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I have this idea that there are two types of poverty.

1) People who make mostly good decisions, but have had bad luck. They've been hit by medical expenses, for example, or been born in circumstances with no real opportunity.

2) People who make bad decisions chronically. Many of these people have substance abuse problems and mental health issues, or come from backgrounds where they never had the opportunity to learn any self-control like dysfunctional families.

It seems like the best thing you can do for #1 is to give them cash, but cash would be wasted on #2. Also, that poverty in the developing world looks mostly like #1, but in the developed world looks mostly like #2.

Am I way off here? Do other people have these thoughts? Is this callous? I'm really asking for feedback.

(I'm posting anonymously because I'm afraid of having this unpopular opinion attached to my real identity.)

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As long as we do not treat this as a dichotomy, and agree that both #1 and #2 are on a scale, this sounds reasonable.

It also depends on income. If you have good income, you can survive a little bad luck, some suboptimal decisions, and a minor substance abuse. Let's not pretend that middle-class people are all without vice.

It is easiest to help people who have a one-off financial problem, but otherwise good education, skills, and habits. A one-off medical expense. A broken car you don't have money to fix, but can't get to your job without. Not enough money to start your own business, despite having a solid business plan.

It may still make sense to give cash to both categories, because it would be difficult (and expensive) to distinguish them from outside. Consider the salaries paid to the bureaucrats judging who is worthy of receiving the help, salaries paid to their managers, the expensive offices they would live in, the extra costs they would impose on the people being judged, and the costs of mistakes they would make -- just giving cash to all poor people unconditionally and expecting that half of it will be wasted on hopeless cases may still be much cheaper.

I think it's wise to acknowledge as part of #2 that it's not just because some people are stupid or impulsive or short-sighted. Substance abuse, mental health, past trauma, bad influences, poor family dynamics, etc. all certainly play a part.

There probably is a subset of people who, as you say, make bad decisions chronically. But even among those people, you will find that many are either open to or longing for help in making wiser decisions.

So the thought process behind just giving them money directly is that they know best what their needs are.

But I think an important part of this is also offering them services that would help them make better decisions with that money, such as financial counseling.

Plenty of people have your types of thoughts - I'd argue it is very rare that people don't :) They just happen to come to different conclusions regarding what's good and what's bad, including 'calling poor people bad decision makers is really bad' that you are aware of and are keen to avoid :).

These are interesting matters and are well explored by analytic moral philosophy.

Here's what some smart people have figured out thus far: http://caae.phil.cmu.edu/Cavalier/80130/part1/sect5/RMP.html

I don't think we have the right to decide who is a "chronic bad decision maker" and who is not. Does it matter? What exactly qualifies as "waste"? Do you have the right to decide what's wasteful and what's not? Ultimately that's what got us here in the first place: a welfare system that's woefully inefficient (because there's so much bureaucracy and red tape associated with using the money on the "right" things). Maybe we should just allocate a fixed national budget for social welfare, and distribute it equally to all takers. If you want to blow your $500 a month on booze.. why not? It's still good for the economy, and who knows, maybe you'll end up not blowing the money after a few months of agonizing hangover.

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