This is the second piece that I've read on Charles Karelis' new book, The Persistence of Poverty. Steven Pearlstein describes it thus:
The reason the poor are poor is that they are more likely to not finish school, not work, not save, and get hooked on drugs and alcohol and run afoul of the law. Liberals tend to blame it on history (slavery) or lack of opportunity (poor schools, discrimination), while conservatives blame government (welfare) and personal failings (lack of discipline), but both sides agree that these behaviors are so contrary to self-interest that they must be irrational.After all, the reason we study, work, save and generally behave ourselves is that these behaviors allow us to earn more money, and more money will improve our lives. And, by logic, that must be particularly true of the poor, for whom each extra dollar to be earned or saved for a rainy day is surely more valuable than it is for, say, Bill Gates.
In economics, this insight -- that the fifth ice cream sundae is less valuable than the first one -- is enshrined in the law of diminishing marginal utility.
But what if this iron law of economics is wrong? What if it doesn't apply at every point along the income scale? If you and everyone around you are desperately poor, maybe it's perfectly rational to think that an extra dollar or two won't make much of a difference in reducing your misery. Or that you won't be able to "study" your way out of the ghetto. Or that if you find a $100 bill on the street, maybe it's logical to blow it on one great night on the town rather than portion it out a dollar a day for 100 days.
Tyler Cowen's description is a little more pithy:
If your car has lots of scratches and dents, getting rid of just one doesn't help much either.
There's a lot of interesting literature on the bad incentives faced by the poor. They often have punitively high marginal tax rates, because of the lost benefits; they also face a high personal "tax" in the form of poor relatives and friends, since earning additional money makes it very likely that they will be tapped for loans and other forms of financial help. This already explains a lot of the behavior that Pearlstein describes, as do various sociological phenomena.
But I find this thesis intriguing. One way to think about it is that the poor face a lot of problems with threshold effects. If I need an apartment and a car, and I have the down payment for a Hyundai and a basement efficiency, each additional dollar improves my lot. If I need an apartment and a car, and I have $30, I might as well spend that $30 on dinner and a movie, because I'm going to end up on Mom's couch tonight either way. Once you reach the threshhold, it's easy to make a straight tradeoff between two forms of utility. But if it's going to take you nine months to save the cash you need, your choice right now becomes fun, or none.
Another way to think about it is that if you are living on the edge, this lowers, rather than raises, the returns to planning. If there's a 50% chance that an unforeseen expense will force you into bankruptcy, why not load up on some credit card debt and have fun while you can?
I'm not convinced . . . but I've added it to my Amazon queue.
A lot of the solutions to the problems of the poor lack appreciation. Here in caring, upscale Palo Alto we ccasionally debate provisions for the homeless, and it usually gets around to "But we have all these great agencies, all they have to do is obey a few rules." Not obeying is often why they are poor.
I haven't lived in this kind of sociological poverty (although I have lived with poverty-level expenditures), but I have read several well written and essentially "liberal" books about the lives of the poor, such as "American Dream," "Hope in the Unseen," and "There Are No Children Here." And I must say that this thesis doesn't ring true to me at all.
Over and over I read about problems that could be easily avoided by having a small amount of money saved as a financial cushion. Their car breaks down, they can't pay the rent, etc. This causes even more financial hardship, as they lose their jobs, and so on. This drives them to wreck their credit, use pawn shops, etc. If they had such a financial cushion they'd easily be able to weather these crises, and the money they'd save would be more than enough to replenish the cushion. The point is that a dollar saved would be much *more* beneficial for them than it is for me. It wouldn't be just fixing a single dent in the car, it would be avoiding major upheavals.
Why don't they have any money saved? I suspect that it's very hard to be a saver if your culture doesn't support it. You are seen as greedy, and like Megan said "you face a high personal "tax" in the form of poor relatives and friends." I've haven't seen much real evidence about this, though, so I could be wrong.
Let's just be sure you know exactly who you're talking about. 'Cause I'd hate for this discussion to take place in vague generalities...
"
* The number of people below the official poverty thresholds numbered 35.9 million in 2003, or 1.3 million more than in 2002, for a 2003 poverty rate of 12.5 percent. Although up from 2002, this rate is below the average of the 1980s and 1990s.
* The poverty rate and number of families in poverty increased from 9.6 percent and 7.2 million in 2002 to 10.0 percent and 7.6 million in 2003. The corresponding numbers for unrelated individuals in poverty in 2003 were 20.4 percent and 9.7 million (not different from 2002).
* As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the average poverty threshold for a family of four in 2003 was $18,810; for a family of three, $14,680; for a family of two, $12,015; and for unrelated individuals, $9,393.
* For all children under 18, the poverty rate increased from 16.7 percent in 2002 to 17.6 percent in 2003. The number in poverty rose, from 12.1 million to 12.9 million.
"
So, would that be all those 35.9 million people's behavior explained by: "If your car has lots of scratches and dents, getting rid of just one doesn't help much either"? How many, exactly, of those 12.9 million kids is the victim of poor spending habits? Perverse incentives are supposed to explain what here, exactly?
Eastern European countries are attempting to send Roma children to school. Some areas offer parents a life-long pension if only they would make sure that their kids will go to school...
The program is not working very well..
Have you ever asked a homeless why he does not take advantage of the free food and shelter available..? The prevention point has long passed.. have you ever noticed that there are proportionally less Asian homeless than...
Indians are by far poorer than Russians and yet live 20-30% longer lives.. Some rich people behave as if there are no diminishing returns and it almost seems as if making money is either pleasure in itself or a displacement behaviour (not knowing what to do if one stands still?)
there is definitely more psychology and culture in place than pure economical rational! (that is why recent noble prices in economics are usually given out for establishing this cross-disciplinary link? we need more on poverty?
get rich or die trying'?
Sounds like an interesting book!
What I am interested in, and haven't seen anywhere (maybe from lack of really looking), is how many of those in poverty are active (mostly graduate) students and their families. When I was in college, there was a story in the student paper about the "high" level of poverty in the zip code which included the on-campus graduate student housing (a significant number of whom had children).
This problem of the low utility of saving a dollar plus threshold effects is one explanation for the popularity of lottery tickets among the relatively poor. The price of a ticket doesn't effect your utility much, and in return you get hope, and perhaps a large enough chunk of change to make a significant difference. (The evidence also suggests that keeping the windfall is hard - not having had money the winners haven't developed the skills to manage it.)
