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What happens when you give homeless people a prepaid credit card.

thestar.com

369 pointspavs242 comments

Being homeless in Canada is 'something else'. You don't really realize how harsh those winters are until you're in Toronto and you see the streetpeople after a night at -30 Celsius.

I've lived on King street, where it ends on the lake, and from there it was about a 20 minute walk to the office. Every day I'd walk that same route and meet probably between 5 and 10 people living 'off the street'. They'd all be equally friendly. They had their own spots.

The police in Toronto was pretty laid back at the time (I'm no longer there so I have no idea how they are today), when a really cold night would approach they'd round up the homeless people and bring them to a shelter. But every year, in the spring one or two bodies would be found in the melting snowbanks. The unlucky ones that avoided the shelters and slept in 'their' spots only to never wake up again.

Winter in Canada is harsh.

Totally agree with this. Spend a year out east and all of the homeless people there get a seriously rough deal all winter. I cannot actually comprehend how anyone survives it.

Living in Vancouver though, it seems that everyone that could get some form of transportation has ended up here or in Victoria; it certainly feels disproportionate to the population/economy.

Yes, that's because the winters there are somewhat lighter because of the presence of a large body of water to the West.

Ditto Chicago. The fact that every homeless person in the country does not save up the $50-$100 (less than a week's work in a major city) in bus fare and make a beeline for Miami or San Francisco has some scary implications about the depths of the problem and/or their ability to make some simple improvements in their situation.

Not all homeless people are hobos. Many of them probably have roots in the cities where they live.

I expect the same reasons apply to people who live comfortably (or at least have a roof over their heads) and choose/refuse to take that high-earning job on the other side of the country.

True. I was talking to a homeless guy in Boston and asked him about moving down south. He said his aging parents were in Boston as well as his therapist.

> ...or their ability to make some simple improvements in their situation.

I think it's almost impossible to understand if you've never been completely destitute, but, ironically, for most people as their situation worsens their ability to cope becomes overwhelmed and their ability to make rational decisions disappears.

This is probably the number one problem of poverty, and it applies to the poor and homeless in developed countries, as well as to the populations of completely broken nations. For example, as they become poorer and poorer, many people become more and more irrationally attached to their "stuff" and refuse to part with it, even if leaving it behind and moving on would dramatically improve their situation. They become extremely reluctant to try anything new. I think their psychology is such that they've been overwhelmed by the failures of everything they have tried, and they don't feel like they can handle a whole new failure; they seem more comfortable repeating the same mistakes over and over again. Malnutrition and stress also do a really nice job of exacerbating any latent mental issues they have, and those won't go away after a year of comfort, which frustrates those people that would try to help them.

So, I don't know what the answer to all that is, but I am convinced that the earlier it is addressed, the better, and that it's unreasonable to expect most people to resolve their own situation.

Old but good HN discussion on homelessness

http://news.ycombinator.com/item?id=116079

> 2) The existence of the minimum wage hurts the homeless. The people I worked with were incapable of producing $6 an hour of value for an employer. If there was no minimum wage, they could work $2 an hour of value and then gradually work their way up.

It wouldn't work though. Employers would take advantage of the situation, market rates would drop to the point where the homeless person would no longer be able to create $2 of value per hour either...

I don't think the supply of human time is that large that the market would adjust that significantly to a lower minimum wage. Lowering the minimum wage would generally raise supply of human time, yes, which drops the price, but the additional human time is by the terms of this discussion already relatively low-grade stuff.

$2/hr of value is a low bar. Anyone who can't do that can't be saved by any job. Based on previous discussions, that statement covers a lot of homeless people anyhow. ISTM that the ones who would be helped by lower minimum wage are high schoolers and younger workers trying to get their first part time jobs, not the homeless.

Minimum wage was created specifically to stop abuse of large numbers of people. I don't think it is realistic to expect that dropping the minimum wage will have just a beneficial effect on the few homeless people that we're talking about, it will have a huge impact on everybody that now earns minimum wage (and you'd be surprised how many people earn 'just' the minimum wage).

Employers as a rule extract a multiple of value from their employees time, not just a little bit over.

You could make the opposite argument: raise the minimum wage to $30 per hour. Suddenly all the homeless people are worth $7 per hour at a minimum.

Free markets are rarely really free, there usually is someone that benefits from the market being free, and in the case of employer employee relationships there always is someone to be found that will do the job for less. That's why we have minimum wage.

"Minimum wage was created specifically to stop abuse of large numbers of people."

Yes, but A: goals and effects are two very different things and B: it was created in an increasingly foreign world and every year it is less obvious that the original logic holds. (I mean that in a very general sense, not in an immediate "discard minimum wage and return to a libertarian paradise" sense; as robots become more and more capable and really start eating into the low wage jobs we may have to consider things like guaranteed minimum incomes or other radical proposals.)

"Employers as a rule extract a multiple of value from their employees time, not just a little bit over."

In my opinion, not if you do a full accounting. Profit margins for established, successful companies in the vast majority of industries tend to run in the single digits percentages, bursting up to 10% or the low teens for some rare cases. And then there's the tech industry, which is another story altogether. It may be true in some abstract sense that companies extract multiples of value over what they pay but it isn't true in a useful sense.

Generally speaking, I deny that there's a huge amount of room for people to cut minimum wages, because employers do not make radical profits on their employees. The job market isn't perfectly efficient, but it's more efficient than that. A person/task that can't justify minimum wage in the modern economy is a person not hired and a position not created, not a person generating 2$/hr of value but forcibly paid minimum wage.

Now, if the economy was grotesquely inefficient and the average company made 200% profit and the only way to pry money out of their hands was with a minimum wage, I'd agree, but that's not the world we live in. It's certainly a world we hear about a lot in propaganda but it doesn't correspond to reality.

I have to agree with jacquesm here. You're right that many homeless individuals can't produce a minimum wage's worth of value for an employer, and you're right that the requirement of a minimum wage then makes it nearly impossible for them to get work that has any chance of improving their situation.

However, jacquesm is right that the minimum wage exists as a lower threshold that prevents the exploitation of workers, and that's as true today as it was in the 1920s. Reducing or abolishing the minimum wage would certainly lead to powerful economic deflation, and while that looks great on paper, in reality it leads to lots more homeless and poor people.

In practice, game theory does not apply to economics as often as theorists think it does. For example, you'd think that if some employer wasn't offering a decent wage, then they'd be unable to get workers, so they're forced to maintain the same wages as everyone else. However, eventually there will be an economic depression like the one we have now, and that will result in huge numbers of able employees, and a ripe opportunity for would-be employers to exploit that situation in a way that wouldn't fix itself for decades.

I am an employer. And, yes, although my margins are ridiculously thin after you count up all the money that goes in to everything, the truth still is that I do make sure I get multiples of value from my employees (or contractors); otherwise, I simply wouldn't bother having them.

Homelessness and the problems of the poor are something that I think about a lot, and as I said, I have no idea what the solutions are. I do know that merely reducing or eliminating minimum wage requirements -- even only for their specific case -- is not a viable solution.

> I have no idea what the solutions are.

...actually, that's not quite true. I think I know of one solution, I just don't talk about it much because it's unrealistic. But here goes: the real colonization of space.

I think that extreme poverty and conflict are symptoms of a deeper problem in human societies. Unfortunately, at this stage of our technological development, human economies must be continually and steadily growing in order to be "healthy" (low rates of unemployment, reasonable consumer price indexes, low homelessness, etc.).

Further, while it's theoretically possible that the planet could support vastly greater human populations, you must take into account human territorialism, cultural divides, and other social-psychological factors. So, in practice, it's hard to imagine the planet supporting, say, twice as many humans, in peaceful conditions, at our current moral and psychological development.

So, there's a kind of "rebound" effect in population growth: rather than trying to grow in the most efficient, compact manner possible, human populations tend instead to grow and explore as quickly as possible, until some barrier stops the growth. When that happens, two interesting effects seem to occur: the barrier area tends to develop denser populations, and the original population centers tend to decay.

Also, you have individuals (and groups of individuals) that tend to vastly out-produce the rest of their society. This is one of the parts of the engine that causes human population growth. However, it also has a tendency to create greater efficiency, which both takes advantage of the poor as well as creates more poor people. (There is a counter-argument that this also leads to better living conditions for the poor, and it's true, but that doesn't resolve the much greater economic divide between the various socio-economic classes.)

If these industrialists don't have some kind of frontier to grow into, then they inadvertently magnify the problems of barrier growth: they create lots of wealth for a small group, at the expense of a much larger group.

This is a very poor, hasty description, but the basic essence of it all is that at this point humans simply need some frontier to expand into in order to maintain reasonably healthy societies, and we don't have one.

I don't think we'll be getting one anytime soon, so I expect the human condition to get a little grim for the next century or so.

Why not colonize the ocean floor instead or as well?

I'd be as excited as anyone if we were colonizing space. If humanity survives long enough and manages to avoid too many dark ages, it is an inevitability, but at the present time, doing so would be terribly expensive.

I'm not sure if you could honestly classify spending trillions of dollars on space colonization is the best way to allocate resources for a poverty reduction program.

In some distant future where such things _are_ financial feasible or necessary, I would imagine that economic opportunities would be traded to the earlier pioneers who would suffer under what would surely be difficult and dangerous circumstances.

The engineering challenges of colonizing the ocean floor are probably as great or greater than those of colonizing space.

Weird but true. Some go so far as to call the ocean floor 'inner space'. http://isc.gso.uri.edu/

> I'm not sure if you could honestly classify spending trillions of dollars on space colonization is the best way to allocate resources for a poverty reduction program.

Historically, this has always been the case though, and the initial up-front expense has always benefited the society willing to fund the exploration. (Or, almost always; I think I recall a case where one civilization went exploring, bumped into a another much more warlike civilization, and was all but wiped out. I don't recall which specific example I'm thinking of though, and there are probably a few anyway.)

they create lots of wealth for a small group, at the expense of a much larger group.

PG does a good job of explaining why this is not true in his essay, "Mind the Gap"

http://www.paulgraham.com/gap.html

The poor get richer too. Just at a slower rate.

With all respect due him, I regard pg's essays as I do Malcolm Gladwell's books: they are often entertaining, occasionally insightful, and never something that I would cite in an argument. (And for all the same reasons.)

So, I predicted this response. In fact, I even said,

> There is a counter-argument that this also leads to better living conditions for the poor, and it's true, but that doesn't resolve the much greater economic divide between the various socio-economic classes.

I've been waiting almost all day for someone to come along and say, "but the poor are so much better off!" So, I apologize in advance ...

What do you think of slavery? I have a somewhat unconventional view of it. I think it was a necessary component of human progress for a long time, until technology could gradually supplant it. I don't think it was inherently evil (except of course in abusive conditions, which it usually was).

What was truly awful about slavery was that there was usually no way for a slave to have any chance at all of improving their class. There were exceptions, sure, but as a rule, once a slave, always a slave. That is where slavery is really bad, IMO.

Similarly, as the class divide becomes progressively wider in modern society, there are more and more people who will find it impossible to markedly improve their socio-economic status. As a rule of thumb, if you're homeless in the U.S. today, you're not likely to be sending your kids to college 20 years from now.

Part of the reason that I'm so passionate about the problem of poverty is because I've lived a small bit of it. I've made the transition from being quite poor to being -- at the moment -- less poor, and with a chance of being in pretty good shape in a few years. It takes a long time, and it takes vast amounts of energy. And, I had good luck on my side: I got to play with computers when I was very young, so I have useful skills.

While I gratefully concede that a poor person today has much better chances of being able to eat cooked food and enjoy the basic comforts of cheap entertainment and toys, I do not agree that having really really poor people and really really rich people is an indicator of a healthy society. Rockefeller, Carnegie, Gates, and others have chosen to do good things with their amassed fortunes, but I'd still rather see larger numbers of people attending secondary schools and learning trades -- things which are much harder to do when they're extremely poor.

I regard pg's essays as I do Malcolm Gladwell's books: they are often entertaining, occasionally insightful, and never something that I would cite in an argument. (And for all the same reasons.)

