Matt Zeitlin

Three Theories of Poverty

with 2 comments

Roughly speaking, there seems to be two ways that poverty is thought about in our political discourse. The basic liberal way of thinking about poverty is that there is an opportunity deficit. For whatever reason, a segment of the population simply does not access to the goods that could enable a decent, middle-class life. This could mean that there’s a gap, that because of where they live they do not have access to good schools that will give them skills to get well-paying jobs. It could also mean that, for whatever reason, they are more likely to be exposed to environmental contaminants that inhibit full mental function. It could also mean that they live in economically depressed areas and because they’re poor, it’s hard to move to more prosperous areas or that crime is really high which makes the investments for prosperity more difficult.

There are two ways to deal with the opportunity problem. One is to revitalize the areas that have high concentrations of poor people so that they are safer, more prosperous and have better schools. The other is to break up areas with high concentrations of poverty so that poor people can take advantage of the greater opportunities in relatively more wealthy communities. Insomuch as Democrats think about poverty policy, they tend to adopt one of these approaches or a mixture of the two.

Conservatives, on the other hand, tend to see poverty as a cultural problem that is due to poor people not having the bourgeois values of thrift, prudence and advance planning that are the real roots of prosperity. If this is why people are poor, you make sure they don’t die in the streets, but it means that government policy is not likely to accomplish much and might even backfire. And so conservatives are not very interested in anti-poverty policy. If they are, it’s in things like “no excuses” charter schools whose explicit purpose is to inculcate these values. But then again, the charter school movement is nearly entirely run, staffed and funded by liberals and Democrats.

Then there’s the third theory of poverty, which is both more nuanced but quite simple. Jamie Holmes, in a piece for TNR, suggested that one problem poor people have is over-taxed reserves of willpower. The insight here is from psychologists who have shown that willpower is a depletable resource and that exercising will in one area means that one is less able to do it in other areas. Poor people have to think about things that non-poor people do not. For the poor, “anything more than a muffin,” requires a taxing financial decision, not a relatively non-taxing preference decision. Holmes summarizes the problem:

Many of the tradeoff decisions that the poor have to make every day are onerous and depressing: whether to pay rent or buy food; to buy medicine or winter clothes; to pay for school materials or loan money to a relative. These choices are weighty, and just thinking about them seems to exact a mental cost

Another psychological insight into the persistence of poverty is the “bee-sting problem.” As Drake Bennett explained in a Boston Globe piece from 2008, imagine getting six bee-stings. If you have one bee-sting, you will do something about it, if you have seven, then you might as well not bother. The poor, then, live in a world of constant deprivation, where it simply may not appear worthwhile to make long-term investments in their well-being. The philosopher Charles Karelis puts it like this: when we’re poor “our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated.” If you have so many financial problems — bills, rent child support, etc — such that paying even half of them still leaves an objectively large amount of other problems to deal with, then it may really be rational to not even pay that half. It may make more sense to acquire a drug habit. More simply, as Karelis argues, if your car has ten dents in it, why just fix one? This phenomenon explains why the poor engage in all sorts of behavior that appears self-defeating even when the incentives seem so clearly to mitigate against it:

Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work.

This third theory of poverty does not deal with the “root causes” of poverty the same way the liberal and conservative ones do. As Karlelis puts it, ”The core of the problem has not been self-discipline or a lack of opportunity…the cause of poverty has been poverty.” The solution then is both radical and simple: give the poor money. With more money, they can get out of the trap of “poor economics” that Karelis describes and be freed from having to make the willpower sapping decisions that Holmes describes.

Now, the politics of giving the poor more money are tricky. Democrats are loathe to make it appear like they are just cutting checks to what conservatives see as lazy, undeserving people who are culturally alien to the mainstream of American society. It was this fear that lead to seeing welfare reform’s strict time limits and work requirements as the only way for welfare and the Democratic party to survive politically. In bad economic times especially, cutting checks to the poor is an unpopular idea.

However, perhaps just giving the poor more money can appeal to people’s anti-paternalist feelings, along with antipathy towards public sector unions. If ones social services money weren’t going to employing more dreaded unionized nurses or social workers or teachers, but instead just straight to people’s pockets, then maybe more voters would feel OK about it.

But at the very least, it’s something that liberals, who tend to be the only ones interested in poverty, should be looking into.

(Also, see Matt Yglesias and Jamelle Bouie).

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Written by Matt Zeitlin

June 9, 2011 at 10:30 am

Posted in Domestic Policy

2 Responses

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  1. Matt, thanks for blogging about my book. My view is compatible with the idea that willpower is a depletable resource. But assuming, as I do, that the poor and the rich have equal reserves of willpwer, I argue that poor people expend less of it in many areas (work, savings) because the realized benefits are less in terms of utility. If it takes the person with five bee stings and the person with one sting an equal amount of effort to relieve the pain of just one sting (say by working for an hour to afford a dab of salve) which is likelier to expend that effort? After all, the relief that comes with going from six uncured stings to five is less than the relief that comes with going from one to none. The poor, I argue, are like people with six uncured stings. Make sense? If not, there’s always the book itself!Charles Karelis

    Charles Karelis

    June 10, 2011 at 8:40 am

  2. Hello Matt, I was informed of your blog yesterday by Sean Kramer, a guy you and your girlfriend met a few days ago. Interesting post you have here. One thing you didn’t speak to, however, is the notion of habit. Do you believe in habits, and one step further, do you believe that people form money habits? If you answer yes to both questions (as I believe both Liberals and Conservatives would be apt to do, although Liberals may find different reasons for those habits having formed in the first place), then do you think it would be successful policy to give money to people who see their lives as “problems to be alleviated” and who may have acquired addictions or any other escapist attachment?

    It seems like many of the factors to financial success work in concert: opportunity, education, thrift, and a reserve of willpower. Although I am a flaming liberal of sorts, I wouldn’t advocate a “give money” policy unless it was part of a multifaceted approach–perhaps in concert with a class on maximizing the returns of the money, different investment opportunities, and the long term cost-benefit analyses of different spending and saving methods.

    Bethany Hill

    June 14, 2011 at 7:12 am


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