perfectionist. Completely the opposite of what Karelis observes.
Sadly, in my experience, they will harass you for leaving the 2 dents behind and then demand that you pay for the flowers you stepped on while using your dent-puller.
A few days later you'll get a summons for small claims court indicating that you owe their brother-in-law who is a part-time mechanic $750 to fix the dents "right".
Offhand, it doesn't smell like hacker news to me. Here's why: it's already touched off a thread on politics. I'm not convinced that these things don't degrade with time. And I am certain that in any case, as hackers, our "comparative advantage" is not in discussing politics.
Another view would be that it is everyones responsibility in a democratic society to vigourously (but respectfully) debate how that society should be structured.
Yet another view would be that to remove one's self from political discussions with one's peers based upon other, unrelated criteria, such as one's perception of one's self as a hacker, only serves to underestimate the broad capabilities of the human mind.
I like to talk politics too, actually. However, I think it's an argument that is poisonous for sites like this. I don't want to see a bunch of links from mises.org, and the equivalent from the other side - I can get that stuff elsewhere.
The article is mainly about the psychological reasons why people in poverty act the way they do. I'll add my 2 cents: The fact is people's brains are wired to not keep doing something when it seems hopeless. Although from an outside perspective it seems illogical to work less when you have less money, from the perspective of the person living in poverty they know that no matter how hard they work, at minimum wage they're never going to have an easy life, and that's a very powerful psychological force. For instance, as a student, I borrow money at the beginning of the semester, and I have some big expenses. I work part time, but my fixed expenses exceed the income I make from working. So I go to work knowing that no matter how hard I work, or how much I try to save, it's physically, mathematically impossible for me to ever come out ahead. By working hard, all I can do is sink into debt more slowly. At least I have solace in the fact that I will soon be graduating. What if I didn't have that hope? What if that were all there were to life? I see people every day, in rural Oklahoma, who live like that, without hope. They go through cycles where they work for a while, realize they aren't getting ahead for all their work, and give up. Wouldn't you?
What gets me is that few people seem to consider "find a job with better pay" as an option. It just doesn't even occur to them. On the contrary, I often hear stories where people might actually pay more for their job than they earn, for example if they drive 50 miles every day to work a minimum wage job (petrol+car maintenance might cost more than what they earn). Either they really don't get the maths straight, or they see it as a temporary thing (need one job to get another), or else I don't know...
What about you, what do you study? Are you sure you could not get a better job, for example by building on the things you study? I must admit I was stupid as a student - I studied maths, but instead of taking on some programming job and earning shitloads of money on the side, I just worked standard student jobs with average (low) pay.
My point: maybe many people just are not aware of the options. I suppose it is infeasible to assign personal life managers to every poor person, but perhaps information technology could be some help? For example better job boards.
Yep, there's a whole area of psych research on that: learned helplessnes (http://en.wikipedia.org/wiki/Learned_helplessness). Seligman's famous experiment of conditioning dogs by electric shock demonstrated this... something you could probably get away with in 1967.
The guy completely ignores the time and risk factors, namely being short-term-payoff-oriented and long-term-payoff-oriented. This is a subject of microeconomics (not 101, of course - it's a lot of maths, integrals and derivative functions).
Poor people do not save extra money exactly because of being short-term oriented. Drugs, entertainment and having early sex also deal with short-term payoff. Short-term payoff orientation also makes a person more risk-tolerant, which is a common attribute of criminals.
All the given examples are easily explainable with a utility function that takes into account risk perception and time discounting (long- or short-term orientation) and current posessions.
Committing a crime or not is a choice between risky and not risky opportunities. This deals with risk perception. Few posessions make the low-risk choice even less valuable. Fixing or not fixing dents on a car fit into choice between long-term and short-term payoff.
Writing this I suspected that the author hasn't worked with advanced microeconomics' maths. Indeed, Karelis is a philosopher. I haven't seen the book, but by his words ("Econ 101 is to blame") suspect that he doesn't know any more complicated economics. That's the reason he finds it wrong.
Indeed. On the subject of long vs. short term thinking, or the time-value of money, the most clear example is the case of rent-to-own stores.
Rent-to-own is a form of financing, equivalent to taking on debt, but unlike other forms of debt, we know that it's used specifically for buying certain classes of durable goods, such as furniture, appliances and televisions. Due to the nature of these goods, we can assume that in most cases the owning of a given piece of furniture, for example, is not a necessity, and further, that buying these goods new is not the lowest cost alternative, when speaking about the total or even initial price. For example, I might be able to get a sofa off the street or sleep on a mattress without a frame or box springs.
Rent-to-own is also heavily favored by poor folks, who have another opportunity, which is to save up and replace their television or furniture at a later date for a lower total cost.
Making the latter choice is the rational one, if your personal discount function for the future value of money is sufficiently low. That is, if you have a long-term perspective, you value future abundance nearly as much as present abundance, and so save up for an outright purchase. However, if you have a short-term perspective, the extra you paid for the television would seem insignificant, because it accrued far in the future, and you're more concerned with immediate abundance.