But, not doing all those things (finishing school, saving, etc) is rational if that is all you have ever experienced. A person cannot create middle class habits and social interactions if they have never experienced them. A teacher or social worker can explain how savings and finishing school will improve that person's life till they are blue in the face, but unless that person sees it modeled in their family or community, hard work and denial of gratification won't just seem like an exercise in futility, it will seem completely pointless to even start doing.
And, a side point, I think it is interesting that in the sample that Megan posted, "Poor" equals "black." Having grown up in an impoverished rural community in the Northwest, I am always struck by how completely off the radar poor white folks are except as the butt of jokes.
William H. Cosby, Jr., PhD has a very simple, very direct and very inexpensive set of approaches to avoiding poverty, which apply equally to all:
take a shower;
wash your hair;
remove piercing jewelry;
wear clean clothes;
pull your pants up;
tuck in your shirt;
tie your shoes;
finish school;
speak common English;
get a job;
work hard;
continue learning;
marry before having children; and,
parent your children.
It seems amazing that it would be necessary to point these things out; it is even more amazing that his recommendations have met such resistance in his own community. It seems that some reasonable level of adult behavior is too much to expect anymore.
The one thing I have learned about "common sense" is that it is not common. However, it used to be!
Acad Ronin,
One year after the State of Ohio established its "education lottery", the State Lottery Commission held a "losers' lottery". The Columbus Dispatch ran a color photograph on its front page of an elderly black man sitting at his chipped porcelain enameled kitchen table, behind several stacks of losing lottery tickets he had entered into the "loser's lottery". The caption noted that he was about to be evicted from his apartment for failure to pay the rent.
This image has remained with me for ~20 years; it will likely remain with me for the rest of my life. My father used to tell me: "We live in hope and die in despair". I suspect that elderly black man has long since passed, in despair.
So wait, is this post about diminishing marginal utility or is it about rich people blaming the poor for being poor? Because there seems to be some confusion in the comments.
I'd also be interested in which conversation Megan intended her post to generate...
I've been stinking poor (I once lived in a Ford Pinto with my sister and parents), and I have a pretty good understanding of how poverty works. Contrary to popular opinion, it doesn't start with the poor failing to follow some common sense behavioral rules and achieving inevitable success. The whole notion of pulling oneself up by one's own bootstraps Horatio Algier style is absurd. Even successful people who started out poor depended on the cooperation and goodwill of those better off than them to succeed. Economics alone cannot account for the persistence of class hierarchies-the tendency of those born within certain classes to remain in those classes all their lives. There are a profound set of cultural attitudes rooted in class-consciousness that follow their own inertia. If you are trying to understand these phenomena purely through incentive modalities, you're never going to get a clear picture of them.
Following common sense behavioural rules, taking advantage of opportunities and challenging cultural attitudes does not assure success; refusing to do so virtually assures failure.
The US is a very mobile society; however, that mobility is not a product of class conscious inertia. Upward mobility is not fueled by drugs, alcohol, sexual promiscuity or perpetual victimhood. It is fueled by education and effort.
-- Adrian Nicole LeBlanc, The Price of Parsimony, NY Times Magazine, June 6, 2004
Mr. Reid, you've already proven quite adequately that you are a booster of the "Smelly and Stupid" theory of poverty. You aren't the only one, of course-there are millions just like you, who pat themselves on the back for being wherever it is that they are on the economic ladder, sneering self-satisfyingly downward at their alleged lessers. If the concept of poverty did not exist, people like you would invent it or something quite similar, and find someone to stick the label to, just so you could have a category of human beings around you always felt superior to. At any rate, it's clear where your heart lies on this matter-no need to repeat yourself over and over again.
(The evidence also suggests that keeping the windfall is hard - not having had money the winners haven't developed the skills to manage it.)
Seconding Acad, it's not just a matter of skills. There's a beautiful sequence in "Clockers" in which a white cop sneers at the stupidity of the black men he sees coming out of bodegas, buying beers one at a time. If they bought a six-pack, they'd save a dollar or two right there, he thinks. In the next chapter, written from the point of view of a smart young black drug dealer, it's explained that anyone who buys a six-pack will quickly lose half the pack to friends and acquaintances who will magically turn up to share a friendly beer the moment they see him coming out of the store. Adrian LeBlanc's essay above also includes a bit about an elderly man who wins a $70,000 legal judgment and blows the money in several months; if he hadn't spent it, she says, every member of his family would have taken a portion to settle various debts and urgent expenses.
At a country level, Jeffrey Sachs talks about the analogous "poverty trap" for families or nations whose income is entirely consumed by expenses. At that level, incremental increases in income don't lead to savings, especially if the family or country is in debt. But given that no one in America is dealing with African levels of absolute poverty, it does seem like there's more of an element of habit and negative cultural reinforcement that makes saving and strategic planning so difficult in poor American communities. The thing is, there are very few cultural agents in contemporary American society devoted to helping people conquer the poverty trap, while massive, powerful agents -- advertising, movies, music, credit card companies -- are devoted to sinking people further.
As a few commentors have already noted, there's a lot more than just economics that accounts for poverty.
That being said, I don't think most people realize how far behind most poor people start. Things that are a minor inconvenience when you're middle class (not even rich), such as bouncing a check, can be catastrophic when you're poor, because there is no economic cushion.
If I make a mistake and overdraw my account, I get slapped with a fine, am chagrined, and try not to let it happen again.
But what if you have no economic cushion? Maybe the overdraft charge means you miss your rental payment, so you have to get a payday loan, which adds to your debt, which you borrow from a relative to pay off, which...
My point is that when you are poor, even a small mistake or accident can be very costly. A middle-class person can afford to be somewhat lazy or careless. A poor person, though, must attain an almost super-human level of economic discipline, and be blessed with very good luck, to make it. I'd go so far as to say that any truly poor person who avoids complete destitution is probably far more disciplined than the average middle class person.
Those of you who think a shoe-shine & haircut are all you need for success are invited to read this: http://www.sadlyno.com/archives/6806.html#comment-257494
And Ed Reid: Upward mobility is not fueled by drugs, alcohol, sexual promiscuity or perpetual victimhood.
What about the members of the privileged classes who abuse drugs & alcohol & receive perpetual passes keeping them out of prison & in multiple stints in rehab? Or whose sexual promiscuity can be handled w/ abortions or pay-offs? These options are seldom available to the less privileged. There are victims, many of them, and to decry "victimhood" is an easy out. Did you pull yourself up by your bootstraps, or were you fortunate enough to be born into a class/culture that pretty much inculcated you w/ "common sense behavioural rules," whether through instruction or example?
Troy Johnson also raises worthwhile points above.