I'm curious what your reasons are.

... but that doesn't resolve the much greater economic divide between the various socio-economic classes

Your statement implies that you believe an economic divide is bad in some way. Can you elaborate on what you believe is bad about it?

pg's essay postulates reasons why people think an economic divide is bad. Then he gives a logical argument why each reason is incorrect.

It's bad because wealth is finite.

No, wealth is not finite, you can create it. You can build your own house for example and you've created wealth.

It's bad because you have to do something immoral to get rich

No, while true historically, it is now possible to get rich by creating wealth.

And he also suggests that while the gap in bank accounts is growing the gap in life-style is shrinking.

If minimum wage was not needed today we'd see nobody earning minimum wage, but only people making comfortably above it.

As long as there are plenty of people earning just minimum wage we need minimum wage.

You can't argue that if we removed or lowered the minimum wage that employers would not take advantage of that and would reduce the pay of those that currently earn minimum wage given that evidence.

Based on the normal distribution of worker skills there will aways be plenty of people earning just minimum wage, but you can't infer that far more people are earning $6/hour at a $6/hour minimum wage than would be earning that wage if no minimum wage existed. Such large scale market inefficiencies would not last for long.

Surely there will be some workers who are paid marginally more because of minimum wage laws, but not much more. Because of the large quantity of low paid workers, the gains from automation are significant. One wheat combine does the work of thousands of laborers.

Firms do not "take advantage" any more than workers do. Surely some workers would be paid somewhat less without minimum wage, but surely more people would be employed, gaining skills and experience, etc.

Who really knows what the impact of this would be on various industries over time. The modern world has done away with low skilled manufacturing jobs (which might have been the first rung on a ladder to more skilled jobs) and replaced hundreds of thousands of workers with a far smaller number of robots.

Most advocates of minimum wage prefer to look at the world as a single slice of time in which it's obvious that someone is benefitting from the policy. Over a longer period of time, the benefit is far more difficult to detect and the case for minimum wage evaporates.

Imagine a world in which people could be hired for $2 per hour (where that's all their skills were worth). The state could simply subsidize their paid work. Then it's not a welfare system but a subsidized job training program. Far preferable both for outcomes and for the self identity of those working in the program.

> Based on the normal distribution of worker skills there will aways be plenty of people earning just minimum wage

Why? Wasn't the wage you made supposed to be based on the value you added? Or has that argument gone out the window?

I really don't see any reason why there ought to be a normal distribution of wages. Also, the wages are not distributed that way at all, it's a power law distribution, relatively large numbers of people make little money and relatively few people an enormous amount.

> but you can't infer that far more people are earning $6/hour at a $6/hour minimum wage than would be earning that wage if no minimum wage existed.

Sure you can. That's unassailable logic. Every person earning minimum wage is a datapoint that you can use as evidence. How many people do you suppose are earning minimum wage right now?

> Such large scale market inefficiencies would not last for long.

In countries without minimum wage they last up to today, in countries with they lasted up to the moment that minimum wage was introduced.

> Surely some workers would be paid somewhat less without minimum wage, but surely more people would be employed, gaining skills and experience, etc.

Right. You mean "would be locked in to wages below subsistence level without much chance of improvement". Gaining skills and experience doing what? Flipping burgers? Checking out at the register?

> Who really knows what the impact of this would be on various industries over time.

Shareholder value would increase :)

> The modern world has done away with low skilled manufacturing jobs (which might have been the first run on a ladder to more skilled jobs) and replaced hundreds of thousands of workers with a far smaller number of robots.

You must live in a different world than the one where I live. Where I live we've outsourced those manufacturing jobs to places where there is no minimum wage and there is a disregard to job safety and public health. And in more than just a few cases where there is no age limit for full time work either.

> Imagine a world in which people could be hired for $2 per hour (where that's all their skills were worth).

Imagine a world in which people could be hired for $7 per hour (where that's all their skills were worth).

We already live in that world.

So firms do take advantage.

> Firms do not "take advantage" any more than workers do.

Right. Workers have yet to take advantage of their employers in a single instance, whereas employers have historically abused their workers routinely and still do so today in many places, and would do so in many more given the chance.

The worst thing a worker can do is to strike. And that is - in most places - a government protected right. Coincidentially, most of the places where you can't legally strike also don't have a minimum wage.

Really, I can see a lot of advantages to Capitalism but there are limits to what it can achieve and if it was a perfect system then we wouldn't need minimum wage, and we wouldn't need unions either. In the real world, unfortunately, we need both.

Capitalism is like democracy, it's not perfect but it seems to be the best we've got. Hopefully in the longer term it will turn out that we can and will do better.

Then, on top of all that there is one more factor. The minimum wage sets the base level for all other wages. There would be a tremendous knock-on effect from removing the minimum wage. When minimum wage was introduced everybody benefited (well, except for the highest segment, maybe).

Sure you can. That's unassailable logic. Every person earning minimum wage is a datapoint that you can use as evidence. How many people do you suppose are earning minimum wage right now?

Technically, to demonstrate that, you'd need to demonstrate that the minimum wage level is an outlier in the overall wage distribution. That should be very easy to see if we had a histogram of how many people earn a given wage, but my Google-fu is failing me on that point.

There are two things an employer can do when considering an employee who they would prefer to pay less than minimum wage: either pay minumum wage, or don't have that employee. There's some cutoff as to which choice the employer makes. You can guess one way, as you do, and most minimum wage earners would be substantially harmed by the removal of the minimum wage. You can guess the other way, as grandalf does, and most current minimum wage earners would be either entirely or near entirely unaffected. Without numbers, either one is still a guess.

http://en.wikipedia.org/wiki/Household_income_in_the_United_...

specifically:

http://en.wikipedia.org/wiki/File:Income-curve-$10k.png

http://pubdb3.census.gov/macro/032005/hhinc/new06_000.htm

Keep in mind that in increase or decrease of the minimum wage will affect all wages higher than minimum wage, with a more pronounced effect on the lower end of the scale.

Minimum wage is 2% of the workforce for full-time employees, a much larger percentage when looking at part-time employees. Minimum wage is also usually found to be associated with either the young, the old or the uneducated, in other words, those that have a bad negotiation position.

It's a good start, but it's based on total income. So, someone with two minimum-wage jobs adding up to (say) 60 hours per week will appear above someone with a job paying twice minimum wage who only works 20 hours a week. That's not what we're looking for if we want evidence that minimum wage is increasing the wages of many on the low end of the scale.

Unfortunately, this happens to be what the census bureau tabulates, which makes it hard to find the data we're actually looking for.

I don't disagree that people should be able to earn a living wage. However it is supply and demand that sets wages (in the absence of a minimum) and so if you are arguing that the minimum wage sets the "floor" you are proposing some fairly mind boggling demand side effects.

Your view also defines workers and firms as adversaries with no shared interest in improving worker productivity (ability to add value). Aside from pure manual labor (for which workers might be whipped to increase productivity and for which virtually no intellect or interest is required) all firms would benefit from improving the human capital value of their labor force.

Strikes are a legacy of the days when work was simply straining one's muscles against the earth or repetitively doing stitching, stamping, etc.

Unions, too, are a legacy of the days when you could be replaced by any willing person ready to step in and earn your wage. Today, Unions are granted additional power (beyond the market power they would have just via collective bargaining) and they essentially impose a tax on certain firms. I'm not anti-union... they serve an important purpose, they just shouldn't have any extra power beyond collective bargaining. New hires shouldn't be forced to join, etc.

In my view, minimum wage laws have a few negative effects:

- they drive low wage work into the black market where there are no protections against abuses.

- they limit employment opportunities for those whose ability to add value is lower than minimum wage... such people become wards of the state, terminally unemployed.

- They make subsidized training arrangements infeasible for low end workers.

- They draw a sharp distinction between employed an unemployed. It would be far more accurate to determine that a person needs $3/hour of support from the state b/c they can only reliably pull in $4 per hour. In today's world, that person is unemployed or is constantly fired after it becomes obvious that he/she is not fit for minimum wage work.

> However it is supply and demand that sets wages...

This has been shown to be false throughout history, at least as many times as supply-side economics.

Are you saying that you don't think prices are set by supply and demand? What sets them, then?

Based on the normal distribution of worker skills

The what?

Imagine a world in which people could be hired for $2 per hour (where that's all their skills were worth).

This reminds me of Metropolis. Is a world where a large portion of people work full time, producing just $2/h, really preferable? That's got class society written all over it.

Setting a minimum wage makes some people's wages rise to it - AND, unavoidably, it also makes some people unemployed.

Because not all employers extract the same value from the same workforce, those more efficient will be able to afford the raise. But, by definition, the employers of some of that population will not be able to afford that raise (otherwise the market value would have been greater). This means some people will become unintentionally unemployed.

This is absolutely true, but the net benefit is huge. It's a typical case of an ethical dilemma, no minimum wage is shitty wages for everybody, minimum wage is a living wage for many and no wage for some.

Exceptions to minimum wage are a thing that's been tried in some places but on the whole it didn't work out well, I believe there are still some experiments running in Europe where long term unemployed can work for less than minimum wage in some jobs (but with a time limit) while keeping their welfare.

It is not a net benefit. It is a net loss for society, as less wealth is produced, so society in general gets poorer. It is also a net loss for those that become unintentionally unemployed. The overall salary mass is not raised, but reduced.

I would also add it is completely illegitimate to prohibit a voluntary agreement based on some supposed "greater good".

Your assertion that no minimum wage means "shitty wages for everybody" is unfounded. Wages are determined by productivity, and it's no possible to raise real wages (taking into account other goods prices) with a law. Only an increase in produced wealth can raise wages.

Edit to add: If you imply that the "unintentionally unemployed" ones are a unlucky few, that's not the case. As you would probably know, official unemployment levels are around 20% in some EU countries, while real levels are probably way above that. That means a whole lot of people is not allowed to produce nothing because of minimum wage laws. The wealth prevented from being created is huge.

That is not true. Underemployment does not benefit anyone: it does not provide the employee with a living wage and results in an unproductive workforce. You can't change the fact that there is a minimum amount of money necessary for a reasonable existence, and going below it is just a means for temporary exploitation of workers, in some (although possibly farfetched) fashion similar to slavery.

Subsistence work with no possibility of improvement does not provide society with a net benefit, but only creates a class of permanent poverty marred by undernutrition and an inability escape the tactical issues of living paycheck to paycheck, and it's an especially important issue in a country such as the US where health benefits are few and time off is minimal.

If minimum wage is taken away, market force WILL drive down the wages, but there will be no social benefit, as it will only result in denying opportunities to a very large sector of society.

A reasonable existence is a completely subjective value. Someone with a $5/hour wage today would live better than some kings some centuries ago. So it does not exist that "minimum amount of money".

Society takes a loss. The less wealth is produced, the poorer the society is. It's as easy as that.

What denies opportunities is denying someone the possibility of working because he's not productive enough.

>Minimum wage was created specifically to stop abuse of large numbers of people.

Fifty years ago, the politicians who pushed for the increased minimum wage did not hide their motives. Nor, in an era of state-sanctioned segregation, did they feel the need to hide their knowledge of who the intended victims of minimum-wage increases would be. In a 1957 Senate hearing, minimum-wage advocate Senator (and future President) John F. Kennedy of Massachusetts said:

"Having on the market a rather large source of cheap labor [hundreds of thousands of black workers] depresses wages outside of that group, the wages of the white worker who has to compete.

When an employer can substitute a colored worker at a lower wage, it affects the whole wage structure of an area, doesn't it? There are, as you pointed out, hundreds of thousands of colored workers looking for decent work."

So, yes, the minimum wage was meant to stop the "abuse" of whites by blacks willing to work for a lower wage. It's sad when the racists have a better grasp of basic economics than the enlightened liberals.

Truth. The whole point of the minimum wage is to convert a labor structure into a voting structure. Abolish the minimum wage and the new workers would start thinking about business, school boards, zoning laws, the tax structure, and so forth. And that simply would not do.

