New Findings from War on Poverty: Just Give Cash
bloombergview.com
bloombergview.com
The key observation is that a study published in Nature "found a correlation between child brain structure and family income. Simply put, family income is correlated with children’s brain surface area, especially among poor children. More money, bigger-brained kids."
This is supported by the Cherokee study: when the families became a bit better off ($4,000 a year) the kids did better when they grew up.
So it's missing the point to argue about how grown-ups might (or might not) "waste" money and whether cash is better than other forms of welfare. The point is that bringing up children in poverty creates a worse outcome for society as a whole.
The fact is that $4,000 a year for 20 years is a very small amount compared with the cost of US police, courts, and prisons. If a poor kid grows up, gets a job and pays taxes, that's a massive win for society compared with the same kid growing up in the sort of deprivation that leads to a life of crime and jail.
As a counter point, you could look at the success of Native American tribes that receive government grants or casino payouts, vs those that don't, such as the Lumbee Indians. http://www.nativetimes.com/index.php/business/features/2470-...
In the case of the Lumbee, there's still a strong sense of helping out folks that need it, but the help is at the discretion of the tribe, not a government (or casino). Furthermore, they've built that system without much federal help.
Note that I'm not arguing for an all or nothing approach here, I think it's reasonable for the federal government to help the tribe financially. I don't think it's reasonable to have the government give money directly to individuals in the tribe.
Well, in some tribes there is economic inequality due to local corruption. So this isn't really a one-size-fits-all solution. It works out well when the local government is actually working for the people (vs. just for itself + relatives).
Is this really true? Is the average Cherokee a criminal who spends 3 years in prison (google suggests prison costs a bit under $50k/year)?
"In total, 6,899,000 adults were under correctional supervision (probation, parole, jail, or prison) in 2013 – about 2.8% of adults (1 in 35) in the U.S. resident population."
https://en.wikipedia.org/wiki/Incarceration_in_the_United_St...
You can't talk about "breakeven" without considering opportunity cost of not taking the choice - in this case, taxes and other returns that better outcomes would produce. It doesn't take much increase in outcomes to arrive with a benefit worth $80k over a whole lifetime.
Secondly, going on math alone, you're missing many variables: the (taxed) income of the free individual, hours volunteered, money donated, "positive influence" ripple effect, etc.
I see your point, but it’s important to note that the authors still haven’t established causation, but are planning a follow-up to do so. The authors aren’t making quite as strong of a claim as you’re making here -yet.
The immediate problem is that the costs of US courts and prisons are extremely high (1) and they are still growing quite rapidly. Jailing one criminal for three years costs over $100,000 (aside from the other social costs that other people have pointed out), which would cover a substantial amount of intervention.
Further, US prisons hold very large numbers of poor people, because poor people have the biggest motive to commit crimes (nothing to lose), and the least ability to pay for bail, lawyers or other treatments (eg for mental illness). I'll take correlation if it shows that interventions help poor children to avoid this fate.
(1) Quoting Wikipedia: "Judicial, police, and corrections costs totaled $212 billion in 2011 according to the U.S. Census Bureau. In 2007, around $74 billion was spent on corrections according to the U.S. Bureau of Justice Statistics."
"In 2014, among facilities operated by the Federal Bureau of Prisons, the average cost of incarceration for federal inmates in fiscal year 2014 was $30,619.85."
"In California in 2008, it cost the state an average of $47,102 a year to incarcerate an inmate in a state prison. From 2001 to 2009, the average annual cost increased by about $19,500."
https://en.wikipedia.org/wiki/Incarceration_in_the_United_St...
Correlation is not causation. What, pray tell, is the direct link that causes a child's brain size to increase in relation to the parents' bank account? Perhaps the reason wealthier children are healthier is because their parents have discipline and work hard to provide a safe, healthy, stimulating environment for their children, which includes retaining steady gainful employment and using the proceeds from that employment to provide food, shelter, and education for the children. This will not magically happen among poor children if you give the parents some baseline income.
I'm not speaking in absolute terms; there is definitely some crossover with good parents who are down on their luck and bad parents who have way too much money. But boiling the problem down to "give poor people more money to fix kids' brain structures" is too lazy, and preaching this about like it's some fundamental righteous principle is highly distasteful.
I don't know; your argument seems to be actually the typical response, the kind of thing most people say when they see something that can be pattern-matched to "give money".
There are of course many non-material things that are important to growth of a children, but why dismiss this one so easy? Is it because it "sounds too simple"? Personally, I think we seriously overstate effectiveness of methods appealing to virtues, morality and "if only people would...". A lot of things in life are indirectly related to material wealth, you can improve pretty much anything by throwing more money at it. And we also know that things like "hard work" and "discipline" are overrated; people usually behave the way they do because of the environment they're in, and you can manufacture discipline by a mix of glucose and (in more extreme cases) some anti-ADHD medication.
I think we're as a society ignoring the obvious because it's easier to blame someone's lack of virtue than actually invest resources into solving their problems.
Yes, that argument nobody is making is indeed absurd.