I will upfront admit only a limited knowledge of economics, but hopefully my math knowledge will save me enough to sound reasonably collected.
I think you make two assumptions here that are either fallacious, or require additional evidence.
The first is that the poor are short-term oriented by choice, not by mandate. Allow me to propose the following Gedankenexperiment. You are a person who is given sufficiently low pay that your net asset change is $0, or nearly so. You are presented with an opportunity for a long-term payoff with a reasonably attractive expected gain, excepting that if the payoff doesn't occur, you no longer have the wherewithal to pay for food and shelter. If you don't take the risk, you are given a near certain probability to maintain your current status. Which would you chose? Keep in mind, these people will place maximum utility on the basic needs of life before venturing into more discretionary purchases, as any one else would.
The second is that they are somehow inclined to take greater risks because of their being in poverty. I'm not convinced by an assertion that even a majority of poor people end up in a life of crime, or any other high-risk behavior. It would seem to me there's far more reason behind staying as low-risk as possible, especially when the few possessions you refer to are the difference between staying warm and dry, and not. A person with several thousand dollars in the bank can afford to play high-risk. A person who is in poverty may be one case of pneumonia away from homelessness.
I can always tell who's actually been poor for any extended period of time, versus who hasn't, by the way they talk about the poor.
I've been in and out of poverty a few times. There is some truth to all of what everybody says, and yet none of what anybody says is the whole truth to it.
There are individual factors: if you're uneducated, or have a lower than average intelligence, or lack self discipline, or would just tend to prefer not to work, then you're more likely to be poor. But, not all poor people fit any of those categories.
If you're used to receiving hand-outs without having to work much for them, then you're more likely to keep accepting hand-outs. But, not everybody fits that, either.
There are a bunch of people that made one or two bad decisions at some point. They don't have to be stupid decisions, they could just be points where the person took a risk and the risk cost them dearly. Those people can then find themselves in one of the most challenging downward spirals that we have in Western society.
The poorer you are, the more effort it takes to become less poor. Think about that for a minute. For example, if you're living in an area with good public transportation -- so that you don't need your own car -- then your rents are likely higher than they would be in more rural areas, where you'd need a car. So, if you're poor enough that you can't afford to maintain a car, and you can't afford high rent, then what do you do? You have to spend even more resources just staying afloat, making it back and forth to work every day.
Inevitably, people who are trying to work their way out of poverty will begin to skim from one of two precious resources: their food, or their sleep. Either they'll take on extra jobs, and work 60 hours a week (or more), or they'll try to save money on their groceries.
It's possible to save money on groceries and still eat well, but that requires more time and attention. Those working their way out of poverty don't tend to have lots of time and attention to spread around.
As you continue to trim down your food budget, and/or cut back on sleep, you'll develop higher and higher levels of stress and exhaustion, which make it harder to deal with new problems as they arise. One of the things the article does get right is the mindset of some of those in poverty: each new thing is a problem, not an opportunity. Each thing that comes along is something that has to be dealt with, allocated resources to, worked around.
So, you end up in this vicious cycle, where you start falling behind because you're too overwhelmed and exhausted to deal with new problems as they arise.
Make no mistake about it, these people are fraught with problems. They can't afford a good, reliable car, so they have to deal with cars that break down, that require maintenance, or -- in California's case -- can't make it through the hairy mess of smog legislation.
There's no magic, easy solution for a person in that situation. They have to work their ass off, and it's pretty even odds that the average person in the same situation doesn't have the fortitude to do it.
In a society where over half of the population lives in poverty, the problem of poverty can reach this incredible runaway condition, where there aren't enough people left that can help others out of poverty, by providing well-paid jobs, training, and education.
I agree with this article. The current thinking on poverty is from the rich man's POV. And consequently, the solutions provided from that POV will do nothing to eradicate poverty.
One such solution is the "One Laptop Per Child" program. And this article explains why the OLPC will never work in the impoverished countries. The child is not hungry for education. The child is hungry for parental care from her indifferent parents who have given up on getting their bee stings looked at...
We inherit a great deal of wealth opportunity (or lack thereof) from our local economy. Credit is a social phenomenon, so wealth and poverty can become infectious. If you're able to easily work and pay for necessities (because of opportunities largely provided by market climate), then you have the money to get every bee sting looked at. It becomes a matter of generating sustainable wealth production, which boosts the pool of potential solutions avilable.
I think the communication potential of OLPC-style laptops is a much bigger draw than the educational one. Could be the infrastructure needed to leapfrog over major industrialization in regions seemingly rich in natural resources and workforce potential, which are squandered by maligned markets. What happens if children in poor markets have laptops? It could provide a means of overcoming parental (and perhaps governmental) problems bottom-up.
"""The child is hungry for parental care from her indifferent parents who have given up on getting their bee stings looked at..."""
Have you spent an time in poor rural areas, or are you just talking out your ass? (Most of the peasant farmers, etc., I know are wonderful parents, nowhere close to indifferent. Their problems are about infrastructure and economic inequality, not attitude.)
