

What really drives the poor - zem
http://www.livemint.com/2011/06/24201858/What-really-drives-the-poor.html

======
paganel
I barely made it half-way through the article, it sounded like an United
Colors of Benetton add adapted into a Nobel-winning Economics paper.

Just a couple of gems that made me skip it:

""" they may well be more driven by ideas, simply because they have less
information about the world outside """

So, supposedly, us, the rich people, live in the "real" world, why them , the
poors, live in a world from which they cannot see "outside". Ok, I got it.

""" She would also read to us books on Mother Teresa, on African children, etc
"""

Mother Teresa and African children in the same sentence, what's this, "feel-
good bingo for well-off people"? Also notice the "etc" after "African
children", that's a first.

And I could go on and on. In case anyone's curious (and before you start
downvotting me), I'm furious about the condescending tone of this article
because some time ago, when I was 15-16, my family went from middle-class
status to poverty (meaning less per US$ 1 per day per person) in a very short
time. I can still remember my mum, an engineer by training, going to the
market place early in the morning to sell home-grown parsley. She gave me most
of that money in order to pay for private math-lessons given by my high-school
math teacher (that was the only way to get into CS school). I still try to
help my parents as much as I can, but 10 years later they still rely mostly on
subsistence agriculture. But, nevertheless, they're happy with it, that's
their life, they have their small piece of land, they garden it, they live
under the sun in fresh air and not in a God-forsaken cubicle with artificial
lights, and my dad would look very strangely at these "rich", paper-writing
people who think he's living in a "different", lesser world.

~~~
Duff
I share your disgust. Personally, I have a real problem with academics or
journalists who go on a junket to a third world country and act like the
people around them are animals in some zoo.

Look at any western family for a similar period of time and no doubt you will
spot all sorts of bizarre dysfunctions or irrational behavior, regardless of
wealth.

People are people.

~~~
mkr-hn
Here's an instructive contrast to the poverty safari:
[http://www.getrichslowly.org/blog/2011/03/01/from-the-
rich-t...](http://www.getrichslowly.org/blog/2011/03/01/from-the-rich-to-the-
poor-or-what-i-learned-in-africa/)

And GRS comments are worth reading.

------
chrismealy
Mike Konczal:

Here’s the normal story. Picture you are in a room with 10 people. Each of
them has a slice of cake. How much you are willing to pay for a slice of the
cake is the ‘marginal utility’ of having it, and the more cake you have the
less any more cake is worth to you. You’d be willing to pay a $1 for the first
slice of cake, but you’d only be will to pay 90 cents for the second slice.
You’d only be willing to pay 10 cents for the 9th slice, and a penny for the
10th slice. Eating the 10th slice of cake in that room would probably make you
sick, hence you want it a lot less than the first slice, which is delicious.
That’s declining marginal utility.

Now picture you are in a room with 10 people screaming. You hate it when
people scream, and you can pay a person to get them to stop screaming. Would
you pay in a similar way to the cake example? Would you pay a $1 to get the
first person to stop screaming, and a penny for the 10th person to stop
screaming?

No. Getting one person to stop screaming would make very little difference in
how much you dislike being in the room. Modern psychology tells us you might
not even notice it. You’d probably only pay a penny to get that first guy to
stop screaming. However getting the second guy to stop screaming might be
worth 10 cents. And the last guy, the difference between some screaming and no
screaming, might be worth the full dollar to you. The more quiet it got, the
more a marginal difference in how quiet it is would be worth to you. There’s
increasing returns to this good; the 10th guy not screaming is worth more than
the first guy not screaming, which is the exact opposite dynamic of the 10th
cake being less delicious than the first.

\-- [http://rortybomb.wordpress.com/2009/12/03/persistence-of-
pov...](http://rortybomb.wordpress.com/2009/12/03/persistence-of-poverty-and-
increasing-marginal-utility/)

~~~
pfedor
It is a commonly used argument that the lives of poor people are very hard and
unpleasant and that dealing with the hardships sucks out all their energy and
brings down their spirits so they can't take advantage of all the
opportunities that middle-class people have to improve their situation.

The problem I see with this reasoning is that if you consider the entire range
of standards of living which people had throughout history and geography, with
maybe middle-age European peasants on one end and say Larry Ellison on the
other, then on this scale, the standard of living of contemporary American
poor is very close to the standard of living of the reasonably well off. From
the point of view say anyone in communist Poland, as well as at least a
billion people living today, what you call poverty would seem like mind-
blowing opulence. On the other hand, I rather suspect that for anyone featured
in The Real Housewives of New York, the lot of doctors and software engineers
and struggling janitors alike must seem like horrifying wage slavery.

So, to claim that there exists a standard of living threshold, and that below
this threshold life is objectively hard, whereas above this threshold it's
easy, and that it so happens that the line lies between the poor and the
middle class in contemporary America, you have to believe that we're looking
at a very unique time and place. Of all the possible values that the threshold
could potentially have, what are the odds that it would actually fall within
this narrow range you're looking at? A hundred or maybe even fifty years ago
in the US (and much more recently in many countries around the world), almost
everyone's standard of living was way below that of contemporary poor. Do you
think all these people were equally as incapacitated by the harshness of their
lives, unable to make rational decisions and work to improve their lives? If
the civilization does not collapse for one reason or another, chances are in
fifty years time even the poor will have the standard of living as good as
wealthy people have now. Do you think the poor of the future will not suffer
from this ten-people-in-a-room-screaming effect?

