How Poverty Taxes the Brain | Hacker News Reader

How Poverty Taxes the Brain

theatlanticcities.com

234 pointsjonbaer171 comments

I can speak to this. For a while in 2010 I was completely broke after leaving my first job out of college, which I hated, and having some other employment opportunities fall through. Having that little money changes your decision making process about absolutely everything. Obviously every financial decision is effected, even the tiniest purchases weigh into bigger questions like "will I have enough money in my bank account to pay rent on the first?" It can reach a point where you can barely purchase a soda without any stress over spending money. And at least for me who is fortunate enough that this was not a chronic way of life, one thing that weighed on my mind was how I was spending my time and whether I was doing enough to make sure I wasn't so broke all the time. I could imagine that at some point that sort of thinking goes away and you believe poverty is a way of life. But I can think of a variety of other meta concerns stemming from poverty that could plague your thoughts.

Mentally poverty can be an all consuming condition. I've come to think of it as comparable to programming in a high level language versus programming in a low level language. If you're financially stable you are like someone programming in a high level language who has tedious tasks like memory management taken care of for you. Whereas if you live in poverty before you can get to some of the really productive work you have some hurdles to overcome.

Another way of thinking of the difference between being financially stable and being poor is that if you are poor it is constantly a necessity to think about short term outcomes first so your mind gets clogged up with them. It is very difficult to get to think about your long term good because failing to properly address your short term outcomes could end in complete disaster. This is why I cannot take seriously comments like this on HN: https://news.ycombinator.com/item?id=6301856 although thankfully the commenter does acknowledge he is being cynical and disrespectful.

I observe this at the grocery store. The ones I visit have people from a wide range of economic status. When I go in, I grab what I need and don't think about price - it's almost always just the staples like bread, milk, fruit and eggs, and I know with certainty that I can afford it. And that I don't think about price is literally true until I'm told how much it costs, then I pay it, then I promptly stop thinking about it. I know my eating habits, I know my income, and I know that my eating habits are well within my budget, so it's not worth spending any more cycles on it.

Contrast this with the people who, upon learning that some item in their basket is not actually on sale, put a different item back. Or split the cost of the groceries across a WIC card and cash. Or use five coupons for a small basket.

For me, going to get groceries is an afterthought - I'm out of certain food, I'm out of my place, so I'll pick them up. But for some other people, it's clear to me that visiting the grocery store is an exercise in risk management and weighing priorities. In other words, being poor is hard work.

For an even more interesting observation:

I have grown up not quite in poverty, but still in a single parent home with mum having to work multiple jobs at times to support me and my sister. Thinking about money has rubbed off on me.

Nowadays I personally have zero money problems on account of my freelancing business doing great. But going to the grocery store habits learned over half of my life still kick in. Do I buy $5 rice or $3 rice? Does that pack of tuna cost less per kilogram than that other pack of tuna even though they're the same brand? And so on.

Buying steak at a restaurant still feels like "Holy crap man, what are you doing, chicken will be just as nice and it's like half as expensive."

I suspect it will take years to unlearn this and I honestly envy people whose parents did not instill this kind of thinking in them. It looks easier.

Easier doesn't mean better. You learned risk aversion and prioritization skills from your mothers habits. The fact is that you don't need to employ that aversion at the moment, but its a tool you have if you do need it.

The number of people I see who blow though heroic gobs of money astonishes me sometimes. I realize that my metric is entirely variable, but I'm talking about paying 2-3x for a similar good simply because its closer at hand, or offers some entirely minor benefit. This behavior isn't an issue when the wind is at your back, but I've had the unfortunate experience of helping, and eventually just watching, people that had a bad turn that just got worse because they didn't know how to stop their bad spending habits when they couldn't support them anymore.

Your mother gave you a gift. Its a gift with a mental toll, but in the long run its a fine price to pay for it.

There are a lot of people out there who make a ton of money and still stuggle financially. For some people, income is like RAM or CPU power: whatever you upgrade to, you'll fill it all up soon.

I also play little games in the store with trying to find deals and such, even though I don't need to. It's far better than the other way around. Certainly there's a middle ground, but it seems to be really hard to hit.

This is true. I think that past a certain level, though, you don't get the real poverty experience. You get stress, but it's a different sort of stress. Like, yes, you might be having some trouble with your mortgage month-to-month, but selling the yacht is always an option. They don't have to work out exactly how far into starvation they'll have to get to make ends meet this month.

You are completely wrong. Easier is better, most of the time. In a 21st century developed economy it's vastly more efficient to spend your time thinking how to improve your income than how to optimize small expenses. Same principle as the famous "Premature optimization is the root of all evil".

No longer poor, but I still price compare, because I'm tired of being screwed, not because cash is tight.

Enjoy that grass fed medium rare top sirloin. Life is good.

Just don't pay top dollar for imported beef pumped full of steroids and antibiotics. I merely want what I pay for. Top dollar for indestructible hipster glasses? No problem. Tack sneaky $2.00 fees on to my phone bill? Hulk Smash!

A moderate amount of moderation is actually good to keep around. But I agree it can be a problem when it takes over everything.

One of the most interesting domestic exercises is to think about how much different items cost in terms of other items.

A steak dinner (say, $50) is worth just a bit more than 3 double-meat Chipotle burritos with drink and chips and guac (say, $14). Each of those burrito meals is worth a bit more than 4 dozen eggs (say, fancy-pants eggs at $3/dz.) Each of those dozen eggs is worth 20 packs of shitty ramen ($.15/pack).

It's an exercise worth practicing, lest you find yourself one day needing to use that calculus.

EDIT:

This is also why buying Mississippi Mud ($4/qt. of passable black & tan) or Arizona RX energy drinks (~$1/can) is a good investment, as is rolling your own cigarettes or smoking pipes.

Each of those dozen eggs is worth 20 packs of shitty ramen

Careful: at a point, qualitative aspects matter. Your eggs are proteins and fats (both of which are essential to survival -- your body cannot manufacture certain proteins and EFAs). Ramen is virtually 100% carbohydrate. While it's going to provide you with energy, it's not going to sustain other essential bodily functions.

And I really have a hard time parsing tobacco consumption as fiscally responsible under any terms.

As far as nutritional value goes, eggs are a great deal. Packed with protein your body can use and easy to prepare.

you know, you could grow a whole baby chicken from one of those!

not from a store-bought unfertilized egg, no.

I think that was just a comment on why there's so much nutrition packing in an egg not any comment on the viability of a given egg.

I do love me my eggs.

Not just protein, but healthy fats and tons of nutrients in those yolks.

I'm gonna go out on a limb here and say smoking tobacco is most certainly not a good investment.

We all have our addictions. Being automatically prejudiced against one that happens to shorten your life isn't as useful as realizing you may be addicted to something far worse, e.g. spending most of your time thinking about dating or worrying how to shape yourself to fit the die that some institution has cast for your life, like college or work.

To be honest, I don't think these are worse than smoking at all. They sound more like phases in a normal person's life.

Take the idea of evolution. As pg points out in his essay, the reason evolution was so difficult for people to accept is that species seem to be unchanging, static fixtures. It would be absurd to suggest that a dolphin used to walk around on land, yet evidence shows that they did, a couple million years ago.

It turns out that the idea of evolution is useful in other contexts. Most of the best software was written by following a procedure strikingly similar to how a creature evolves. The idea of "release early, release often" is the idea of evolution applied to the process of writing software. In fact, this idea is so valuable that we probably wouldn't be having this conversation without it, because neither Viaweb nor Arc nor YC would exist.

It was normal for society to be unaware of evolution the same way we're unaware of the spin of the Earth. And when people started to look at the evidence, it was normal for society to reject it. It wasn't until Darwin, an established scientist near the end of his life, that society allowed the idea to take hold.

The consequence is that those who live a life that society lays out for them are almost universally denied access to the best ideas, because the best ideas are the ones you haven't thought of yet.

It's tempting to believe that you're resistant to the effects of society laying out a normal path for you to follow. Aren't we free to think whatever we want? After all, no one can prevent us from thinking, right? Actually, that's exactly what happens. "Here is where you live. Here is where you play. Here is where you learn. Here is where you work. These are the hours you may relax." That cycle is too powerful to resist unless you actively try to break it. It stamps its seal onto your brain. For 16 hours a day, your thoughts are not your own -- they are owned by whomever pays you. The reason is because even though you are technically free to think whatever you want whenever you want, most people never do. At work, people think about work, or about coworkers. At school, you think about school or (more commonly) about other students.