About 1% of the population earns min wage, 20% of whom are teenagers. I was surprised it is so low, given all the political discourse about it.

http://www.bls.gov/cps/minwage2009.htm

I think you misread the stats by a bit. From the article:

"Together, these 3.6 million workers with wages at or below the minimum made up 4.9 percent of all hourly-paid workers."

"Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less."

"Among employed teenagers paid by the hour, nearly 19 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over."

I think you misread my post.

3.6 million = 1.2% of "the population", which is roughly 300 million people

There are 818,000 people earning min wage who's chronological age is between 16 and 19 (i.e., "teenagers"). See table 1. That's 22.9% of 3.6 million.

Minimum wage just outlaws all jobs that are worth less than $6 per hour. Suppose the unemployment rate is 5%, if minimum wage were raised, unemployment would increase. If it were lowered, unemployment would decrease.

There is a widespread misperception that businesses naively overpay employees for work that is actually worth less than minimum wage. This is not the case, which is why there is litter on sidewalks and beaches (for example) and why there has been a rise in the use of robotics (mechanical car washes, street sweepers, assembly line robots, grain harvesters, etc.)

Maybe in the short term some workers were overpaid, but it is generally very brief and does nothing to equip those overpaid workers for the future since industry is striving to correct the inefficiency and develop a robot, etc.

I think the point you are missing is that it's not just about the wage someone is paid, it's also about the training the job provides. Minimum wage prevents people unable to add $6/hour of value from having a job at all, which makes them helpless wards of the state. Great accomplishment.

http://news.ycombinator.com/item?id=1644264

You're assuming that those working for $2 an hour were being paid fairly and that what they were doing wasn't worth $6.

Also I've read at least 2 studies showing that min wage in the US didn't decrease employment but did increase earnings (ie people weren't sacked nor even underemployed because min wage increased).

> ...if minimum wage were raised, unemployment would increase. If it were lowered, unemployment would decrease.

And yet, there are so many stories from wait staff about how important tips are to their ability to survive. Lowering unemployment at the expense of a much larger group's ability to survive is not a good idea IMO.

You keep making this point over and over, but I don't think you understand the reality of the situation from a business owners perspective.

I'll talk from the perspective of someone who has both earned minimum wage at McDonalds and designed manufacturing robots to replace people.

When I was working for minimum wage, I worked my ass off. We'd retunely serve >$1,000 an hour in business with 10 employees making minimum wage. 10x7 = $70. There is plenty of overhead but when your payroll expense is less than 1/10th of your revenue, would lowering the minimum wage really do much? In our case the limiting factor on how many people were working was literally how many jobs there were. Add in some more poeple, what do they do? Nothing. So all the minimum wage does is set a floor on what they paid us. I was horribly overqualified, so was everyone else, anyone who walks in the door can handle the job, so they would just pay the cheapest people to do that job required by law.

Now fast forward to when I had graduated college and was designing robots, I was working on a system for a production line where the parts cost >$50,000 each. The person it was moving aside (they weren't actually fired) made >$40,000 a year. Much more than minimum wage. The reason for the replacement was that the robot could do it more precisesly and thus waste fewer compononets. The value was not the cost of labor, but the ability of the robot to do something better than what a human can do.

The robot cost a lot of money, hundreds of thousands of dollars, and the person it was replacing only made about 1/5th of that. This was a relatively long pay off project just looking at labor vs robot costs. The real savings was in reducing wasted procduct. So the robot was replacing high skilled labor that was far above minimum wage anyway.

If your argument ever relies on McDonalds replacing people with robots, you're just wrong. Robots are not that cheap and people are not that expensive. Minimum wage is peanuts already, lowering it won't add more workers. Would you really replace the person handing cups out of the window for $5 an hour? What kind of robot would you need with the articulation to pick up a cop, hand it out the window and find the person sitting in their car. Would it really be worth the tens of thousands of dollars to replace a $7 an hour worker? Hell no! That's why we don't have robots at McDonalds. But if the minimum wage was $2 an hour, the guy at the window would be making $2 an hour, and there wouldn't be 2 workers just becuase the minimum wage was that much lower, becuase you only need one guy at the window handing out cups no matter what he costs.

Another example: my uncle owns a gas station in New Jersey, he is required to have paid pump attendants 24/7 by law. He pays them miminimum wage. This barely even factors into his bottom line at all, he believes it lowers the insurance more than it costs him in wages. Yet he has to do it by law, and he has to pay them by law. If minimum wage was lower, he would just hire exactly the same number of people and pay them less. There is no extra work for the extra people. There is no reason for him to pay any more becuase there is no skill required for the job.

It is relatively simple and established economics, but more importantly it is something that you can feel as a business owner (if you are one). For a lot of this stuff there is a set number of people you need to get the job done and price of labor does nothing but affect how much profit you have. Lower prices of labor doesn't change how many people you need at a restaurent or a gas station. There is a minimum and maximum number of people that is effective regardless of cost. Thus minimum wage is helping those people in no skill jobs to have a realistic wage instead of just a race to the bottom.

You are forgetting to ask the question "Why can McDonalds hire such unskilled workers and still run a successful business?"

McDonalds has put many millions of dollars into automation systems and foolproof menus that allow the food to be prepared effectively by minimum wage employees.

Short order cooks generally earn roughly double the minimum wage, so you can see how significant an accomplishment this was.

Most of the items sold by McDonalds could probably be sold out of an "automat" style vending machine, so I imagine that the decision to use actual humans is more about marketing than about production.

As for the NJ gas station attendant, the law requiring gas stations in NJ to hire people to pump gas (self service stations are outlawed) was simply intended to increase employment among very low end workers.

The objective could have also been achieved by outlawing dishwashing machines or farm combines, etc.

So your point rings true -- the value of a pump attendant is very low (lower than minimum wage) when set by the market precisely because people don't want the service and it wouldn't exist without a social policy driving it.

The situations you have mentioned all involve unskilled labor. The invention of modern farm equipment and many appliances is to blame for decreasing the value of unskilled labor.

The question that I consider most important is in how you look at unskilled labor. Is it a "class" of people who will never improve their skills and are doomed to live on whatever wage is the market price for unskilled labor? Or are the currently unskilled workers (many of whom are in high school) likely to obtain skills and experience that makes them command a far higher wage?

I'd argue that artificially inflated minimum wages, not intrinsic quality improvement, is why McDonalds relies far more upon pre-prepared items assembled (bun, pattie, cheese, lettuce, bun) in the store than on semi-skilled short-order cooking.

A restaurant like Noodles & Co. is a great example of how a chain was able to introduce one small skill (the art of stir frying a bowl full of noodles, sauce, and a few other ingredients) to make the food taste significantly better than if it were made in a factory and heated up, or stored in a vat then ladled on.

Again, I haven't argued that a living wage is unreasonable. I'd just rather see market wages left alone and separate state subsidies of the unskilled, along with career counseling, community college availability, and possibly free daycare.

The approach we have today is to proudly proclaim that our $6 minimum wage helps people, when it actually (and measurably) harms them, as I've illustrated elsewhere in this discussion.

But employers don't set the wage. If they did, then all wages would fall to the minimum wage, when in fact only 2% of the US labor force does. Why is that?

Russ Roberts covers the answer better than I could: http://www.econlib.org/library/Columns/y2005/Robertsmarkets....

But minimum wage affects many more wages than just the minimum wage itself.

It shifts the whole range to the right, with some compression at the top end.

Your insight is correct, but I don't think you're following it through to its conclusion.

As a thought-experiment, step through the economic process that would occur in the face of increasing the minimum wage to $100. Think about how the prices would flow through the economy.

Nominal wages across the spectrum would increase at various rates, leading to a general price inflation. Actual wage increases, if any, would last only until the market adjusted to the new price levels.

In the meantime, the structure of the market would shift to become more capital-intensive and less labor-intensive, and would increase imports from labor-rich but capital-poor nations. Prices are information, and the market obeys. When you tell the market that labor is more expensive, it will adapt to need less labor or look for it elsewhere. It's not clear to me how such a scheme helps low-skilled workers.

Now, of course no one is arguing for a $100 minimum wage, but the economic effects of a smaller minimum wage are different only in magnitude.

The core flaw is not understanding that prices emerge from the market. When you try to treat them as inputs rather than outputs, you create systemic misinformation. That distortion tends to lead to misallocated resources which in turn leads to a poorer world.

There's been research either side of a county line in catering and related service jobs (short order, waiter, barmaid, etc.) USA indicating that min wage lead to more employment ...

I couldn't find it but there's this one from 2007:

"For cross-state metro counties and cross-state contiguous counties, we find strong earnings effects and no employment effects of minimum wage increases. The large negative elasticities in fixed-effects panel regressions are generated primarily by regional and local differences in employment trends that are unrelated to minimum wage policies. This point is supported by our finding that division-level placebo minimum wages are negatively associated with employment in counties with identical minimum wage profiles."

Dube, Arindrajit, Lester, T. William and Reich, Michael, Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties (August 1, 2007). Institute for Research on Labor and Employment Working Paper Series No. iirwps-157-07. Available at SSRN: http://ssrn.com/abstract=1005523

All first world countries (and probably most developing countries) have a minimum wage, yet all the "homeless person found dead from ..." are from the US. In Western Europe most of the the "homeless" I see are actually bussed in from eastern Europe to pan handle.

> If there was no minimum wage, they could work $2 an hour of value and then gradually work their way up.

Wouldn't panhandling itself be far more lucrative than this? Based on walking by many beggars every day in a downtown area and seeing people giving them money, I'd estimate most of them make more than minimum wage anyway.

This was my question.

I used to live in London and there were a lot of panhandlers there. It was clear that for some this was their job. Moreso, you just need one little old lady to give em a fiver to beat busting your hump at MacDonalds for an hour (for less, even before taxes).

A lot of panhandlers were (clearly) illegal immigrants. Some had mental health problems.

Whatever the reason there seemed to be a code for the homeless, like not crowding certain areas (basically "territory").

I don't know the details but from an anthropological point of view it's interesting that even the desperate, destitute, mentally ill, drug addicts and illegal immigrants seem to have an innate capacity to self-organize.

This applies to more than the truly destitute. Have you ever seen (or been) a reasonably well-off college student who suddenly has a whole semester's worth of work to do in the last week of classes, then goes out partying all night before finals?

I'd argue that you really don't realize how harsh it is until you're one of those street people. Don't underestimate experience.

An intresting idea. For those that would like to be charitable to the homeless but are concerned about how it gets spent, we've started carrying a few $10 gift cards to McDonalds (or something similar). That way we know it gets spent on a relatively decent meal, and not booze. Recently we've seen more homeless families with kids - and it's especially nice to be able to give them a few of those.

edit: An added benefit during the winter, is that they get to be a 'paying customer' somewhere warm for at least a couple of hours.

That's a really nice initiative.

I don't know -- McDonald's + "relatively decent meal" is a very relative idea. From a nutritional perspective, it may be only marginally better than booze.

Bullshit. McDonalds is not the best food in the world but it's not going to have an intoxicating effect on you and de-hydrate you to boot. It also isn't addictive.

Personally I'd eat anywhere but there but you really can't equate giving someone a burger (or perhaps a salad?) with a bottle.

It's a ridiculous thing to say.

And I'm about as anti-Mcd's as it gets, mostly because whenever I go there I feel like crap for the next 24 hours (lack of gal bladder) so I avoid them like the plague.

True enough.

I'm not a foodie snob, by the way. I've never even been to the West Coast. :-) It just gives me serious pause to think about giving a homeless person who eats sporadically and drinks a lot McDonald's. It seems like it would wreak havoc on their digestive system.

I get the idea, and that's kinda nice, but I would see it as a bit unfortunate that McDonald's get your money and that they get to eat McDonald's food (as opposed to something healthier and subjectively more ethical).

I do a bit of dumpster diving and otherwise collecting food that would otherwise go to waste (there are a few restaurants near where I live that will happily give you their leftovers if you go them at closing time). If I ever see a homeless person I always offer them the food that I have.