It's interesting that this article is at the top of the front page -- unexpected topic to fit the category of hacker news.
My theory: problem solving and unconventional solutions are of interest to hackers and this article presents poverty as a puzzle and hints at an intriguing fix.
I don't think that you can eradicate poverty (handouts don't count) because there simply isn't enough non-subsistence related work for 6 billion people.
for our purposes poverty = subsistence or close to it
once energy is cheap (distributed solar) humanity can turn to the problem of food distribution and education. Once we start getting more people educated more einstein's and other people who add disproportionate value to humanity should pop up and we'll get accelerating returns.
the point of all this is to solve the population problem before the population problem solves us, so to speak.
A negative income tax seems to me like a generally good, if naive, solution.
Of course the problem is that a straight forward negative income tax creates a resistance level where each additional dollar earned is worth less and less. The simple negative income tax leads to the situation in the 1970's study mentioned in the article (people are discouraged from working).
I think the solutions lies in creating support levels, or income targets. I.e. $15k or less is taxed at 0%, $15k - 20k at -5%. This would establish a support level at $15k.
I can even imagine a system where meeting an "income goal" (support level) one year triggers a higher one for the next year. I.e. if you make $16k in 2008 and are taxed at -5%, you must make $20k in 2009 to receive the -5% rate again, otherwise you'll be taxed at 0%.
Eventually, if the person keeps meeting income targets, they'll no longer be poor (by definition).
Longer answer: My great-grandfather Reginald Braithwaite was one of nine children (that we know survived) growing up in a one-room shack in Barbados. His son Leonard was the first Black Member of Provincial Parliament in Ontario. His grand-daughter Gwen was the first woman AND the first person of colour to work in Systems analysis with Empire Life.
Sadly, the (possibly apocryphal) Chinese Proverb about returning to poverty in four generations may hold: her son is chiefly known for blogging.
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[ 2.7 ms ] story [ 104 ms ] threadTo explain, in gambling (think lottery tickets, not poker) you trade $1 for something that actually has less than $1 worth of economic value. There is obviously another component at work (behavioral, not economic), call it hope. If economists have found a way to quantify hope in this context it seems that they could try the same thing with poverty, the results would certainly be interesting.
Gamblers tend to derive utility from gambling, i.e. the act of gambling gives them a rush. The extreme case of this is video games. I'll never win any money by purchasing a Wii (like the lottery, I lose with probability close/equal to 1). But I will derive more happiness from playing Wii sports than I will from the money I spent on it. Similarly, gamblers enjoy playing the game, and this gives gambling positive utility (for them).
However, the argument Karelis seems to be making is that the marginal utility of increased income is zero (for some income range which constitutes poverty). People don't tend to do actions with zero marginal utility, so they don't try to increase their income. Basically, earning $15k/year doesn't make you any happier than $10k/year, so why bother to increase your income?
(Note: he actually claims that "economics doesn't apply to the poor", which is either stupidity or hyperbole. )
One interesting policy implication of his model (if it is true, which I doubt): taxing the poor is good policy. If a poor person is no happier at 15k/year than at 10k/year, then we should tax all poor people making $15k/year at 33%. It won't make them any more unhappy, whereas taxing a richer person will. It also suggests that any wealth transfers to the poor that dont solve all their problems are wasted (welfare is "all or nothing").
As far as dents on the car are concerned, let me write what conventional microeconomy says. Here is the function to estimate the choices.
U = sum(F(x(t))/(1+r)^t) by t from 1 to infinity (or life expectation), where F(x) is a momentary utility function, r is "perceptual" discounting rate (sorry, don't know the English term), which means that F(x) next year is 1+r times less nice than having it now.
If you don't repair the car, x(t) will be constant, let's say X. If you do, first period it is x(0) = Y < X, but since t=1 x(t) = Z > X.
The problem is that F(Y) has more weight than F(Z)'s. The more r is, the greater the difference and more probable the first choice will win. The problem of poor people is that (1) their r is much more than that of middle class, and they don't value the future, (2) their F(x) (perception of what is good) is different.
The authors example is a man who's car has many dents. Utility might behave like U(0 dents) = 1, U(1 dent) = 1/2, U(n >= 2 dents)=0. If a car has 5 dents, the marginal utility of repairing one dent is 0 (U(5)=U(4)), so the owner does nothing.
Of course, in real life, most utility functions behave in the opposite way. Going from homeless to a studio apt? Major gains in utility. Going from a studio to 1 bdrm? Nice, but not as fantastic.
I was simply pointing out that if the author is right, the difference between 10k and 15k would be very small (indeed, quite possibly smaller than that between 100k and 150k).
In fact, I'd suggest that diminishing returns explains American "poverty" much better than flat utility curves. 45% of the poor own their own home, 95% are not overcrowded, 75% own a car (30% own 2 cars), nearly all have a TV (25% a big screen). Virtually no one is starving, over 70% of those the USDA classifies as "hungry" are obese. The typical poor family is also supported by 16 hours/week of work. It's quite possible that poverty is explained simply by a low marginal gain from increased work (the poor already hit the point of diminishing returns).
