The Globalization of Plutocracy

According to a 2015 paper by American political scientist Larry Bartels of Vanderbilt University, the gap between the rich and poor — and the subsequent unresponsiveness of government to the needs of the majority — is not just a feature of United States, as a multitude of studies have revealed. The struggle between the haves and have nots seems inextricably tied to our species, varying only be degree.

For example, in almost every nation Bartels studied, the wealthy were generally and categorically opposed to social spending, even during bad economic times. Continue reading

Great Advice On Dealing With Panhandlers

Over at Everyday Feminism, wrote an excellent piece addressing how best to respond to panhandling, a sadly common experience in our daily lives that is usually met with indifference, discomfort, and sometimes even hostility.

For those seeking a more constructive and compassionate approach to panhandlers, the article is well worth reading in full. I personally found the following bit of advice to be especially worth highlighting, not least because it echos some of my own sentiments over the years: Continue reading

Is a “Star Trek” Economy Soon Upon Us?

One of the most alluring things about the Star Trek series is its vision of a near-Utopian world, where peace, social justice, and economic prosperity exist for all humanity (and other enlightened species).

Underpinning this success is replicator technology, in which anything anyone could ever want can be made for free, completely eliminating the need for money and, with it, socioeconomic inequality and poverty.

This unusual concept is explored in the book “Trekonomics“,  by Manu Saadia, which examines the implications and feasibility of Star Trek’s “post-scarcity” economy. The New York Times covered some of the book’s key talking points. Continue reading

Even Hardworking, Well Educated Poor Kids Rarely Climb Out of Poverty

Despite its reputation for offering unmatched upward mobility and opportunity, the United States is still a difficult place for people on the lowest rungs of society to climb to prosperity. So concludes some recent research reported in the Washington Post that found even the most resolute and intelligent among the poor have a difficult time getting ahead.

[In] large part, inequality starts in the crib. Rich parents can afford to spend more time and money on their kids, and that gap has only grown the past few decades. Indeed, economists Greg Duncan and Richard Murnane calculate that, between 1972 and 2006, high-income parents increased their spending on “enrichment activities” for their children by 151 percent in inflation-adjusted terms, compared to 57 percent for low-income parents.

But, of course, it’s not just a matter of dollars and cents. It’s also a matter of letters and words. Affluent parents talk to their kids three more hours a weekon average than poor parents, which is critical during a child’s formative early years. That’s why, as Stanford professor Sean Reardon explains, “rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students,” and they’re staying that way.

Poverty makes it difficult for parents to spend quality time with children, let alone afford the various extracurricular activities that enhance a child’s aptitude for learning and good behavior earlier on. Even middle class families find it increasingly hard to raise a child optimally, especially as most households require at least two incomes to stay afloat, and ever longer workings hours. Continue reading

Lessons From Norway

Following my recent post about the merits and applicability of the Nordic Model, I figured I would continue with a more in-depth analysis of the Nordic country that can perhaps be considered the most exemplary: Norway, which has consistently been ranked as the best country in the world in overall human development and prosperity.

Needless to say, a nation with as many plaudits and positive outcomes as Norway deserves some measure of scrutiny. What accounts for the country’s unprecedented success in just about every area of human flourishing, from economic wealth and security to civil liberties and health? How did a country that was once among the poorest in the world rise to the upper echelons of social, economic, and political achievement?

American writer Ann Jones spent four years living in this seemingly idyllic country, and recounts her experiences — and why Norway has succeeded where the U.S. has failed — in an article in TomDispatch, later reproduced for BillMoyers.com. She found that enjoyed short working hours, ample time for family and leisure, an accommodating pace of life, and an overall sense of safety and satisfaction.