This part of the article is very informative:

"He wanted to have pork and rice from a Vietnamese noodle joint on Spadina but they wouldn’t take the card. So, he scrambled to McDonald’s. Lunch was a double quarter-pounder with cheese."

McDonald's, for all its downsides, has never in my experience discriminated against a person for their appearance. As long as you've got shoes and a shirt on (no pants?), they will serve you.

I read that as "noodle joint was cash only", like many mom and pop shops are.

Believe it or not, to somebody who hasn't had a whole lot to eat in the recent past, everything that one would normally hold against a McDonald's meal becomes a big advantage. That high-fat, protein-heavy, "empty carbs" meal, the one you probably shouldn't have for lunch every day, is pretty much exactly what a homeless fellow ought to be eating in the winter. Sure, it'd be nice if he could get a veg or two to go along with it, but there's a requirement for concentrated calories you probably wouldn't understand.

(I've been homeless in Toronto, back in the mid-'90s. Big recession. Some of you may remember it. It took eight weeks to get a gig shining shoes, and even then I was among the working homeless until I'd saved enough to pay rent up front on a room you probably wouldn't think of living in. And no, eliminating the minimum wage wouldn't have helped -- I would never have been able to afford to move indoors. I do wish I could figure out where these amateur economists get their ridiculous ideas. I'm sure it looks good on paper, if you eliminate things like, oh, the cost of food and shelter from the equation. Remember, the solution should be as simple as possible, but no simpler.)

I pretty much agree with everything you've said, except that "everything one would normally hold against a McDonald's meal" includes much more than its nutritional properties.

Except just like food stamps or gift cards, the dishonest bum will just sell them for fifty cents on a dollar, and the honest one will get a square meal either way.

While the initiative is clearly well-intentioned you're making the same "error" as those who espouse food stamps: anything that can be traded for goods and services can be traded for cash, usually at a deep discount.

Basically if someone wants to get alcohol, drugs or whatever, it doesn't matter what you give them: someone somewhere will exchange what they have for drugs or cash to get drugs.

A good portion of the problem of homelessness could be addressed by a sane approach to substance abuse. One innovation is a special 'drug court'. If a person charged with an offense has a drug problem, they have the option of entering a rigorous rehabilitation program with intensive support and somewhat intrusive monitoring. The upfront costs are a little higher (than standard courts) but data indicates that it really pays off in the long run.

And related to that, it would be really helpful if drugs were treated as a mental and social health issue and not as a law enforcement problem.

A better approach would be destroying capitalism.

Edit: Sorry, I do more or less agree with you that what you are describing is pretty much the right way to handle drug problems, but I think it's important to point out that poverty and homelessness are symptoms of capitalism, which is the real problem.

Capitalism is an economic system. It says nothing about social services or policy. There are plenty of countries with free market economies which provide extensive social services and have very progressive social policies (see northern europe and scandinavia).

I'm just curious, what other systems have you seen?

Okay, I should probably just come clean and say that I'm an anarchist (an anarcho-socialist for those that believe that "anarcho"-capitalism is actually a form of anarchism). Anarchists have a bunch of ideas about what are the causes of the problems in our civilisation are and what can be done to change it and our lives for the better which are more or less internally consistent. So do capitalists, "anarcho"-capitalists and even the Catholic Church. All of these respective philosophies are internally consistent, or at least can be made so. So, I guess it was kind of pointless for me to say "capitalism causes poverty", which although I believe in the truth of that statement, most of the people on this site are capitalists and have a set of basic assumptions which justify capitalism. The statement I was making doesn't attempt to question or identify those basic assumptions, which I guess was my intention, but was just a lazy post that really just seems a bit absurd by capitalist set of assumptions. It makes sense perfect sense from the anarchist set of assumptions. So really, the post should have said "hey guys, while that drug policy sounds good, there is a school of thought that says that the real problem is capitalism itself, and I would subscribe to that school of thought and vouch for its applicability to the real world, and maybe you might find it interesting to think about that and read up on it a bit", but in order to do that I would have had to explain everything in a much deeper way than I was prepared to do at the time.

I want to get back to the point about internal consistency though. It's pointless to exchange our theorems (things like "if we change X about drug policy, Y about homelessness will change") when the axioms on which we build such theorems are different. The only truth we can get from a discussion like that is "well, given the capitalist set of assumptions, we can prove that this is true, but it is not true given the anarchist set of assumptions". That's a lemma you can use in the proof of the truth of such a statement, but to prove that it's true you have to show that capitalism's (or whatever) assumptions accurately model the real world. I admit I'm very much guilty of ignoring this in my post above, and I'm sorry for lazily making such a meaningless post. (By the way, the reason "anarcho"-capitalism isn't anarchism is because anarchism and capitalism have assumptions which contradict each other, so to be able to make it internally consistent, they must lose some of the assumptions that anarchists have which contradict capitalism's assumptions.)

So, economically then, what do I propose? A sort of decentralised socialism, I guess. I would broadly subscribe to the ideas outlined here (http://en.wikipedia.org/wiki/Anarchist_communism#Economic_th...), which probably explains it better than I can. The reason I think these ideas and the ideas and the assumptions that justify them are more applicable to the real world than those of capitalism is basically just because they line up with better with what my intuitions have been. I've always been unhappy with authority and being coerced, and the justifcations offered to me for such coercion have always seemed kind of circular. In is-piracy-bad debates, I've always been on the side of the pirates, but also always felt that there's more to it than this, that there's some sort of logical conclusion that we (pirates) are not taking this to, and now I think anarchism is that logical conclusion. Anarcha-feminism agrees with and expands on ideas and feelings I've had about gender before I knew about it. Anarchism gives legitimacy to my intuitions and offers a framework in which they can be made logically consistent, and also offers an explanation for some social problems that I hadn't ever even thought about that are consistent with my intuitions. Basically, and I know this is pretty much a false dichotomy, but it does kind of get the point across - I've always felt that it's much more satisfying and generally better to be co-operative than competitive, and I think capitalists basically think the opposite and say that it's human nature to be greedy, etc. My experience has shown that I get a great pleasure out of sharing my things and with people and helping them out, but capitalism makes it difficult to share with people because you need money and everything in order to survive in a capitalist system, so by giving stuff away, you're risking your chances of survival, or at least decreasing your freedom. I think capitalist ideas might appeal to people because it gives them justification for being many times richer and therefore freer than other people. I don't think that is justifiable, certainly not when it's something that affects a person from birth (how wealthy a background they come from), and it's incredibly naive to think that everybody who's poor can just go out and start a business and get as rich as anyone, as if it's their fault that they're poor (for not doing this) and that everybody is completely in control of how wealthy they are.

Those are pretty much the ideas that I have. Anarchism is the school of thought that makes them logically consistent, but capitalist ideas are also logically consistent in their own framework, and if we disagree on the axioms then there aren't really any words or logic that can be done to resolve that disagreement. I'm really just trying to make people aware of anarchism, and maybe make them feel that their ideas are legitimate if they have anarchist ideas (because I think a lot of people have anarchist ideas but don't take them to their logical conclusion or realise that it's possible to do so), and maybe make people realise that there's more to anarchism than punk rawk, if there are people who haven't taken it seriously until now because of that kind of perception. That's it. Sorry about the initial post.

So, I read a little bit about Anarchist-Communism from the Wikipedia page, but it seems like it would never work in the real world.

For one thing, there are no property rights, people are free to live wherever they want, which usually tends to turn society into Mad Max type "you live wherever you can take and hold by excessive force" scenarios.

For another thing, all goods and services are communal and you are expected to just walk into any community store and take as much as you want or need. Let's take beer for example: Everyone loves to drink beer but nobody wants to go to the trouble to make it. How do you suppose those community store shelves are going to stock themselves? Basic food and supplies would be the same deal. What does a farm gain from putting the food created by his hard work on the shelves? Freeloaders will just take it all and he'll get nothing in return.

I guess I'm trying to see how society wouldn't devolve back into tribal villages under any form of anarchism. I just don't think people will work hard for each other out of altruism. They need a reason to work, and that reason seems to be wages and compensation.

For a really thorough discussion of all of this, check out "An anarchist FAQ": http://anarchism.pageabode.com/afaq/index.html

TL;DR. Sorry, I'm not going to read a 500 page dissertation on the philosophical points of Anarcho-communism, and all the various forms of Anarchism. If you want to bring me around to thinking Anarchy would be anything other than Mad Max you'll probably need to give me a bulleted list of reasons why.

I guess what I'm asking for is some evidence, not philosophical links from a huge, wordy FAQ.

The problem is that not everything can be fit into one page. We're talking near-total changes to the very most fundamental ways that we've built society, and so a bullet list should not be able to convince you.

As for evidence, maybe look at existing communities? http://en.wikipedia.org/wiki/List_of_anarchist_communities

The Spanish Revolution is probably the most popular one cited.

And that is the problem with communism: in a society with any scarcity, human nature will take over. Even in a small society with very strong moral leadership and social and philosophical unity, it is a challenge[1]. I do wonder what would have happened to Orderville if Congress would have left the early Utah pioneers alone.

[1] http://historytogo.utah.gov/utah_chapters/pioneers_and_cowbo...

That is a big problem with communism, but there's one even greater: the calculation problem.

Without property, there is no trade. Without trade, there are no prices. Without prices, it is impossible to know how to efficiently allocate resources.

Correct me if I'm wrong, but your main point is that capitalism takes as an axiom that people are naturally selfish, while anarcho-socialism takes as an axiom that people naturally are altruistic.

So I have a question: What motivates you to help other people?

That's quite a simplification, but yeah, I'll accept that for the purposes of this post :)

If something I do visibly helps somebody, I feel good then because it feels like I have a purpose in life. It feels like I'm contributing to something greater than myself.

I think one of the most fundamental human urges is to feel like you belong to something. Helping people is so far the best way I've found of satisfying that urge. Capitalism seems to be based on the idea that that what people really want is more stuff. I think the reason that seems to be true is because having stuff and acquiring more of it is necessary to survive in a capitalist society. You need to have money to buy food and shelter. That's also why people don't share more of their stuff - sharing their stuff reduces their chances of survival. Even if somebody is rich "enough" to survive, they still need money to participate in nearly every other aspect of society. They can't listen to music, or go out with their friends, or really do anything unless they have money (or stuff that can be converted into money). This is always in the back of people's minds and is the reason people don't share more, I think.

Yeah, you have to work hard and be intelligent to reap the benefits of society. That sounds like a feature, not a bug.

... do you do anything for reasons other than money? Do you have hobbies? Code on the weekend?

If someone was proposing the idea of Open Source to you, would you ask why anyone would want to contribute to it?

I do those things because I enjoy them and they benefit me. Money isn't the only motivator.

Exactly. I do the same. So I don't think that the concept is out of the realm of possibility.

Generally, anarchists acknowledge that there'd have to be a lot of social change before a state of anarchy could actually come about. If the government disappeared today, it'd be total chaos. Kind of like how I'd advocate for a total abolition of the prohibition of drugs; such a transition couldn't happen right away, it'd have to happen over a period of time.

An anarchistic society would have to be significantly different than our own. I think it'd end up being much like the Internet; there'd be a large number of very small communities. A decentralized network.

I'm not sure if this would ever come about or not.

Anarchism only works if everyone is honest and peaceful. Not everyone is honest and peaceful. Therefore anarchism is a naive governmental/philosophical system.

Also, on the internet, people steal shit from each other, hack in and destroy people's systems, commit fraud (phishing), and threaten to kill/harm one another all the time.

Thank you, but I'd rather live in a world where there exists an entity that protects property rights.

There are a multitude of ways that an anarchist society deals with crime: http://anarchism.pageabode.com/afaq/secI5.html#seci58

Much of the stuff necessary for life isn't fun or intrinsically satisfying, and money motivates people to do the mundane.

Sex and eating immediately come to mind as counterexamples. When you said "life" did you actually mean something more specific along the lines of "modern life in the west"?

Both sex and eating can be orgasmic, as opposed to being mundane.

What kinds of things are you talking about?