~~~
yummyfajitas
_So, to claim that there exists a standard of living threshold, and that below
this threshold life is objectively hard, whereas above this threshold it's
easy, and that it so happens that the line lies between the poor and the
middle class in contemporary America, you have to believe that we're looking
at a very unique time and place._

Not only that, but you also need to ignore most of the world. Even traders,
programmers and executives living in Bandra (a part of Mumbai more expensive
than Manhattan) tend to have lifestyles worse than many US poor people. I.e.,
cramped apartments in poor condition, long commutes and very few luxuries.

Given this, the Karelis/bee sting/screaming guy theory would predict Mumbai's
corporate lawyers would behave similarly to the US poor - never saving for the
future, blowing their money on crappy food and booze rather than education,
etc.

Strangely, that doesn't happen.

------
wccrawford
They finally hit on the real story halfway down:

"“Generally, it is clear that things that make life less boring are a priority
for the poor,” they write in their new book."

Yes, the poor spend their money unwisely when they have extra. That's the real
reason.

If a rich person finds themselves down on their luck, they knuckle down and
work really hard to get into a situation where they can afford to buy
luxuries.

It isn't about lack of opportunity. It's about wise choices.

I can't find the story now, but there was a fairly wealthy man who decided to
give all that up and see if poor people could pull themselves up. He stowed
his credit cards and cash and went to live on the street. He started at day-
labor sites until his work ethic paid off and he got a steady job from
someone. He had goals like an apartment, a car, etc, with a certain amount of
cash in the bank. He gave himself 1 year. At 9 months, he had completed his
goal, and a family member fell ill. He quite before the 1 year, but he had
already completed his goals and was on his way to a good life.