All numbers are taken from here (http://www.heritage.org/Research/Welfare/bg1713.cfm), who in turn stole them from the census. See also this chart http://www.heritage.org/Research/Family/images/Chart1.gif of working hours for poor families.
This decision making process works pretty well for day-to-day life, but it can get frustrated when the outcomes are very large, usually dying and big money. So some lottery players approximate the chances of winning to be zero and don't buy; others approximate small probability and get a large expected value of a ticket and buy many.
On the topic of terrorism and small probabilities, over 40,000 people die in car crashes per year in this country. It's essentially as if 9/11 has been happening every month for decades on our roads. But which do people care more about?
In the early 1970s, a large-scale study gave poor people in four cities a so-called "negative income tax," a no-strings-attached payment based on how little money they made. The conclusion: the aid tended to discourage work.
Yeah, that's right. The obvious occurred, as usual. All such theories, and all such fawning articles, rely upon one unalterable precondition: Nobody involved has actually lived among the destitute, while destitute.
Direct quote:
Reducing the number of economic hardships that the poor have to deal with actually make them more, not less, likely to work, just as repairing most of the dents on a car makes the owner more likely to fix the last couple on his own. Simply giving the poor money with no strings attached, rather than using it, as federal and state governments do now, to try to encourage specific behaviors - food stamps to make sure money doesn't get spent on drugs or non-necessities, education grants to encourage schooling, time limits on benefits to encourage recipients to look for work - would be just as effective, and with far less bureaucracy.
What you quoted was a common rebuttal to the argument above, which the guy in the article counters with:
Karelis responds that the data from that experiment is in fact quite ambiguous, and there has been debate among economists over how to interpret the results. But ultimately, he believes, the strength of his arguments is less in how they fit with the economic work that's been done to date on poverty - much of which he is suspicious of anyway - but in how familiar they feel to all of us, rich or poor.
* Edit: Formatted quotes, thought I could use Markdown.
Exactly. If I wanted to summarize the argument of the article I would translate from newspeak to English:
We want to pay right-thinking, liberal arts majors middle class salaries for them to administer money distributions from functional people to dysfunctional people. We have no data to suggest this will help anyone, but we are pretty sure it will help ourselves.
"Dysfunctional" people are poor because they deserve it, because they are dysfunctional and have not earned anything. "Functional" people are wealthy because they are functional and have earned their wealth.
Let's take a look at a time in one's life before anything can be earned or deserved: At birth, does one newborn somehow deserve better education, improved nutrition, and a life that will offer far more opportunities and fewer hardships than some other child?
No, of course not: By your own ethos, you only deserve what you have earned. There is no way to make a moral argument that newborns deserve anything other than equal circumstances to begin to create a life for themselves. (Unless you are the sort who believes you chose your parents well and deserve the just rewards of that choice....)
Even for the Ayn-Rand libertarian there's a pretty compelling case to be made for widespread welfare efforts: not for the poor, who may have earned their own hardships, but for their children who will suffer without having done a thing to deserve it.
But fine:
At birth, does one newborn somehow deserve better education, improved nutrition, and a life that will offer far more opportunities and fewer hardships than some other child?
In fact, parents are responsible for their own children. I am not responsible for other people's children. That is a hard, cold fact. The only way to force equality is just that: To force it. People who are careful with their finances, with their vocations, with their reproductive activity inevitably wind up supporting other people's children. Think what you will about that. To me, it is disgustingly criminal.
That doesn't sound like a "cold, hard fact" to me. It sounds like an opinion on the best way to structure responsibility within a society.
Do you believe you have any responsibilities at all, to society at large? If so, why do you specifically exclude children?
Yes: To not force others to raise my children.
Leaving those children hanging out to dry would be what I'd consider disgustingly criminal. I'm not sure I can get my bile to rise to that level for helping them.
Being taxed to help children is about the last thing I'd fight against, as a matter of priority. First I'd go after the actual wasting of tax dollars, which helping children certainly is not. In fact, it's essential if you care about society even from a _self-interested_ standpoint.
It's similar to health insurance. Is it "fair" that if you don't need to use it, you end up paying for other people who aren't so fortunate? If you live long enough, the probability approaches 1 that you'll need it. And it may cover more in hospital bills for you than you paid into the system.
I think the essential basis of your objection is that life is a competition and that if you're winning, you should be able to press your advantage instead of having your lead reduced by outside interference.
By contrast, those of us in the "cooperation" camp think instead of fighting over who gets the bigger piece of a smaller pie, we can make the whole pie bigger. And taking a broader view, even eliminate competition altogether by providing computational resources to each individual that will maximize hir experience of life (via completely convincing VR), given what our limited brains are even capable of and how it pales in comparison to the possibilities of nonbiological intelligence.