Having lived in a communist/post-communist society, I can tell you this is bullshit. Communism, no matter what form, does not work. I agree that maybe (maybe), capitalism is a crappy system, but it is still 5 times (I counted) better than any other system we as a civilization currently came up with.

I know there is no way that I'll change your mind on this. All I can say is that there is nothing "free" in the world. Attempting to pretend like there is simply allows someone to take advantage of someone else.

EDIT: First off, thank you for the detailed response. Also, you did not answer my direct question as to whether you have lived in societies that have different systems than democracy/capitalism or the ones with a more socialist incline. The (other) trouble with communism is that it seems that many advocates of it think that it just hasn't been done right yet. Well, I propose that it cannot be done right and any place that had a pinch of communism in it will show it, and in an ugly way.

Sorry. I'm quite young and I've never lived in a non-capitalist country, or anywhere outside of Ireland or even Dublin.

But I'm not a communist, I'm an anarchist. I guess that doesn't significantly change your point, you probably still think it can never be done right or whatever. Basically, I disagree, but like I said above, I think we're disagreeing about the axioms.

You did admit though that capitalism is flawed. Ever since I realised that, all I want to do with my life is to help those (anarchists) who want to destroy it and create a better world. I just can't justify casually living my life in the capitalist system when I could be out there trying to replace it and helping those who suffer because of it. It feels like my life is meaningless otherwise.

I can recommend the book "Moving On", which discusses a participatory economy, which was quite interesting to me personally. although it does (as you would expect) bog down with committees!

By the way, the shortest and most succinct laymen's description of anarchism came from a crimethinc flier i saw, possibly this one [low res PDF] http://thecloud.crimethinc.com/pdfs/fighting_for_our_lives_l...

Wow, I'm really surprised to find someone on HN who is against capitalism. Here are a few points for you to consider, they might help you clarify your position on capitalism:

1. What you are probably really against is collusion between big government and big business. This is a real problem and is antithetical to true capitalism.

2. In a free market economy, there is plenty of room for charity and there is no one stopping people from organizing and participating in communes.

3. Taking my money through force to redistribute through inefficient state run welfare programs is not going to benefit anyone but the government. The poor will continue to be poor, and the elite will continue to extort those who actually add value.

Yours points are true but also somewhat simplistic. I'm not addressing you point by point, but laying out a couple of points for you to consider.

1. There is a tendency to corruption in any concentration of power, government or corporate. There still remains the problem in capitalism that concentration of capital leads to entrenchment, stagnation, and corruption, and our regulations, faulty as they certainly are, have historically at least attempted to address problems in concentration (Sherman Antitrust Act and the original Glass-Steagall Act). There is no fire-and-forget legislation that can guarantee this, of course, since it is also in the nature of power to route around such fault lines.

2. Many theories based on the free market assume rational actors. The bulk of psychological research shows that this is a faulty assumption for individual humans. I argue that we also have sufficient evidence that this is a faulty assumption for behaviors in aggregate (corporations and governments). We need to take this into account when we talk about the power, the benefits, and the faults of the free market.

With regards to your point 2, I'm interested in data you have regarding the relative effectiveness of charity and the welfare state. My understanding is that the European-style welfare state consistently gets more balanced outcomes and a higher quality of life for more people than reliance on charitable institutions.

Your point 3 is too laden with loaded words to be used effectively in an argument and reads more like right-wing talking points than an attempt at discussion. When discussing this in the future, I recommend sticking to redistribution and outcomes, and leave out the rhetorically charged "taking my money through force" and "extort".

Also, you will be hard-pressed to find anyone who will argue that "inefficient state run welfare programs" are a good thing; really the argument is about relative efficiency between state welfare systems and private charity.

I'll concede that my second and third points skew the conversation away from the issue of addressing homelessness.

If the topic were 'personal liberty' than they might have more relevance. I guess the attack on capitalism as being 'evil' brought out my personal bias.

> Wow, I'm really surprised to find someone on HN who is against capitalism.

Heh, yeah :) It's possible to like computers and enjoy programming without being a capitalist though! Look at the free software movement!

What you are describing is "anarcho"-capitalism, I think. I'm an anarchist. We seem to agree agree on some things. I think most of the same things that stop people from organising and participating in communes in our current society would still exist in an "anarcho"-capitalist society. The rich still control the means of production, and the poor need to work for the rich in order to survive. I can't see that ending well. That's the essence of it.

Capitalism and F/OSS advocacy are not contradictory. I'm of the opinion that for certain kinds of software, F/OSS is the most efficient approach in the context of a free market.

In particular, for software that (1) has a wide audience and (2) does not provide a significant competitive advantage, it makes sense to share the development burden amongst others that need the same software. A successful open source project is cheaper to maintain because of market forces: more organizations (including your own) are able to develop expertise in the software, driving down the price of such support.

It's absolutely true that sometimes F/OSS can make sense as a tactic within capitalism.

Generally though, F/OSS is used as an example of how people don't behave rationally, in an economic sense.

Rationality in an economic sense does not mean "logical". What it means is "purposeful".

He's right though, in the communist countries that I've visited there was nobody homeless.

I am surprised that on HN someone that states something that contributes to the discussion gets modded to -4, I thought we reserved that for trolls.

You can find plenty of things wrong with communism, and I think that for the most part capitalism is to be preferred but that doesn't make him factually wrong.

Communism isn't the opposite of capitalism. China's both communist and capitalist. It also, incidentally, has extreme levels of poverty.

The communist countries you visited likely did a good job of hiding the homelessness. It's one of the advantages of having that sort of control over your subjects.

> The communist countries you visited likely did a good job of hiding the homelessness.

The communist countries I visited I lived in for quite a while, and no, they didn't do a good job of it, it simply didn't exist. I would have definitely noticed. And yes, I did visit the poorer regions. Now they have homeless people though. But they're no longer communist.

Everybody had a job, everybody had a house. Maybe the job was changing the traffic lights or something similarly inefficient but you'd have a job, guaranteed.

And I know it isn't the opposite.

Second this, although the only communist country I knew was Hungary and I got to know it just before the regime change. The Communists built huge housing projects around Budapest specifically to ensure that everybody, no exceptions, had a place to live and a job to work. It might be a stupid, demeaning job - there were no vending machines - but it was work, and a place to call home.

Now, there are tent cities along the Danube and in the corners of the railway easements. Say what you like about the wonders of capitalism and the "fact" that communism just swept the problems under the rug, but anybody who actually witnessed both knows that for the people on the very bottom, communism is far, far better. And for the people in the middle, it was about the same, albeit with fewer electronics. Of course, for people at the top, it's the same; they're just allowed to be honest about their Swiss accounts now.

Chomsky actually says that the fall of the USSR was actually a great victory for socialism/communism, because it wasn't actually communist.

I am not educated enough on the subject to know how correct he is, but it's interesting nonetheless.

Chomsky refers to the 'real' communism, which has to date not been implemented by any society (and which possibly can not be implemented with people the way they happen to be).

It always has been a version of an oligarchy.

The same goes for those 'communist' countries out there today.

It's quite true, and sounds very close to the No True Scotsman fallacy. I don't believe that statist communism could ever work.

I think the 'fat cats' simply used the term communism to make the have-nots believe that they were living in a fair society without exploitation. A propaganda device rather than anything else.

Yep. And the idea that you could control production centrally with any sort of accuracy is pretty laughable.

When some oppressive hellhole styles itself the People's Democratic Republic Of Wherever, everyone sees through the ruse rather than blaming its failings on actual democracy. I don't see why communism is held to a different standard. There weren't any secret police disappearances or corrupt apparatchiki in Marx's advocacy, were there?

Yep. Liberal democracy has surely caused the world its fare share of ills.

Communism's aim was always the abolition of the state. Technically, communist countries were what Marx called dictatorships of the proletariat, which he thought was a transition stage between capitalism and communism. This transition never occurred, so Chomsky is correct.

Marx was held back by his historical era (as are we all); he believed that evolution consisted of a progression. We now know pretty well that evolution goes any damn way it wants, and imposing a direction as "forward" is wishful thinking at best. The spontaneous dissolution of the state is probable - eventually. Very eventually. Forcing progress, as Lenin hoped to do, was naive, although (imho) well-intentioned.

The breakup of the USSR is not a victory for anybody, really. The very presence of the USSR in the first place was a detriment to the mindshare of communism, and its breakup ensured nothing beyond the fact that Americans could say they "won" the Cold War, whatever the hell that means.

Something like the original communist ideal can be seen - as it's always been - in the spontaneous organization of maker communities and other types of community. But if real communism is ever going to appear among us hominids, it's not going to come out of a State that grants it to the masses. The masses are just going to have to make the State superfluous. And that is not going to happen any time soon, libertarian science fiction notwithstanding (I like my Vinge as well as anybody).

I imagine the reason he got modded to oblivion was that he made an extraordinary claim "...I think it's important to point out that poverty and homelessness are symptoms of capitalism, which is the real problem" with no attempt at justification.

Besides which, capitalism is not a form of government. So he started from a position of error and then went out on his limb from there.

So, you point that out. Downmodding for being wrong is ridiculous.

I did point it out and I didn't down-vote him (because I was hoping he would expound on it). But you know that voting means different things to different people (and HN has gone on vast navel-gazing tangents trying to define it).

If people see a controversial position half-heartedly argued, the bad marks should not come as a shock nor am I sure they are unreasonable. In the end though, the points are utterly irrelevant as long as it doesn't dissuade others from taking controversial positions and, crucially, defending them.

It was an extraordinary claim (given the demographic here) and I made no attempt to justify it, so I can see why it was modded so harshly. I think the modding was a bit extreme, but I knew when I was making the post that it was going to be a -4 type of thing.

However, I don't think question of whether or not capitalism is a form of government has anything to do with the point I was making.

Meant to upvote you and fat-fingered it, sorry.

> Besides which, capitalism is not a form of government.

But he also didn't say anything about government. He said it was capitalism.

Right, but this can be trivially shown to be false in the case of capitalistic systems with minimal levels of homelessness and poverty and socialist economies with rampant poverty.

I wouldn't say trivial. It's not like most economies are purely one or the other.

And to be fair to his argument, he's talking about stateless socialism.

Could you please name those communist countries?

I still have family in mainland China, and we know there is a homelessness problem in China. The government effectively insures that they are out of sight, so they beg where they can out of sight. You can find them in loading docks or behind restaurants. This is not a new problem that has started since economic reforms, it has always been around.

I have talked with my coworker, someone who lived in Soviet Russia until his 20s, and he will confirm that they also had homelessness problem. At that time it was dealt with similarly.

(1)Simple searches give clear depictions and discussions of the homelessness problems in these current and historical examples.

(1)Post edited here to remove an inappropriately rude and confrontation postscript (I accused the parent of lying or being willfully ignorant; which does not cover the gamut of possibilities)

I've lived in Poland, spent plenty of time in then Czecho-Slowakia and a lot less in Eastern Germany.

> You are either dramatically incorrect or lying.

Sorry ?

You begin the post with "He's right though," and then provide anecdotal evidence. I am not arguing against your experience. Your experience is not wrong; I am arguing against that the grandfather post is "right" that homelessness is a symptom of capitalism, to which you agreed and supported.

Those countries that did not have homelessness under Communism have plenty of it under capitalism, for those countries that I have experience with.

That's not a scientific study, but it definitely should give you pause. Oh and I forgot to add Romania to the list.

I said "in the communist countries that I've visited", to qualify my experience, and to make sure that you understood that I was not speaking for all communist countries at all times.

http://news.ycombinator.com/item?id=117171

Wow, I'm really surprised to find someone on HN who is against capitalism.

Perhaps after you've been here longer you'll realize it's not all that homogeneous an audience.

Your point 1 is well taken (meaning: I personally agree).

Point 2 is somewhat simplistic; large-scale organization is superior to voluntary charity, which is why third-world countries have poverty problems and billionaires at the same time, while Sweden doesn't have much of a poverty problem.

Point 3 is so full of loaded terms it's nearly useless except as an indication of your own biases.