Perhaps the reason wealthier children are healthier is because their parents have discipline and work hard to provide a safe, healthy, stimulating environment for their children, which includes retaining steady gainful employment and using the proceeds from that employment to provide food, shelter, and education for the children. This will not magically happen among poor children if you give the parents some baseline income.
Did you RTFA? The improvements happened after families started gaining an extra $4k from a new casino that was opened in the area.
So yes, it did magically happened after the parents got a baseline income increase.
So you argue that instead of actually using the results of research we should focus our welfare using understanding based upon 19th century moralizations.
My parents put together made less than $4,000 a year when I was born. Yet, today they are not poor and neither am I. Nobody gave them any free money, why wouldn't I be skeptical of these studies?
My parents were poor because they were born in a shitty country with a shitty economic system and there wasn't anything they could do except leave. That's bad luck.
If you're born healthy in the US you start with opportunity and have to actively fuck it up.
Ahh so $4000 had rather more purchasing power than in the US then. I wondered about a salary that low.
You are resistant to early, empirical results that poverty causes negative outcomes for children, and you will require stronger evidence to overcome this resistance.
Fair I suppose, but it says a lot about your politics. And I'll leave it there.
What we've seen in study after study is that if you take low-income people who are struggling and give them more money, they use it in ways that improve their lives, they become more productive, and this has profound long-term impact.
At the same time, I don't think anybody really disputes that giving moderate amounts of extra cash to a heroin addict is unlikely to improve their lives. They need medical treatment before anything else.
I've never seen a study which looked at extra cash injections for long-term unemployed. That would be an interesting one. I would be unsurprised to find that cash alone was insufficient to solve their problems; the most obvious thing they need is education.
My point here is that cash clearly helps in some - probably most - circumstances. But "just give cash" is insufficient; we still need to work on all the other things as well.
Different people weight these two errors differently. Some people think it's really terrible to fail to help an honest person in need, but don't care as much about the cost of enabling a self-destructive person. Others don't care much about (1), and would in fact not help a single person rather than let (3) happen once.
Public policy needs to be informed both by the available interventions, (i.e. give cash, give cash only after a drug test, give treatment after a failed drug test, then cash after completion, etc.)
Unfortunately the 'loss function' of the different types of errors is what really gums up most honest debate on these issues. A lot of these are evaluated on moral principles more than economic costs, which further complicates the story. I disagree with them, but there's a lot of people that think there should be harsh penalties in the world for using drugs, no matter the societal costs. Or that giving anybody a handout from taxpayer money is wrong, even if it ends up saving taxpayer money in the future.
Drug users sometimes engage in acquisitive crime to get money to buy drugs. Or they become sex workers. The public health burden of (unregulated) sex work is considerable.
So giving these people cash reduces the crime they commit, and reduces the need for them to become sex-workers. Often just giving them the cash is far cheaper than the legal system alternatives - the police investigation and the trial is likely to be expensive. (I accept your point that some people just don't care about saving that tax money, they want "tough on crime" policies)
> Public policy needs to be informed both by the available interventions, (i.e. give cash, give cash only after a drug test, give treatment after a failed drug test, then cash after completion, etc.)
This is so simplistic it's almost hateful.
It's a failure to understand the complex drivers of a lot of severe drug addiction.
http://www.theguardian.com/commentisfree/2010/oct/21/drug-ad...
Whoa, I didn't intend to advocate for any particular interventions, just giving some of the difficulties of talking about these in the US political environment, and that short parenthetical list is the sort of interventions that are often brought up tin these discussions.
I meant really that being clean shouldn't be a precursor
It won't guarantee the absolute best return, but it can effectively guarantee a very respectable average return.
There is another comment below about giving in-kind stuff instead of the more fungible cash, but the problems with that (and with your example) boil down to that being moralizing. People want to moralize rather than enable. If a person has the means and doesn't use them, then and only then, can we claim some other problems remain to be fixed, but we cannot even logically conclude that the problems are blocking something debatably-desirable at this point. We can't have a non-armchair/inherently-smug-and-preachy discussion until everyone has a basic income.
This problem isn't going away, and is only for lack of numbers. Even someone who wants to die by heroin would be better off being allowed to, than forcing them to harm others (or themselves differently) in order to get there.
My point was rather than a financial-assistance-only approach is insufficient: we also need, at minimum, strong education and healthcare support, because there clearly exist groups of people who need them.
I agree with that collection of policies, based on my understanding of current economic thinking and research.
Purely anecdotal but please <enable me> and I'll quit economic activity to devote myself to life-improving activities (and a big thank you to whoever is continuing them for my sake). Fortunately I'm an odd-ball and no one else anywhere would even think to behave as I would. So, my story is not only anecdotal but completely irrelevant.
You'll get bored shitless after a week of doing nothing with your life improvements to make a point, and suddenly you'll be back here having a productive input in the society, be it arts or engineering, services or thinking. But maybe you do really want to make a point and decide to just drink and be merry. That would still be a significant improvement for the society over having you perform "economic activity" in advertising or other bullshit industry we keep because we're too big on puritan values to even consider that slaving away your life for food and shelter isn't the optimal way of living.