It was the absurd tax rates statement that got my attention, personally. Who knew that the reason we had so much poor people was that our lowest in the industrialized world tax rates were just too high? Imagine if Sweden figured that out, they'd IMMEDIATELY solve their deep poverty issues!
Careful, Justin, there may still be tar on Gordon Lightfoot's broad brush and feathers in his pillow.
brooksfoe,
Thanks for linking that. I remember reading it when it was first published, and I was thinking about it as I read McArdle's entry.
There is a tendency to blame a lot of the poor for their condition. Given that bad habits really are the cause of a lot of poverty's persistence, it is justified to an extent, but it can be taken too far if it refuses to recognize that there are things we could do to teach these behaviors, or to demonstrate them in the proper way. Of course, some of the things we could do will not be welcomed by the poor as it might appear to them that we are still being condescending, even if we have the very best of intentions. Note just how hackles are raised in people who are not even poor when others point out some the the behavioral changes that would be beneficial.
The real question, to which I have never really seen a really satisfying answer, is how do you educate people out of poverty.
On the structural issues with benefits, cut-offs, and taxes, we obviously need to find ways to dispense aid in ways that don't involve these truly stupid issues that occur at the margins of income levels. We give aid in the expectation that it will aid people to climb their way out of the hole, then we cut the rope in two when they are halfway out. Truly self-defeating.
Justin, I don't think you understood my point. THe point is, a poor person who earns an additional dollar may lose more than a dollar in benefits; the average at one point was more than 50% of the extra dollar any poor person earned was consumed by lost benefits. Obviously, that creates terrible incentives to work. It's not income tax, but to the poor, the loss of benefits might as well be.
Yancey Ward,
I don't believe you can "educate people out of poverty", though education is certainly a big piece of the puzzle. I also don't believe that you can "enable" them out of poverty. It would be difficult for them to escape poverty without our involvement; it is impossible without theirs.
The question is better asked of those who have come from poverty and reached success. Both William H. Cosby, Jr., PhD and Walter E. Williams, PhD (Chairman Emeritus, School of Economics, George Mason University) were raised in the projects in South Philadelphia. Both are well educated and both are successful. Both are also very articulate; and, both have spoken out on this subject. Both have also been vilified for their comments.
Ed Reid's theory on how to get out of poverty:
[personal grooming habits.]
Personal grooming products, suits and such for job interviews, the nicer clothes suitable for a working environment, and dry cleaning services all cost significant amounts of money, which poor people are short on.
finish school;
This one is, of course, so easy if you go to a crime-ridden, drug-ridden school with terrible funding and crappy-to-mediocre teachers (better teachers get themselves moved to cushier assignments).
speak common English;
Where by "common English" I think you mean "the English spoken by the upper classes of society". Upper-class children grow up speaking this; middle-class children learn it in school; poor children tend to do neither, given that they're not members of the upper class and go to crappy schools.
get a job;
Because, of course, they just hand jobs out to all takers.
work hard;
continue learning;
The last time I checked, working hard meant long hours, which kind of reduces the opportunities for learning.
marry before having children;
Because, of course, birth control is free and 100% effective and partners are always willing to use it, poor women never get raped, the government funds free abortions, and putting up children for adoption is free and not stigmatized.
Being able to wait until marriage before having kids is really dependent on a nontrivial amount of financial and social resources. Sure, some people wait until marriage to have intercourse, but it's phenomenally unreasonable and unrealistic to claim that poverty should be the punishment for a less than Hurcluean level of self-discipline.
parent your children.
How this helps you get out of poverty is beyond me. Wouldn't it be easier to get out of poverty if you ignored your children, saving you money on expenses and giving you more time to work overtime? In reality, parenting children is an excellent way for working parents to stay in poverty, since doing things like missing work to take kiddo to the doctor or refusing to work long hours so they can see kiddo in the evening tends to get them fired.
Megan,
I think it completely appropriate to call such effects taxes. The benefits are income, and removing them at the margin is exactly the same thing as a tax.
The whole notion of pulling oneself up by one's own bootstraps Horatio Algier style is absurd... Economics alone cannot account for the persistence of class hierarchies-the tendency of those born within certain classes to remain in those classes all their lives.-GL
The wonderful thing about a free market is the opportunity it offers people for advancement. Look at a list of the top 20 wealthiest people today and note how many did not inherit their wealth. Bill Gates, Warren Buffett and (the late) Sam Walton are examples of just how well a free society rewards merit.
This contrasts very favorably with the rigidy of a socialist system. The riots in the French banlieues showed just how desperate people can become when they are denied any opportunity to rise. In a socialist country you have to know someone or bribe someone--preferably someone in government--to get ahead. In a free market you can open up your own company and get rich if you are offering a service other people value.
A free market doesn't bring utopia, it's true, but it offers more hope to people who have talent and are willing to work hard than any other system.
Well, Yancey, it is rather shocking to find myself agreeing with you on something, but there we have it. I think your note about cutting the rope when the beneficiary is halfway out hits the nail right on the head. There are so many different things going wrong in most poor people's lives that making it out of the poverty trap requires a whole confluence of different, simultaneous improvements in what's available to them. LeBlanc's book "Random Family" is the greatest piece of writing I've ever seen on how this works. And I don't think anyone with any sense would disagree that the single most important thing is to have an economy that pays decent wages for low-skill jobs.
It shouldn't surprise anyone that when you head into poor communities, you find bad behavior and lack of skills. But people also need to recognize that there are plenty of people in poverty who would be solid, hardworking citizens if they weren't poor. Many people have gotten stuck on this issue of a "culture of poverty", without being willing to move on to the next step: what do you actually do, concretely, to change that culture? Cultures don't change just because a bunch of people harangue them. They change when incentives and resources change.
What about the members of the privileged classes who abuse drugs & alcohol & receive perpetual passes keeping them out of prison & in multiple stints in rehab? Or whose sexual promiscuity can be handled w/ abortions or pay-offs? These options are seldom available to the less privileged.
Precisely. One might mention a certain prominent Republican politician--a man born to a rich family--as an example of the this phenomenon.
The same is true of bad things that happen and are not your fault in any way. If you're born rich, a few bad turns of events will set you back a bit but not fundamentally change your status; if you're born poor, a few bad turns of events will completely screw you over. I was able to recover from serious medical conditions (epilepsy, depression) in my late teens and early 20's thanks to the fact that my rich parents had the time and money to take me to doctor after doctor and access to high-quality medical insurance that would cover even adult children. Now I'm in law-school and am on track to "upper-middle-class" (read: upper-class) success. If I had been a poor depressed epileptic without health insurance at 22, rather than a well-insured depressed epileptic with rich parents, I'd have been screwed.