What people 'deserve' is arbitrary, and extremely position sensitive. For instance - what if you were to phrase the education issue in terms of "if somebody works part time and wants to pay to attend university to do extra subjects that are not provided under government university sponsorship, do they deserve to be allowed to do so?" Or "if somebody works hard and drives an old bomb of a car in order to save money to pay for a particular education for their children, do they deserve to be allowed to make that choice?" Or, "if somebody wants to spend five years sitting around smoking marijuana and collecting government benefits while failing to make any progress on the degree they're supposed to be doing, do they deserve government funding for this, when the opportunity cost for that choice hits poor people who have no interest in a university education but who can't get jobs due to the correspondingly higher levels of taxation required to fund such university places?"
The idea of what people 'deserve' is completely arbitrary. Ideas like 'deserve' and 'fairness' don't belong in public policy, except in reference to:
* direct application of the rule of law
* formation and honouring of private contracts
* ownership of private property (and that excludes anti-rights that are often mislabeled as property, such as "copyright")
These rules extend from the idea that you should be allowed to do what you like so long as you are not impinging on your neighbour. As 'mynameishere' says in the existing reply to this comment, the only way to guarantee other equality on other levels is to force some individuals to give up something for the benefit of expense of others.
And one of the side-effects of that sort of thinking is policy that acts against even the common interest. If you ban private schools so that everyone can be equal, that means people who would have put extra money into education (creating spaces in private schools and thereby removing demand form the public sector) instead spend it on improvements to their house or funding a more luxurious lifestyle. People who to improve education standards for poor people by abolishing private education need to think harder. And people who want to make everyone equal regardless of relative outcome need to have a look at Cambodia.
I'd like to return to another part of mynameishere's previous comment: "We want to pay right-thinking, liberal arts majors middle class salaries for them to administer money distributions from functional people to dysfunctional people". Governments tend to grow in a way that gives more work and power to the decision makers. This process is the enemy of individual freedom, and - as a general measure - fails on a utilitarian basis, also. If they don't have unambiguous facts to support what they're doing then they need to be blocked.
If it is wrong to force some individuals to give up opportunities and wealth in order to benefit others; is it not then also wrong for a child to be equally or more deprived by the circumstances of their birth?
The two are not identical but they have enough in common to make it a very valid question. Rephrased: An irresponsible parent is stealing their child's future away, just as the state might steal from you to pay for their meals. It is easy to agree that both are wrong... but I think it will take some fancy dancing to justify the second as wrong while the first is okay.
Both yourself and mynameishere have made the same leap of judgment to condemn one possible solution (widely applied), but that's missing the point: either deprivation due to circumstances of birth is wrong or it is not -- regardless of whether the possible solution of wealth distribution might be itself wrong.
I don't have a problem with debating these solutions -- I find estate taxes an elegant compromise, for example -- but what I do have a problem with is those who pretend that poverty & inequality as it exists today is a just part of the natural order and praise that all is as it ought to be: That is self-justifying sanctimonious BS of the first order.
The word 'deprived' is interesting. "Lacking in advantage, opportunity or experience." The child is deprived because they have not been given one of those three things.
Thus, these scenarios do not correspond.
They're fundamentally different. The uncomfortable feeling you got that caused you to write the above sentence might have been used to better effect. You're deliberately being sloppy with the language to further a broken conclusion. Stealing implies property that has been taken away. That's not what's happening here.The dancing is all yours, and this is the second post in a row where. Semantic tricks do not thrust an argument beyond logical barriers.
No. It is not your place to steal from people, nor to get the government to do it on your behalf and then pretend it's any different. It's very easy to throw nasty names around.Your frustration at seeing potential gain go to waste (the child) and consequential suffering on the part of that person is clear. Please - try to see where I'm coming from.
I want a situation where as many people get good education, health care and moral guidance. However, government is a mechanism that is both poor and dangerous when it is given charge of these things. Poor because it is not subject to the brutal honesty of market forces to keep it in check, and dangerous because it uses every bit of power that it is granted to (in some measure) line the pockets of the people involved in its running and self-perpetuate at the expense of our freedoms.
Government creates dependance on itself, steals our liberty, and poisons minds such that when good people identify a problem they wrong assume that it's the government's responsibility to fix it rather than their own. It's not.
If you want to improve the lot of a particular grouping of people, then there are things you can do like finding ways to sponsor people, finding charities that actually make a difference in things and supporting them, or getting involved in things that make a difference yourself.
But actually, in order to do good you don't even need to go that far. If we go out into the world, be effective in our careers, have a family and raise them well enough that we are improving on the contribution of ourselves and our spouses, that will actually make a positive difference because we'll be growing a better next generation and creating opportunities for others through our economic activity.
Powerful government is the enemy. It is wasteful, inherently corrupt and hampers the ability of honest people to do what I describe in the above paragraph.
This situation is morally acceptable because nothing has been forcibly taken away from them. If we were running around stealing food from the mouths of those with blue eyes, then it would be wrong because it would be violating their property. However, as they never had a good job in the first place, there is nothing wrong with a world that denies them the opportunity to aspire to one.