Most importantly, Norwegians, like the rest of their Nordic neighbors, take a pragmatic approach to government, supporting policies across the political spectrum based simply on whether they work for the majority of people at minimal cost. Continue reading

Why The Nordic Model Works

The Nordic countries — Denmark, Norway, Sweden, Finland, and Iceland — are some of the most successful, and subsequently admired, nations in the world. They often rank high, if not highest, in just about every metric of prosperity, including life expectancy, gender equality, political stability, civil liberties, and economic competitiveness.

These achievements in human development are attributed to the so-called Nordic Model, which combines the competitive, dynamic, and business-friendly economy of a capitalist market with the stability and safety net of the state — in short, the best of both worlds.

But as the Finnish-born Anu Partanen writes in The Atlantic, there is much about this vaunted approach to governance that is misunderstood by Americans across the political spectrum. Continue reading

Six Alternatives To Policing

While law enforcement of some form or another is as old as humanity, the use of an organized, permanent police for to maintain order emerged only around two centuries ago. This, along with mounting scrutiny and debate regarding the effectiveness of the law enforcement system, has led some, like Rolling Stone’s José Martín, to question whether police are even necessary.

It seems like a rash, if not unthinkable, claim; police are taken for granted in just about every place where stability and rule of law exist. It is an institution most people consider to be a given in civilized society, let alone something whose existence should be questioned. What would be the alternative?

Well, Martín lays out at least six of them, all of which have been proven effective, or at least feasible, to some degree. Continue reading

Polling The World’s Poorest People

All too often, the world’s poorest denizens are dealt the added blow of being invisible to their wealthier neighbors, governments, and even many of the humanitarian groups keen on helping them. Furthering worsening the plight of the poor, according to Claire Melamed of Aeon, is the shocking lack of information about what they think, feel, and experience everyday. Without these data, it is more difficult to connect to the human side of poverty, let alone to devise evidence-based solutions to alleviating it.

The World Bank recently did a brave and very revealing piece of research. They asked their own staff to what extent they imagined poorer and richer people in three countries would agree with the statement: ‘What happens to me in the future mostly depends on me’. Bank staff predicted that around 20 per cent of poor people would agree with the statement.

In fact, more than 80 per cent of poor people felt that what happened to them in the future depended on their own efforts – four times as many as the World Bank staff had predicted, and about the same proportion as richer people. It’s worth letting that sink in. Here we have staff in one of the most powerful development agencies in the world, freely assuming that the people whom they are employed to work with, and for, feel passive and helpless when in fact the opposite is the case.

If more people — from the average citizen to policy makers and development agencies — knew exactly what poor people believed and how they behaved, a lot more progress could be made towards eliminating this scourge once and for all. Continue reading

The Poor Are Neither Corruptible Nor Ill-Disciplined

To add further insult to the many injuries of poverty, those struggling to get by often face the heavy stigma of being perceived as lazy, irresponsible, and even immoral. Being poor is a less a product of bad circumstances and environmental factors, and more the result of stupidity, ill-discipline, and personal failing.

But as the New Republic reports, various studies are finding that the very nature of poverty makes seemingly irrational decisions perfectly reasonable.

The very definition of self-control is choosing behaviors that favor long-term outcomes over short-term rewards, but poverty can force people to live in a permanent now. Worrying about tomorrow can be a luxury if you don’t know how you’ll survive today.

Research supports this idea by showing that poor people understandably have an increased focus on the present. People who are among the poorest one-fifth of Americans tend to spend their money on immediate needs such as food, utilities and housing, all of which have gotten more expensive. In this situation, the traditional definition of self-control doesn’t make a lot of sense.

Working toward future rewards also requires trust that those rewards will be waiting for you when you get there. To shed light on this we can look at the the classic experiment about self-control–the “marshmallow game”. Researchers use this experiment to measure how well children can delay gratification. They put one marshmallow on a table and tell a child that she can eat the marshmallow in front of her, or wait a while and the experimenter will bring her two marshmallows.

It turns out that children don’t wait as long for a promised larger reward if they first learned that the experimenter was unreliable compared to other children who played with a reliable experimenter. And, of course, instability and unpredicability are hallmarks of life in poverty.