This is the thing about poverty. If you have extraordinary talent, or extraordinary luck, you can escape it. However, it is insufficient to point to examples like these and say that a society has "upward mobility." The test of class fluidity is best measured not by the how the brightest perform, but how the typical, average, hard working individual performs. I think that most people would agree that in a well engineered society, that should be all it takes to escape poverty. Most of the time, it just isn't enough.
It's also interesting to note that a person who is born in the middle or upper classes, but who isn't terribly bright or motivated, will still probably die in the class he was born in. Now, I don't buy the meritocratic notions that so many (especially college educated) Americans suck on. I think it's perfectly alright for a middle class person who isn't particularly noteworthy to continue to live as well as he always has. I wouldn't want to spoil anyone's fun. It is simply worthwhile to point out that sometimes all it takes to stay afloat is a decent support system-family and friends that can help in a million different ways. Poor folks usually only have other poor folks to call upon when they need help. The needy do in fact help each other, but of course, these are the last people you would really want to call upon for generosity.
Most Americans are so wealthy compared to the rest of the world they simply have no clue what poverty means. The people who are officially defined as poor in America are among the wealthiest people in the world. According to Census Bureau data (summarized by Ed Morrissey at 'Captain's Quarters' earlier today):
The poor in America live in the following conditions:
* 43% of the poor own their homes, and the average home is a three-bedroom house with a garage and 1.5 bathrooms
* Over two-thirds of households have two rooms per occupant, which belies the notion of overcrowding
* 80% of the poor have air conditioning
* Almost 75% own one car; 31% own two or more
* The average living space for the American poor is larger than the average space for all people in Paris, Vienna, and London, among other cities in Europe.
So perhaps the American poor are poor because it's a perfectly OK comfortable lifestyle by global standards? Perhaps we could just leave them to get on with their lives rather than trying to stuff our snotty, interfering, middle-class standards down their throats?
"Most Americans are so wealthy compared to the rest of the world they simply have no clue what poverty means. The people who are officially defined as poor in America are among the wealthiest people in the world. According to Census Bureau data (summarized by Ed Morrissey at 'Captain's Quarters' earlier today):
The poor in America live in the following conditions:
* 43% of the poor own their homes, and the average home is a three-bedroom house with a garage and 1.5 bathrooms
* Over two-thirds of households have two rooms per occupant, which belies the notion of overcrowding
* 80% of the poor have air conditioning
* Almost 75% own one car; 31% own two or more
* The average living space for the American poor is larger than the average space for all people in Paris, Vienna, and London, among other cities in Europe.
So perhaps the American poor are poor because it's a perfectly OK comfortable lifestyle by global standards? Perhaps we could just leave them to get on with their lives rather than trying to stuff our snotty, interfering, middle-class standards down their throats?"
Look, I don't know about anyone else here, but I didn't consult the Census Bureau when I was formulating my notion of poverty. No one I know who I would define as poor (and this is not a small number) owns their own home, for instance. However, much of this data is misleading. Living space in America is of course greater than living space in European cities that were designed before the advent of vehicular transportation. It wouldn't be much different from comparing the living space enjoyed by the average American and the average inhabitant of Tokyo, and then waxing sophomoric about how much easier it is in the US.
Poor people have cars because in most places in America you need a car to get by. Try to get by in Nebraska without a car sometime. But that just adds more necessary expenses to the poor, who also have to pay for gas and auto insurance. Owning a car doesn't necessarily indicate greater prosperity.
Finally, of course there are countries with much greater poverty than the United States. That doesn't change the fact that there are millions of truly screwed people living in this country today, many of whom would love some middle class standards "shoved down their throats," if that's what it would take to get health insurance and good enough wages to save a little money to safeguard against future calamity.
Huh. Ok.
So, I see this is precisely the conversation Megan intended to bring about by her post. Neat. And to think she bans obscenity while simultaneously promoting it.
Wow. Really? The Atlantic is really into this?
Are they really aware that they've become a venue for this particular reactionary obnoxiousness? Maybe I'll write an email...
http://www.theatlantic.com/a/feedback.mhtml
Anyway:
As someone raised in poverty, I can say with the certitude of someone whose experience will surely be dismissed as anecdotal that, sure, there is a threshold at which that perverse effect - that point where it's not really worth saving what you could spend - takes place.
But to confuse that with an explanation for (or an interesting tool in the analysis of) poverty only indicates a complete disregard for the actual experience and dignity of poor people. You simply have no idea what your talking about.
But there's a common solution to ignorance - education. We have, as a society, dedicated a not insignificant number of dollars to gathering the information needed to make our debates on public policy more than a futile exercise in class prejudice. And even given the general level of ignorance here, there are numbers out there that might serve to illuminate this strange phenomenon of poverty: historical income inequality, real wage change over time, disposable income, consumption rate, numbers, numbers, numbers all over, but no one willing to look them up...
Wonder why? And why does Megan always fail to look them up before posting these interesting counter-intuitive hypotheses that just happen to confirm peoples' worst prejudices...?
Maybe 'cause it's much more fun having this discussion in ignorance of those facts that might disabuse you of the notions you use to comfort yourself in the face of other human beings in need.
Anyway, have fun. It's very unlikely that anyone genuinely poor will come along to disabuse you of your comforting prejudices, either here or in real life. But, hey, there's always the possibility you might get mugged...
CS-
Come off your high horse. Megan was offering this as AN explanation, not THE explanation. And remember that numbers alone don't give you the full story. Statistics can be made to show whatever the aggregator wants to them to show. That is why it is also important to try and explain why the numbers are the way they are in order address problems before they occur.
But it seems you only care about outcomes.
"The reason the poor are poor is that they are more likely to not finish school, not work, not save, and get hooked on drugs and alcohol and run afoul of the law."
Isn't this reasoning a bit circular? It basically claims the poor are poor because poverty is terrible and causes (or at least correlates) with economically unwise behaviour. But how did they become poor to begin with? And why do some people escape it?
Also, it is worth pointing out that this argument only applies to poverty in wealthy, industrial countries. Those suffering from extreme poverty in the third world are not poor for any behavioral reasons, unless one points being unlucky enough to be born into third world poverty. And the welfare state, by not allowing the wretched conditions of the third world, does change the incentives of the poor, making them seem lazy and in some way deserving of their condition, when they're trapped by bad beginnings and poor incentives. Nonetheless, it is a marked improvement over third world conditions--I have no urge to see us return to the economic jungle.
cs,
Do you have a point to your comment made at 12:13?