Interestingly, I keep reading HN and sometimes pause to make a new account with 0 karma, in order to contribute (hopefully) compelling comments and conversation when I am so inspired to, despite the karma/profit-motive. I actually think the presence of karma encourages me to be argumentative and act out indulgently, self-destructively, and even anti-socially, in the same way I see people in poverty do.
I would imagine that a stable supply of the substance to which one is addicted, plus money off which to live, would form an excellent foundation for being a non-destructive member of society.
But I also see my alcoholic sister who uses almost all of her child benefits for liquor. That said, without the direct payments, I would expect her to turn to prostitution. So there's that at least.
As many Westerners have stopped realizing what family life is, they have done all they can to offload these familial responsibilities onto the state so that they can have greater individual independence. A big loss for us, and I don't think we can hang on much longer.
To be clear, I'm not saying you're not doing enough, as I obviously don't know you or your family. I'm commenting that even if you were doing all you could (and you probably are), the social support isn't there to make it work.
What type of education did you have in mind?
The usual package in Europe is a combination of remedial math/english/science and apprenticeships in professional trades - things which no plausible "basic income" recipient could afford to get via private tuition, but which can be easily affordable as an organised programme.
This was done in London. Here you go: https://decorrespondent.nl/541/why-we-should-give-free-money...
> giving moderate amounts of extra cash to a heroin addict is unlikely to improve their lives
It's hard to generalize without a larger-scale study, but the article has some evidence to the contrary. But if by moderate you mean $100 then of course they'll be begging again tomorrow. It has to offer a new perspective.
> It's hard to generalize without a larger-scale study, but the article has some evidence to the contrary
This is an interesting and subtle case: they gave out money, and did some amount of aid work (the article indicates £50k was spent, of which £39k was the handouts, and it's not clear what the rest was spent on), in a city where addiction treatment is free and readily available to anybody who's willing to take it. That combination of things worked, at least in these cases, and I think that's consistent with my expectations that we need combined financial, healthcare, and education support to get really good results. To get more insight we'd need a study which ran the same programme in many locations, including ones where these things are not readily available.
> But if by moderate you mean $100 then of course they'll be begging again tomorrow. It has to offer a new perspective.
And therein lies the tricky part: it's definitely true that if you give somebody enough money, it will solve all these problems for them. Unfortunately it's just unaffordable to raise everybody to the median income. Can we afford enough to make a difference at the population level, even if it's not enough to make all their problems go away? I don't know, and we should keep running more and larger experiments to find out.
And I'm completely confident that I could as well -- not because I'm a good judge of character just because I'd simply replicate this study grab 100 long term homeless addicts at random and give it to them.
But here is another way too look at it.
People with rich parents might not become as successful as their parents but they are rarely ending at the bottom of society.
Even if money alone doesn't motivate you (which I think is entirely fair to belive), you are more likely to try and use them for something useful if you feel like it's within your reach to do so.
The motivation isn't the money itself but rather opportunity within your reach.
True, but if it indeed helps in most circumstances, then we should just go ahead and do it. Right now people are searching for increasingly obscure cases where cash handouts won't help to block the entire idea. It's an easy excuse to make that enables one to do nothing.
I don't think that it helps anybody to offer endlessly reduced compromises in an effort to find common ground with people who are willing to do that. Let's not lose sight of the fact that the status quo - even in the US - is already a combined package of financial, medical, and education support. How about just continuing to improve all of them? We already know that they all work well.
Every welfare recipient should have a shrewd case worker that dispenses welfare as needed, sees that the recipient is really doing all they can to be self-sufficient, and creates opportunities where the recipient can make a contribution back for the gifts they receive (like volunteering at the food bank once a week), tailored specifically to the recipient's condition.
Just getting some extra cash with no strings attached certainly doesn't strip you of your dignity, and if it does, you can always refuse and demand food stamps instead. In Germany, getting food stamps is what strips you of your dignity. You hold up the queue at checkout while they figure if they can accept those and if they are allowed to give you change, etc.
"Just getting cash" strips one of dignity no more than "just getting water from the river" or "fruits from a tree" stripped humans of their dignity in the past. Nature provides for us unconditionally. No one is truly independent from the systems they're embedded in, and the assumption that a baseline amount of resources that can form a stable foundation will make one forgoe "improving their situation" is, frankly, offensive to me as a human being.
What makes you believe this is true, beyond simple assertion?
It's clearly nonsensical to withhold money from them that they would otherwise have received. It also doesn't sound like a good idea to expect them to pay for their own treatment from the money you gave them. We need both for this to work.
It seems like there might also be some bias in selection - presumably one has to consent (in writing) to be part of a long-term study. Perhaps this encourages participants to think of the future and might influences decision-making away from short-term goals and towards "investment" uses of the money rather than ephemeral ones.
I'm looking forward to seeing the results of their differential experiment, and whether there's as much difference between the $333 and $20 groups as there is between the $20 group and the "$0 group" of the general population.
