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Comment by challenger22 | Hacker News Reader

The "It's hard to take risks if you don't have a safety net" thread that's been active today has plenty of evidence for it (https://news.ycombinator.com/item?id=19958301).

My argument is the flip side of (and generalization of) the usual claim that poor people are discouraged to try anything entrepeneurial.

Another competing claim could be that rich people are honestly less competent than poor people. I could easily argue against that one; IQ and conscientiousness are highly positively correlated with income, based on numerous sociological studies. People who dispute this fact have an agenda.

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> My argument is the flip side of (and generalization of) the usual claim that poor people are discouraged to try anything entrepeneurial.

Being poor is what made me an entrepreneur! When you have nothing to lose, then there's little risk in rolling those dice.

I've had a weird ride in my lifetime from upper-middle class => poor => lower middle-class => finally working my way back to upper. From that perspective, I wouldn't agree with either statement.

I wouldn't say I was ever discouraged from entrepreneurship, even at my lowest. But it did make the math a hell of a lot harder. When you're poor, there's always something more you can lose. Choosing between investing in your business or what you eat that week is a difficult decision.

What I would say is that those circumstances give you the motivation to find the clever, efficient solutions, and to make wiser, less risk-adverse decisions. I never wanted a startup that burned money just to get acquired. I wanted one that could make me real money from the very beginning.

Being poor raises the bar on the quality of the business you intend to create, because failure is worse for you than anyone else.

> I never wanted a startup that burned money just to get acquired. I wanted one that could make me real money from the very beginning.

I agree!

Although many years back my preferred business model became developing a business so that I can sell it whole-hog to somebody else, that has never meant that I was OK with burning money (or even using other people's money in the first place).

Coming from a place of poverty is probably why I am extremely reluctant to actually go into debt for a business. My preferred method is to live lean and bootstrap up.

Before I consider selling a business, I want it to be a real, profitable business that is standing on its own. If it's not that, then I don't have anything to sell.

At least in my sphere of influence, the word "poor" has changed from "has nothing to lose" to "is in a position in which they have already lost quite a bit".

For example, I and many of my colleagues are battling large amounts of student loan debt; if we were truly starting from 0 and had absolutely nothing, pursuing entrepreneurship would be at worst 0 gain and wasted time, but at best a successful endeavor.

Realistically, however, many of the young and poor are starting from a disadvantaged state where in reality, taking a large risk is dissuaded by the risk of defaulting on student loan payments or shredded credit scores.

What I'm getting at is, many people would love to be truly poor rather than in the pit, and being in the pit brings a lot more risk to the average person (who otherwise might have the drive or skills to really make something worthwhile)

> the word "poor" has changed from "has nothing to lose" to "is in a position in which they have already lost quite a bit"

I'm not sure that I understand the distinction you're making here. Yes, one path to being poor is losing what you have. But in the end, such people are just as poor as those who never had anything in the first place. They both have nothing (more) to lose.

> many of the young and poor are starting from a disadvantaged state where in reality, taking a large risk is dissuaded by the risk of defaulting on student loan payments or shredded credit scores.

Most poor people are living in a trap of debt -- that tends to go hand-in-hand with being poor, as is having shredded credit scores.

My distinction is that, for many, being poor isn't starting from the bottom, but rather being in the hole. While they both have nothing to lose, someone starting from the bottom has a lot more to gain given they aren't paying into the trap of debt, and debt is very prolific given that student loan debt has been on the rise.

> someone starting from the bottom has a lot more to gain given they aren't paying into the trap of debt

It's very hard to find a poor person who isn't saddled with debt, whether they have student loans or not. Being poor is very expensive, after all.

That said, I don't think a person's monetary wealth can be measured by their income alone. It has to be measured in net terms: assets (including income) minus overhead and debts owed. A lot of people who consider themselves wealthy are actually poor and living on borrowed (i.e., somebody else's) wealth.

This works great for folks who are young and healthy or live in a country with a strong safety net. But as far as the US goes, there are many people who would love to take a shot at starting a business or changing careers, but can't afford to give up the health insurance that is tied to their current job.

IQ and conscientiousness, as we measure them, are correlated with income.