Do I have that right? (I'm pretty sure I do, as you can substitute "poor parents" for "blue eyes" above, and my second paragraph is a very close paraphrase of your counterargument.) If so it's an odd place for a line in the sand: Taking what you have now is morally wrong, yet arbitrarily* removing opportunities for what you may have in the future is perfectly acceptable. (* Arbitrarily as in: without regard to your capabilities or to your past choices.)
You have a very long and loud argument against government, largely on moral grounds... But I'm not talking about government, I'm talking about the morality of poverty itself, specifically in children who have no responsibility for their situation.
It is perfectly possible talk about whether their situation is just or not without invoking government: Suppose you had access to a magic button, and pressing it will -- at no cost to anyone -- give every child a fair start, where their life's success will solely be the product of the wisdom of their choices. Is there a moral imperative to press that button? Would it be wrong, in the way that theft is wrong, to turn your back on it?
If yes, then what we end up with is a debate along utilitarian lines: At what cost must we address the wrongs done to those born into poverty?
If no, well, that is where I throw the 'nasty names' around.
p.s. : A total side issue, but I don't see that taking stuff off a dead person is "stealing" from anyone. ;)
* You've used the word 'fair' and I've already explained that as a worse-than-useless word in a conversation about public policy.
* You've mentioned "at no cost to anyone" and that's not what we're talking about here and it is a crucial part of the discussion.
Sure enough - after having claimed that you're not talking about the bridge into coercion through government - you come clean and admit that actually that's exactly what you're doing. I suspect that this conversation will end in value incompatibility which is a shame, because I suspect if it does then at least one of us is not being entirely honest with self - we seem to both be broadly utilitarian. I think nasty names (which I fall to sometimes as well) are a temptation in two scenarios:* Value clash with the other person, you make a last ditch effort to shame them into converting to your values.
* Situation in which you feel yourself having cause to abandon something you hold dearly due to internal incompatibility (e.g. someone who is a both religious and a white supremacist is having trouble reconciling parts of the bible's teaching with the fulfilling feelings they associate with Friday night ceremonies), and you want to pretend that there's a value clash to allow for an easy exit out of the conversation and being able to escape the need to reconcile the incompatibility.
The property belongs to them. They leave instructions on what is to be done with it. It is not unowned property, nor is there any doubt about the wishes of the owner in the presence of a will. Therefore doing other with it is stealing. In the absence ...Although, I am unwilling to believe that people who have never been destitute cannot come up with a solution - it's harder, but saying that it is impossible is like saying we just don't have imagination.
[Edit: no-idea why you are being heavily down-modded. I had that knee-jerk reaction when I first read your response (probably because I tend to go leftist), but when I actually read the article in detail, yours is a very valid response.]
"By the way, vice in any form is self-reinforcing, as he suggests. Ancient moralists realized it; modern “mental health” professionals do, too. The behavior of poor people is often that of simple vice. It is not new, nor are the traps involved.
Example? Think of becoming fat: the fatter you get, the harder it is to exercise, the less incentive you have to exercise; the less you exercise, the fatter you get. You get caught in a feedback loop that spirals into imbalance and self-destruction. Sloth and gluttony (the old terms for two major causes of being overweight) are not new nor are they hard to understand."
(Please note that I am not agreeing with or endorsing this opinion, merely providing a link)
Take a 12-year-old kid in middle school. Let's assume he is bright enough to do well, if he did the homework, etc. He goes home every day to a dirty house, where he spends hours by himself playing video games. His mother is at work earning an hourly wage, and when she gets home, she is bitter and sarcastic. His father is gone. There isn't enough money to pay the bills, so the phone, tv, etc. are constantly being turned on and off (i.e., general chaos).
At his suburban middle school, he has to endure the humiliation of being pushed toward lower-status "vocational" programs despite his (at least average) ability, because of his poor attitude, laziness and the fact that his family is known in his hometown as being somewhat "troubled."
It is only natural that a young person in such a situation might become disinclined to work hard, because he doesn't know what the point of "working hard" is. In his world, and the world of his family, "working hard" just means putting in more hours that enrich someone else. He hasn't been exposed to any other ways of life, and the well-to-do telling him that he's "lazy" probably won't serve to motivate.
Having said all that, there is nothing stopping this person from realizing the error of his ways as an adult and acting accordingly. Luckily, we have many examples of successful "late bloomers" available to us these days, but I think for many kids the damage will have been permanent.
(No worries about discussing it, I was hoping to discuss it. I just get paranoid that everyone assumes that I believe every word of every link I post)
This, for me, is the biggest problem with the article.
>In the early 1970s, a large-scale study gave poor people in four cities a so-called "negative income tax," a no-strings-attached payment based on how little money they made. The conclusion: the aid tended to discourage work.
we need to stop all aid to third world countries. not only is the vast majority of the money absorbed by corruption and armed conflict, even the money that gets through doesn't help.
of course, this fails to account for the fact that we want those countries in armed conflict and hanging on our every welfare check because it means we can take their resources for way below market value. can you imagine how expensive things would be if the african nations were organized enough to have business infrastructure?
You might want to check out something like "Guns, Germs, and Steel", which is one of the latest works to effectively debunk your assertion, pointing out, as the article does, how poverty leads to poverty.