Based on this article, there is also no reason to believe that cash assistance rather than in-kind assistance is necessary. The proposed mechanism is "Parents are happier because they have more money, leading to less fighting within the family. This lowers stress on kids..." But in-kind assistance would also lower stress since parents wouldn't need money.
In-kind assistance has the added benefit that parents can't divert public assistance intended for children's welfare into other goods (e.g. alcohol, tobacco, drugs, junk food).
It might surprise you that putting poor people into gray government housing devoid of life or joy and under the control of administrators not accountable to those people generally results not only in abuses but also in crime inside that housing. But that's what you find, not only in the housing projects you're proposing, but also in military barracks (often in the form of gang rape) and in prisons.
It turns out that, in practice, parents do a better job of assigning resources to their children's welfare than governments do. This is true despite both the occasional glaring exception and the general situation that nearly all parents spend some money on things like tobacco or junk food.
Of course, it would be great to have government or community institutions that serve as a safety net for the kids whose parents aren't providing their needs, for whatever reason. Unfortunately, as a society, we do a terrible job of providing accountability to any kind of institution whose job is ostensibly to care for people without political power — whether we're talking about mental hospitals, prisons, nursing homes, housing projects, or schools. Public schools are only as good as they are because of pressure from parents.
If you could assume, for just a moment, that those moral failings are in fact mostly results of external causes - like environment, continued bad material situation, stress, perhaps bad upbringing - would you then, in that world, see giving direct support as preferable to waiting for people in need to "get their shit together"?
If so, then consider that we're likely to live in that latter world - continued studies of human behaviour show that we're much more influenced by our conditions than our inner character. This is actually pretty positive, because it means we can actually fix things on a systemic level (and it also means things can be broken on it).
Nearly all of India lives in far worse conditions than American poor folks and also don't make the same bad choices.
Your theory doesn't seem to be predicting the world very well.
would you then, in that world, see giving direct support as preferable to waiting for people in need to "get their shit together"?
The post you are responding to explicitly favors giving direct support - just in-kind rather than cash.
...continued studies of human behaviour show that we're much more influenced by our conditions than our inner character.
[citation needed]
Short-term, voluntary material deprivation and stress, both of which you can end instantly at any time you want if you so choose, isn't the same thing as poverty.
> Nearly all of India lives in far worse conditions than American poor folks and also don't make the same bad choices.
Exactly my point. No sane person would call nearly all of Indians a nation of lazy, irresponsible people, and yet it's a popular sentiment towards the poor in western countries. I think my theory predicts the world pretty good.
> The post you are responding to explicitly favors giving direct support - just in-kind rather than cash.
I should have wrote "unconditional support", by which I mean support that doesn't make assumptions about what the helpee really needs based on helper's view of personal virtue.
> [citation needed]
Start with "fundamental attribution error" and continue from there; it's pretty well-studied area.
How do you define "poverty"? Apparently it's not material deprivation, harsh environment or stress. So what is it?
I think my theory predicts the world pretty good.
Your theory predicts that intelligent Asian professionals, when faced with material deprivation, environment and stress will make good choices? Similarly for upper middle class Americans temporarily placed in an educational situation?
And it's only a narrow set of people who will actually wind up making bad choices?
I guess I totally misread your post. So in fact, it's not true that "moral failings are in fact mostly results of external causes"?
The fundamental attribution error is not a magic incantation to ward off all evidence of bad decisionmaking or moral failure.
It's being stuck in material deprivation. My theory is that it's most often caused by harsh environment or medical conditions. "Harsh environment" includes being born into poverty.
My theory predicts that even intelligent Asian professionals will make bad choices faced with enough material deprivation, environment and stress. People backpacking and students are doing it out of their own choice and can always stop backpacking and go home / drop out or change university to a less demanding one. Unless they're doing either to escape poverty, at which point you can clearly see it's not the conditions of backpacking/education that are the source of one's problems.
> I guess I totally misread your post. So in fact, it's not true that "moral failings are in fact mostly results of external causes"?
My point is that there's much less moral failings happening at all than people (usually in a better situation) like to think. That is - a person X is not poor because he's lazy, he's poor because he is malnourished and so stressed that he doesn't have spare cognitive capacity to educate himself and get a better job. My theory predicts that if you solve his direct financial needs for a predictable while (for him; as opposed to random, one-off, non-repeating, small help that doesn't let him plan), he'll most likely recover and start to improve his condition.
> The fundamental attribution error is not a magic incantation to ward off all evidence of bad decisionmaking or moral failure.
No, but it's a name for when people are too eager to see bad decisionmaking or moral failure where there is none. Also, I pointed it out as a starting point - articles describing the concept in detail cite studies about the effects of environment on human behaviour and elaborate on how predictable humans are if you can set up the external conditions.
I'm sorry I am not linking to anything concrete, but I'm writing from a crappy hotel over Great Chinese Firewall. I am asking you to trust that if you start from fundamental attribution error, you'll end up reading about relevant studies :). It's 5 minutes for you, 5 minutes per site for me :(.