.
Any suggestions on what policies or actions might help the poor? Any ideas or suggestions on how to help end the self destructive behavior that serve to keep some people poor?
Or do you just prefer to ignore the issues?
Meh.
Look, I frankly don't care if "Megan was offering this as AN explanation, not THE explanation."
I was remarking on Megan's propensity to post apparently any counter-intuitive hypothesis that just happens to speak to peoples' worst prejudices - How racist was the Southern Strategy? Are poor people poor because they don't spend their money in the way we think wise?
It's ridiculous to do this all the time and pretend that the conversation you generate is somehow out of your control. It's lazy and irresponsible, to boot.
And it's completely out of control dancing in the streets crazy to do that without posting any numbers at all, ever.
And, frankly, I do sincerely doubt that The Atlantic would really like to sponsor this particular conversation.
http://www.theatlantic.com/a/feedback.mhtml
TJIT
Give me a break. Are you pretending you care now? 'Cause I gotta say, ascribing poverty to "self-destructive behavior" really telegraphs a whole outpouring of caring and understanding to come. Nice.
I don't feel any need to provide a comprehensive solution for poverty right here and now, nor should I.
But blaming the poor for being poor is nothing but an exercise in the kind of class prejudice that went out with the gilded age.
And Megan is, in fact, directly responsible for generating this vomitous outpouring of ignorance.
If she'd post some numbers, do some research to back these things up, do anything except drop these things on her blog and pretend that she's shocked, simply shocked when her comments turn into a rhetorical re-enactment of the Punic Wars, I might be more understanding.
But, no. It's ridiculous.
http://www.theatlantic.com/a/feedback.mhtml
How about unions to get these people out of their slough of despair? If the jobs these people have are non unionized, maybe a union would help them.
All these statements were made about Appalachian whites and Okies in the 20's and 30's. But once they joined a union and became factory workers, paid at a higher than average wage, somehow mysteriously the problems disappeared.
Or is this some kind of code for African American? What, they don't collect welfare under 13 different names?
c.s. says
Nobody was asking for a comprehensive solution. Apparently this is an issue that you know a lot about and it would be interesting to have your input. Hopefully you will feel up to contributing something at a later date..
One other thing. When reading other peoples comments it is useful to pay attention and recognize the difference between these two words
.
1. Some
2. All
Poverty is caused by a mix of wider societal policies and poor personal choices, and I don't know that we can squeeze it into an "either/or" type of presentation.
I've a friend from a poor background who I have tried to help out to some degree, but on almost every occasion she opts for using money for immediate gratification.
One example:
Her account at Bank of America got overdrawn by about $70. She has no job and is in a crazy family situation. So, I helped her get the balance positive so she could avoid landing in the chexsystem database. We discussed the importance of avoiding that. (Among other things, like the importance of getting a job with a 401K and health care, and not replicating the behavior of her aunts and father).
Okay, speed ahead a little. I note to her that her account has about $2 and that her next monthly fee is going to overdraw her account again.
She is faced with 1) using a portion of the money-a few bucks- to add to her balance OR 2) use all the money to go to NYC to visit her new boyfriend who is in a drunk driving program (and who promises to a) stop drinking b) get a GED c) stop using cocaine and d) get a steady job when he gets out.
Now what option do you think she chose? To see the boyfriend. Why?
Because everyone around her constantly makes immediate gratification choices, with the women in her family wasting 90% of their mental energy chasing after men who treat them poorly, instead of trying to build their own separate identities and resources.
Her mom, dad, and aunts do not have credit card or bank accounts, nor have any of them completed college. None of her immediate family even pays market rents. She has no influential examples of productive living.
That does not absolve her from the stupidity of her own decision making, but she has a much greater mountain to climb. Just coordinating certain tasks that others take for granted (whether job hunting, getting callbacks when 5 people share the cellphone, finding transportation) is a chore.
Poverty is not caused by any one thing, and probably won't be solved by any one thing, though on a case by case basis it can be solved by behavioral changes.
TJIT
Way to miss the point. Intentionally.
The onus doesn't rest with me: I don't, and shouldn't, bear any responsibility for suggesting any solution to poverty merely because I point out that this conversation is ridiculous.
It's not my job. I don't want to, and I don't think that's what this post was intended to generate.
You want to have an informed discussion? Go look up the numbers. See if this notion of "poor people are poor because they spend their money poorly" really stacks up. I'm sure you can figure out what to Google. The Census has great numbers available.
Of course, that was Megan's job, originally. Unless she wanted to play host to exactly this level of "poor people are poor because they don't bathe" ignorance. But hey, that seems to be her modus operandi here at the Atlantic...
http://www.theatlantic.com/a/feedback.mhtml
Oh
And
By the way, I see "some" and "all:"
Approaching poverty with the primary question of how to solve those "self-destructive" behaviors does reveal that you don't really care: you consider yourself an appropriate judge of people you have never met and of whom you have no knowledge - indeed, capable of determining for them what behaviors are appropriate - merely by virtue of your social class.
That's absurd.
So trying to pretend you care with that as your starting point isn't ever gonna' be all that convincing. But, hey, good luck with that.
Thanks, Finn. That sounds like the real world.
Those suffering from extreme poverty in the third world are not poor for any behavioral reasons, unless one points being unlucky enough to be born into third world poverty.
Robert, what's interesting, actually, is how many of the behaviors we think of as the "reasons" why poor people in the US are poor actually CAN be observed among people living in absolute poverty in the third world. Failure to save is a common response to extremely uncertain conditions where there is no realistic way to invest one's savings to produce greater return later.
People in the third world living on poor land, subject to disease, overcrowding, and so forth often look "lazy" to us. That's generally because extra labor they might invest is unlikely to bring rewards. In most places, when an investment is discovered that brings in reliable returns, these "lazy" people turn into human dynamos. See, for instance, Vietnam after the war ended and private rice farming was re-instituted in the South: from indolence and near-famine to world's #2 rice exporter in 8 years.
To me, what this says is that much of the "self-destructive" behavior which laissez-faire-oriented commentators condemn in the poor in the US is more likely a response to poverty than a cause of it. Put people in conditions where industriousness generates a solid return that they can keep (not lose to debts, crime, etc.) and many of those "habits" will disappear. The question is how we as a society can create those conditions. Of course the problems of lack of skills and cultural disincentives (many of them fomented by US media culture) will remain. But let's put it this way: rap entrepreneurs and drug dealers work hard.
cs says
Still not interested in educating those who know less then you about poverty? .The rest of us have a choice. We can ignore how poor decision making keeps some people in poverty.