That sounds quite a lot like an addiction. In the same way a drug user becomes obsessed with acquiring their fix, most people are obsessed with living whatever life society tells them to be living. And in practice that means most people are limiting themselves to a small fraction of their potential, because your potential stems from your ideas, and your ideas come from your thoughts, and your thoughts are mostly not your own.

I believe those addictions are the real ones to be avoided. And avoiding smoking is good while you're at it, but probably doesn't matter as much.

This is a strange defense. You are basically defending an addiction by saying that it is better than smoking crack or doing heroin. That doesn't really defend your addiction, it is just comparing it to other things you could do that would be even worse.

I don't really care if you smoke or whatever, it is just rather expensive in the short term and potentially outrageously expensive to the point of bankruptcy in the long term. Also there are shorter term health implications that kind of suck as well. It is certainly not a good investment.

Yeah, careful with using that ramen as a currency unit. It sure is cheap, but it's the kind of food that will mess up your health long-term.

This is a weird statement: I ate at a ramen restaurant a couple of nights ago. It was quite healthy, I think I had pork, egg, spinach and seaweed in mine. There are plenty of good ramen restaurants branded from Japan. It is not the best food, but it is not the worst food either.

In context, I think ramen should be read as "only ramen".

Especially since what was referred to was "packs of shitty ramen."

They're not thinking of ramen-at-the-noodle-house ramen.

They're thinking of nothing-but-cheap-dry-noodles-and-salt ramen.

Ah, I forget hacker news has an American biased perspective, where ramen just means cheap crap you get in packets, not the fancy stuff we have in Asia.

And of course, ramen in Japanese just means "Chinese noodles", plenty of people in china eat them everyday in china and they are just fine. Imagine if some Chinese poster said "Yeah, careful with using that white bread as a currency unit. It sure is cheap, but it's the kind of food that will mess up your health long-term".

Isn't that weird o first glance?

I'm Australian.

We have packet noodles too, we just call them "noodles".

Paul Graham has referred to ramen a lot in the past, I guess it's a west-coast-exposure-to-Japan thing.

No, you're encountering the bias that $.15 ramen causes. And the HN bias towards pedantry (not always unfair).

15-cent ramen is crap everywhere that you can discuss a $50 steak dinner and $3/dozen eggs. The egg in your ramen, by those units, would have cost 25 cents alone, and is clearly excluded.

The ramen I had was 40 RMB, which...given that 1 RMB is .16 USD, is around 40 ramen units. They would never call ramen as fangbian mian here.

If you only ate wonderbread for all 2k calories of the day, it would mess up your health -- just as eating $0.125 packets of ramen would mess up your health if that was all you ate.

Not all ramen is $.125 a pack though, most of it in the world is actually not! It is just stupid and shallow that people think "ramen" would just mean the crap that they sell in American grocery stores.

Why not just use the real name of what you are talking about? "Instant noodles," "instant ramen," or "fangbian mian" would be much more accurate and much less bizarre.

From wikipedia:

> In North America, Japanese instant noodles were imported starting in the 1970s bearing the name "ramen", causing the term "ramen" to be often used in North America to refer to instant noodles.

So there you go. I'm sure it will disappear in time, as awareness of asian cuisine develops.

And this is hackernews, where all the readers must be from North America? I doubt the poster is even in San Francisco, where there are lots of decent ramen restaraunts to be found. On that same wiki page, there is nary a pic to be found of instant noodles.

Not sure why you're making such a big deal about it. Misuse of loan words is common in many languages, not least Japanese. Why, not 3 hours ago I was talking to someone who is about to rent a マンション (mansion) in Tokyo. Needless to say it is not any kind of mansion an english speaker would recognise, and I didn't see any pictures of same on the japanese wikipedia page. [1]

It happens. It will probably happen less now the world's so interconnected. Not worth four comments in a row!

[1] For the uninitiated, in japan a "mansion" basically refers to an apartment in a building built to a certain quality.

Well, yes, it is an english speaking website, so I imagine the colloquial usage of 'ramen' probably refers to whatever the colloquial US usage of 'ramen' is.

At our place we don't bother eating instant noodles unless they're Shin Cup or Mi goreng.

You can actually eke out a decent meal if you're willing to add additional nutritious items (eggs, greens, etc.) to otherwise bad instant noodles.

Ah, but keeping track of cost/benefit is a solemn duty in a capitalist economy. The only power you as an individual consumer have against vendors and producers is the power of choice - the choice to buy which product at what price at which location. No matter whether you have plenty of money or have to turn each currency-unit twice before spending it, if you forget about this you will get pilfered. You will lose track of current market prices for commodities and end up paying through the nose because the vendor in your location has noticed he can increase prices without losing business, thus increasing profits. Others who have less to spend will take their business elsewhere and before you know it you'll have created yourself the groceries-equivalent of an Apple store.

So if you happen to see fewer and fewer people swapping products in their baskets because they are not on sale or using coupons or hands of small change or whatnot, take heed and do some comparison shopping.

"If you're financially stable you are like someone programming in a high level language who has tedious tasks like memory management taken care of for you. "

This is exactly the correct metaphor.

I had to, at one point, stop using my coworking space and start working from home because I couldn't deal with the occasional overhead of "Huh, shit, I forget to bring lunch--can I afford to eat out today? Do I have enough gas to commute?".

Money is this magical barrier to all sorts of annoying daily minutiae--even a little bit is enough to let you shrug off the effects of suboptimal decisions. Being able to simply buy a lunch when you forgot to bring one can change your whole afternoon of productivity.

This is why you don't need to pay your programmers too much but you do need to pay them enough that they can focus more on their job and not on trivial items.

In hindsight, nicely presented lunches, gym (and perhaps babysitting?) on campus apparently serve a very real purpose. It makes sense that they are minimizing distractions. (When you think of it this way, employees should not have to pay income tax for free lunch at work but that's a different conversation.)

However, your parent comment made me think a little:

>It can reach a point where you can barely purchase a soda without any stress over spending money.

Do people with money not stress about spending money? I mean sure, I have a decent wage rate. According to the New York Times[0], a little more than half of Americans make less money than I do. However, it is difficult to shake the fear. I am by no means wealthy and I have no alternate source of income. If I am out of the work force for a few months, I will have to take shelter with my (retired) parents. I am by no means the most frugal person in the world. I have a nice Nexus 4 phone and I make whimsical purchases like going to the water park ($40+ for about three hours) and I eat out and stuff a few times a week. However, there is that fear in the back of my head that says what happens tomorrow? I would like to go to grad school. Will I be able to afford it?

The article makes me feel like the wealthy people don't have worries like that. I kind of envy that.

[0] http://www.nytimes.com/interactive/2012/01/15/business/one-p...

I don't think it's that people with money NEVER stress about spending money - it's a matter of degree. Most software engineers are good earners by US standards, and as such, going to the water park for $40 doesn't really register. Buying a $1 soda isn't even worth thinking about. However, buying a $20,000 car would certainly lead to some thoughts like "Can I afford this? What won't I be buying because of this car?" The advantage that a good income provides is that you're not stressing about daily purchases - not that you stress about nothing at all.

This is exactly it. Practically everyone has some legitimate financial concerns but when your financial concerns get to the point that every single purchase feels like it's effecting your bottom line in a meaningful way is when there's an extra layer of stress on your day-to-day thinking.

I find having a good income just brings on the stress of ensuring that you are saving enough for when you no longer have a good income, and so that $1 soda is still a mental hurdle, even if you can easily afford it.

I've found that automating my finances make a lot of those stresses go away.

I don't have to worry about accidentally overspending in my checking account and not being able to pay my bills because my bills are paid from a separate account, and they're all on auto-pay.

Likewise, my savings and retirement investments are automated and I just know that enough is going there. I have a checking account, which is labeled "Spending" and that's what I use to buy groceries, etc. It doesn't matter that it's literally dwindled down to almost $0 a couple times a month because my bills and investments are automatically managed.