"I'm really surprised to find someone on HN who is against capitalism."

Hello, my name is Reginald and I am a Socialist.

I tend to refer to myself as a "centrist libertarian", because I used to be hardcore right libertarian, but lately have developed relatively strong anarchist sympathies. (Oh, and capitalists can't be anarchists.)

Out of curiousity, why did you stop at the centre in your journey leftwards?

I don't 100% buy it yet. I feel the same way about capitalism that I do about religion; losing my religion was a long journey over a period of years, that took a lot of unlearning. I'm in the middle of that process with capitalism now.

That's cool :) Good luck! I'd really recommend getting involved in your local anarchist collective (which from Google seems to be this one: http://anarchistnews.org/?q=node/8085). Actually, shit, after a bit more Googling, that place seems to be dead. That's very sad. If a new place pops up though, try to get involved if you can. I've really, really benefited from getting involved with Seomra Spraoi, which is a similar type of place in Dublin. Being able to be around people who understand your basic assumptions in life, in a fun and sociable environment, has done so much to keep me sane.

We have a local FNB that I've been meaning to go help with, but haven't found the time. I was also involved in the G20 stuff here. In the meantime, I've +frontpaged /r/anarchism, been doing a lot of reading, and taking it slow.

That's cool. I was just having a discussion with somebody earlier about how much better discussions are in real-life places like Seomra Spraoi than they are on /r/Anarchism though. You get so many people on /r/Anarchism who take a moral high ground against people who they (usually correctly, but this isn't the point) perceive as not being "real" anarchists. Even when we disagree, discussions in Seomra Spraoi are always very pleasant and respectful, and there is a real sense of togetherness, despite our minor differences. Basically, don't lose faith in anarchism and anarchists because of /r/Anarchism, because I could see that happening to somebody. :)

No worries, point well taken.

> (Oh, and capitalists can't be anarchists.)

Explain why.

The Anarchist FAQ covers this point in great detail.

http://www.infoshop.org/page/AnarchistFAQSectionF

tl;dr on the FAQ: private property creates hierarchy.

What defines government is not hierarchy: it's coercion.

I'd beg to differ. The hierarchy is what enables the coercion to take place, they're two sides of the same coin.

Anyway, I'm sorry, but this comment is 3 pages back in my history, so I probably will forget to come back and check. If you'd like to discuss this further, my email is in my profile.

To be fair, the need for slave labor on collective farms did reduce the problem somewhat. But that practice was stopped precisely because it was inefficient to force mentally and physically handicapped people into a physically demanding profession.

A similar program to what we have in California, you're saying?

http://en.wikipedia.org/wiki/Proposition_36

While I agree with treating drug abuse as a health issue - and Especially not a matter of law enforcement, I'm not sure it directly addresses homelessness. Drugs tend to be an escape, as are addictions to said escape. Most people I've known with drug issues have far deeper issues, the pain of which their addictions tend to alleviate if at least for the moment.

Sure, some find peace in work or family or friends or creative endeavors or what-have-you, but some tend to find solace in the ability to not think or more specifically not dwell on the pain of living - especially living a life unkind.

The best you can do is replace one drug with another (eg. methodone), but the inherent problem tends to be mental - and as of yet there's no cure for the human condition.

If a dependency on a drug is abolished, what comes next? Someone who has fallen beyond of the reaches of society due to escapism isn't going to suddenly become a productive member just because they no longer crave a substance. A person will continue to deal with their world as they know best.

Drugs don't make a person give up on society, they just make it a little easier to live with not fitting into it as well as everyone else seems to.

Stories like this make me wish that it was easier for homeless people to be declared mentally ill and placed into mental health facilities. (Damn you, deinstitutionalization.)

There are some people who are homeless because they're poor, but in the vast majority of cases it seems that the primary problem has nothing to do with not having a home.

  > (Damn you, deinstitutionalization.)

Read up on what actually happened in those places. Read up on 999 Queen St. (for a Canadian example) or watch "Mental: A History of the Madhouse" (a BBC Documentary for a British example).

I would agree with you if those places didn't end up being worse than prisons... ("No one will believe the crazy girl when she says that I raped her!", etc)

[edit] In general, Canada seems to have better support for mental health issues than the US does.

I would agree with you if those places didn't end up being worse than prisons...

Thing is, the streets are worse than (Canadian) prisons, too. It's not unheard-of for homeless people to ask judges to please send them to jail.

But more significantly: We need to fix mental health institutions. Saying "making functional mental health institutions is hard, let's go ride bikes" is fundamentally failing in our obligations to the mentally ill.

Another big issue is failing to provide a social security network that actually works in that it helps those in real need and has enough of an incentive to get out of the program again.

There seem to be only two versions of this, one that leaves people without incentive to go back to work (the European model) and another that says 'you're on your own' tough luck.

Another thing that jumped out at me in these stories was the lady that had daughters but was living on the street anyway. If my mom were about to be homeless she'd be living here, not on the street and I'm sure my brother and sister would think about it just the same.

Another big issue is failing to provide a social security network that actually works in that it helps those in real need and has enough of an incentive to get out of the program again.

Canada's welfare system is just fine, actually. The "Jason" in the article is a good example of how it works -- shortly after becoming homeless, he talked to the welfare office, he found an apartment which rented for the standard welfare rate, and if he hasn't already moved in, he almost certainly will within the next week. The vast majority of instances of homelessness are resolved quickly in exactly this manner.

Why doesn't this happen for the small minority who end up being long-term homeless? To a very large extent, it comes down to one thing: Mentally ill people aren't very good at doing paperwork. People who are addicted to drugs or are schizophrenic aren't very likely to accomplish the steps Jason went through to get welfare-funded housing.

To put paper obstacles in the way of those in need that are unable to pass those hurdles is not a system that is 'fine'.

It's not unheard-of for homeless people to ask judges to please send them to jail.

There's a fairly simple algorithm to ending up in jail: commit a crime and get caught for it. I wonder why you don't see more of that if homeless people are so desperate for shelter. (Though if they're mentally ill, that might explain why it doesn't occur to them, or why they're not terribly effective at making and implementing effective plans.)

There's a fairly simple algorithm to ending up in jail: commit a crime and get caught for it.

For minor crimes, that's ineffective: You'll be arrested, charged, and released back onto the streets with an order to turn up in court at a later date.

As for why such people don't commit more serious crimes -- homeless people aren't (necessarily) psychopaths. Wanting to have a warm place to sleep and decent meals doesn't mean that they'll go out and kill someone just to get themselves arrested.

There was an article in the past few months (or maybe longer, if it was a reading assignment) about one homeless man in NYC that had a yearly tradition of putting on his nicest coat, going to a fancy restaurant and eating a large meal, and then saying he couldn't pay. He would then go to jail for the winter. He cost the city upwards of hundreds of thousands of dollars.

So yes, it happens, and yes, it is far more expensive than simply providing the necessary social services to begin with.

I have been reading up a lot of Neuropsychology books and articles recently (not to be confused with pop-psych), and I have noticed that I have gained a lot of understanding, tolerance and acceptance of other people (and my own) and their mental quips. Once you start to understand how the brain works (not superficially, but _really_ have a good grasp), you start seeing yourself and world around you in a different way.

I might go as far as proposing that studying psychology is as humbling experience as studying cosmology and astronomy.

I've had the same experience. Truly humbling, indeed.

One mental condition that really fascinates me is schizophrenia as you begin to understand reality is the brain's way of interpreting chemical, visual, auditory, tactile and other external stimuli, but also via its internal chemical reactions, neural connections that can go haywire.

Cognitive dissonance is another topic I'm fascinated by and wish everyone would know about it.

Anyway, if your interested in these subjects, but don't want to read very technical papers, I recommend reading Jonah Lehrer as he'll point you in some interesting directions: http://www.wired.com/wiredscience/frontal-cortex

Agreed. It would make "intelligent, successful" people be more humble about their accomplishments, if they realized that they were really lucky to have the genetic dice roll just the right way that their brains worked basically okay, with no significant distortions or blind spots in their reasoning and functioning ability.

I have Jonah lehrer's blog on my feed. However I wouldn't recommend his books though (or most other mainstream pop-psych books). We recently read it on /r/NPBC (Neuropsychology Book Club) and I thought the book was an oversimplified interpretation to sell his predeterminer narrative of the book.

Currently we are reading Antonio Damasio's "The Feeling of What Happens" (really enjoying it so far, very dense.)

You can read Lehrer's unofficial reddit interview here (The OP, subtextual, is a professional Neuropsychologist):

http://www.reddit.com/r/IAmA/comments/d1pib/jonah_lehrer_aut...

You can read my thoughts on his interview and his book on the comment's section. Same username.

If you wouldn't recommend Lehrer, what would you recommend?

One think I have recently learned when it comes to recommending books is to point out the obvious: I have a different level of personal experience and knowledge about the topic, so the books I liked is often the result of my personal experience and the kind of books I usually like.

I am a fan of dry, no-nonsense, non-fiction books. So I don't think its very surprising that I often don't enjoy pop-psych books because they tend to dumb down the science and use selective knowledge to get readers hooked into the topic. Hard science is rarely a priority in those kind of books, its the personal narrative and interpretation they want to push that takes precedence over actual science.

This is why I often read books thats written by people who have good background knowledge on the topic and is a professional on that field. Which means I try to avoid books written by General "sciency" guy who has an interest in many things and read some books on those things and he is just rehashing and reinterpreting those words the way he likes it to sell as many books as he can.

I am fairly new to Neuro/psych books. So I don't have an extensive list of books I have already read. However I do have a fairly good list of books on my queue that I have collected over the last few weeks from other professionals neuropsychologists on the field.

- Anything by Antonio Damasio (just started reading "The Feeling of What Happens", loving it.)

- Books by Daniel Dennett

- Books by Joseph Ledoux

- Books by Oliver Sacks

- Subcortical Structure and Cognition (needs some neurology background, I have none. I am slowly building myself up to reading it)

- The Neuroscience of Religious Experience

- Phantoms of the Brain

Note that all the books or authors I have recommended are either psychologists or neuropsychologists by profession (AFAIK), unlike Lehrer, who is a science journalist with interest in psychology. When you read a hardcore no-nonsense Neuropsychology book (ie, Damasio) and then compare it to lehrer, I think you will see the glaring difference in knowledge and substance.

What do you think of Richard Granger? I've read several of his papers (Essential Circuits of Cognition, Engines of the Brain), and as a non-neuroscientist his hierarchical model seems interesting and plausible, and more importantly from my point of view, computationally feasible.

I have never heard of him. I will check out some of his work. Thanks.

Any books & articles you'd particularly recommend? I've read some popular neurology stuff (books by Oliver Sacks, Jonah Lehrer's blog), but that's it, and would love to go deeper.

Edit: I see a few suggestions from you in other parts of this thread. Any others?

I have recommended some books here: http://news.ycombinator.com/item?id=1643750

For articles and research paper:

http://www.reddit.com/r/Neuropsychology/

http://www.reddit.com/r/psychology/

For any specific articles I would recommend I will have to go through my huge list of saved links. I am a bit lazy right now, I might come back to this later and post some. :)

Cool, thanks. I bookmarked it and will check back later.

Same goes for many criminals. The brain is a complex bunch of grey goo. So many ways the wiring can go wrong. We have a long way to go before we can fully understand psychiatric/psychological conditions, much less treat them.

> Stories like this make me wish that it was easier for homeless people to be declared mentally ill and placed into mental health facilities. (Damn you, deinstitutionalization.)

It's actually good that it is not so easy to declare people mentally ill, especially when they're not. Canada has a history of having it's 'social services' go completely out of control when given too much power, one nice example is the service that ostensibly protects children from abuse.

(But in fact is just as likely to do great damage to both children and their families).

I think many people would like to institutionalize the homeless just so the 'problem would go away', but homeless people are a symptom of a society that has issues, not just of those people.

For instance, banks and lawyers contribute to the number of homeless people by making it too easy to declare people bankrupt, seizing their possessions and means of generating income or their house, or to destroy someones life in divorce proceedings.