In that case, India falsifies your theory. Virtually all of India - including the professional class - is stuck in material deprivation vastly worse than American poverty - the average American poor consumer unit consumes $20k/year, while Indian GDP/Capita is $6k/year (adjusted for cost of living).
They don't usually make the same bad choices. They get educated, save money for a rainy day, mostly avoid drugs, etc.
Actually, now that I think of it, English literature adjuncts are another counterexample.
My theory predicts that if you solve his direct financial needs for a predictable while...
Why financial? Why not just fix malnourishment directly?
I did google the fundamental attribution error, but I did not find any studies showing that certain specific environmental conditions will cause all sorts of people to engage in the same bad behaviors that poor Americans engage in.
The most I found is studies showing things like "people will attribute a basketball player's poor shooting success to ability rather than reduced lighting." This suggests a bias is present, but doesn't come close to proving your thesis.
> In that case, India falsifies your theory. Virtually all of India - including the professional class - is stuck in material deprivation vastly worse than American poverty - the average American poor consumer unit consumes $20k/year, while Indian GDP/Capita is $6k/year (adjusted for cost of living).
Here by "bad" choices I meant "bad from comfortable western observer's point of view". The decisions are probably mostly good from the POV of the poor person involved. People in India are stuck im material deprivation because of the environment - the state in phase space in which their society is in. Similarly, many poor people in western countries.
> Actually, now that I think of it, English literature adjuncts are another counterexample.
Sadly, I don't know anything about this class of people.
> Why financial? Why not just fix malnourishment directly?
I don't think anybody will say that this isn't helpful. It is. Hell, it's almost as good as giving money away, assuming you cater to his particular needs - take into account what foods he absolutely dislikes, his time schedule, his allergies, etc. Because if you don't, if it's MIL-STD-01 meal pack 3 times a day, this is robbing one from dignity and in case of people with allergies / some types of mental conditions it's stress-inducing.
People generally have a need of control over their own fate. It's a base Maslovian need. Most of the in-kind conditional help as implemented in today's welfare denies the beneficiaries such control. This has a serious psychological impact, and you don't have to look further than mental institutions and care houses to see the problems it causes. Or even observe how people abuse welfare or even refuse it at all in order to cling to any semblance of control over their lives they have left. Handing out cash empowers people. They can chose their meal, chose what they invest in, chose their direction.
Another keyword (an almost-synonym to FAE) I forgot about - correspondence bias. The general direction I'm trying to point towards is the one presented by things like Stanford Prison Experiment, Milgram Conformity Experiment, FAE/correspondence bias, the entire economy and game theory - that people's decisions and outcomes are generally predictable based mostly on things external to them. That people follow incentives, determined by things like their mental state, stress, environment, available opportunities, etc. - and that explaining something away as "laziness" or "bad character" or "irresponsibility" is in most cases counterproductive.
If I manage to get hold of a semi-decent Internet connection (allowing to load anything better than plaintext) tomorrow I'll look for links to some sources.
[proceeds to ignore comment]
So maybe instead of coming up with social prescriptions based on abstract bullshit theories that sound good to you, which is because they flatter your preconceptions or because you've heard them repeated frequently, you should open your eyes to the things that are actually happening in the actual world, and see what happens in reality.
I've seen the model I've advocated work well dozens of times in reality.
Please understand that all of the groveling before "empirical results" is thinly-veiled hypocrisy. How many times does someone see a dense academic document and say "Oh, this totally changes my opinion on this controversial issue"? Almost never; if they agree with the outcome, they beat everyone over the head with it and call them denialist for not accepting it, and if they disagree, they insist that the outcome is biased, that there were "flaws in the methodology", etc.
If I did give you an article, study, or paper that supported my claims, don't pretend like it would matter. 98% of the time, people will accept propaganda that supports their existing opinion on controversial issues, and nothing else. It's why our media is the way it is.
I've lived in housing far worse, in terms of material living conditions, than what I'm proposing. I'll happily do it again, most likely next Jan.
The main problem you describe (people committing gang rapes) is a problem with the people rather than the environment. Folks aren't materially deprived, they are just bad people. Now consider these folks: http://www.zostel.com/media/photo/Jaipur_Zostel_Common_Room_... Suddenly, materially worse living conditions don't seem so bad. Instead of "gray government housing devoid of life or joy", it's a fun youth hostel.
(In contrast, my experience staying in real poverty (aka a nice building in an average Maharashtran village) was far less fun. The lack of mosquito netting, power, internet and running water made life quite unpleasant.)
> You've now demand that specific goods be added to the list
>> It turns out that, in practice, parents do a better
>> job of assigning resources to their children's welfare
>> than governments do.It's a pattern you see almost universally in the user comment sections of political journalism. People who want to think find the comment section's tone hostile, because it's filled with ideologues with Pavlovian responses and pre-canned arguments. The ideologues don't need to read what the other side's ideologues have written - they just need a few key words and they're salivating. Political comment sections are a write-only platform.
I don't think this phenomenon is specific to any political ideology, mind. I think it's fairly universal.
Personally, I disagree with 'yummyfajitas conclusions, but I wouldn't go as far as to imply motivated reasoning.