My wife and I lived pretty poor for the first 3 years of our marriage, and only the last couple years have I been earning enough to be able to "set-it-and-forget-it" with my finances. The reduction in stress is HUGE, though. Earning more money definitely allows you to spend your time thinking about things that don't cause such stress.

Interesting perspective, but I feel like the stress comes from the idea that you can never have enough saved. Even if you schedule a certain percentage of your income to be saved automatically, what if you need that percentage + N in the future? You are ultimately limited by your income, but within those confines, if you squander a $1 now, you won't have that $1 to fall back on in the future.

I have a fixed monthly allowance for whimsicalities. I tends to make things a lot more clear and simple. It also makes it more obvious that buying experiences is a MUCH bigger return on investment than buying stuff.

That Moto X you bought recently? It will keep you satisfied for a while - the same kind of satisfaction that comes from a large, copious meal, or really good sex with someone you're attracted to but not really attached to; but it won't make you happy or bring you peace. However, going out camping with the kids for one night - it's 10x cheaper and brings real happiness, peace, and clarity.

I always thought that, at least for me, there's a level of cost below which I can just buy something on a whim without worrying about whether I can afford it at all, and above which I need to think about it for a minute. When I was in college, that level was about $10. It was a kinda weird transition when I got my first professional job out of college, and I had to get used to that threshold being closer to $1000 instead. I can see how it can be stressful if you're broke enough that your threshold for this is more like $1.

> there's a level of cost below which I can just buy something on a whim without worrying about whether I can afford it at all, and above which I need to think about it for a minute. When I was in college, that level was about $10. It was a kinda weird transition when I got my first professional job out of college, and I had to get used to that threshold being closer to $1000 instead.

And then you get two kids and a mortgage, and that threshold drops like a comet into a neutron star.

I'm currently at the $10 threshold and live with a slightly older roommate whose threshold is more in your current range.

Going out to restaurants, shopping, and general errands are so different for us. I help him out a lot so when we do things I listed he usually covers my meals and everything but I'm still in my lower threshold thinking.

Going to the grocery store and spending $300, to the hardware store and dropping $400, picking up some car part for $100 in a single day and he doesn't bat an eye. I would have exhausted an entire month or more of pay in one day if I did something like that.

Going to a restaurant and seeing a meal costs me, say, 2 hours of work requires me to think about it. If my roommate is covering it might only be 20 minutes of work.

The differences are amazing.

> Do people with money not stress about spending money?

It's a matter of degrees. It's quite different to ask "Can I afford to buy this product? Should I get a cheaper one, or go without?" at every product at the grocery, or ask "Can I afford to continue buying those groceries? Should I change my routine?" once after you pay your grocery bill.

> In hindsight, nicely presented lunches, gym (and perhaps babysitting?) on campus apparently serve a very real purpose. It makes sense that they are minimizing distractions.

One of the less savory goals of these perks is to make sure that you go back to work as soon as possible after you're done with your things. A different perspective is that it's win-win: your employer benefits from less downtime in their employees, and the employees benefit from the perks.

> The article makes me feel like the wealthy people don't have worries like that. I kind of envy that.

There was an excellent article a year or three ago about the stresses that the super-rich go through. I can't seem to find it anymore (I can't recall any keywords besides "super-rich"), but it gives you a sense of how their financial stress is of a different quality.

http://www.theatlantic.com/magazine/archive/2011/04/secret-f...

...I was literally off by one word. /facepalm

Thanks.

"Money is this magical barrier to all sorts of annoying daily minutiae--even a little bit is enough to let you shrug off the effects of suboptimal decisions. Being able to simply buy a lunch when you forgot to bring one can change your whole afternoon of productivity."

Exactly.

I also find that poverty detrimentally affects people's self-esteem and confidence. It's hard to avoid seeing income as a societal judgement of your value or ability (even though it really isn't).

I've seen this in my family: if people are laid off or struggling financially, it is just incredibly destructive. Losing a job had more impact on my relatives' happiness than getting a divorce. When I called my family I could tell they still hadn't gotten hired without having to ask. Their voice was depressed and they were frustrated with even the littlest things. It is heartbreaking to witness the effects of poverty in people you love.

I know when I was quite poor in college, thinking about money made my chest tighten and my eyes get hot. I knew I couldn't pay for a fourth year. If the slightest thing went wrong, I was just fucked. There was terrible anxiety, and simmering fury, that wasn't alleviated for years.

While this may not be true to everyone contributing their 2 cents on this piece, most folks here cannot possibly fathom nor understands what it's like to be buried in stress due to poverty or near poverty experiences. I, too, have experienced my fair share of impoverished conditions throughout the course of my life, but it is a bit difficult, even frustrating, trying to explain to someone the effects of poverty. The emotional and physical toll poverty takes on one individual is beyond belief, but some folks will never get it, to be honest. Furthermore, the effects never quite diminish, even if one is able to climb out of poverty, unfortunately.

There is a definition of "social class" I read in the last few years that separates income or wealth from social class. The definitive marker in this definition is the length of time you are able to plan for. Naturally wealth affects this, but is not the be all end all. This definition separates the spendy nouveau riche who blow millions on status markers as still being 'lower class', where thrifty thoughtful people of modest current means would be of a 'higher' social class.

Thoughtful thrifty people of great means are able to think in terms of what their grandchildren or foundation might be doing. The impoverished, disadvantaged of education (Like the SOB who stole my motorcycle only to crash it immediately) might be thinking minutes or hours into the future.

Having been in various economic conditions under varying amounts of stress, I find ritchiea's post dead on the money.

This is how the class system in Britain works. As far as I can tell in the US, wealth is the only input into the social class equation. In Britain there are lots of inputs e.g. where you went to school, your accent, your vocabulary, your occupation, your friends and that of your parents. Wealth is a very small input (except so far in that you can afford to send your kids to the "right" schools where they will make the "right" friends and perhaps ascend a rung).

It is all that and more; it is not just the extra mental effort, it is also the stress that messes with your ability to reason; that makes rationality diminish, and drives emotional instability and crisis creating behaviors.

I agree with a lot of what you're saying but one thing that's always bugged me is how we account for sub-optimal decisions.

What I mean is that if I make 60k per year and I choose to spend very little of it by driving an un-fancy car and cooking all my meals at home and living in a small apartment (perhaps with a roommate) I might be able to save half my net income. Or I could spend nearly all of that income on a bigger place, nicer car and meals out. And then I would potentially be in the exact same mental place as the person in poverty.

What if that gets scaled down to 20k instead of 60k? Is there still nothing I can do to figure out a way to save money? Even if my cognitive load is high due to being poor, which way does causation go? Maybe I consciously decided to live in a bigger place and eat more meals out and as a result I now have more financial worry.

I guess what I'm asking is which way does the causation go? Does being in poverty cause you to become overloaded or does the inability to prioritize well or think under stress cause the poverty? To me this question is neigh impossible to answer because you can't look at a single decision or experiment to determine the outcome.

My naive thinking about this kind of thing is that it's like a betting game. With 50/50 odds you might be up some or down some but in the long run little changes. A hundred $1 bets on a coin toss should leave you with just as much money as you started with. But if the odds change, even just a tiny bit, the outcome of a hundred bets gets really different. Having a slight edge on the house, 51% instead of 50%, can cause you to slowly but surely come ahead of the house. And similarly, going from 50% to 49% can cause you to slowly bleed to death.

Now some math. A 50% chance of winning is the same as a 100% payout. For each win you double your money, for each loss you get nothing. 51% is a 102% payout. 49% is a 98% payout. We'll neglect the notion of a finite bankroll since these are small bets; our bankroll is the full $100.

With 50% odds:

1^100 = 1 so you never make or lose money

With 51% odds:

1.02^100 = 7.24

With 49% odds:

0.98^100 = 0.133

Now of course I don't know how this game would scale to real life. Would a person have only a few chances in a lifetime to make these kinds of "bets" or do you get these chances several times a day? And what is the quantity of the bet? Is it how much I spend, or how much I choose to spend versus my other options of how much to spend?

For example if I feel thirsty I could choose to drink water from a drinking fountain (free) or buy a soda ($2). Is the bet quantity $2 (how much I spend or don't spend) or is it $1 because I either "double my money" (which is to say, I don't spend the $2) or I "lose that bet" buy the soda and spend the $2. I would tend to think it's a $1 bet.

