

Romanticizing the Poor - jfornear
http://www.ssireview.org/articles/entry/romanticizing_the_poor/

======
petercooper
I feel that this piece plays with contradicting ideologies. It pushes a left-
wing agenda of "more government" as a way of protecting "vulnerable" poor
people (who are made out to be stupid enough to _need_ protecting by
"corporations, governments, and nonprofits") while suggesting a comparatively
right-wing solution:

 _Rather than viewing the poor primarily as consumers, people interested in
economic development should approach the poor as producers. The best way to
alleviate poverty is to raise the real income of the poor by creating
opportunities for steady employment at reasonable wages._

Great idea, and corporations have done this for years. But who defines
"reasonable wages?" Leftist policies on workplace regulations (including
minimum wages and time limits) make it _harder_ to employ "poor people."
(Note: I'm only using this article's terminology for simplicity. "poor" is a
silly term, IMHO.)

If you can employ a qualified, capable worker for minimum wage (and right now,
this is easy), why would you employ someone who is "poor"? If the "poor"
worker is as ill-equipped as this article suggests, he is likely to be less
productive - yet if you can't pay under the minimum wage, you may as well not
hire him. If you _do_ hire him, if he is so stupid, you are more likely to
need to fire him - resulting in higher costs, potential increases in
unemployment insurance, and more.

Since leftist regulations (which I am partially in support of) have caused
"poor" people to be too expensive to employ, corporations instead outsource a
lot of labor intensive tasks to countries where it's cheap enough for
outsource companies to hire the _really_ poor (with the lack of workplace
protections and regulations to boot). This leaves _our_ poor even poorer, all
for want of getting rid of a few regulations.

~~~
rue
I do not think the poor are made out to be stupid in the article, moreso it
perhaps contains in it the American poverty experience: among Western
countries, poverty in the U.S. is quite unique particularly in the form of
long-term predation and lack of any social support structures. Poverty in the
UK is not necessarily any less entrenched, but it is still a different beast.

 _> If you can employ a qualified, capable worker for minimum wage (and right
now, this is easy), why would you employ someone who is "poor"?_

Indeed, I do not think "reasonable wages" necessarily translates to "minimum
wage" which - in the U.S. and many other places - is not actually sufficient.
But that statement was specifically counterpoint to the recently fashionable
(and in some ways very good) microfinancing movement and other forms of
entrepreneurship.

To nevertheless answer the question to convince someone espousing a liberal[1]
perspective: because it creates more consumers for your products. A minimum
wage job does not as a rule require highly skilled employees so that a
newcomer can generally become proficient within 6 months, usually less.

[1] In the sense of the _actual meaning of the word_.

~~~
potatolicious
> _"counterpoint to the recently fashionable (and in some ways very good)
> microfinancing movement and other forms of entrepreneurship."_

To add to your point - I volunteer a bit with the homeless, and what I have
seen from professionals involved in this field is that basic life-sustaining
activities are not sufficiently accessible to the poor, which leads me to
believe that microfinancing and entrepreneurship is a poor solution to the
poverty problem.

Below a certain income threshold, transportation becomes nearly impossible,
and taking government and charitable handouts such as using the food bank is
almost a full-time job. Someone at the _very_ bottom is spending his/her
entire waking hours trying to get to the next day - entrepreneurship is the
last thing on their minds.

The homeless in my area (Seattle) queue for up to 3 hours to receive a single
meal (if they are lucky enough to get it before it runs out), and similar
waits exist for the food bank, job services, social security services... the
list goes on.

What we need to encourage are programs and systems that will allow people to
gain the bare necessities for survival - shelter, food, and security - without
forcing them to commit _all_ of their time to this task. Believe it or not,
_free time_ is the solution to the problem - one can only seek to improve
one's lot when not entirely consumed with bare survival.

~~~
hga
I may not have time to follow this discussion, but I'd like to make two
points:

The Soviet Union pretty explicitly followed a policy where in urban areas it
took so much time to acquire food that the potential for "counter-
revolutionary" thoughts and actions were minimized.

Some would say in response to your free time point that "the devil finds work
for idle hands". More to the point, would everyone do something good with the
free time? Certainly not, but that's OK as long as there are limits on the
negative externalalties (sp?) of that free time (e.g. our version of Rome's
"bread and circuses" is atomizing, most people watch sports on TV, at home or
perhaps in relatively small groups at sports bars, and we do a pretty good job
of maintaining order in our stadiums (compare to soccer in the U.K.)).

------
patio11
Speaking of sin taxes in developing economies: last I heard about 10% of the
revenues of Chinese governments below the national level is the sin tax on
cigarettes.

I'm opposed to sin taxes for prudential grounds: there is absolutely no reason
why the government should try to trick poorly educated poor people out of
their honestly earned wages, and yet _every_ US state with a lottery spends
eight to nine figures a year on advertising designed to do exactly that! Ditto
for governments which promote vice as an economically lucrative sideline.