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We can even petulantly stamp our feet and complain when anybody mentions this problem.
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The downside to ignoring this problem is that it condemns some people to remain in poverty. But apparently some people are happy to ignore the problem even if ignoring it condemns some people to a life of poverty.
Cs says:
"Approaching poverty with the primary question of how to solve those "self-destructive" behaviors does reveal that you don't really care: you consider yourself an appropriate judge of people you have never met and of whom you have no knowledge - indeed, capable of determining for them what behaviors are appropriate - merely by virtue of your social class."
Fine, if I'm not an appropriate arbiter of what self-destructive behavior is and is not, stop trying to take my money. You heard me. Stop trying to take me money (or tax it) EVEN when I beg, despite your coercion, for some basic definitions of what "self-destructive behavior" is.
This is coming from a formerly poor black person.
TJIT
bleh. it's neat that you can do that, rhetorically, I mean it must make you feel nice, but, really, who cares?
you like your point of view because it allows you not to care and it lets you judge people. that's actually just fine. seriously, it's actually better if you stop pretending to care, because if your first instinct when approaching poverty is to tell other people - people who you've never met, about whom you know nothing - how wrong they behave in living their lives, they probably could do without your help. you just aren't gonna help anyone with that attitude.
buy hey, tithe at your preferred place of worship. give to charity through reputable organizations.
That's cool, let other people handle the actual knowing about stuff and caring about people in particular thing. then you can keep your point of view, safely judge people, and do some good.
but please, stop pretending you care for the sake of argument. it's boring.
by the way, are you incapable of looking stuff up on the google? it's pretty easy. here, try http://www.google.com/Top/Society/Issues/Poverty/
and good luck with that.
cs,
You have provided some interesting comments. Unfortunately they are not related to what I have written. You said
and and I am curious how you could stitch that much opinion together on me, my class, my knowledge of the poor, and what I think about the poor from my few brief comments..
That is an amazing amount of insight you claim to have especially since I discussed nothing you attribute to me in any of my posts.
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How do you do that?
cs,
You have written volumes on this comment thread. Unfortunately very little of it has been related to the topic at hand.
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I was hoping you would be able to provide a few more of your thoughts on poverty and how to end it.
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Your input would be appreciated.
know what? you're right.
that was presumptuous.
and preachy.
bleh.
sorry.
anyway, i think i've made myself abundantly clear.
and i've given enough info for you to figure out how to help some people out if you want to. it's really not like you have to reinvent the wheel with poverty initiatives - or go looking for novel explanations as to perverse incentives and interesting exceptions to the law of diminishing marginal utility - there are tons of people out there who have made it their life's work.
so i'm done with this.
This is rather amusing. The unions like to pose as the saviors of the poor but nothing could be further from the truth. As economists have long recognized, unions protect insiders at the expense of outsiders. Thus, for example, highly paid union workers at GM and Ford benefit at the expense of poor people who would like to work in the auto industry. By forcing wages above the market equilibrium, the unions restrict employment and shut the poor out.
cs:
You have not "given enough info", because you have given none. If you think statistics would add something to the discussion, how about (a) linking to some particularly useful ones, and (b) explaining precisely how they refute Megan or particular commenters. Telling us to Google stuff and repeatedly linking to the Atlantic feedback page is not useful.
And stop pretending that none of us know any poor people. Some of us have them in our own families. Just to take one example, one of my nephews is living in a trailer with his wife and baby, trying to find a job, with very little success. He was fired from the last two for driving forklifts recklessly and thereby damaging company property. His poverty is certainly in great part his own fault: it's really not hard to keep your forklift under the usual 5mph limit.
As far as I can see, "cs" has only made clear that the discussion is abhorrent (though the argument then becomes tantalizingly silent) and that one should complain to the editors about even permitting it. But where do I send my complaints concerning "cs"?
Regarding poverty (even if it sounds like the US poor would have a perfectly fine middle-class lifestyle in Europe), I do believe there is an element of culture to it. Perhaps the full enchilada of 401K:s, tax breaks and whatnot is just too much to digest for someone getting started. So I'd instead suggest beginning with just the following: put away a feasible, fixed part of your salary in a savings account every week before any expenses; don't touch that money; don't think about it; don't talk about it. Adjust your spending accordingly. The rest will come in time.
Tom: please travel to Europe immediately and visit some "poor" neighborhoods, in the interests of obtaining a freaking clue.
Having a lot of space does not mean you are less poor. It means that real estate is cheaper where you live. Please consult a New York millionaire for a clearer explanation of this phenomenon. Similarly, someone who owns a 1992 Taurus, has no health insurance (and crooked teeth), and lives in a double-wide near Winslow, Arizona, is not richer than someone who lives in a subsidized flat in a working-class suburb of Amsterdam with a day-care center on the corner, free health care from private providers, and easy transport to work or entertainment via bicycle or tram.
cs,
Do you really believe bad habits have no relationship to the degree of one's poverty? It appears as if you believe poverty is just an act of nature.
It is certainly true that one method of improving people's material wealth is to give them more money in the form of handouts, but unless a good portion of them change their behaviors (and transfer those new behaviors to their children) these handouts are likely going to have to be permanent, generation after generation. What's more, the presence of such permanent support creates moral hazard at the bottom margin between the poor and non-poor. In other words, whatever we do must include addressing the education of people so that at least some of them can escape the behaviors that keep them in poverty, or at the very least, find a way to break the family chain of poverty that is so apparent.
As for the third world poverty, the primary problem to be solved is the issue of secure property rights. Such rights don't exist in almost all the poor third world, and without that no one will take the required first step out of poverty- saving a portion of your own production and investing it in future, higher production. No one will save if there is no assurance that someone else will not simply take it from you. Unfortunately, there is little that outsiders can do to establish such governments in these countries. Outsiders are almost never welcomed when it comes to establishing governments- a lesson the US is being forced to relearn in Iraq and Afghanistan. We can demonstrate the model, but it is up to the third world to adopt it.
It has taken several hours to get past the tone of Elliot Reed's post ("Ed Reid's theory on how to get out of poverty:") and realize that he has perhaps stumbled upon a solution to addressing the poverty problem. For the record, the theory is not mine and I noted its source when I posted it above.
[personal grooming] Permit food stamps to be used for the purchase of soap and shampoo. Laundry detergent is already permitted.
[finish school] Issue education vouchers to poor students to make it possible for them to escape "crime-ridden, drug-ridden school with terrible funding and crappy-to-mediocre teachers ".
