What if the problem of poverty is that it’s profitable to other people? • Hacker News Board

Re: What if the problem of poverty is that it’s profitable to other people?

#291

Post by pliny » Mon, Apr 11, 2016, 10:05 AM UTC

crdoconnor wrote: post #267

thecopy wrote: post #250

Earlier quoted context omitted.

So what you are, in effect, saying, is that these poor people would be better off if the owner of the trailer park would kick them all out? Then they would not be "exploited". I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.

If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation. The difference between that and slumlords is simply a matter of degree. Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.

>If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation.

What is wrong with this scenario? If there were no ambulance service I automatically choose "Die" (which is, apart from matters of inheritance, always the wrong choice), but if there is the ambulance service I can buy my life for the relatively meagre price of 80% of my wealth, then having neither children nor wife I would take that deal ten times out of ten.

Re: What if the problem of poverty is that it’s profitable to other people?

#292

Post by yourapostasy » Mon, Apr 11, 2016, 10:06 AM UTC

lazzlazzlazz wrote: post #284

jakobegger wrote: post #266

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing? In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing. And it's amazing ho…

Artificially decreasing housing prices always creates shortages - that's already well understood. The more people who can take advantage of artificially lowered prices, the more pressure there is in other parts of the housing market to absorb excess demand. The cost of decreasing those housing prices are paid for somewhere else in the system.

Hm, how is a cooperative / mutual-aid-like financial/organizational structure imposing artificially lower prices? The profit is absorbed by the members in-kind in the form of lower shelter costs in exchange for the responsibilities of shared ownership, and as the shareholding owners it is their right to take out profits in the form they mutually agree upon. Just because the profit is not capital and not in the norm of conventional land owners, I don't see these Wohngenossenschaften are artificially decreasing prices. The Wohngenossenschaften are smarter capitalism, squeezing out more inefficiencies.

Re: What if the problem of poverty is that it’s profitable to other people?

#293

Post by gradstudent » Mon, Apr 11, 2016, 10:08 AM UTC

gozur88 wrote: post #258

gradstudent wrote: post #241

Earlier quoted context omitted.

> Will those people be better off sleeping rough? Everyone should have access to basic housing. If they do not that's a failure of government to provide a sufficient social safety net.

Well, okay. If you live in a place with a "failure of government", do you wait for the government to get fixed? Until then let them eat cake?

> Until then let them eat cake?

Of course not. But neither is it all or nothing; slum or safety net. My point is the root cause needs to be explicitly identified before it can be rectified. The root cause in this case is America's fetishism for small government and smaller taxes.

Re: What if the problem of poverty is that it’s profitable to other people?

#294

Post by sokoloff » Mon, Apr 11, 2016, 10:24 AM UTC

bryanrasmussen wrote: post #271

mantas wrote: post #253

Earlier quoted context omitted.

What is basic housing? Today's poor housing would look like a damn luxury 100 years ago. Today's luxury housing will probably look bellow standards after 100 years

no I'm sorry, I live in a house that was a damn luxury a 100 years ago and it's still a pretty fine house today. The houses described in the article would probably look pretty good compared to the poor housing of a 100 years ago, but not like any sort of luxury. The "look at those big screen tvs the poor have" argument does not translate well here.

Indoor plumbing came to rural America in the 1930s. Electric lighting came to cities in the 1920s. Electric appliances were rare in the 1920s, even in cities. The first self-contained electric refrigerator was invented in 1923. (Ever wonder why your grandparents probably still call it "the ice box"?) Cold running water was probably available, but water was still heated by the stove or fire in most places. (The single-lever faucet was only invented in the late 1930s.) Rural water supplies were still via manual wells. Heating systems were commonly manually fed by coal with no thermostatic control.

A modern small home, with electric lighting, an indoor flush toilet, a refrigerator and other electric appliances, hot and cold running water, thermostatically controlled HVAC, microwave, and cable TV? Absolute luxury compared to the typical house built and lived in in 1916.

My house (a quite respectable house built in the mid-1920s in Cambridge, MA) appears to have originally been fitted with a coal furnace and has had electric lighting retrofitted (originally had gas lighting). An oil furnace was retrofit in 1937. It seems to have had flush toilets from the start.

Re: What if the problem of poverty is that it’s profitable to other people?

#295

Post by yourapostasy » Mon, Apr 11, 2016, 10:29 AM UTC

sokoloff wrote: post #268

petra wrote: post #117

Earlier quoted context omitted.

Let's for a second assume that people stay in the same house for 30 years[1]. Why can't they just purchase the house cooperative slowly with each rent payment ? My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor…

Largely because of the "Dodd-Frank Wall Street Reform and Consumer Protection Act" of 2010. That's right, government protecting the people again; in this case, lease-options or lease-purchase agreements with a financing component where the purchaser is living in the property during the term are now deemed consumer financing arrangements (rather than real estate financing arrangements), which are subject to review by…

This is interesting. A quick search turned up an article [1] that outlined some of the difficulties with lease-to-own residences I wasn't aware of. However, the CFPB is likely on the losing side if the leases are structured as short-term rentals, terminable at any time, as Rent-A-Center has done [2]. This type of consumerism is likely to be self-correcting over generations of time; I'm seeing far less participation by Millenials and younger generations for this consumerism than older generations, by simple virtue of the fact that they are quite drained of financial resources and growth potential by the time they graduate. If this trend is real and continues, then the velocity of money could seem great while juiced by the Fed, then drop like a cliff function when demographic realities trump monetarism and lack of fiscal policy changes in the US.