The question is, does the fact that I have fewer dents in my car make me more likely to fix the others? If someone comes along and does almost all of my dishes for me, am I more likely to wash the last few myself?
I believe the answer to that is not, as Bennett suggests, "Yes."
If someone comes along and fixes most of my car for me, or cleans most of my dishes, when I had no inclination of doing it myself, why would I stop them? If someone is going to come and fix my problems for me, why do it myself? All you have to do is wait long enough, and, like magic it's done for you!
So while it is an interesting theory, the problem is, people become set in their habits fairly quickly. If I do not wash my dishes one day, I am not really more inclined to wash them the next. Indeed, why should I? There is suddenly an almost empty sink in which to store the dirty ones.
Wash them all but two.
Go there a couple hours later and see what happened.
That would only be a sample of one though. The experiment may be worth just to make you realize how powerful the mixture of gratitude, self-hate, the willingness to help oneself, greediness and generosity is.
Do the remaining two pans and glass get cleaned by anyone else?
Of course not; they are the base dishes that we pile everything else on top of that day.
Why clean the remaining two dishes, there was originally an entire sink full of them! Comparatively, it's almost spotless!
In my native Sweden, which has a much more generous social network than the US, it's clear that there are people who don't bother getting a job because they can live off unemployment. But social mobility is also higher than in the US; the correlation between income and parental income is weaker.
It boils down to the question of how many freeloaders you are willing to accept for each person that these policies help become self-sufficient. One way is to try to calculate the minimum cost to society in the long run (based on policy cost, positive contribution of those who succeed, as well as external factors such as cost of crime). Another way is to make a judgement based on moral grounds (either that people should not be given handouts by society or that it is morally wrong to have people living in poverty.)
A few days later you'll get a summons for small claims court indicating that you owe their brother-in-law who is a part-time mechanic $750 to fix the dents "right".
Does this guy not watch Judge Judy?
What about you, what do you study? Are you sure you could not get a better job, for example by building on the things you study? I must admit I was stupid as a student - I studied maths, but instead of taking on some programming job and earning shitloads of money on the side, I just worked standard student jobs with average (low) pay.
My point: maybe many people just are not aware of the options. I suppose it is infeasible to assign personal life managers to every poor person, but perhaps information technology could be some help? For example better job boards.
The guy completely ignores the time and risk factors, namely being short-term-payoff-oriented and long-term-payoff-oriented. This is a subject of microeconomics (not 101, of course - it's a lot of maths, integrals and derivative functions).
Poor people do not save extra money exactly because of being short-term oriented. Drugs, entertainment and having early sex also deal with short-term payoff. Short-term payoff orientation also makes a person more risk-tolerant, which is a common attribute of criminals.
All the given examples are easily explainable with a utility function that takes into account risk perception and time discounting (long- or short-term orientation) and current posessions.
Committing a crime or not is a choice between risky and not risky opportunities. This deals with risk perception. Few posessions make the low-risk choice even less valuable. Fixing or not fixing dents on a car fit into choice between long-term and short-term payoff.
Writing this I suspected that the author hasn't worked with advanced microeconomics' maths. Indeed, Karelis is a philosopher. I haven't seen the book, but by his words ("Econ 101 is to blame") suspect that he doesn't know any more complicated economics. That's the reason he finds it wrong.
Rent-to-own is a form of financing, equivalent to taking on debt, but unlike other forms of debt, we know that it's used specifically for buying certain classes of durable goods, such as furniture, appliances and televisions. Due to the nature of these goods, we can assume that in most cases the owning of a given piece of furniture, for example, is not a necessity, and further, that buying these goods new is not the lowest cost alternative, when speaking about the total or even initial price. For example, I might be able to get a sofa off the street or sleep on a mattress without a frame or box springs.
Rent-to-own is also heavily favored by poor folks, who have another opportunity, which is to save up and replace their television or furniture at a later date for a lower total cost.
Making the latter choice is the rational one, if your personal discount function for the future value of money is sufficiently low. That is, if you have a long-term perspective, you value future abundance nearly as much as present abundance, and so save up for an outright purchase. However, if you have a short-term perspective, the extra you paid for the television would seem insignificant, because it accrued far in the future, and you're more concerned with immediate abundance.
I think you make two assumptions here that are either fallacious, or require additional evidence.
The first is that the poor are short-term oriented by choice, not by mandate. Allow me to propose the following Gedankenexperiment. You are a person who is given sufficiently low pay that your net asset change is $0, or nearly so. You are presented with an opportunity for a long-term payoff with a reasonably attractive expected gain, excepting that if the payoff doesn't occur, you no longer have the wherewithal to pay for food and shelter. If you don't take the risk, you are given a near certain probability to maintain your current status. Which would you chose? Keep in mind, these people will place maximum utility on the basic needs of life before venturing into more discretionary purchases, as any one else would.