Anyhow I'd love getting some kind of real feedback on the math here rather than just "you're an asshole for not thinking those in poverty are victims"

If you're curious about causality could have saved yourself the trouble of constructing these thought experiments by reading the abstract:

"[W]e examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort...Instead, it appears that poverty itself reduces cognitive capacity."

http://www.sciencemag.org/content/341/6149/976.abstract

Buying or not buying a soda seems like a plausible example arithmetically, but in practice any personal budget that does not include a few small luxuries is not a personal budget that anyone is going to follow. If it's not a soda it's going to be a magazine or something else eventually.

Anyway, even if we concede arguendo that those now presently in poverty got there by being stupid and drinking soda they couldn't afford or not finding cheaper lodgings etc., if we somehow removed bad decision makers from the population it wouldn't mean an end to poverty. It would just mean good decision makers would find themselves in poverty. That's because we need at least 5% unemployment to keep inflation at bay, with some number above that underemployed and some number below that dropping out of the workforce entirely. While those states could theoretically be transitory for everyone, in practice they're going to be sticky for a large number. So even in a population of 100% good decision makers you're still going to have some poverty just so the central banks don't run up against NAIRU.

And then, if this paper is correct, those new poor are also going to start having a hard time with congnitive tasks.

The argument wasn't that drinking soda caused poverty. It was a thought experiment about the idea that a person's decisions are cumulative and that a person could lean ever so slightly towards saving and slowly dig themselves out of poverty, or ever so slightly towards spending and find themselves in poverty. And that it wouldn't necessarily take hundreds of year for those decisions to add up, that perhaps it could happen in a few years or a decade.

I definitely don't understand the link between unemployment and inflation. Could you elaborate a bit how full employment causes inflation? I'm not being purposefully dense; I just don't get it.

I know I characterized your argument a bit harshly. It's probably true? In some cases? All? I don't know. The paper doesn't rule it out. It does purport to show that causality does run the other way [as well].

Anyway, I just think it's important to keep in mind how much the macro environment affects which bad decisions get punished and how much. The same mistake that might have got you a nasty email from the boss in the late 90s might have got you fired in the late 00s. The sorting effect you hypothesize might happen, but there's significant variability in how harsh it is, at least a portion of which we have control over.

As for inflation and unemployment, basically all mainstream economists agree that there is something called NAIRU, the non-accelerating inflation rate of unemployment. It's the rate of unemployment below which inflation starts to accelerate. The Wikipedia article isn't very helpful but here it is:

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

Here are Excel files of historical NAIRU rates targeted by the Federal Reserve:

http://www.phil.frb.org/research-and-data/real-time-center/g...

Here is a paper on NAIRU (opening section is a reasonably good general introduction) by Greg Mankiw, who is not my favorite economist but very widely respected [pdf]:

http://scholar.harvard.edu/files/mankiw/files/jep.ballmankiw...

The section on why NAIRU exists basically concludes "nobody knows." Unfortunately this is macroeconomics so there's a lot of just-becausing.

I'm not sure if it's a good theory or not but it's widely believed by economists, especially central bankers. So if unemployment goes above a given rate, which changes depending on circumstances (I think the latest estimate is 6.5%), they're going to tighten the money supply anyway so that growth and especially job growth slow down.

So essentially, it's an unstated national policy in almost every country not to have full employment.

Okay I'm glad to see that it's not something you espouse yourself necessarily, but rather a phenomena that central bankers believe in and thus act accordingly to. Macro stuff is weird and generally wrong IMO but I didn't go through any formal economics. That might make me more qualified or less, depending on your point of view.

At any rate thanks for helping me understand the NAIRU rather than just calling me an idiot.

I agree completely that the macro environment is hugely influential. Saving and frugality are beneficial at one interest rate or naive and foolish at another. It's really strange how the "common sense" idea that you shouldn't spend money you don't have is 100% true at 10% interest but only about 5% true at 1% interest. Especially with inflation at a couple percent.

Your thinking at to low a level, the choices that have real impact are things like:

  Where should I live? (Buy? Roommates?)
  What kind of car should I get? (Make? Age?)
  Sould I learn? (To cook, draw, lisp?)
  What kind of Heath insurance do I get? (none?) 
  What cellphone plan do I get.
  What do I do for entertainment?
  Should I start packing lunch?

Each of these can be with 100,000+$ at retirement should I get a soda while at I get gass may be habit forming, but it's got little long term impact. Edit: Getting a Starbucks coffie every day or bringing from home is also one of the 100,000+$ choices but only in terms of the habit not crap I forgot to buy beans what do I do?

I was trying to give a single example that fit within the framework of small decisions, but yes there are definitely bigger decisions too.

I would argue that the soda vs water is easily worth $100k at retirement. Two times a day a person might make that choice. That's $4 a day, 365 days a year or $1460. Or $43,800 after 30 years. Once you add in some kind of compounding interest (I know there is very little yield available these days, but that's not the norm) you can easily hit $100k.

I guess part of my thinking is that it's not even JUST the big decisions that a person makes, but ALL the decisions they make. You can come out ahead on any/all of them and the effects are cumulative.

Probably worth a lot more than $100k once you look at the effect 2 sodas a day has on your health.

Everyone has a sustainable comfort level. For most (single) people, that level is well above poverty, but well below a typical Silicon Valley programmer income. It's what you end up spending on ordinary monthly bills, food, and other routine needs and wants, including minor impulse purchases.

For me, when I lived in Santa Clara, this ran me about $2500, including medical premium and certain somewhat expensive tastes (and rarely cooking anything myself). It's where I typically ended up without thinking about it. (If I did watch myself a little more, I could pretty easily stay under $2000.)

I'm in a cheaper area now, but bought and partially renovated a decent sized house on half an acre in a semi-urban area, so the number has actually gone up a bit rather than down, but at the same time, some of the difference is effectively increasing my basis in a valuable asset.

If my income doubled, I'd get more work done on my house, but my routine expenses would otherwise remain largely unchanged. My savings would grow a lot faster. I would not have materially less money-related stress, because my needs are already more than met, not because my spending increased to compensate.

As someone who took a break from a good programming job to attend grad school (on a $20k/year stipend), I can say that for me the causality went poverty->stress. I've never had trouble with money management, but boy I sure sweated every little thing during those years. I was short with my wife and kids. I had sleepless nights. I had no idea how I would ever afford retirement or even health care. Now that I'm back to earning a good living my stress is way back down again. I feel my judgments are more considered, and I'm more confident in myself.

Your logic is flawed in that people in poverty everything is a priority.

When you live paycheck to paycheck you don't make 'decisions'. You just function and watch TV.

I don't think you can make that argument reasonably. Everything is a priority for everyone on the planet, always. Demand is infinite and supply is finite. The world's been like that for as long as people have been around. Monkeys exhibit behaviors that you could argue have to do with some kind of understanding of "fairness"

http://www.cbsnews.com/8301-205_162-57497280/video-monkey-an...

If you have free time to watch TV it's because you're choosing TV as a priority over the extra money that a second job would bring you. That second job would also put a dent in the amount of free time you have to watch TV and be sold a story that you need to buy things in order to be happy. That's all advertising does.

Are there people working two jobs and still perpetually living paycheck to paycheck? Absolutely. Hell there are people working 80 hours a week making over $100k a year living paycheck to paycheck.

http://www.cnbc.com/id/26645137

It seems to me that "poverty" is a combination of where you start out in life and the trajectory that your decisions cause. What I mean is that someone who is born with a $10mm trust fund could easily whittle it down to nothing by the time they're 40 years old. And that a person who starts out with nothing, plus some malnutrition due to growing up in poverty can still get ahead if they make choices to consume less than they earn (no matter how little) and to invest their savings in things that can bring a return.

How does someone who makes only $20k per year manage to save money and invest it? I don't know the specifics to be honest. I'm having a hard time finding good investments myself and I make substantially more than that.

But I don't think it's right to say that people are 100%, unequivocally victims of circumstance and that once in poverty it's impossible to escape is correct. We as human being don't have any control over where we're born or who our parents are, but we do have some control over the choices we make.

I'm not sure if you're trolling or just extremely naive and idealistic.

You're still operating under the assumption that you have choices when you're in poverty.

Imagine working two jobs 80 hours a week and pulling in $2000 at minimum wage.