I believe it remains to be shown that "competence" is also correlated with income.

> IQ and conscientiousness, as we measure them, are correlated with income.

They are? Do you have studies indicating this?

They're on the first page of google search results, so I'll let you find the ones you like best.

I was hoping that you had a paper that didn't appear there, as the authoritative ones I see there seem to indicate that there is a minor correlation at best.

Oh yeah, it's minor for sure. Personally, I believe it's more of a "being wealthy means you do better on IQ tests" effect than "IQ measures how much money you will make."

I was mainly getting that point out of the way so the poster I was replying to wouldn't get hung up on my evil liberal agenda.

Considering my characterization of my own point earlier,

>Being too afraid to generalize the wealthy as competent causes yourself to miss an personal actionable moral lesson about goal-oriented behavior. It is entirely possible to make this judgement, and learn from it, without demonizing the poor as incometent or subhuman.

I wouldn't call your viewpoint evil, but I'd like you to characterize where I'm arguing from in your own words. Seems like you think I've jumped into the looney bin.

Putting too much emphasis on IQ is a bit distasteful, because people can't change their IQ very much. But conscientiousness is worth advocating for. To me, it seems like the left-leaning opinion is so afraid to make judgements between people's measurable differences that they want to immediately shame people for recognizing those differences.

> Putting too much emphasis on IQ is a bit distasteful

I wouldn't say "distasteful". I'd say "inaccurate". It's not clear what, exactly, IQ actually measures and it's up for debate if it measures intelligence in any meaningful way.

https://thesocietypages.org/socimages/2008/02/06/correlation...

The scatter plots show a correlations strong enough that they startled me when I saw them. The higher the IQ, the lower the correlation though.

Yeah, I saw those plots. I didn't personally find them startling, though. To me, they show a weak correlation (that is stronger as you go lower in income, as you note).

That's an incredibly strong correlation by social science standards (seriously, one number correlates that well with something as complicated and path-dependent as income?), which is also weak enough to be completely useless for an individual trying to make decisions. There is no contradiction, because social science is incredibly hard.

Competence is the ability to do something (a goal) successfully or efficiently.

IQ measures the ability to perform abstract reasoning tasks successfully. Conscientiousness measures the willingness and desire to perform one's duties well. Additionally, among people that earned their wealth, the fact that they are wealthy demonstrates that they achieved their goal of becoming wealthy. These all indicate competence to me. Wealth, in general, can also be imagined as a state where one's needs are met, which is (for people that earned their wealth) almost always closely related to having achieved certain goals.

I would have a hard time imagining an argument that rejects these claims and also demonstrates that wealth and competence do not correlate positively.

Bear in mind that this is talking about populations as a whole- correlations are something we can tease out via sociological studies, and experiments are few and far between. There are facts about human nature that we will never prove conclusively, but to be an effective agent in the world, you should try to learn things about people that cannot be proven. Being too afraid to generalize the wealthy as competent causes yourself to miss an personal actionable moral lesson about goal-oriented behavior. It is entirely possible to make this judgement, and learn from it, without demonizing the poor as incometent or subhuman.

> I would have a hard time imagining an argument that rejects these claims and also demonstrates that wealth and competence do not correlate positively.

The line of reasoning makes sense. My only doubt comes from my own personal observations: I've never personally noticed a correlation between income and IQ.

You may have a selection bias towards some level of IQ. Does your sample's wealth distribution match the population's?

> Does your sample's wealth distribution match the population's?

It's hard to say -- I'm basing this on my lifetime experience. Across that time span, the bulk of the people I knew have ranged (at various times) from "dirt poor" to "the 1%".

Memory can be a tricky thing, of course, and I'm naturally speaking subjectively (and therefore not with statistical significance), but I never noticed a smaller percentage of high IQ people in the dirt poor group, nor a greater percentage in the wealthy group.

The breakdown has always seems pretty constant across socioeconomic levels to me.

But it also depends on what you count as "intelligence". I have noticed that the higher you get on the socioeconomic ladder, the more "socially intelligent" people tend to be. But specifying IQ as a measuring stick excludes most of the other forms of intelligence, including social intelligence.

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