~~~
nazgulnarsil
I'm a libertarian, so I have systemic/ideological objections to taxes in
general, but from a pragmatic point of view: taxes on voluntarily consumed
luxuries are better than involuntary taxes. especially if the consumers of
those luxuries are imposing negative externalities via scialized medicine.

~~~
patio11
I sympathize, but as a libertarian, you probably shouldn't need too much
convincing that the state is going to act in the interest of its revenue
streams against the interest of its citizens. For example, the state will tax
tobacco on the one hand and massively subsidize it on the other. They'll
declare gambling illegal so that if you want to gamble you'll "voluntarily"
pay the hidden tax on lotteries (lotteries are essentially taxed at 50%
relative to typical games in the casino, with the tax being terrible, terrible
odds for players which are protected from market pressure by being a legally
enforced monopoly on sin). In many places in the US the government _literally_
is the one distributing the alcohol.

~~~
nazgulnarsil
lotteries aren't gambling. you will always lose for absolutely any reasonable
definition of the word always.

------
Mz
_More generally, poor people “could easily save more without getting less
nutrition by spending less on alcohol, tobacco, and food items such as sugar,
spice, and tea,” Banerjee and Duflo conclude. For example, the typical poor
household in Udaipur could spend up to 30 percent more on food if it did not
spend money on alcohol, tobacco, and festivals.

Consuming alcohol and tobacco not only takes money away from a family’s
nutrition, but also sets off a cascade of other problems that poor people more
frequently encounter. Alcohol abuse, for instance, reduces work performance
while increasing accidents, domestic violence, and illness. Because many
indigent people earn their livelihoods through physical labor, falling ill
means not earning money._

A small problem with their theory: Every last item they list has medicinal
purposes. It's possible (and in my opinion very likely) that alcohol, tobacco,
spices and tea are being used by "the poor" to self-medicate. For example,
alcohol kills germs and poor people often live in filth. How do we know that
their situation wouldn't be worse without it? If you want them to stop
drinking, you would need to resolve the underlying reasons motivating them to
drink -- which may well be rooted in "poverty" but it isn't necessarily rooted
in lack of money per se.

Financial problems grow out of real problems. Resolve the underlying real
problems and the financial problems tend to clear up on their own, or at least
improve. Articles like this focus too much on money per se and too little on
the real problems -- the problems which would still be harming these people
and lowering their quality of life even if we lived in a Star Trek universe
where money no longer existed.

~~~
roundsquare
Its true that we should look into the root causes of each of these so called
"sins" but I don't think what you are saying is particularly likely.

I'll search around for studies, but I would bet its far more likely that these
goods are being consumed to take the edge off life (as this article suggests).

 _Indeed, a recent field study in Sri Lanka reveals that more than 10 percent
of poor male respondents regularly spend their entire incomes on alcohol._

Certainly the medicinal argument can't be made here. Even though alcohol kills
germs, consuming it in large amounts produce a net harm on your health. If 10%
of males are spending their entire income on alcohol, then its likely that a
large portion of them are spending a large portion of their income on alcohol,
so much that they are doing more harm to their bodies than good.

In addition, the fact that they spend money on festivals argues that they are
doing things to take the edge off life and not doing this for medicinal
purposes.

In part, I imagine this article is a reaction to a lot of people discussing
how innovative the poor are and saying "if we could just give them a chance,
they'll pull themselves out of poverty." This, really, is the basis of the
microfinance industry. To some degree, its true. Poor villagers in India often
are often engaged in a large number of (informal) financial transaction at any
time. They have various loans with various money lenders, things they borrowed
from neighbors, self help groups, etc... all of which they keep track of
without a pen and paper (much less a computer). In addition, there are many
instances of well-intentioned people getting things wrong. (One example is
that many MFIs required that their loans be used on profit-making activities,
and not refinancing loans to money lenders. This is foolish because the loans
to money lenders are often at a higher rate and just refinancing that loan
would help them immensely as well as almost guaranteeing the repayment of the
micro loan). However, its not clear to me that this translates to the ability
to quickly jump into the formal economy without protection. This projection is
necessary and thats what the article is arguing for.

In the end though, I do agree with something you are saying. Its critical that
the _entire_ problem be approached, not just the lack of money. This approach
is hard to sell because it is slower and doesn't produce a magic bullet/catch
phrase to sell, but its probably the only way to make a proper dent in the
problem. This is why government intervention is critical. Even if this is a
profitable exercise, it would be a _very_ long term investment with uncertain
returns, something that a profit driven enterprise is unlikely to take on and
something that NGOs aren't big or coordinated enough to solve[1].

[1] Since this website attracts a lot of entrepreneurs, I suggest that there
is a startup idea hidden here. I don't know how this would work, but if anyone
has ideas, I say we discuss them.

~~~
Mz
My viewpoint is undoubtedly not "defensible" in terms of citing studies and
such. It is rooted in my first-hand experience with getting myself well when
doctors claim it cannot be done. Given my overwhelming success in that regard,
I am confident that my view is closer to the truth about health than the
conventional view. But given that this discussion is essentially "dead" on HN,
I see no reason to belabor the point.

Peace.