[speak common English] Taught in private schools accessible with education vouchers.
[get a job] Have private schools bring illegal aliens in as guest speakers to explain how to get jobs, since they seem to have very little problem doing so.
[work hard/continue learning] Most of those not in poverty work hard. Those who have finished school can generally read, and thus continue learning. Many employers also offer education and training opportunities.
[marry before having children/parent your children] The cheapest and most effective birth control pill is still an 81 mg. aspirin tablet, pressed tightly between the knees. Failing that, condoms are cheaper than crack and/or weed. Adoption IS free, for the egg and sperm donors; and, I suspect, it carries no more stigma than having "round heels".
Finally, when the poor have finished school and can read and write at a basic level and perform basic math calculations, they will be ready for "interview clothes", which do not generally consist of suits requiring dry cleaning for high school graduates seeking entry level positions. Pants which completely cover the underwear cost approximately the same as those that just barely hang on the butt. Shirts which can be tucked into pants which fit at the waist cost approximately the same as crop tops. Tied shoes can actually be the same as untied shoes.
Or to put it another way.... Hard work often pays off after time, but laziness always pays off now.
brooksfoe,
I live in Europe. I grew up in a poor neighbourhood in Europe. Sorry to burst your bubble.
Then you apparently haven't been to Winslow, Arizona.
As for the third world poverty, the primary problem to be solved is the issue of secure property rights.
I wouldn't say that's the "primary" problem to be solved everywhere in the third world. Many third world countries have developed successfully without yet solving the property rights issue (e.g. China and Vietnam). Other countries which set out with great fanfare to solve the property rights issue first, DeSoto-style, have failed to develop (e.g. Peru and Egypt). Property rights mean very little in places where the property itself is worthless, as in areas in Africa where soil is exhausted, populations are too dense, and transportation and access to markets have broken down over the past 30 years. Having property rights will not resuscitate an economy crippled by infectious disease (AIDS, malaria and TB). Property rights require government enforcement; societies immiserated by disease, drought, infrastructure collapse, etc. will be unable to enforce those property rights. Property rights are part of the puzzle, but they're not a magic bullet; nothing is. You have to do it all together.
You could throw up your hands and say "it's their own fault, then". But then you're back where you started.
I asserted in a previous post that social inertia accounts for a considerable part of the perpetuation of income inequality. The discussion in this thread is an excellent example of what I mean. There is literally an argument going on here about whether or not the poor deserve, on some fundamental level, to be poor or not. It's really bizarre, and there are a whole host of wholly invalid assumptions that underlie adherence to the notion that they do. But there isn't any cure for it. I could stamp my feet, beat my chest, scream to the heavens; it would do no good. As long as people are arguing about whether to help the poor, rather than how the poor should be helped, not a whit of progress on the issue will ever be made.
The poor in America -- the long-term, can't-ever seem-to-get-out-of-poverty poor -- are poor because of one primary, overarching reason. They are stupid.
The average measured IQ of African Americans is 85. For white Americans, the average is 100. For people reading this, the average is probably 110 or so. I doubt you can even imagine what it's like to be really stupid, stupid enough that, for example, you cannot determine that buying "economy size" saves you money, because you cannot do even the simplest math.
Poverty does not cause people to do stupid things. Plenty of poor people scrimp and save, get educations, work hard, and guess what? They rise out of poverty.
Stupidity causes people to do stupid things. Doing stupid things, continually, day in and day out -- that is what causes poverty in this country.
America is probably closer than anywhere else to a true meritocracy, where "merit" is defined by intelligence. Smart people, especially smart people who happen to qualify for affirmative action, get hoovered into the higher education system. We routinely see people rise from poverty to the middle class or even rich in a single generation.
But capitalism certainly does lift all boats. Even our mainly-black underclass would rise, if all other things were equal. However, all other things are not equal. We are importing millions of dirt-poor people every year, who have higher intelligence on average than black people do. On average. So long as we remain unable to affect IQ, and so long as there is a continuing supply of dirt-poor immigrants, blacks will continue to sit at the bottom of the American class structure.
This is the ugly truth.
Just to be on the same page..
when we talk about poverty - we are NOT talking about low-wage labor.. at least I am not.
low-wage labor in the US is not poverty as others have pointed out.. those people are often fat, drive cars, have TVs, microwaves, air-conditioning, etc.?
I am more concerned with the so called "underclass" that exists everywhere around the globe.. Like with crime - economists assume that there always will be a natural level of crime, unemployment or poverty... I agree. this level is relatively low in the US already compared to other regions...
But analysing these dynamics (evaluating the socio-economic costs) and finding the best measures to reduce those rates (in line with animal psychology and evironmental context such as unemployment) is desirable and underrepresented?!
We are all to quick to point out that poverty poses socio-economic costs.. we know that! we are all too quick to point out that current measures are not working for all... we don't always know that?
But I would like to know how far we are away from the "natural rate" (what is it anyway?)?
Maybe current approaches are not so bad after all? maybe we would have even more poverty without existing policies?
I for one know too little about current homeless programs - other than talking to some homeless about their situation myself.. they usually tell me that they would rather sleep in the park than in a hall with other strangers.. they tell me that they rather beg and walk around than work.. and I do understand them! They do not see value in money (other than you can buy drugs with it) and do not believe that they could connect with the values of society?
One day I got some homeless excited when I tried to catch a sick feral cat in San Francisco.. It was funny - they really wanted to catch that cat because they hoped for a better life for him.. they wanted to help somebody instead of being helped. it did not matter to them that we were also restricting his freedom by "forcing" him to get healthy... (something that would keep me up at nights). But they wouldn't want the same for themselves? I confronted them with this issue - it only caused a black-out..
When I asked a by-passer, a guy in a banker suite, if he had seen the sick cat we were looking for - he replied: "why do you not help humans, say the homeless..?"
the homeless next to me overheard the comment and added: this is why I am homeless..
brooksfoe,
China and Vietnam are cases that support my argument, not invalidate it. You are taking a far too narrow view of what I mean by "property"- I take it you are referring to land, but even in the US, we don't truly own the land or even houses for that matter, we rent them from the government. These two countries are beginning to prosper because the fruits of one's labor is now considered to be their property to dispose of as they wish for the most part. If the countries revert to their old stances regarding the communal ownership of income, their progress will halt in it's tracks.
Citing Peru and Egypt as examples where property rights are strongly enforced, but are not developing economically is pretty weak. First, I see no evidence that property rights are very sacrosanct in either country. Both have horrendously corrupt governments.