YF may not have been dishonest, but the post was also not worth engaging.
Surely none of us is without sin when it comes to intellectual dishonesty.
Pardon me, but you remind me of the "What have Romans ever done for us?" scene from the Life of Brian.
What if someone inherited a place to live, but has no money? What if she grows her own food, but she can't afford the suit she needs to interview for jobs?
Premise 1: Each person's situation is distinct. In other words, there is no standard group of benefits that would solve everyone's problems.
Premise 2: Poor people will use cash to improve their lives in the long term, rather than just blowing the money on short-term pleasures.
That second premise is exactly what's being demonstrated in small studies, national programs outside the US, and surveys.
If someone has wealth I'd generally expect them to consume that wealth before receiving wealth transfers.
But more generally, if people have some of their needs being met but not all, then they can consume only some of the available in-kind benefits. E.g., a wealthy person with no income (like you described above) might provide their own housing but get their food from the government cafeteria.
Premise 2 is both debunked in the US. Google the consumer expenditure survey and witness poor folks spending money on short term pleasures. Your premise 2 also conflicts with the article: Even if bad behavior does make poverty worse, it’s also the case that poverty causes bad behavior in the first place.
Now you can try to improve the choices that poor folks make. But you can also just eliminate the bad choices and directly manage their lives until they develop the ability to manage their own life.
You don't need to make it so complicated. Just tax people on their wealth and income, then pay everybody the basic income. Those at the very top will end up paying far more in taxes than what they receive in basic income.
"When poor people are explicitly given a room, 3 square meals/day, and government issue poor-people sweats"
"You've now demanded that specific goods be added to the list and we can explicitly have a debate on the merits of those goods."
"then they can consume only some of the available in-kind benefits"
"But you can also just eliminate the bad choices and directly manage their lives until they develop the ability to manage their own life."
All of these things have massive overhead at the administrative, procurement, and distribution tiers. Each of these things costs a lot of money:
1. Deciding on what to distribute
2. Subsequently arguing with recipients over the addition of items to the available benefits, and subsequently approving new items
3. Selecting and procuring the available options for each benefit item or type.
4. Distributing each item.
5. Tracking inventory of each in-kind benefit.
6. Negotiating returns of each in-kind benefit.
7. Balancing stock levels of available benefits to match the partial consumption of some recipients.
While I haven't seen a specific evaluation, I would be completely flabbergasted if this overhead was somehow a lesser cost than the potential loss of cash benefits to pleasure spending.
EDIT: To summarize, why manage this all centrally instead of relying on market dynamics that are well understood and efficient retail and distribution infrastructures that already exist?
As for determining the actual minimum benefit, that's really just the job for a few bureaucrats. Once the basics are specified, the rest reverts to (free) political pundits - e.g., kragen arguing that books should be included.
And note that the losses due to pleasure spending can be HUGE in some cases, mainly relating to location. For example, consider the various housing projects in the east village, upper west side, etc. The cost of pleasure spending is $manhattan 2 bedroom - $cheaper location dormitory (living in Manhattan without roommates is a consumption choice).
It's bad enough trying to manage IT procurements through RFPs. When you try to manage social spending through RFPs, the result is madness.
This is empirical, and not just opinion. The UK has made a policy of outsourcing all kinds of critical social services to "market forces", and the results are predictably unsatisfactory.
Why would they be anything else when you have a direct and clear conflict of interest between maximising shareholder returns and providing effective services?
Is there any evidence to suggest that cash assistance to poor families is wasted at anywhere near the rate you're describing? I can understand being uncomfortable with the amount that may get spent on alcohol or other vices, but I still think that any reasonable amount to expect would be much lower than the amount wasted on administering in-kind and similar benefit programs. Just think about how much it costs us as a society to administer EBT systems -- it raises the cost of food for everyone, not just the benefit recipients.
There are 53,809 NYCHA housing units in Manhattan alone.
https://en.wikipedia.org/wiki/New_York_City_Housing_Authorit...
Assuming an average market rent of $2,000 (a huge underestimate), and assuming dormitories could be provided in distant brooklyn/queens/bronx for $700 (an overestimate), that means we are wasting 70M/month on luxury goods for poor folks in one county alone.
Are you really trying to claim that the cost of administration would exceed $1300/month per housing unit?
https://www.census.gov/hhes/www/poverty/about/overview/
The vast majority of the US is quite a bit cheaper than NYC. Further, we don't need to provide cash assistance to match an area's rent -- thus achieving the same "ship out the poor people" policy you seem to espouse above. If someone can spend their $500 monthly benefit on Manhattan rent, or spend that same benefit on NJ rent, many will choose the latter and thus avoid the waste you claim is inevitable.
And you've still cited no evidence which makes me think that the waste you're citing could exist on a national scale anywhere close to the administrative burden of an in-kind program.
This can always be done, sometimes at tremendous inefficiency.
http://www.fns.usda.gov/tags/water-dumping
'"Water dumping" involves buying beverages that require a container deposit and immediately dumping out the contents in order to return the container and receive the deposit credit in cash.'