[1] http://www.mhmarketingsalesmanagement.com/home/featured-arti...

[2] http://www.huffingtonpost.com/2012/02/03/rent-a-center-cfpb-...

Re: What if the problem of poverty is that it’s profitable to other people?

#296

Post by coldtea » Mon, Apr 11, 2016, 10:41 AM UTC

pdkl95 wrote: post #32

Snargorf wrote: post #13

Earlier quoted context omitted.

Sure they would. People will do almost any job, if they're paid enough. This is why military contractors in war zones, Arctic crab fishermen, and prostitutes make a lot of money. This is econ 101; supply and demand. You know it too. You're (presumably) not impoverished, but you'd work in diamond extraction or a clothing sweatshop, if you were paid enough.

> if you were paid enough I've always liked the idea that you should never turn down an offer or request. Instead, you should name your price . Sometimes that price might be functionally equivalent to turning down the offer, but there's always a tiny chance that someone might agree to your (probably laughably unreasonable) terms. (I should really watch The Magic Christian again)

Or watch the Indecent Proposal:

http://www.imdb.com/title/tt0107211/

Re: What if the problem of poverty is that it’s profitable to other people?

#297

Post by TheOtherHobbes » Mon, Apr 11, 2016, 10:48 AM UTC

darawk wrote: post #257

HillRat wrote: post #182

Earlier quoted context omitted.

For some reason I'm reminded of the old joke: a Keynesian and a rat-ex theorist are walking down the street. "Look," says the Keynesian, "A twenty dollar bill!" "Can't be," says the other economist. "If it were there, someone would have picked it up already." Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic main…

Don't get me wrong, i'm not saying it's not plenty profitable. I only mentioned the higher rents thing to illustrate the point that the landlord does not have an interest in keeping these people poor. This article is suggesting that these landlords are causing poverty, but then it goes on to not even try to make that case. They may be making money from poor people, and they may even not provide them the level of serv…

>This article is suggesting that these landlords are causing poverty

The landlords are causing poverty by increasing rents to the maximum level the market will bear, removing money from the system and - usually - moving it offshore.

Because slum property is so immensely profitable, there's no incentive whatsoever to invest the profits in anything riskier. So you end up with wasteful non-projects like this:

http://www.dailymail.co.uk/news/article-3490220/The-Ghost-Ho...

Meanwhile renters see their disposable income - in fact their economic freedoms - eroded until they can barely afford housing and food.

You now have a deflationary cycle where it becomes harder to find customers for new businesses, and harder to find investment because investors don't believe customers are easy to find.

Of course it's not just landlords. But generally economic cultures are designed to be favourable to either increasing or decreasing economic freedom for the low-paid. And if it's the latter, the predictable result is massive inequality and a deflationary uncontrolled descent into terrain which not only does the poor a lot of damage, but also eats away at the sustainable economic value of the assets of the rich.

Re: What if the problem of poverty is that it’s profitable to other people?

#298

Post by TeMPOraL » Mon, Apr 11, 2016, 10:49 AM UTC

mruniverse wrote: post #243

mentando wrote: post #233

Earlier quoted context omitted.

Yeah, in theory it is awesome, but it just does not work in real life...

I think even in theory it's not awesome. What is awesome is a system where everyone benefits when everyone is self-interested.

It's not awesome, it's poison. Cooperation > competition, and artificially forcing everything to be expressed in terms of the latter is cancerous to society. Ignoring conscience and empathy is wasting the in-born qualities that allow us to be more efficient in groups.

Re: What if the problem of poverty is that it’s profitable to other people?

#299

Post by anexprogrammer » Mon, Apr 11, 2016, 10:50 AM UTC

lazzlazzlazz wrote: post #284

jakobegger wrote: post #266

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing? In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing. And it's amazing ho…

Artificially decreasing housing prices always creates shortages - that's already well understood. The more people who can take advantage of artificially lowered prices, the more pressure there is in other parts of the housing market to absorb excess demand. The cost of decreasing those housing prices are paid for somewhere else in the system.

Meanwhile using housing as much as an investment vehicle as housing (see London, SF, and numerous other cities) promotes the creation of shortages to drive up rents and capital gain.

You can't seriously be saying that the housing market is working as intended in places where pushing 70-80% of the wages cannot rent a basic apartment there.

The cost of those artificially inflated housing prices are paid for someewhere else in the system. As increased stress and illness, as migrant workers in illegal occupation, as companies unable to fill lower pay roles, as a lack of nurses, teachers and firefighters, as lack of opportunity for their children.

You don't have to adopt a socialist perspective to see it's broken right now.

Re: What if the problem of poverty is that it’s profitable to other people?

#300

Post by facepalm » Mon, Apr 11, 2016, 10:53 AM UTC

Already the first paragraph annoys me to no end because it claims "What if the problem isn’t that poor people have bad morals – that they’re lazy and impulsive and irresponsible and have no family values – or that they lack the skills and smarts to fit in with our shiny 21st-century economy?", implicitly claiming that is the common way to think about the poor. That is just nonsense (yes you can surely find people who think that way, but not serious economists, journalists or policy makers). Didn't read on...