And then there are those that simply don't want to be part of the 'rat race' that have no other option but to become homeless (the Roma in Europe for instance). That used to be 'ok', but these days everything has to be owned by somebody so there is no way to be out of it all without trespassing.

It's not all clear cut. For sure there are mentally ill people that are homeless but I'd be highly surprised if that was the majority. For the most part they're just ordinary people down on their luck abandoned by friends and family. And plenty of them hit the bottle or drugs after becoming homeless, not before.

This article was posted here before (http://www.gladwell.com/2006/2006_02_13_a_murray.html) and suggests homelessness might be a power-law problem. Ordinary people who are homeless because of everyday misfortune don't stay homeless for long and don't contribute to the homeless problem--chronically homeless people, many of whom are either mentally ill or mentally adapted to life on the street, are the biggest part of the problem.

The power law in the article refers to the costs associated with individuals, and to the number of people that were found to have returned to 'normal' life.

So a relatively small number of people are responsible for the majority of the costs attributed to all homeless people (in that case mostly for hospital treatments), they stay homeless because they can't get out or don't want to get out.

Those homeless people that are very motivated to stop being homeless will usually do so, those that are mentally ill or serious substance abusers have little to no chance.

Those that have 'adapted to life on the streets', I find it hard to find fault with them, they chose that path, the problem is with 'us', the ones that are not homeless because we see them as a problem, but they might disagree.

Being homeless is no picknick, but being in the rat race isn't either and some people might prefer the one over the other.

I think many people would like to institutionalize the homeless

I absolutely do not want to institutionalize the homeless. I want to institutionalize the mentally ill.

For sure there are mentally ill people that are homeless but I'd be highly surprised if that was the majority. For the most part they're just ordinary people down on their luck abandoned by friends and family

You're right that the vast majority of people who become homeless are not mentally ill. However, the vast majority of people who stay homeless are mentally ill.

> However, the vast majority of people who stay homeless are mentally ill.

That's likely true but it is only a very small portion of the total. And many of those are still not mentally ill, just substance abusers (which has it's own long term effects on mentality, compounding the problem).

many of those are still not mentally ill, just substance abusers

Drug addiction is a form of mental illness.

(Also, many long-term homeless drug addicts are "dual diagnosis", i.e., have some other mental illness as well.)

> Drug addiction is a form of mental illness.

No it isn't. If I inject you with heroin for a couple of weeks steady that makes you a drug addict, but not mentally ill.

DSM-IV counts substance abuse as a psychiatric disorder, and research has shown that it is far more effective to treat substance abuse as a health issue than otherwise.

But I think we may have to agree to disagree here.

I think we're already agreeing for the most part: Substance abuse is a different thing than being addicted, you can't use the terms interchangeably.

The one is a mental problem, the other has to do with the brain in a very specific biochemical sense.

I think that for the most part there is plenty of overlap between the two in terms of the people that are afflicted but there is a direct biochemical reason behind being addicted to any drug that is not directly related to mental illness.

To clarify, addiction is a disease. According to Dr Drew Pinsky in an interview on "The Eyes of Nye" (yes, that's another Bill Nye show)

> The definition of a disease for me would be 'an abnormal physiological process brought on by a relationship between the genetics of the individual and the environment. That path of physiology would create a set of signs and symptoms that progress in a predictable way that we would call a 'natural history' and by affecting the natural history we create a predictable response to treatment [...] and addiction does fit that, but people get hung up on where the physiology goes wrong. They don't understand that it's a brain disease.

> I want to institutionalize the mentally ill.

Institutionalize is a nice, clinical sounding word, but what it means is incarcerate. Imprison.

You are talking about locking up people without them committing any crime, without any trial, without them having any appeal or defense, for a week, or a year, or their entire life.

You, I suspect, would condemn a police authority who wanted to imprison whoever it liked, for however long it liked, on grounds of serving the general good. It is just as wrong to give a medical authority those powers and declare they'll only be used to help the people they're imprisoning.

Well - let's keep this in context. I lived in Vancouver both Pre/Post Institutionalization - and I'm pretty certain those people who are chronically homeless lived much better and happier lives when they had a warm home to sleep in, and people to watch out after them.

And, I don't know what institutions you are referring to, but Riverview (one of the mental health institutions) had a Bus Stop in it. Crazy people were always getting on board - It's true that people who posed a threat to themselves or others, or were in for evaluation to determine if that were the case had their ability to leave restricted - but I don't think "Institution" and "Prison" are synonymous.

You are talking about locking up people without them committing any crime, without any trial, without them having any appeal or defense, for a week, or a year, or their entire life.

Not at all. In Canada, at least, people in psychiatric institutions have ample opportunity to challenge their detention. Their cases are reviewed and they are considered for release far more often than those who are convicted of crimes are.

In the bad old days in the U.S., crazy people, or people deemed crazy, could be kept in a mental institution against their will for years and years. When I hear people decrying deinstitutionalization, I assume they want to return to those bad old days.

I don't know about Canada, past or present.

Your post contains quite a few misconceptions on bankruptcy. No one can declare you bankrupt - you need to go to court and ask them to do so. Further, most people get to keep their house/car [1] and their "means of generating income" (work tools exemption).

If you mismanage your finances, really the worst you need to worry about is losing some of your stuff (which you probably couldn't afford anyway). If you make more than the median income in your state, you might need to enter a payment plan rather than having your debts wiped away.

The tax man or your ex wife can ruin your life with debts that can't be wiped away. The bank, not so much.

[1] The judge needs to decide that you can continue paying the mortgage, which might not happen if mortgage/month > income/month. Further, there is a value above which this no longer applies - rich people may lose their estate or the Bentley.

Your post contains quite a few assumptions about location and reality.

Having seen a contractor go bankrupt, his house, car and his work tools sold to the highest bidder and the money split evenly between the tax man (the rest of his stuff) and the bank (his house and vehicle) very recently says there is at least one situation where you were simply dead wrong.

There is voluntary bankruptcy, and involuntary bankruptcy, see http://en.wikipedia.org/wiki/Bankruptcy it is not fair to suggest all bankruptcies are voluntary.

The main assumption I made is that you were discussing personal bankruptcy rather than corporate bankruptcy (which can be involuntary), due to your statement that it was "too easy to declare people bankrupt".

I suppose under the circumstances you describe, you are correct: a person may lose their job if the corporation they work for goes bankrupt involuntarily. On the other hand, corporate bankruptcy can't touch a person's house/car, unless perhaps that person bet all their personal positions on the success of a corporation.

So I suppose an involuntary corporate bankruptcy may cause the personal bankruptcy of an entrepreneur. I'm still not sure how this rather unusual situation would contribute significantly to the number of homeless.

Personal bankruptcy can be involuntary as well in plenty of places.

Self employed people are private individuals and are with some regularity pushed in to being homeless, either alone or with their families if they have them due to economic downturns.

There now is some nice legislation on the books that will make it impossible to escape credit card debt when you file for voluntary bankruptcy (chapter 7), and it is also much harder to file for that than it was in the past.

Typically an individual that has been declared bankrupt can be evicted from rental property as well because of debt incurred after the stay due to the filing for bankruptcy.

So even on rented property there is no guarantee that filing for personal bankruptcy will protect you from being homeless.

Speaking for my own neighborhood, the burden of deinstitutionalization is severe. My carriage house apartment was the residence of a man with Huntington's Disease. Twenty years ago he would have been at the State Hospital; instead, he was given a small stipend and left to die on his own. Of the six windows in the apartment, one survived his habit of throwing things in rage; there was food and nicotine liberally spattered on every surface in the apartment - and if you've never mopped a ceiling before, I assure you the pain in your shoulders is unique after the first day. There was urine in the heating ducts, and he could usually hit the toilet when he defecated, but not always.

The state doesn't want to pay for keeping him in a healthy environment - that's expensive and Indiana doesn't like public expenses. His family apparently couldn't afford it, and arguably that sort of lottery is unfair, deciding that some families get to go without the expense of crazy relatives while others get the short straw.

After the bank foreclosed on the property, he was living in a truck for a while. I don't know what's become of him now.

So tell me again that it's good that people can't be declared mentally ill. There are people who really are mentally ill, and dodging society's duty by saying they're better off dying free is not the answer.

People can be declared mentally ill. It just isn't easy. And that's good. In the case of the person you are describing it would be pretty difficult to get him to be committed in most jurisdictions, especially if he didn't want to be.

Did you talk to those people when they became homeless or did you watch them after years of homelessness during which they were at best ignored by common people?

LCBO is the Liquor Control Board of Ontario.

I had to look that up, too. Wikipedia says, "LCBO stores are generally the only stores allowed to sell hard liquor in Ontario".

About 30% gets spent there, the majority of it on a card reported stolen.

The Canadian government has all kinds of monopolies, the LCBO is just one of several. You can really see how Canada has its roots in The Hudson Bay Company when you study how that came to be.

In case you're interested:

http://en.wikipedia.org/wiki/Hudson%27s_Bay_Company

In the US, we have state monopoly liquor stores as well. They were instituted as part of the regulation scheme when alcohol was legalized at the end of Prohibition. They continue on as major revenue generators for the states. Many states don't have them, but many do as well.

Ontario is one of the Canadian provinces which implemented Prohibition as well: http://en.wikipedia.org/wiki/Prohibition_in_Canada

It's really interesting how disconcerting this is. I live in Pennsylvania, which has the same state store concept. I've lived here all my life. I don't travel much, and so the once a year or so that I leave the state, I have a roughly five second period when I walk into a 7-11 and they have beer in the cooler.

My first experience with state owned liquor stores was in Norway. At first I was shocked at finding them - they look more like a pharmacy than a store - after thinking about it, I could probably accept those in my life.

After all - if you want to purchase liquor you still can. But why not monopolise the revenue from the stores to the state, while distributing what is a dangerous substance in a controlled way. If you start purchasing too much, then you can get flagged as needing help. I'm pretty sure that's why Norway does it - you don't want too much dangerous drinking during the long winters.

I'm normally against any type of state intervention like this, but I can see the benefits. Provided, of course, that the revenue is used to offset personal income taxes- which is probably naive on my part.

Yeah, in Ontario the LCBO sells wine/liquor, and then The Beer Store sells, well, beer/coolers/etc.

As an American who has visited Canada many times, I've always been struck by the high functioning of Canada's homeless population. There are a lot of homeless youth and young adults who panhandle, etc.

Also, in Canada the work force is far more competitive (higher unemployment drives this). The person helping you at a fast food restaurant is a good communicator, appears clean, and is helpful and good natured. Across the border in the US, many fast food employees are noticeably less able.

So my hypothesis is that due to higher unemployment, many "homeless" in Canada are in fact people who would easily hold down a job in the US.

The US homeless, on the other hand, almost all appear to have psychiatric problems or substance abuse problems. I'd speculate that few US homeless would be able to hold down a simple job even if they were given a $5K per month stipend and fully subsidized apartment for the first year.

Here's a good essay on Canadian vs American unemployment numbers. Structurally, the Canadian unemployment rate has largely tracked the American one, but been higher. The professor who wrote this essay delved into the reasons why and found that the unemployed in Canada were more likely to search out work and therefore be counted as unemployed (i.e. the definition of unemployed in both countries being folks who seek work but currently have no job).

http://faculty.arts.ubc.ca/criddell/canusune.pdf

Also, Canadians have traditionally been supportive of quality public education and other social institutions. The person serving coffee at a Tim Hortons working minimum wage probably was in the same school system as the person he or she is serving who might be a banker. Private schooling is typically relegated to the upper middle class/rich, and those parents who want to send their children to religious schools (e.g., Jews or Muslims, as Catholic schools are fully publicly funded in many provinces).