That's extremely gross. Most poor people are poor in part because of serious health problems. Giving people "3 square meals/day" implies forcing them to accept some standard issue, probably godawful cafeteria food that they have no control over. This can make health problems far, far worse, driving up medical expenses and driving down their ability to be productive.
To me, that sounds like a) hell and b) permanent underclass in the making.
And if you think in-kind assistance cannot be diverted to other goods, you are really, really clueless as to how creative people can be about converting the things they can get into the things they want to get. The reason we have all kinds of laws about how you can use food stamps is because so many people find ways to convert them to guns, alcohol, you name it.
Citation needed? There was a study a while back purporting to state that most bankruptcies in the United States were due to medical costs, but that turned out to not be the case upon further examination.
Some people are employable only because huge inefficiencies that exist in job market (e.g. it's easy to pass a programming test and hard for your employer to determine your actual productivity) and that would be better off on an UBI, providing some value without the stresses of not getting paid for being unable to e.g. maintain 9-5 schedule, or your employer not understanding that you have random periods of downtime due to depression.
It is too late to edit the comment. It may not be "most" poor people (ie more than 50%) but it is certainly many.
I can also confidently state that a high percentage of homeless individuals have either a medical or a mental health condition that is an underlying cause of homelessness hy substantially interfering with their ability to make their life work. I believe that for the homeless population this is well over 50%, though I don't have a citation for that either. However, my previous college class and firsthand experiences suggest that health problems lead to homelessness. I know that once you are on the street, it can be hard to take care of yourself and homelessness often does cause or worsen health issues. I think this reality masks the degree to which health problems both precede and contribute to incidence of homelessness. I think most people think people on the street are ill because they are on the street. But everything I have seen indicates most of them were ill before they became homeless and that fact contributed to them ending up on the street or outright caused their homelessness. In many cases, being on the street does cause a worsening of their health, but that should not be misconstrued as "Well, they are only ill because they are homeless."
Everyone I have ever known reasonably well who had a serious health crisis experienced significant financial stress as a consequence, above and beyond the high medical expenses per se. Some things I have heard over the years: Job loss, time away from the job, passed over for promotion, took a demotion to a lower paying position. There are also additional expenses incurred beyond the medical expenses, such as higher food costs due to being too sick to work, transportation expenses if they need to travel to get care, etc.
I also recall reading in an article that the most common factor in cases where women were on welfare for very long periods and could not seem to get off welfare was that she was de facto responsible for providing care for a relative with high needs of some sort, either a special needs child or elderly parent in poor health or similar scenario.
I'm not clear why that's a problem.
If, as you fear, America should at some point find itself giving too much to the poor, then perhaps proposals to limit that would be appropriate, but right now (and for most of recorded history) we have the opposite problem, and your fear does not look at all realistic.
A conservative or libertarian model would tend more toward a negative income tax or guaranteed basic income than what we have now. In fact, Milton Friedman was a big advocate of the NIT.
That aside, conservative politicians aren't famous for demanding that the poor be given free money.
The current British conservative government seems intent - quite literally - on starving the poor to death. That seems to be more usual for conservatives than aggressive agitation for a guaranteed basic income.
Milton Friedman is just about the most famous conservative/libertarian economist there is. Nobel Prize, even.
Yes, they are. These services are known as prisons and you will find no greater a champion of their construction and expansion than among the most hard right wing members of the Republican party.
Nice attempt to shift the goal posts, but I'm not going to bite.
We're talking about welfare reform, not prison reform.
You can get a subsidized housing, free food, free medical care, and direct deposit cash every month from the government, and you don't need to be a felon to do it. In fact, you must not be a felon to be eligible.
That's one way of looking at it. Another way is that they entrap many people who don't deserve to be there and would be productive members of society if it weren't for some ridiculous punishment on a nonsensical law.
I think it's unreasonable to believe that even half the people in an American prison would be homeless without it.
No, they are not. Prisons and welfare are for totally different purposes.
In the same way that conservatives want to "micromanage" the lives of welfare recipients, liberals want you to believe everyone's problem is that they don't have infinity money and that there's no such thing as an imprudent expenditure. Liberals usually do not put any weight on independence or self-sufficiency, so they're OK with a society where everyone is on the dole.
By contrast, conservatives believe that people who are not self-sufficient need help to become self-sufficient. Conservatives believe this is micromanagement to the same extent that liberals believe gun control to be micromanagement. To each party, it's the obvious, common sense solution, and it's not about patronizing or babysitting, it's just about supervising people who obviously need supervision.
Signs and wonders....
What's more recent is that we've got a few long-term studies like this one providing results showing that no-strings cash benefits do give strong beneficial results. This was long suspected, but that suspicion is now supported by evidence.
The government is the unique position; they are able to realize a gain on this via income tax revenue. Maybe this can be done via basic income? Could we pass a basic income bill as an "investment in America" and is there a model where the government actually makes a return on this investment?
Women are subject to meaningful rate limits. Ultimately the number of women determine the rate at which a population can reproduce.