700-rent 200-car note 80-insurance 500-food 200- utilities 200-gas

Where are you going to make 'choices' to get ahead assuming all of your time and money are gone?

This is the cycle of poverty that unskilled people live under if you weren't born into a middle class family that can help you get ahead or if you don't get lucky.

So barring 'lucky opportunities' impossible is a pretty accurate way to describe poverty in America.

I think the reason we don't see eye-to-eye on this is this line right here:

> 700-rent 200-car note 80-insurance 500-food 200- utilities 200-gas

When I look at that I still see room to squeeze it cheaper. Rent could go down with a roommate (or several). A $200 car note is pretty substantial. $500 for food is also a lot more than needs to be spent.

I think that when you look at that, it's a bare-minimum kind of thing and it couldn't possibly get any cheaper.

What it boils down to is the will to make the sacrifices necessary to stop having to make all these short-term tactical decisions and be able to start taking a longer view.

Here's a lady who talks about having a $30/week food budget for her AND her husband.

http://moneysavingmom.com/2012/04/is-it-possible-to-survive-...

I would also suggest that you don't attack me personally for my views and instead argue why they're wrong. When I disagreed with you I said "I don't think you can make that argument reasonably." When you disagreed with me you said "I'm not sure if you're trolling or just extremely naive and idealistic." You can do better.

If you're really that numb to people's suffering that you argue that it's possible to live on a 30$ weekly food budget because one wing nut posts a web page about it...

Well, it really does make me think you're trolling and that you've already make up your mind that 90% of the world is in poverty because they made poor decisions.

You could drink your own urine to save money on water bills as well....

Thanks for attacking my character rather than my argument.

http://lmgtfy.com/?q=living+on+%2430+per+week+food+budget

That's 1.6 million hits. Obviously not all of them are about a precise $30/week food budget but plenty are. The idea that "one wing nut posts a web page about it" is blatantly false.

Did you even read the article? The lady espouses savings and thrift and the notion of building up a budget buffer so that when good deals come along that you can afford to take advantage of them. That means getting more than $30 worth of food per week while still only spending $30 on average.

Just because you can't imagine how it's possible to eat well on $30 per week doesn't mean it is impossible. It probably means that you've never had any reason at all to try and thus no idea about the feasibility. I can't say that I blame you for not trying; it's clearly a waste of your time. But it is doable.

I think this is exactly right. There's almost always somewhere you can cut - when I was a student I lived on $11k per year in today's dollars. $2000/month seems kind of luxurious.

And I didn't suffer any of the wrenching decision making overhead in the article. Decisions were easy - "Is there any way I can avoid buying this?" No? Then I bought it.

College students are like the Kevin Federline's of poverty.

They believe that because they lived frugally for a few years while seizing opportunities that a middle class existence opened for them they are now able to speak expertly on poverty and what being on the street is like.

And Kevin Federline made it up out of the streets with his dangerous thug dance moves.

>They believe that because they lived frugally for a few years while seizing opportunities that a middle class existence opened for them they are now able to speak expertly on poverty and what being on the street is like.

Based on this and your earlier comment I have serious doubts as to whether you've actually met someone who makes less than about $60k a year. You do ape your Contemporary Marxism professor passingly well, though.

One of your previous comments:

"$80k is hardly the low end of the car market. I can buy a decent Porsche for less."

You're a poverty expert obviously. With nothing but warmth, mercy, and compassion towards those less fortunate than you.

Fox news and Rush Limbaugh will guide your moral compass.

>One of your previous comments...

Proving nothing. How do you know whether or not I can afford a Porsche? The ghettos are full of kids who know how much a high-end Lamborghini costs.

As it happens, I could afford to buy a Porsche if that was the sort of thing I wanted. Because in the decades since college I lived within my means and strove to make my skills more attractive to people who might want to hire me.

One thing I didn't do was fetishize poverty. All you have to do to be poor is refrain from doing anything. In the US nobody of average intelligence needs to be poor.

>Fox news and Rush Limbaugh will guide your moral compass.

I don't watch broadcast television or listen to commercial radio, so I'm not exactly sure what's on Fox or what Limbaugh is saying. But to the extent they support things like self-discipline, thrift, and hard work (you can find definitions for those words with Google) I agree with them.

Lol having mercy and compassion = fetishizing poverty? You sir are amazing.

That's not compassion. That's stroking your own ego.

You're a sick person.

For pointing out the utter vapid shallowness of your "compassion"? Guilty as charged, I suppose.

I am sick of this whole notion that poor people cannot pull themselves up by their bootstraps. This notion that "poverty taxes the brain" is utter nonsense. Peoples brains are generally not taxed by being poor, their brains are lazy and their attitudes are bad, that is why they are poor to begin with.

I take personal interest and issue with comments surrounding this since I lived it. I have personally experienced, watched and read detailed stories of so many living in America who have done just this - Pulled themselves up out of poverty.

My personal experience (and those close to me as well) with having almost nothing was this: You have a lot less to worry about (literally). You don't own much, you have a lot of time to think and research how best you should improve your life. You have less distractions and it is easier to focus on your goals and ambitions. If you have a simple budget (takes hardly any time to make one when you are poor) you don't have to even think about "will I have enough money to make rent this month". This whole notion of poverty taxing the brain is yet another "excuse" for the poor disadvantaged soul living in poverty.

It comes down to this, if someone works hard and makes good choices (either on their own accord or by following wise advice), they are absolutely going to escape the poverty they may have been born into or ended up in by some circumstance.

Let me give you a little example of how things have changed in the last couple of hundred years. Do you think that early settlers brains were "taxed" so hard that they could not work hard? That they could not make good choices? They had to work hard just to eat, just to feed their families (if they had them). If they made one bad choice or made one mistake, they could have lost their herd or crop. This could mean their very lives. They may never have been able to escape barely surviving back then, but times are much different today. Take that level of work ethic and wise/conscientious decision making and put it into the average poverty stricken youth today and do you think would happen?

Your family's lack of money should mean almost nothing today, if anything - it should be extra motivation to work hard and improve you and your family's lives. Is there a reason that a minority youth in the worst and poorest inner city project cannot go to school, pay attention in class, do their homework and achieve at least a "C" average? Well with that average, they will be accepted to any state college. If they are poor, there is a ton of financial aid (free money) available. If necessary - get a student loan (this is your ticket out of poverty here, it is worth it). This is the escape out of the projects that almost everyone can do. It will not cost you a single penny of your own money until you finish college. Even then you can take an online film study (or similar) class at a local community college ($50) every semester and put off paying back your student loan almost indefinitely.

we see case after case of middle or upper class people lose everything and climb back up out of poverty, immigrant after immigrant (or refugee) come to America with nothing to their name and even not be fluent in English in many cases, yet climb out of poverty, minorities from the poorest and most violent inner-city projects climb out of poverty, yet I hear again and again how and why people cannot do it on their own. Well people do. What makes these people so special? Are they extra smart? Do they have more attractive faces and bodies? What is it that allows some to climb out of poverty where most cannot.

The limiting factor here is themselves - their attitude. This has been fostered by such things as the collapse of the family, the loss of strong morals and ethics, the nanny state (creating dependency and sending a message that they cannot do it on their own - creating victims), the entitlement attitude, the victim and disenfranchised mentality, racism (I mean minorities toward majorities here), class envy, the entire black culture in America today.

You would think that if the government really wanted to solve poverty, they would lookup everyone in the country who had escaped poverty, and interview them. How did you do it? How could others do this too? Then publish the results in a big ad campaign.

What would we find? A huge overlap of answers (which I already outlined). The problem is - the government is not really interested in eliminating poverty. Nor keeping people out of prison. The government (generally) is not the friend of the minority or the impoverished. The government does not wish to eliminate or diminish itself by enabling people to become independent of it.

Is it "fair" that someone is born with a silver spoon in their mouth and can move through life lazy and comfortable, while another is born in poverty and must work harder and have to make better choices to succeed? Of course it is not "fair", but it is reality and it is not changing. I can tell you a fact though that the individual who pulls themselves up by their bootstraps is a lot happier and more content person than the one born into wealth. Is that "fair" too? Happiness is something that can never be purchased (for any amount of money).