In other words, he spent his money wisely and was able to vastly improve his
lifestyle in less than a year. But most poor people say it's impossible. Are
they not trying? Are they trying, but making too many bad decisions?

~~~
wvoq
Hi. I'd like to see if I can offer you some personal insight about the
plausibility of extrapolating evidence from the scenarios you describe into
broader policy judgments.

Currently I'm in a Ph.D. program in a field I find extremely interesting, and
am quite happy with my position relative to my goals and background. A few
years ago, however, I was living in a one room apartment above an auto body
shop, sharing a kitchen and bathroom with several tenants in various stages of
socioeconomic distress (viz. social service dependence, street-level
prostitution, drug addiction, &c.). My life was generally unpleasant. I was
working as a day labourer in construction and drove my four hour daily commute
in perpetual terror of being pulled over while driving on a suspended license
(for failing to pay an old ticket that was sent to the wrong address). My
"roommates" repeatedly stole my food and occasionally broke into my room to
steal loose cash. I had no health insurance. When I bit the bullet and drove
myself to the ER after receiving an inguinal hernia on the job (while carrying
literal tons of demo debris down three flights of stairs in a Baltimore
rowhouse in July), I was stuck with an 800 dollar medical bill that plagues my
credit to this day. When my parked car was struck in a drug-related accident
(remember I didn't live in the best part of town), the city ran my plates and
booted my car, soon after which it was towed and I had to find another job. My
life was brimming with problems, the solution to any which required money that
I didn't have. Moreover, the concurrence of all of these problems seemed to
frustrate action on any one of them: how do I work if I don't have a car? How
do I recover and fix my car if I don't have any money? How do I find work if I
can't lift heavy objects without aggravating the hernia? How do I treat the
hernia without health insurance, which I don't have even if I had a job? I am
not relating all of this in order to garner sympathy, but rather to explain
the kinds of problems I encountered, and their apparent magnitude relative to
my means then.

One aspect of poverty which is probably less salient to those not acquainted
with it is that it alters parts of your personality that you previously
considered stable. While I had always considered myself a relatively even and
temperate guy, friends who saw me then would tell me that I seemed constantly
angry and brooding. Things that I could have taken in stride before were
usually occasions for despair.

Even my tastes changed. Whereas I had previously considered soda and
individually wrapped danishes disgusting, I found I could hardly help myself
in 7-11s on my way home from construction sites. I used to enjoy cooking, but
could barely manage to throw a can of beans a 25 cent box of mac and
artificial cheese when I got home. (I shopped at a discount off-brand grocery
store full of security cameras, screaming children and expired fruit.)

There is a famous quote from Orwell's _Road to Wigan Pier_ which I had never
understood until that point in my life:

"The basis of their diet, therefore, is white bread and margarine, corned
beef, sugared tea and potatoes -- an appalling diet. Would it not be better if
they spent more money on wholesome things like oranges and wholemeal bread or
if they even, like the writer of the letter to the New Statesman, saved on
fuel and ate their carrots raw? Yes, it would, but the point is that no
ordinary human being is ever going to do such a thing. The ordinary human
being would sooner starve than live on brown bread and raw carrots. And the
peculiar evil is this, that the less money you have, the less inclined you
feel to spend it on wholesome food. A millionaire may enjoy breakfasting off
orange juice and Ryvita biscuits; an unemployed man doesn't.… When you are
unemployed … you don't want to eat dull wholesome food. You want something a
little bit "tasty." There is always some cheaply pleasant thing to tempt you."

This is just about one of the most accurate and robust observations you can
make about the psychology of poverty.

So that's why I'm no longer terribly impressed about the exhortations of the
rich to "knuckle down and work really hard" in order to bootstrap oneself into
economic security and material comfort. My situation wasn't nearly as
destitute as that of a lot of people in this country alone, and when I came
home from work I wanted--very badly--to blow money I didn't have on cheap
comforts and postpone thoughts of tomorrow.

Secondly, it's important to acknowledge that even while living with junkies
and hauling debris for $10/hr, I was much better off than many in my
situation, for reasons that make me much less impressed with riches to rags to
riches stories such as you describe. Let me explain.

When I first began applying for construction jobs, I was objectively under-
qualified in comparison to almost any other applicant, of which there were
many since construction jobs were becoming scarce around 2008. I remember one
interview where I flatly failed the ``technical portion" and had over-
estimated my competence to boot, demonstrating that I didn't even know what I
didn't know. I was nevertheless hired because I "talked educated" (verbatim
quote, I swear to god), which I assume meant either that I was white, or
didn't come from the working class backgrounds of south Baltimore of the other
applicants. About three months after my first day labor gig (which I only
found because I had internet access and at-the-time reliable private
transportation), I was running a crew under my boss. I was offered this not
because I was an objectively knowledgeable and competent carpenter, but
because 1) I had learned serviceable Spanish in an enrichment program as a
kid, and 2) the college-educated owner felt that I was "more like him" than
the Salvadoran guys who actually knew what they were doing.

I was also able to pull in some lucrative (to me) side gigs tutoring math and
Latin in-home (again, internet and car), which ultimately allowed me to get
out of construction and start teaching rich kids full time. That obviously
would not ever have happened if I were a day labourer from west Baltimore,
rather than a middle-class kid from the county who happened to be very down on
his luck.

The differences that separated me from the people I met during that period
were vast. If I had found myself in those circumstances without the advantages
of white skin, middle-class education and secret-handshakes, and freedom from
further complications like care-giving responsibilities (as you somehow manage
to mention and dismiss the significance of), I'm not sure that things would
have turned out the same way. Really, I'm not so sure that things were
guaranteed to turn out the way they did for me at all.

~~~
daniel-cussen
>"The basis of their diet, therefore, is white bread and margarine, corned
beef, sugared tea and potatoes -- an appalling diet. Would it not be better if
they spent more money on wholesome things like oranges and wholemeal bread or
if they even, like the writer of the letter to the New Statesman, saved on
fuel and ate their carrots raw? Yes, it would, but the point is that no
ordinary human being is ever going to do such a thing. The ordinary human
being would sooner starve than live on brown bread and raw carrots. And the
peculiar evil is this, that the less money you have, the less inclined you
feel to spend it on wholesome food. A millionaire may enjoy breakfasting off
orange juice and Ryvita biscuits; an unemployed man doesn't.… When you are
unemployed … you don't want to eat dull wholesome food. You want something a
little bit "tasty." There is always some cheaply pleasant thing to tempt you."