A man can mate with many women, so eliminating a single man from the reproductive pool might have a significant impact. However, the women that man could impregnate might simply end up impregnated by someone else.
Not entirely sure how to model this.
I think that the argument from "avoiding coercion" is silly. First, because that isn't what literal coercion means. But moreover, At federal minimum wage, that money only takes 350 hours to earn. Over 18 years, thats 20 hours a year. If someone doesn't value being a parent enough to work an extra 23 minutes a week, then it doesn't seem like that is a right they value particularly highly. Also, there are laws that, taken together, coerce parents into working more than 23 minutes a week to support and care for their children. If we aren't willing to get rid of laws against child neglect, why are we worried about coercion in this case?
In contrast, an American man can decide to get a vasectomy at age 18 and, yeah, sure, we will do that. No problem.
Nonsense.
I don't think denying men who are old enough to serve in the military the right to reproductive choice remedies the situation in any way.
The other possibility, though not a politically correct one is genes. Rationally I find it hard to believe that genes play no role in our intellectual capacity, and they would mechanically self perpetuate poverty.
Without any hard science to back it, my intuition is that a brain is like a muscle, people are born with different muscle structure, largely driven by genes (but with a certain degree of randomness). So not everyone can make it to the olympics. But going to the olympics also requires hard work and training. If all one does is eat burgers and watch TV, the only outcome is to become obese irrespective of the muscle structure.
I think this is the problem. Here's research that's trying to find some quantitative data about this issue, trying to cut through our received wisdom and intuition. And the response is... rooted in received wisdom and intuition.
(I don't mean to dispute your proposed model -- merely to suggest that us sitting here and speculating about models is precisely the wrong way to understand these issues.)
Frankly, I'm a little disappointed with the tenor of the discussion on this site; it seems the collective will to libertarianism is stronger than the belief in empiricism. I'm happy to be proven wrong, though.
Consider that every side in every political debate believes the evidence supports their opinion, and that the evidence the other guys are using is a sham. Although academics have a bias in aggregate, which should not automatically be mistaken as valid consensus, you can usually find at least a few outlying reports to support any desired political position.
What it boils down to is that people believe whatever they want, probably for emotional reasons, and they can't really be convinced otherwise. They're only ready to come to the table when those emotional links have been severed by something in their life experience.
Yes; a check in the mail does not raise a kid, parents do. But what a check in the mail can do is enable one of the parents to stay home and do the kidraising instead of having to seek another job so that the family can have heat in the winter. That's why it is useful.
Nobody does that any more.
If the first, s/check in the mail/electronic transfer/; if the second, well, global warming and stuff...
When you give someone cash you give them the ability to buy books, or go to places, or buy lego, that stimulate a child.
I'm not sure if you've seen how kids interact much but peer pressure is extremely strong and if you're off reading books and playing with Legos at an early age there's little guarantee that it will persist into puberty and beyond. Plenty of friends I grew up with early on had a lot of these interests but most fell into a typical lower/lower-middle class trap of drugs and sex (with partying linking both together, of course). There were some middle-upper/upper class kids that participated a little, but there are different forces at work for those kids entirely that makes it quite easy for them to escape a bad cycle with merely competent parenting skills compared to a completely overworked, overwhelmed single parent or split parent household that defines a great deal of lower income household living situations.
We're not here on HN trying to solve the world's problems or something in comment threads anyway, so being a bit qualitative and subjective is something that goes with the territory of a lot of social science. We could go really rigorous but measuring people and behavior is really, really hard to do well without making the results of papers so narrow they're irrelevant for making meaningful social commentary arguments.
I don't think anyone questions that extra money does good. The big question in the fight against poverty is: given X available welfare dollars per family, what is the optimum allocation between giving them as benefits or giving them as hard cash?
After that you must consider the systematic effects. If you do manage to increase x and allocate it to the poor. What will it do to the economy? There is a chance that it will feedback into increased tax revenue, which again raises x. More money allocated to the poor means more money spent on things needed by the poor, which means increased demand for certain goods and so forth. It's also possible that the same poor, now equipped with secure funding, starts new business to fill that demand which creates jobs and more taxable incomes.
http://www.bloomberg.com/news/articles/2014-08-11/rajan-urge...
"Cash would empower the poor to choose where to buy goods, providing an alternative to government-run monopolies and creating competition in the private sector"
What's funny is that we have devised this completely contrived way of divvying up the world's resources, including this notion of private ownership over key natural resources. But, in truth, no one needs to go hungry, without shelter, water, etc. There is enough.
But, then, we step back and say, "what if we give these people, who currently cannot subsist under this scheme, some marginal share of the resources we've convinced them by fiat are someone else's to give them in the first place?"
Then, of course, we measure their outcomes within the context of the same scheme, and ponder other ways to help them.
Yet, the scheme itself is much more seldom questioned. That one person can earn bilions from what's pulled from the earth we all inhabit, while others die from lack of access to the same should be expected to create irreparable distortions in outcomes. But, it's somehow accepted as an unchangeable, almost natural premise, even as we search for solutions.