This is a very interesting article, but the experiment, as described, doesn't seem to back up the thesis. They show that people who have less money are more taxed by financial questions, but that could just as easily be a cause not an effect of poverty. (ie, it could back the notion that it's trying to refute.) The article did mention a similar study in India where they tested people who were seasonally poor, but it didn't mention whether their scores changed after they received their harvests. That seems like the crucial point.

It totally does mention that their scores changed after they got the harvest... they went up, presumably because the cognitive burden was gone. Similarly, the experiment with car repairs of different expenses showed that the cognitive impact is correlated to how 'bearable' an expense was: rich people weren't impacted by a thousand dollar repair, but poor people suffered an impairment that wasn't there when the repair was only $100. This is pretty clear evidence that they didn't just pick a bunch of dumb poor people: the poor people started performing worse when there was financial pressure. This could probably be extended to test the impact of financial pressure on 'rich' people: propose they're hypothetically unemployed, or disabled and see if this has a cognitive impact. The problem is that rich people don't deal with that kind of problem with any regularity, so they might be able to shrug off a hypothetical situation.

As an anecdote, I make a software developer's income, but I also farm on the side. With some new expansion this year, virtually all of my cash assets are tied up in crops that are still growing and I'm going to struggle to finish out the remainder of the season. I'm probably considered "rich" on paper, but I have been feeling these effects start to creep into my own life regardless.

Eric Blair (known to some as George Orwell) wrote two of the most biting descriptions of the grind of poverty:

Down and out in Paris and London

http://www.george-orwell.org/Down_and_Out_in_Paris_and_Londo...

The Road to Wigan Pier

http://www.george-orwell.org/The_Road_to_Wigan_Pier/

I read Down And Out In Paris and London and would recommend it to anyone who wants to read a detailed account of how it was (and probably still is) to be poor at Orwell's time.

I believe The Road To Wigan Pier must be quite similar although it will most likely focus on British poverty. I think it is very hard to fully understand poverty unless one has lived in such conditions for a prolonged period of time as an adult (I don't know if they are any accurate studies on how it feels like to be a poor child).

>>low-income people who were primed to think about financial problems performed poorly on a series of cognition tests

Wouldn't highly busy people with a lot of stuff to worry about such as startup entrepreneurs, chief level executives also perform poorly on cognition tests? Doesn't that prove that when your mind is busy at any level of Maslow pyramid, cognition tests and other games become trivia to ignore?

So IMO, these results tell more on attitude towards cognition tests than cognitive power. Au contraire, it can be argued that, people in need focus more on what matters by ignoring noise including tests. So necessity is the mother of positive change and maybe of innovation?

The study is not trying to prove that worried people do worse on tests. That's well-established, not news to anyone.

It's demonstrating that day-to-day financial decisions like "should spend $1500 to repair my car?" produce enough worry in poor people to have a strong cognitive effect, wheras they don't have that effect on rich people.

Have you ever tried to push code after not eating for three days because paying taxes wiped you out?

It's a very different sort of distraction.

Most poor people (not enough food to eat level poor, not 40k is poverty in SF kind poor) do not pay any taxes and actually get money back from the government (unearned income tax credit).

Before I moved to US I lived in a poor Eastern European country. When I was in university my food budget was ~$70 and my total budget was around 150-160 dollars/month. Eating out was not really an option even once a month. 2k/month is as far from real poverty as I am from Bill Gates.

As a matter of fact, I have. Except that I still owed the taxman a lot of money, and was hitting up everyone I knew for loans to keep him off my back just a bit longer, all while working 16+ hour days, 7 days a week in an incubator, trying to get a new business off the ground so that I could get some money coming in and eventually pay everyone back. I learned a LOT of lessons in frugality, and as of last year I'm finally in the clear, hopefully forever this time.

It's a shitty situation, but it's not an insurmountable problem. Life ain't fair and nobody owes you shit. You may not be responsible for the situation you're in, but nobody's going to drag you out, so you have to drag yourself out. Or just sit there and die. Your choice.

Good, you had the energy, youth and education to know how to acquire loans without getting shorted, working 16 hours without preoccupation for other things aside from your own well-being (your business very much counts as that), and in the context of an incubator.

Now think of someone with little formal education who has been taught all his life that there is not way to solve those issues because you don't know anyone who has gotten out of that shithole.

What motivation would you have?

People seem to underestimate how important is to have a glimmer of hope that a situation is insurmountable. Sitting in a couch watching TV is not an irrational response for spending decades under that situation without any possibility of clawing your way out.

mmmmm yes golden bootstraps all around

Look, it's something that is surmountable, but we shouldn't for a second treat people in that situation with anything but compassion.

Or just, avoid stress by working a reasonable amount of time and planning your meals.

I think they call that working smarter.

One (admittedly cynical and disrespectful) hypothesis could be that some of the low-income people are low-income precisely because they disliked abstract reasoning in the first place, thus making them less likely to pursue their education.

To be honest, there are dozens of different ways to interpret this data.

There really isn't. You're letting your bias influence your opinion. Read the paper, draw your conclusions carefully, I wager you will have to change them.

Replace 'disliked' with 'incapable of,' and that hypothesis is neither cynical nor disrespectful. People with subpar cognitive abilities are less likely to move themselves out of poverty.

Now that all of these perspectives have come together, the implications for how we think about poverty – and design programs for people impacted by it – are enormous.

So you mean it might be a bad idea to endlessly complicate the tax code and setup massive, complex bureaucracies all in the name of helping the poor? There's a chance they might not have the cognitive bandwidth to traverse these boondoggles designed to help them?

Simplicity will liberate as many or more people from poverty as generosity.

> So you mean it might be a bad idea to endlessly complicate the tax code and setup massive, complex bureaucracies all in the name of helping the poor?

We don't do that in the name of helping the poor.

We do that in the name of avoiding helping the undeserving (whether the undeserving poor or others undeserving of the help), and/or in the name of attempting to influence the behavior of the poor with "help" as an encouragement for them to accept the influence.

Accepting those kind of bureaucratic structures with those kind of motivations is often a political compromise made with those otherwise unwilling to help the poor in order to get some help to the poor, but helping the poor isn't the motivation for those particular structures.

Its not the people that want to help the poor that oppose simpler options like Basic Income.

Most of the complications in the tax code are not in the name of helping the poor.

This is really interesting when correlated with the arguments over WalMart wages vs Costco wages; your average WalMart shop floor employee already has a cognitive load issue "comparable to the cognitive difference that’s been observed between chronic alcoholics and normal adults."

Makes you think twice about what you pay your employees. Also it guides thinking on how employee benefits, like food available on campus, can benefit your company; especially in the information worker realm.

Isn't this essentially what Maslow's hierarchy states?

Who knows, it is made up stuff with no basis in legitimate research.

Exactly!

I imagine this could also be applied to startups running out of cash. Not only do you have the stress of all the implications of running out of cash, but getting more cash becomes the number one priority, over things that you would otherwise be doing if you were flush. You might have to take on cash from sources you would otherwise decline. You might have to start thinking about doing client work. Fun stuff.

The experiment really doesn't match up with what they're saying. It's certainly well studied that making difficult decisions taxes you mentally, and it's not surprising that spending $1,500 is a more difficult decision for someone with a lower net worth.

Where it falls apart is with the assumption that only the poor have to make difficult decisions. If anything, wealthier people spend a lot more time making decisions at work and receive commiserate cognitive load. Not sure working at McDonalds requires you to make any decisions at all.

Even if we're going to pretend that financial decisions are the only decisions in life, I still think the poor might expend less cognitive energy. Frequently they are poor because they specifically avoid making financial decisions. (Hence that's not a cognitive load.) On the flip side, people with more significant assets have to make more significant/difficult allocation decisions, etc.

Mental bandwidth is not just purely down to the decisions you make for yourself, do you think working in McDonald's is not a stressful way to spend your day? These days I have a pretty high stress job, but I know which rile I'd rather be doing.

You also have to remember that for many people in a service role, that might be the only job they could find and they don't have the chances we do to pick and choose roles based on interesting projects.

Poverty is a great opportunity for startups. There's huge pent up demand for crowd sourcing of the Mechanical Turk variety. There's no real reason a person shouldn't be able to work anytime, using just a smartphone, and earn a middle class income. This is going to be huge next year, 2014 will be the year of the crowd-work.