The second is that they are somehow inclined to take greater risks because of their being in poverty. I'm not convinced by an assertion that even a majority of poor people end up in a life of crime, or any other high-risk behavior. It would seem to me there's far more reason behind staying as low-risk as possible, especially when the few possessions you refer to are the difference between staying warm and dry, and not. A person with several thousand dollars in the bank can afford to play high-risk. A person who is in poverty may be one case of pneumonia away from homelessness.
I've been in and out of poverty a few times. There is some truth to all of what everybody says, and yet none of what anybody says is the whole truth to it.
There are individual factors: if you're uneducated, or have a lower than average intelligence, or lack self discipline, or would just tend to prefer not to work, then you're more likely to be poor. But, not all poor people fit any of those categories.
If you're used to receiving hand-outs without having to work much for them, then you're more likely to keep accepting hand-outs. But, not everybody fits that, either.
There are a bunch of people that made one or two bad decisions at some point. They don't have to be stupid decisions, they could just be points where the person took a risk and the risk cost them dearly. Those people can then find themselves in one of the most challenging downward spirals that we have in Western society.
The poorer you are, the more effort it takes to become less poor. Think about that for a minute. For example, if you're living in an area with good public transportation -- so that you don't need your own car -- then your rents are likely higher than they would be in more rural areas, where you'd need a car. So, if you're poor enough that you can't afford to maintain a car, and you can't afford high rent, then what do you do? You have to spend even more resources just staying afloat, making it back and forth to work every day.
Inevitably, people who are trying to work their way out of poverty will begin to skim from one of two precious resources: their food, or their sleep. Either they'll take on extra jobs, and work 60 hours a week (or more), or they'll try to save money on their groceries.
It's possible to save money on groceries and still eat well, but that requires more time and attention. Those working their way out of poverty don't tend to have lots of time and attention to spread around.
As you continue to trim down your food budget, and/or cut back on sleep, you'll develop higher and higher levels of stress and exhaustion, which make it harder to deal with new problems as they arise. One of the things the article does get right is the mindset of some of those in poverty: each new thing is a problem, not an opportunity. Each thing that comes along is something that has to be dealt with, allocated resources to, worked around.
So, you end up in this vicious cycle, where you start falling behind because you're too overwhelmed and exhausted to deal with new problems as they arise.
Make no mistake about it, these people are fraught with problems. They can't afford a good, reliable car, so they have to deal with cars that break down, that require maintenance, or -- in California's case -- can't make it through the hairy mess of smog legislation.
There's no magic, easy solution for a person in that situation. They have to work their ass off, and it's pretty even odds that the average person in the same situation doesn't have the fortitude to do it.
In a society where over half of the population lives in poverty, the problem of poverty can reach this incredible runaway condition, where there aren't enough people left that can help others out of poverty, by providing well-paid jobs, training, and education.
One such solution is the "One Laptop Per Child" program. And this article explains why the OLPC will never work in the impoverished countries. The child is not hungry for education. The child is hungry for parental care from her indifferent parents who have given up on getting their bee stings looked at...
I think the communication potential of OLPC-style laptops is a much bigger draw than the educational one. Could be the infrastructure needed to leapfrog over major industrialization in regions seemingly rich in natural resources and workforce potential, which are squandered by maligned markets. What happens if children in poor markets have laptops? It could provide a means of overcoming parental (and perhaps governmental) problems bottom-up.
Have you spent an time in poor rural areas, or are you just talking out your ass? (Most of the peasant farmers, etc., I know are wonderful parents, nowhere close to indifferent. Their problems are about infrastructure and economic inequality, not attitude.)
My theory: problem solving and unconventional solutions are of interest to hackers and this article presents poverty as a puzzle and hints at an intriguing fix.
for our purposes poverty = subsistence or close to it
once energy is cheap (distributed solar) humanity can turn to the problem of food distribution and education. Once we start getting more people educated more einstein's and other people who add disproportionate value to humanity should pop up and we'll get accelerating returns.
the point of all this is to solve the population problem before the population problem solves us, so to speak.
Of course the problem is that a straight forward negative income tax creates a resistance level where each additional dollar earned is worth less and less. The simple negative income tax leads to the situation in the 1970's study mentioned in the article (people are discouraged from working).
I think the solutions lies in creating support levels, or income targets. I.e. $15k or less is taxed at 0%, $15k - 20k at -5%. This would establish a support level at $15k.
I can even imagine a system where meeting an "income goal" (support level) one year triggers a higher one for the next year. I.e. if you make $16k in 2008 and are taxed at -5%, you must make $20k in 2009 to receive the -5% rate again, otherwise you'll be taxed at 0%.
Eventually, if the person keeps meeting income targets, they'll no longer be poor (by definition).
Longer answer: My great-grandfather Reginald Braithwaite was one of nine children (that we know survived) growing up in a one-room shack in Barbados. His son Leonard was the first Black Member of Provincial Parliament in Ontario. His grand-daughter Gwen was the first woman AND the first person of colour to work in Systems analysis with Empire Life.
Sadly, the (possibly apocryphal) Chinese Proverb about returning to poverty in four generations may hold: her son is chiefly known for blogging.