People who grow up in poverty quickly learn that it doesn’t pay off to save for an uncertain future if the reward they are waiting for sometimes isn’t there after the wait.

Indeed, if you don’t see a future, why bother saving or investing what little income you could spare, if any. The harsh and uncompromising demands of poverty make it so that short-term considerations are practically all that matter.

In our society, hardly anything is more adverse to survival than poverty. It would be foolish to spend precious mental resources thinking about solving a problem that won’t occur for a month when you can’t afford dinner tonight. A series of studies in 2013 on scarcity among people in the lab and farmers in the real world found that being deprived of money caused the equivalent of a 13-point drop in IQ. That kind of a handicap will make it hard for anyone to engage in the high-level thinking required for self-control.

Like any other kind of thinking, self-control can be taught. Children do better at self-control (and in school) when their parents teach them to solve problems independently and to participate in family decisions. But that kind of involved parenting takes time, and financially poor parents are often “time-poor”, too.

Family factors, like nurturing and stimulation, are directly linked to mental development and can be limited by time poverty. And parents living in poor, dangerous neighborhoods don’t give their children as much autonomy as parents who live in less dangerous neighborhoods. This doesn’t mean that poor working parents aren’t choosing to teach their kids self-control. It means they may be prevented from teaching self-control to their children.

Needless to say, poverty creates dire conditions for impressionable and developing minds. Poverty’s capacity to embed itself into the minds of young people is perhaps what is most pernicious, as perpetuates the psychological and physical consequences for generations.

A child born in the bottom fifth of the income distribution has less than a one-in-10 chance of moving to the top fifth, and even the brightest poor children are still less likely to complete college than average wealthy children. Evidence supports the commonsense conclusion that children in poverty have little reason to have high self-efficacy about self-control based on observing those around them.

Working out of poverty is an uphill struggle. The extra work required of people at the bottom to move up takes its toll on health. Poor children who succeed in school and life, particularly members of minority groups, often have worse health than those who fail, showing at least a 20 percent increase in a biological measure of heart disease risk.

A recent study found that adolescents from poor backgrounds with higher self-control did better psychologically but actually aged faster at the molecular level than those with lower self-control. Self-control and achievement require poor people to overcome a number of structural barriers and obstacles. This is stressful, and stress takes a toll on health. Navigating this difficult terrain causes wear and tear on key parts of the body such as the immune system and ultimately deteriorates health.

With all this mind, the article rightly points out the need to change how we frame the issue of self-discipline in the context of poverty.

We tend to think that focusing on long-term goals is always a good thing and satisfying short-term needs is always a bad thing; we say that “self-control failure” is equivalent to focusing on the near term. This definition works well for people who have the luxury of time and money to meet their basic needs and have resources left over to plan for the future. But self-control as currently defined might not even apply to people living in the permanent now.

Meanwhile, an article in the New York Times tackles the equally pervasive myth that the poor, being so weak-willed and negligent, are susceptible to further laziness and degradation when given assistance. So not only do the poor face ostracization and shame for their condition, but they are deprived of any help for reasons of weak character.

Abhijit Banerjee, a director of the Poverty Action Lab at the Massachusetts Institute of Technology, released a paper with three colleagues last week that carefully assessed the effects of seven cash-transfer programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found “no systematic evidence that cash transfer programs discourage work”.

A World Bank report from 2014 examined cash assistance programs in Africa, Asia and Latin America and found, contrary to popular stereotype, the money was not typically squandered on things like alcohol and tobacco.

So across widely distinct cultures and societies, handouts generally have no ill effect on work ethic or financial responsibility. Nevertheless, the myth of the corruptible poor remains widespread, if not intensifying. The culprit?

Professor Banerjee suggests the spread of welfare aversion around the world might be an American confection. “Many governments have economic advisers with degrees from the United States who share the same ideology”, he said. “Ideology is much more pervasive than the facts”.

