Noah Smith has an interesting post at Bloomberg on some recent studies on strategies for helping the poor, one from the NBER and the other from Nature Neuroscience. The connecting thread between the two is giving money to people.
Our present system is predicated on in kind payments to the poor. We pay physicians, dentists, social workers, teachers, and many, many other people earning multiples of the median income to help the poor and hope that it actually helps the poor. Why not eliminate the middle man, give the poor money, and let poor people decide what will help them?
There are any number of reasons including that physicians and teachers have much better lobbyists than the poor do. One of the things I find endlessly fascinating is the widespread belief that the NRA has a stranglehold on the Congress because of their lobbying but other interest groups including bankers, realtors, physicians, and teachers, all of whom through their professional or industry organizations spend at least as much on lobbying as the National Rifle Association does, don’t have similar influence in their own areas. They’re certainly getting a lot more for their money.
Another reason is that there’s a strong Calvinist streak in our national ethos. The poor are poor because they deserve to be poor. They make poor choices. They can’t be trusted to act responsibly or take charge of their own lives.
I think that’s problematic. The reality is that the potential impact of a poor decision weighs much heavier on the poor. One night’s getting drunk or getting high or getting pregnant can ruin a poor kid’s life whereas for a rich kid it would mean nothing at all and for a middle class kid it might just be a speed bump. I’m not trying to excuse poor decisions. Just trying to suggest a different way of thinking about them.
Another thing that many people don’t realize about being poor is how stressful it is. High levels of cortisol early in life can have adverse effects on brain development and on impulse control, just to name two.
I’m not sure what the solution is. There will always be poor people especially when we define poverty in relative terms. Freedom means freedom to fail but I think that we probably should think carefully about just how cosseted we think the poor should be.
Freedom means freedom to fail….
Unless you’re a banker or some other big time financier. Those guys aren’t permitted to fail, no matter how much it fucks everyone else.
The Calvinists among us don’t want to let the poor choose how to spend their gummint allowances as they wish for fear they might spend it on booze or porno. Far worse, however, is that any poor woman can increase her effective income and society’s costs by simply breeding again, whereupon her kid gets a subsidized mis-education and much more for years on end. Better she should just stay drunk, for my money.
I dunno about that article….doesn’t the hypothesis contradict a quite large social experiment we’ve already tried since the 1960s? So because one community had some positive results in the short term we’re supposed to throw out reams of evidence that welfare transfers have created a moral hazard and contributed to the breakdown of families and communities, and exacerbation of poverty?