For the problems of third world countries you cite, like disease and malnutrition, it is difficult to solve these things without a semi-competent government in place. Solving them may help the development of strong property rights, but, again, without property rights there is no saving, no investment, and no way for a people to improve their own lives via their own work. As you wrote, it may be a case that you are ultimately left either to throw up your hands or to be permanently in the position of having to subsidize these countries' consumption.
Gordon Lightfoot said
Bold emphasis is mine..
Gordon I think you may be misinterpreting some of the discussion.
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If poor decision making is contributing to poverty it is important to acknowledge that it is one of the causes of poverty and try to determine ways to improve decision making ability. If this problem is not handled those who are poor because of inadequate decision making ability are doomed to remain poor.
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Trying to find the root cause of poverty is not the same thing as saying poor people deserve to be poor.
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It is a critically important step to developing policies that will help the poor improve their economic standing.
I suspect that fatalism plays a big part in enduring poverty. The people I know personally or worked with in association with local charities that are dirt poor, are hopeless. They don't work for a better life because they see it as impossible.
My mother-in-law was raised in an upper-middle class family, but never learned how to take care of herself. Her father, and later her husband did that. After her husband died at early age she was completely lost and proceeded to basically spend all of the life insurance money on nonsense like dinners out and nice vacations. She's now facing retirement age with no savings and no plan to accumulate any. She still spends her meager income on foolish nonsense like weekly manicures. She has given up on life, so she's just waiting around to die and trying to be comfortable in the meantime.
My mother, on the other hand, grew up in a lower-middle class family, and has spent her life denying herself indulgences as she scrimped and saved her way through. After my dad died a few years ago, she actually started earning more money than she ever had in her life. She's also very involved in her church and its charity work. She would never get a manicure (in fact she never used a gift certificate for one given as a Mother's Day gift), and only dines out for special occasions. Though she would tell you she is still barely making it, she is sitting on a tidy nest egg, and has the money to retire, but she won't despite being 70.
What's the difference in these two stories? In a word, hope. One woman believes that tomorrow can be better and works towards it, the other doesn't.
even in the US, we don't truly own the land or even houses for that matter, we rent them from the government.
Wha? I think you're thinking of the UK, honey. In the US, as far as I know, if you own the land, you own the land.
These two countries are beginning to prosper because the fruits of one's labor is now considered to be their property to dispose of as they wish for the most part.
If you reduce the definition of "property rights" to such a vague and imprecise one, then it really makes it clear that property rights aren't the answer. Virtually every country on earth considers the fruits of one's labor to be one's property to dispose of as one wishes for the most part. That includes such beacons of capitalist prosperity as Congo, Somalia, Guatemala and Moldova.
The thesis I took you to be referring to is the Hernando DeSoto thesis, which posits that legal title to property is the key difference explaining why capitalism works in the developed world and fails elsewhere. Legal title to property monetarizes investment and allows people to mobilize capital; the argument is that people in the third world can't access capital because they own their land informally and don't have official ownership of their businesses, so banks won't lend them money. This is a very interesting argument, but as it's turned out, for the reasons I listed above, programs to help poor people gain legal title to their property and businesses have been somewhat disappointing as engines of poverty alleviation, because you need non-corrupt governments to enforce such measures. (And banks willing to loan money to average people, and markets for the assets used as collateral.) Also, microcredit programs have shown that it's possible to extend credit to the poor even without clear legal systems of title underpinning the collateral. And, of course, we know that it's possible to have strong, consistent economic growth under corrupt governments (see Thailand, South Korea, China, etc.), without clear title systems. So to make the establishment of legal title regimes the "primary" component of your anti-poverty strategy seems misguided. It's a good thing to do, and can bear results especially in poor countries where land is valuable -- as in much of Asia. But in Africa, where much of the land is exhausted, it seems like a less powerful tool.
If, on the other hand, you were to first pave a road to the afflicted region; then provide irrigation to water the land; plant trees for soil conservation; extend easy credit initially for fertilizer, for depleted soil; make free improved crop seeds available; distribute bed nets and free malaria medication; and THEN give people title to their land -- then that land might be worth something, and they might start to make their way out of poverty.
"Gordon I think you may be misinterpreting some of the discussion.
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If poor decision making is contributing to poverty it is important to acknowledge that it is one of the causes of poverty and try to determine ways to improve decision making ability. If this problem is not handled those who are poor because of inadequate decision making ability are doomed to remain poor.
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Trying to find the root cause of poverty is not the same thing as saying poor people deserve to be poor.
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It is a critically important step to developing policies that will help the poor improve their economic standing."
I'm not missing anything here. I'm not really thinking about comments you have made, by the way. I don't disagree that the agency of the poor must be accounted for in order to come to terms with poverty. It is not, however, the only thing, nor in most cases, the most important. People are far too eager to paint a broad, generalizing brush over the poor as a class of individuals. Sympathetic people will cast them as hard working, but ruined by circumstance. Then there are those who think that poverty in America can only be caused by laziness and stupidity. Both approaches have their problems. Ideally, we would not truck with these generalizations at all, but it's impossible in practice to work that way. Given a choice between imagining a teaming mass of ne'er-do-wells and a sea of the unfortunate, I think the latter is simply more accurate, as well as, dare I say it, better for the soul? At any rate, I am extremely tired of people who haven't missed a meal their entire lives dismissing the travails of the poor in America, for some convenient, completely obtuse reason. If you haven't been there, and you haven't looked into it, you probably don't know what the hell you are talking about.
brooksfoe,
No, if you own something, you don't have to keep paying for it. Real estate taxes are a form of rent. What you own when it comes to land and housing is an infinite term lease. I own my refrigerator, but I don't own my house. There is a difference, and I am using "own" in the absolute sense.
As for the rest of your comment, you are misunderstanding me. It is one thing to have philosophical right to the fruits of one's labor, but an entirely different thing in a secure, legal sense. What I wrote is that countries need secure property rights. Most of the third world does not have secure property rights, even the ones where it might be philosophically accepted that you should.
In China, before Deng, and in Vietnam until the late 80s you didn't even have the philosophical right to the fruits of your labor; that has changed, and it has freed people to accumulate capital (the surplus fruits of their labor).
This thread is likely dead, having fallen off the front page, but here is an op-ed by Gregory Clark, author of A Farewell to Alms. I have his book on my table at home, but won't have a chance to read it until this weekend. There is an ongoing book club on MarginalRevolution.com.
He discusses the issue of third world poverty. I am not yet sure how much I agree with his arguments for the Malthusian trap theory, but he is dead on when he discusses the real solutions to Africa's poverty.
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