Speaking as a university dropout and child of a middle class family in the poorest, most stigmatized part of Toronto, it was expected of all my friends that we get a post-secondary education. There was no question about it. Census numbers seem to back this up (http://www12.statcan.gc.ca/census-recensement/2006/dp-pd/pro...). There were roughly 14 000 people aged 25-34 in that area of the city. Only 4 000 of these people had no post secondary education. Anecdotally, there's a Catholic high school in the area that installed a day care so that it could accept mothers (usually unwed teenagers of course). It was a little bit controversial when it was first started, but this was in the early 1990s long before these kind of things were normal. Incidentally, that same Catholic high school also supplied free condoms in their bathrooms, much to the dismay of the Church. There's much more of a push to be educated here in Canada than what I see in the U.S.. So that might be what you saw during your visits.

Also keep in mind that because we have universal health care, it's much easier for the mentally ill to seek and get the help they need before it's too late and they end up on the street. That said, I live in downtown Toronto now and most of the older homeless that I encounter seem to be mentally ill or have addiction problems. The younger ones usually come from abusive households, so that's what drives them into the streets.

I read this article a while back: http://www.allvoices.com/contributed-news/4018083-beggar-ear...

$50,000 (AUD) a year! no tax as well.

What do you guys think about a beggar earning more money as the average Australian who actually works and earns money(I'm simply giving Australia as an example because I live there)?

I think it's a scandal and a disgrace - SOMEBODY call 60 minutes!

But no, seriously, why do people have such a big problem with this? The person begging and earning 50k is hardly getting money for nothing - I've done both telemarketing and shopping mall face to face direct sales and that's not easy or enjoyable. I think directly asking for money would be worse.

If someone spends 20 to 40 hours a week and manages to make a decent living, I don't see how that is bad, and I'm sure I can think of jobs and maybe entire industries that have a worse net effect economically or socially but are considered OK.

There are definitely more dishonest yet not as maligned ways to make a living than donning some old clothing and pretending to be poor.

People have a problem with this for a number of reasons, including but not limited to:

1. They feel duped. They gave some money to a person because they thought that person was down on his/her luck, then find out that they were played. People don't like being defrauded.

2. They are intellectually outraged because the beggar has made a career out of taking money in exchange for nothing of value, although some might argue that the warm fuzzies provided by the act of giving count as something of value.

3. They are angry that these beggars are destroying good will toward other beggars who are begging because they really do need help.

Of the ones I discussed, I image #1 is the biggest factor.

There's the "Begger King" in Hongkong whose daughter studied her undergrad in Oxford, UK!

>Card 5: $75. Laurie buys $74.61 worth of food, phone minutes and cigarettes at a gas station convenience store. Returns card.

Looks like Laurie checked the balance on the card and used it fully. She was the only one to use almost the entire balance.

Smart? or Greedy?

That's a false dichotomy.

To me, Laurie is the only one that has a shot at improving her condition.

She's been out of a job for 10 years...

Obviously they are all in tough situations. However she spent the money somewhat wisely, knows how to use a computer, skype, and has some programming skills. She also sends out resumes. I'm not saying that she will make it, but from this pool she is the one who may manage to get out of it.

What really killed me was seeing the homeless buy or sell drugs/booze. I went from a really wealthy suburb to a college campus that was more representative of "the real world" and encountered the homeless on the edge of campus for the first time in life.

At first, we'd give money and feel awful about the homeless situation. Then, we saw a couple of the regulars making a drug deal. Then we saw that again.

After that, in my mind, any dollar I'd give isn't going for a McDonald's sandwich. Instead, in my mind, I was practically buying crack for the homeless myself.

The sad part is that I realize that it's likely that there's only a few bad apples and they're not all representative of the whole batch...but it's enough to let me say "no" without feeling guilty.

So basically, you know you're rationalizing your lack of charity, and you don't care.

Everybody has their own way of rationalizing why something is not 'their problem'.

You could buy some food and give that instead. I've had a guy panhandling outside a supermarket here refuse food that I'd just bought because it wasn't money. Clearly he wasn't hungry but to me that doesn't make me look at all homeless people in the same way.

To be fair, we have now done exactly that. If we have food on us, we'd give it.

Not saying I don't care or rationalizing that it's not my problem. I'm just saying that the way I explain this could be used by many others to explain it as well.

'This homeless guy asked me for money the other day. I was about to give it to him and then I thought he was going to use it on drugs or alcohol. And then I thought, that's what I'm going to use it on. Why am I judging this poor bastard.'

these homes people seems awfully nice, but these are Canadians people we're talking about here. Let see how they do, say...San Francisco? Hey, SF Chron, are you listening?

Yea, what about NYC?

Insufficient sample size for drawing conclusions about target population. /sarcasm

Right, that shouldn't be the point of this article. I think the takeaway are the personal stories.

Has anyone ever talked to a homeless person before? I recommend doing so from time to time. It's easy to judge some of these "bums." You'll find out some of these people have serious psychological/psychiatric problems (with alcoholism/drug addiction being a result, not just a cause).

There was a girl living in a house of mine that stood empty for a year because I couldn't sell it. Before then she was living in an old caboose.

We talked quite a bit, she was a gifted artist on the one hand and totally out of touch with the world around her on the other.

She said she could talk to trees and was completely fascinated by eyes. Last I heard from her she was living in Spain, doing drugs living on the street again.

I don't think she was homeless out of need as much as that she simply chose not to be a part of this society of ours.

Sounds like schizophrenia to me. I subletted to a person with schizophrenia (a very nice korean guy, very religious), also. As I point out somewhere around here, it's a truly fascinating mental condition.

I am not a doctor but from your description of her there's a good chance she had schizophrenia. Her statements are consistent with it, and problems keeping friendships and jobs leads to financial and social problems with then leads to homelessness which then leads to more problems, including drugs, and it snowballs from there.

If this was the case, the root affliction is not her fault, and she probably needed anti-psychotic medication on a regular basis, and government financial aid to keep her off the streets. Talk therapy is almost useless for that condition. Though giving her shelter and helping her to keep social connections is vital. So it sounds like you helped her out a lot.

I don't think it is possible to psycho-analyze someone based on so little data.

If everybody that talked to trees or other spirits had schizophrenia you'd have to include each and every religious person, to me their beliefs are just as weird as someone talking to trees.

It's not that simple.

Agreed, thus the wording of my first sentence. However the belief that you can talk to trees (delusion) combined with being fascinated with eyes (possible hallucination or sensory distortion) combined with no job or home all adds up to something highly consistent with schizophrenia. I've had a lot of direct personal experience with someone who has this condition, and have done a lot of reading and talking to doctors, so I have some basis for making this estimation.

Regarding religion. That's complicated. It may very well be the case that some people who make religious claims are in fact mentally ill. There are likely also other people who claim to follow a religion who are not mentally ill: they were either raised by their parents to believe that way, or, they chose it.

> combined with being fascinated with eyes (possible hallucination or sensory distortion)

In an artistic sense.

A sample of what she could do:

http://pics.ww.com/v/jacques/eckart/dscf1836.jpg.html

Why do you feel the need to change her life? Did you even consider that she might actually enjoy a life that is so alien to your experience?

Agreed.

I lived and worked in downtown Chicago for close to 3 years. There is a large population of beggars. About 90% of them are black males. During the same period, I also saw lots of black males, who looked like these same beggars, in convenience stores and grocery stores buying alcohol and tobacco -- ONLY. Not other stuff along with it. Only those things. They often favored a certain kind of beer. I often saw that same kind of beer can, or wine bottle in a brown paper bag, discarded empty in the gutter or near trash cans in the same neighborhoods. Eventually, you put two and two together and conclude that it adds up to four. Do all of those beggars buy alcohol and tobacco with the money they get? Probably not. Are all of them addicts or lazy? Probably not. Are probably a large portion of them that way -- and/or mentally ill? Probably yes.

But once you see that enough with your own eyes you begin to feel less sympathy for many of them. Not a total lack of sympathy or empathy -- I don't want anyone to live that kind of life, even if it is a case of failed willpower -- but it also hardens you a little bit when there's a call for more aid. Some people truly have hard things happen to them, and it's not their fault. Some people truly bring trouble upon themselves, and it is their fault. And it's hard to distinguish between them from a distance.

They're hard to distinguish up close, too. No matter how you get there, whether it's mostly by choice or mostly by circumstance, rock bottom will likely involve you doing whatever you can to relieve your misery for a few short hours. I have a hard time faulting someone for short-term behavior when they don't have much of a future to work toward.

But you're (somewhat) correct when it comes to aid. Giving a homeless person 5 bucks won't do anything to alter their condition. It'll fill their belly, at best. But consider what 5 bucks probably means to me or you and what a meal means to someone who can't always count on one.

If you worry about homeless people spending your 5 bucks on booze, go spend that 5 bucks on a sandwich and give them the sandwich.

You need the pick your homeless person carefully if you do this. There's a nontrivial chance it will result in verbal harassment and/or a confrontation.

Maybe first ask if that's ok? "Can I buy you a sandwich" is a lot more friendly than "here's a sandwich".

I've made that exact mistake myself, but I think this may be the better approach.

That does sound like a much better approach.

I'm not so sure about that. My experience with homeless people is that most of them are honest to a fault.

They wouldn't be begging if they were not. Begging is asking for money. That's an honest persons last recourse when they have no other options.

A dishonest person would steal, not beg.

I'm sorry to contradict you, but there are dishonest beggars too, that make leverage of compassion.

In Italy, some time ago, they made a report on TV on fake beggars. They were normal people, with houses, jobs and cars that in their spare time pretended to be beggars just to get more money.

Yes, but they are not the norm, and I did write 'most'.

And don't be sorry :)

I think there are certainly the more 'honest' homeless people. But I do guess where you live. In some areas/countries being 'dishonest/dodgy' is the 'norm' and so it attracts the majority of homeless people to do the dishonest things they do.

I lived in Italy at that time and yes, nowadays italians (with the proper exceptions) are not the most honest people you can find.

(I am italian myself and I say this with a little of bitter sadness, but it is how it goes, unfortunately).

I think asking them to return the card games the experiment. They might get paranoid and think it's some weird undercover sting. Or more likely, maybe they think they've found a sugar daddy who's going to start hooking them up every week, so they want to play nice.

It'd be interesting to see if the results would be different if you just dropped the card off and walked away.

So am I the only one curious about the potential embodied in this experiment?

If you have accountability (via the credit card system) and challenge/reward (through a broader giving community), maybe you have the beginnings of a new and effective system for helping people.

But does it scale? Once you get beggars knowing they can get free money like this, how much do their attitudes change? How many people start to scam the new system? Does the scamming effectively prevent it from helping people who actually need it?

And as pointed out in other comments, many 'homeless' are homeless by choice, not because they can't get one. Some beggars aren't even homeless... They just choose to ask for money instead of earning it.

It's very difficult to make a system work properly when all humans are involved.

Yeah, people will either go along with a game plan or game the system itself. But maybe this is a way to structure in some freedom and personal connection that isn't there currently.

The move to electronic benefits from paper food stamps has reduced fraud substantially, and perhaps most significantly reduced the social temptation to game the system. So it seems like there's a similar benefit possible from moving from hard currency panhandling through rechargeable gift cards and public-purchase credit cards.

If a Kiva-ish system is more beneficial than standing out on the street, maybe you give people the freedom to stop structuring their life around panhandling and give them incentives to live more independently.

And these tools could even help provide a system that actually fills the gap between someone just making it in the working world and giving up on it for the more toxic world of panhandling.

But it's true that you are facing the most enormous incentives to game the system imaginable. It requires some really careful and clever reward design. I know it seems a little overenthusiastic, but I keep thinking it would be fascinating if there were a nonprofit that offered game design resources to other nonprofits...

Became clear that the problem is not in the need of money, but in finding a purpose, fulfilling an immediate need. If they had used the money in the most efficient way, they wouldn't be there in the first place (obviously)

The minor side-story here is that all these cards probably ended up, even if further used by the author, with small balances remaining on them. Pure profit for the issuer.

"...a man who had appeared with a can of beer and poured half into her paper cup. Joanne appeared sober."

I wonder about the accuracy of this reporters story, after reading this passage.

I think the operative word is 'appeared'.

"Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. " -Confucius

"Sit around feeling smug about your superior moral philosophy without doing anything, and the poor bugger'll starve to death."

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