What kind of work are you talking about? I live in a village/province/country with a very high unemployment rate for part of the year; I tried getting people (esp youth) here in the village to do the work you suggest; it's simply not possible. They cannot do it; not native English and the jobs which are out there are either trivial for a computer to do meaning they pay literally cents or too hard for them to do (correctly) even after training.

Yes, most US citizens with a smart phone (they were poor right, smartphone?) and a few neurons could get to a level of a few $100/month doing jobs which are or almost are doable by computers now. Check the HITs on mturk currently; there are exactly these 2 categories; most of them are already doable (and very easy as well) by computers and the rest is too hard for someone who is not native English speaking or who is just not smart enough.

The crowd-work industry is woefully immature at the moment. However, it's potential is far greater, 1000000x or more.

The way to imagine it is that all work that gets done in the world could be split up into pieces and coordinated by software. When there is a lot of this crowd-work to go around, prices will rise and crowd-workers will earn a reasonable income.

Much of enterprise software today is already this, the filling in forms and systemic procedures. However, it hasn't been intelligently designed to be distributed through the internet, instead having been mostly a transfer of pen and paper forms into a computer.

Another type of crowd-work is of the physical variety, what amazon, uber, task-rabbit do. There are complaints that these reduce wages, but I don't buy that. There is pent-up demand for things that currently don't get done. For example, I might hire someone to clean my house, but the current mechanisms are too much effort. If there was an uber-like button to press, I might do it every once in a while.

I could get carried away and talk about this for hours so I'll stop. But the essential point is to reorganize all work through web and mobile interfaces, have human -> computer -> human, instead of the inefficient human -> human system.

I'm witnessing this tax first hand right, but the tax is in a more literal sense. Some background: Right now my commute is about 35 minutes through Southern California (I live in Riverside and drive south to the Inland Empire). On Tuesday, my car was totaled. I was in the middle lane on a 3 lane highway when I saw someone coming up behind me a couple of miles before my exit, so I got over to the slow lane. Right as the car behind me was passing me in the middle lane, their tire exploded, spinning them into me, and spinning me across the freeway into the center divider.

This crash is an example of just how much money not having money costs. It wasn't an issue of the driver's unsafe driving, but of the driver's unsafe vehicle due to poor maintenance. Well, that driver doesn't even have insurance, let alone money to fix their balding tires. For now I'd agree with anyone that says it's their fault for driving it, because that's my insurance's stance and that's the stance that gets me reimbursed for my vehicle, but I can't help but see how if they wanted to fix the initial problem of poor maintenance and no insurance, then they'd need money, so they'd need to drive to work...

But it gets worse. My car handled the crash like a new car should. I was safe. I got a little whiplash but I felt fine and was back to work that day. Her car, much older than mine, flipped (exploding tires are about as bad as a car accident can get - keep up on your treads and watch the air pressure in the summer folks!) and she left the scene unconscious in an ambulance. Now I don't know what the statistics are, but my bet is if you don't have car insurance, you're note likely to have medical either. So this woman, who started too broke to replace her tires, now has whatever legal trouble one gets for not having insurance, has no drivable vehicle, huge medical bills, and whatever suit my insurance files against her.

Me, I'm fine, but I'm without a car (and I opted out of the rental car coverage, and she has no insurance to reimburse me for one), so in the name of frugality I start taking the bus. I go against traffic on my daily drive, so there aren't many routes, but there is one. It makes 93 stops between Downtown Riverside and my place of work. It takes about 2 hours 15 minutes with walking time. That's over an hour and a half longer than my commute driving. I'm on the bus with a few other people who make the same trip. Right now my life consists of waking up, walking to the bus, sitting on the bus, going to work, walking back to the bus, taking it home, walking home, eating a small meal, and going to bed to repeat the process tomorrow. Not to mention last night the bus was 2 hours late because of flash floods in Riverside. I got home after my bed time. Everyone this morning was taxed by pretty much all definitions of the word. Night class? Studying for that certificate to get a promotion? Reading a fucking novel? Ain't nobody got time for that.

You do have time to read, though. You just stated you have 2 hours on a bus.

True, and I'm already 10 chapters into Moby Dick, but it's just not the best environment for that. It feeds back into the article. There's a reason studying is synonymous with a quiet place, or with people also studying with you. Doing it under less ideal circumstances than that creates overhead on your attempts to "get ahead" that people with means do not have to deal with. Not making excuses for myself, I am of means, but I can definitely see how an uphill situation quickly becomes a complete vertical situation.

I've been making some good progress coding on the bus, fwiw... but a new, light-ish laptop with battery life certainly helps with that, so that's more an argument for why more people with means should be taking the bus more rather than any kind of dismissal of your thesis.

(Sorry for the late reply) I spent too much time over the past few months putting a budget together, and I'm about to head back to school to finish the last year of my degree while working, after which I'm likely getting married, so I'm being frugal. My response to my car crash was, "get through this spending as little money as possible. Also make going without a car hurt so that paying for rental car coverage next time is easier". I also thought the ordeal would be handled by my insurance by last Friday, but the police report hasn't been finished and is holding everything up.

As for the laptop, I've got a Samsung Chromebook (the small, ARM one) running Ubuntu and I recommend it. It's ARM, which makes getting things running a bit hard, and it's not the beefiest, so if you want to wait for the new ones this year that will likely be x86 and beefier for $250, you can do that too. I don't take it on the bus though. That was the first bit of advice I got from someone else on the bus.

"Also make going without a car hurt so that paying for rental car coverage next time is easier."

On the flip side, I like to make sure I can get by without a car. Of course, my understanding is that's a whole ton easier up here (Bay Area) than down there.

Congrats on the impending nuptials!

I used to commute nearly an hour each way on the tube in London, and read endlessly. Until someone asked me about the books I'd read lately and in could barely recall then story lines. Yes at the time I was engaged and was enjoying the story and act of reading, but it just didn't go in to my mind in the same way that reading at home or on the beach does.

So I stopped reading and started cycling. Much better use of my time, and I was forced to spend that time with my thoughts (and watching my safety on the road) I was better off mentally than when I was kidding myself that I was being productive.

I'm not saying you can't read or work on a commute, but it did not work for me in the slightest.

Why not rent a car on your own dime? A low-end one can be cheap, on the order of $20-25/day, which is pretty reasonable to save you a lot of time on the bus until you find a new car. Obviously not an option for poorer people, which is your whole point, but it could be a good option for you.

This makes perfect sense. If you're all stressed out trying to figure out if you'll have next month's rent or how you're gonna eat this week, you won't have the mindset to read a good book, consider how to improve your life in the long term or just relax your mind with some smooth jazz.

A sorta near-topic question.

How often do people check their bank account balance? I've been told I'm odd for not checking at least once a week. Do people who have more money not bother checking it? I only check once a month, when I'm about to pay my mortgage. Sometimes not even then, which means I don't know what my balance is for 2 months.

I am OK off these days, but have never really considered myself rich, but I go months without checking my bank account or even credit card bill. I don't need to as I simply know that I am spending less than I earn. Even at university when I had £5000 too live on in London, I rarely checked.

I come from a frugal family, so I always consider before I buy something. But even for larger purchases I just know what's in my savings roughly and go for it. It helps that while I've not been commanding very high wages, I have been employed consistently since I left university 14 years ago.

This is a good paper but I believe it is misinterpreting the results. There is strong evidence that people have a limited capacity for making tough decisions. This "willpower" or "bandwidth" gets used up as decisions are made. I think the right interpretation of the results of the experiments is that fixed price decisions are tougher decisions for poorer people than for richer people. This interpretation would differ from "poverty impedes cognition" in the decisions of richer people to bigger price tag scenarios. I would expect asking richer people about what they would do if their house were destroyed in a plausible way not covered by their insurance would induce a similar cognitive impairment.

This article made me think about David Allen's Getting Things Done (GTD) system / methodology.

One of the ideas in GTD is that by getting organized and using a trusted reminder system, you free up some subconscious processing capacity.

I have found GTD to be helpful.

Doesn't the fact that they scored the same on the first tests actually prove that being rich or poor doesn't matter in practice?

If you give someone a problem to solve and then another one of course he will still be busy with the first. For rich people it's a simpler problem so they solve it quicker.