Some would argue that the U.S. is a different story, because we host certain ethnic, social, and cultural groups that are more prone to laziness than other societies. But decades of evidence from domestic welfare programs do not justify this hypothesis.

Already in 1995, an analysis of rates of birth to unwed mothers by Hilary Hoynes of the University of California, Berkeley, found that welfare payments did not increase single motherhood. And the experience over the next 20 years suggested that ending welfare did not reduce it.

The charge that welfare will become a way of life reproducing itself down the generations is also dubious. Before welfare reform in 1996, some four in 10 Americans on welfare were on it for only one or two years. Only about a third were on it for five years or more.

And what about jobs? There is little doubt that welfare can discourage employment, particularly when recipients lose benefits quickly as their earnings from work rise.

Still, the effects are muted. For instance, in 1983 Robert Moffitt, then at Rutgers University, estimated that welfare reduced work by some four hours a week out of a total of 25.

“There is some disincentive effect consistent with theory, but the economic magnitude is not large”, said James P. Ziliak, head of the Center for Poverty Research at the University of Kentucky. “Oftentimes these disincentive effects are overstated in the policy discourse”.

Yet still these negative impressions of the poor — and the subsequent disapproval and gutting of aid — persists to punishing effect. Even when economic circumstances plummeted and people found themselves unemployed and financially unstable through no fault of their own, this already-baseless line of thinking persisted.

When the Great Recession struck, many of the poorest Americans found there was no safety net for them. “Extreme poverty was more affected by the shock to the labor market than in prior experience”, said Professor Hoynes at Berkeley.

Why is this debate still relevant today? The evidence has not caught up with the popular belief that welfare reform was a huge success.

The old welfare strategy … blamed for so many social ills died long ago. Its replacement is tiny by comparison, providing cash to only about a quarter of poor families and typically only enough to take them a quarter of the way out of poverty.

As long as we fail to accept the external and structural causes of poverty, in favor of blaming and shaming the poor themselves, the scourge of poverty, and its subsequent sociopolitical consequences, will continue for generations, squandering millions of lives in the process.

What are your thoughts?

The Great Expense of Being Poor

Over at The Atlantic, Barbara Ehrenreich reminds us of just how burdensome poverty can be. One would think this is obvious, but far too many Americans prescribe to the notion that poverty is a product of bad behavior and character, rather than the natural outcome of bad circumstances, such as a dearth of well-paying jobs.

What I discovered is that in many ways, these [low paying] jobs are a trap: They pay so little that you cannot accumulate even a couple of hundred dollars to help you make the transition to a better-paying job. They often give you no control over your work schedule, making it impossible to arrange for child care or take a second job. And in many of these jobs, even young women soon begin to experience the physical deterioration—especially knee and back problems—that can bring a painful end to their work life.

I was also dismayed to find that in some ways, it is actually more expensive to be poor than not poor. If you can’t afford the first month’s rent and security deposit you need in order to rent an apartment, you may get stuck in an overpriced residential motel. If you don’t have a kitchen or even a refrigerator and microwave, you will find yourself falling back on convenience store food, which—in addition to its nutritional deficits—is also alarmingly overpriced. If you need a loan, as most poor people eventually do, you will end up paying an interest rate many times more than what a more affluent borrower would be charged. To be poor—especially with children to support and care for—is a perpetual high-wire act.

Most private-sector employers offer no sick days, and many will fire a person who misses a day of work, even to stay home with a sick child. A nonfunctioning car can also mean lost pay and sudden expenses. A broken headlight invites a ticket, plus a fine greater than the cost of a new headlight, and possible court costs. If a creditor decides to get nasty, a court summons may be issued, often leading to an arrest warrant. No amount of training in financial literacy can prepare someone for such exigencies—or make up for an income that is impossibly low to start with. Instead of treating low-wage mothers as the struggling heroines they are, our political culture still tends to view them as miscreants and contributors to the “cycle of poverty”.

Continue reading