So, calories, or not enough of them. Cooked food has more net calories than
uncooked food. It's probably the same reason that, nowadays, poor people like
to watch TV: it shuts your brain (20-30% of your metabolism) down harder than
falling asleep. It's a decision that doesn't make any sense until you think of
it calorically.

~~~
delinka
It's also not cheaper to buy brown bread and raw carrots. It's less expensive
to buy the "tasty" higher-sodium canned foods. Eating healthy is not
inexpensive. Add to that that raw foods in quantity go bad sooner than cheap
canned items and the cost of raw and healthy give up because of the extra
waste.

As for entertainment, the more wealthy enjoying turning off their brains as
well. But they spend money on going to live performances at playhouses or
symphonies. TV is comparatively cheap. Also with TV, you have more immediate
choices (especially with something like Netflix): to watch more cerebral
material or dumbed-down garbage.

~~~
derleth
> It's also not cheaper to buy brown bread and raw carrots. It's less
> expensive to buy the "tasty" higher-sodium canned foods. Eating healthy is
> not inexpensive.

Also, you have to factor in how much it costs in terms of time to prepare a
meal from fresh, more-or-less whole ingredients compared to throwing something
prepared into the microwave or onto the stove. If you have the time to cook
after your job, wouldn't you be tempted to get a second job instead of
cooking, if only to make your constant, grinding debt go away faster?

Then you get into 'cultural poverty', where someone flatly doesn't know how to
cook because their parents never cooked and only ate at cheap restaurants
(which isn't cheap) and used prepared food. You might say 'oh, just get a
cookbook', but I know first-hand how much implied knowledge you have to have
to get much out of a cookbook. Implied knowledge has to come from somewhere;
if you didn't get it from your parents, you likely don't have it.

------
elmindreda
Poor people are human beings, so I assume it's the same things that drive
other people.

~~~
zem
it's amazing how few policymakers realise that. mostly, the poor tend to be
infantilised and patronised.

~~~
protomyth
To be blunt, quite a few politicians really don't want changes to the current
status because it would endanger their power-base. If you ran on an issue, it
is helpful not to solve the issue and blame the other guy for not solving it.

One example is bilingual education. There are very effective groups and
lessons that can teach students English in a short amount of time, allowing
the student to be in the same classrooms as everyone else. But if that student
(or anyone else) doesn't speak the language of the majority, they are easier
to control because they are not independent and need "special" programs. If
they were bilingual, then they would have a better chance than 1 language
people to get jobs and opportunities. More language = More options. Instead we
get a lot of empty political rhetoric that keeps everything the same.

~~~
omouse
Not only that, but there's money involved. How many billions are sent in
foreign aid? Some of that money disappears due to corruption and who doesn't
want some corruption happening ;p

------
ttran08
I read the whole article, however, I didn't think it did a good job of getting
to the bottom of everything that does matter. The article needed to give
people a better sense of the situation of the poor, by providing more
insights. Otherwise, people who've never experienced poverty would not
understand why it's so important to help these people out. The best reporter
on an issue like this is someone who actually made it out of poverty and is
actively trying to help their own people.

------
known
Are _Untouchables_ allowed to own/operate a restaurant in India?
[https://secure.wikimedia.org/wikipedia/en/wiki/Untouchabilit...](https://secure.wikimedia.org/wikipedia/en/wiki/Untouchability)

------
omouse
_“Generally, it is clear that things that make life less boring are a priority
for the poor,” they write in their new book.

“They don’t just need nutrition that will keep them alive longer—they also
need a reason to want to live longer. Being healthier by denying yourself the
little pleasures you can afford, a cup of tea or a bowl of steaming rice,
makes little sense if you have nothing else to look forward to,” says
Banerjee. “I think they make exactly the choices I would make in their place
as regards food.”_

...isn't that fucking obvious? You can extrapolate from our own rich society
where people would rather spends thousands on electronics than on non-fast-
food. Paying double for healthier food? Fuck no. Paying hundreds for an
iPhone? Fuck yes.

------
Vitaly
im getting some weird html on this url. the body is empty and its followed by
a style/css tags with flash embedded in it. wtf?

------
nowarninglabel
Good insights, though instead of biometric (?!) based money transfers, I'd
like to see a further push on phone based transfers and other branchless
banking. Recent research reported through CGAP shows branchless transfers
being used increasingly by the poor,
[http://technology.cgap.org/2011/06/17/does-branchless-
bankin...](http://technology.cgap.org/2011/06/17/does-branchless-banking-
reach-poor-people-the-evidence-from-india/) I was hoping they might discuss
Microfinance's role in helping the poor reach their goals, since at kiva.org
we tend to think of microloans as one of the small steps towards solving the
problems they face.