Of course it's possible to end up in a negative spiral. It's up to society to provide for people on a sufficient level that they can lift themselves up if they are able to.

TL;DR: Poor people are 13 IQ points below non-poor because they spend "brain bandwidth" thinking about their poverty instead of doing other brain activities.

There was a recent article on LinkedIn that talked (anecdotally) about the same taxing on the brain for people that have limited time (http://www.linkedin.com/today/post/article/20130627224702-13...)

This list by John Scalzi seems to help us figure out the actual aspects that take away cognitive volume: https://news.ycombinator.com/item?id=1712493

In general, it makes sense, since a lot of behavioral research shows that making too many decisions takes away our power to make other decisions and cognitive power.

I think their experiment may be an example of prospect theory in action. And relative utilities/loss aversion.

http://en.m.wikipedia.org/wiki/Prospect_theory

it might be interesting once it is independently replicated several times.

why downvote this? the rational response to yet another psychologal 'priming' study is extreme scepticism.

Some political/philosophical frameworks are extraordinarily resistant to frank discussion. Down-voting and shouting-out are the way that proponents of those frameworks deal with any uncomfortable questions that may at all detract from their presupposed conclusions.

Even though your comment was really innocuous, it implied that maybe the study was wrong. Maybe hard work and intelligence are the prime factors in success vs what happens to be in your bank account at the moment. Some people can't handle even that implication.

I think this is related to the research that your willpower and energy is limited. When you have to make tough decisions over the course of the day you get run down, and start making worse decisions.

Who'd of thought?

Just keep the majority of your people poor/starving/wanting, and they'll have no time to contemplate how to overthrow your regime.

What a concept.

I wonder if being ugly taxes the brain too, as ugly people probably have sex less than average to beautiful people.

yeah, they just proved Maslow's hierarchy of needs from another angle.

What is correlation and what is causation?

Is it possible that less intelligent people are shunted (through education, etc) into lower-paying jobs? Thus, it becomes a self-fulfilling prophecy.

You are suggesting that maybe poor people just have lower IQ, but this study doesn't support that.

It shows that cognitive performance between rich and poor is the same when they're asked questions which both groups consider easy and/or non-stressful.

the cognitive performance between rich and poor was the same in the sample they looked at (using their specific test). we know that is not true in general -- richer people are smarter on average.

Good point. What I mean to say is that the question of "who's smarter, rich or poor?" is not relevant to the study in question, and can't explain the results.

On a slight tangent, is the better education "rich" people are getting thanks to their money making them smarter in the first place though?

These things feed on each other, the feedback is a loop.

It's more like busy people are too busy to read the article so they post flamboyant comments hoping to get a tldr.

Being poor is a full time job. I have fasted for weeks without problems and yet on the one occasion in the last 20 years where I was unable to buy food for three days the hunger was severe and overwhelming - the experiences had nothing in common.

The cognitive load I have seen on friends struggling with poverty is immense - they are permanently mentally exhausted of all the hard decisions and complicated math needed to make the income last longer. When I was with a friend out buying groceries figuring out the correct amount of baby formula diapers and detergent to buy took half an hour (yeah I offered to helped with the bill, was rejected) and the amount saved compared to just throwing stuff from the shelf in the cart was less that 10% of the total.

Edit: Here is an idea for a product - easy to use program that balances the budget as good as possible while taking into account the unique challenges that struggling people are faced with.

The poor do tend to acquire cell-phones. They're necessary for survival and appearing that you aren't a lost cause.

So this would help many many struggling folk who do have access to the tech.

The prices for cellular service are still very high, though, and that's the biggest barrier. The poor who can't make the payments. But its not a bad idea that would help many people trying to move out and away from poverty

http://goo.gl/TjeDJq

> Here is an idea for a product - easy to use program that balances the budget as good as possible while taking into account the unique challenges that struggling people are faced with.

It's a good idea, but saving money often has an up front cost and I think an app to help the poor would fall into that category.

The people that would end up benefiting from such an app would be people that could afford to purchase a device to run the app.

I think venomsnake's choice to use "program" instead of "app" was intentional. Most people have access to a computer at the library or even an aging Dell/Compaq that they bought when times were better. This hypothetical program sounds like something that could run inexpensively on AWS and save to Dropbox (like fargo.io).

An app... for people who can afford smartphones but not groceries?

It's an interesting problem, though. A smartphone app would be the perfect way to deliver that functionality, but if someone has a smartphone, they probably don't need it.

Actual article:

http://www.sciencemagazinedigital.org/sciencemagazine/30_aug...

Posting this does not necessarily convey agreement.

It's odd how HN upvotes both articles about learning how to think as well as articles that claim that people are doomed to their financial circumstances because of externalities.

It's a strange schizophrenia in a community pursuing entrepreneurialism.

Both ideas can be valid at the same time. You can know how to think or be able to autonomously change your life, but at the same time you can also be severely limited or constrained by your circumstances. Humans have a degree of agency (assuming free will) but that doesn't mean they can always realistically escape the human condition.

I wouldn't say doomed---they just have much harder hurdles to overcome.

We should both inspire people to overcome the hurdles, but also work on creating an environment with less artificial hurdles.

On top of everything else, you should probably look into what schizophrenia actually entails.

Where you say schizophrenia you probably mean split personality disorder. I am not even bothering to re-read your first sentence because of your perpetuation of this horrendous misuse of language.

Actually you're talking about the medical definition whereas he's using the colloquial definition. I agree that the mismatch is unfortunate and perpetuates stereotypes about the medical definition, but he isn't wrong to use the word like that, according to the dictionaries I've checked.

Yes because pedantry is so much more meaningful than engaging in communication.

Regularly, competing views are upvoted, for example for tech stacks or languages. More than one mind end up in schizophrenia everywhere, don't they?

Yeah, but you can get a startup company's technology going with Ruby, Python, or PHP.

However, if you espouse an absolutist "victim of circumstances" ideology like the article:

The finding further undercuts the theory that poor people, through inherent weakness, are responsible for their own poverty – or that they ought to be able to lift themselves out of it with enough effort.

You are doomed.

As far as I see, it happens the following way. Some people see some article on HN, their mind flashes in dissonance. They upvote the next article which opposes that one.

So that's why, right after we see an article defending X, we see one defending an anti-X, or not-X.

I'm sure that happens just the way you said.

I just think it's strange that people who would come to HN looking to learn more about entrepreneurial things would resonate much at all with "the environment determines outcomes, not the individual" type thinking.

Not only does that mindset doom entrepreneurial success, but I wonder why people with such a defeatist attitude toward self-improvement are here in the first place.

No it doesn't. I've been poor. There is no 1 standard deviation IQ penalty.

"The finding further undercuts the theory that poor people, through inherent weakness, are responsible for their own poverty..."

Again, no. The poorer members of our society have more limitations on average. This is usually IQ, but will often be something like physical disability (ie., blindness), ugliness, or poor socialization, inherent or learned. This does not mean that it is all right to construct a society without full employment or universal healthcare. But if people trying to help the poor continue to be taken in by the above belief, they are never going to get anywhere.

Whoa, slow down there chief.

"Poor" can also encompass all the nice middle-class folks who are heavily leveraged in assets, with credit-card debt and student loans and mortgages and the like.

We're not just talking about Crazy Joe Hobo.

> > are responsible for their own poverty...

> no. The poorer members of our society have more limitations [...] like physical disability.

I hope I haven't mangled your words too badly. But I'm a bit confused - are you saying that people are responsible for being blind and thus are responsible for being poor?

It's not a moral calculus, Dan.

So you as an anecdote trumps multiple people in the sample for the research?

It's funny how anecdotes in a comment section that support an article's premise are always upvoted/supported, but any anecdote that runs counter to it is always met with a hostile reaction.

Really, provided the article is well founded, comments that support it are doing a service to the readers and those that don't are doing a disservice (if they are giving people the sense they are typical). People respond to stories.

The problem, of course, is that anecdotes will exist on both sides of just about any issue, so they should be viewed with skepticism when trying to convince in the first place...

Do you have any statistics? I've seen cases where an article's premise has been taken apart with anecdotes and people upvote/support those also. Not often but I've seen it happen.

Also location, network, lack of friends and family support, mental illness, pressure from peers to conform to a low standard...

Reply on news.ycombinator.com