To help poor people, give them money • Hacker News Board

Re: To help poor people, give them money

#121

Post by Shorel » Sat, Jul 11, 2015, 3:27 PM UTC

taurath wrote: post #27

ianferrel wrote: post #13

The best way to help poor people who make reasonably good decisions is to give them money. People who make bad decisions often end up poor. Giving them money will not help them make better decisions, and may make them worse off. How you think those two effects interact, and how much you value efficiency of donation vs. enabling people with poor decision making skills to waste probably determines where you stand on th…

Poor decision making skills? I don't think you understand what it is to be poor. People are more rational than you think - when people experience long term problems and generally a very inconsistent world (food/money/resources come by sporadically), they make decisions that help them in the short term, because to their experience there is unlikely to be a long term. If someone below the poverty line wins $10,0000 in…

And you don't understand what it is to be poor either.

I live in a country (Colombia) where plenty of men waste their paychecks in beer. I see it every month. Less now than when I was younger, but still.

It has made the beer company very rich and profitable, but I can assure those were not good decisions made by the men, and it was not the fault of the government.

What happens when someone doesn't want to fit in to that mold? Their own friends call them cheap, not so close friends try to con them from their savings, and general people think of them of 'the bourgeois who we have to steal from'.

There are polls where people in Colombia are self-described as 'one of the happiest in the world'. It's actually 'we have to pretend to be happy' just to fit in society. And that involves wasting paychecks in booze with friends and/or family.

Think about people in NY pretending to be rich. It's the same here, but the pretension is: we-party-more-than-anyone.

I even remember when parties had to be until 6am or even 11am of the next day to be considered 'normal' and not a failure.

And all this has the consequence of most people having no savings at all.

Re: To help poor people, give them money

#122

Post by csentropy » Sat, Jul 11, 2015, 6:40 PM UTC

dragonwriter wrote: post #106

csentropy wrote: post #99

Earlier quoted context omitted.

Minimum wage is an artifact of economic folly. If you are voluntarily selling your labor, it means that you are getting the best value for it. If you could get more for your labor, you would. If no one else wants your labor, it means that the price you get is the most for your labor. It does not mean that that is all you will "ever" get. It just means that is all you can get until you can figure out a way to be more…

> If you are voluntarily selling your labor, it means that you are getting the best value for it. If you assume (as do most Econ 101 models) that humans are pure rational actors in the sense of the rational choice model, which there is considerable empirical evidence that they are not. And also assume that the market for purchase of the kind of labor that the subject is selling is perfectly competitive on the buyer-o…

Assuming humans are "rational actors" according to a third person's definition of rationality is the biggest flaw in the theory you mentioned. Rationality is not amenable to interpersonal comparisons. What looks rational to me depends on my wants, needs, desires, orders of preferences and is impossible for you to deduce in an y objective way. That is the problem with most econ 101 models.

Re: To help poor people, give them money

#123

Post by csentropy » Sat, Jul 11, 2015, 6:46 PM UTC

unclebucknasty wrote: post #112

csentropy wrote: post #93

Earlier quoted context omitted.

This had to be the most absurd argument ever made. Poor people are poor because they are poor and therefore they will be? I can give you a million examples of poor people that have gotten wealthier (including my own and a lot of people I personally know) but it wouldn't matter to you would it? Ever heard of social mobility? To fix society, give everyone everything they need for free? Amazing insight.

Several years ago, I saw a replay of a news show from the 60s on which the guest was MLK Jr. The interviewer suggested that King's success, as well as that of a few other "colored" people was proof that nothing was wrong with the status quo. Segregation and all the other ills of the day had nothing to do with the challenges faced by "colored" people. They just needed to be smarter and work harder. Putting aside that…

You state two discrete events and in the next sentence talk as though they are causally related. Maybe economic mobility is harder in the US now than before. Could economic strangulation by regulation be the cause of it? Maybe the wealth transfer induced by central banking is? There are many unknown variables that could cause that. But people only cling to what fashionable prescription makes them looks good. The evidence of >500 million people lifting themselves out of poverty since liberalization of china's and India's economy proves that it is possible beyond a measure of doubt if economic freedom is increased. But that is not a fashionable opinion is it? Any flavor of marxism/socialism/redistributionism is good except what works. Funny

Re: To help poor people, give them money

#124

Post by Frondo » Sat, Jul 11, 2015, 6:53 PM UTC

csentropy wrote: post #123

unclebucknasty wrote: post #112

Earlier quoted context omitted.

Several years ago, I saw a replay of a news show from the 60s on which the guest was MLK Jr. The interviewer suggested that King's success, as well as that of a few other "colored" people was proof that nothing was wrong with the status quo. Segregation and all the other ills of the day had nothing to do with the challenges faced by "colored" people. They just needed to be smarter and work harder. Putting aside that…

You state two discrete events and in the next sentence talk as though they are causally related. Maybe economic mobility is harder in the US now than before. Could economic strangulation by regulation be the cause of it? Maybe the wealth transfer induced by central banking is? There are many unknown variables that could cause that. But people only cling to what fashionable prescription makes them looks good. The evid…

Well, yes, because the tens of millions of people working 3 minimum wage jobs aren't being "strangled by regulation".

It isn't a "lack of economic freedom" that makes the poor get screwed by shitty jobs and all the fees tacked onto poor-people services, it's the cottage industry that's sprung up around screwing the poor. The poor have little to no political power (and they wouldn't have time to exercise it, juggling their three part-time minimum wage jobs), so there's very few people actually looking out for them.

It's funny, when we do peel back regulations, and the poor get screwed further, these myth-of-overregulation people never reflect on that. They never stop to think that maybe, just maybe, the poor are getting screwed even further because it isn't regulations that are hurting them in the first place.

Re: To help poor people, give them money

#125

Post by unclebucknasty » Sun, Jul 12, 2015, 3:41 AM UTC

csentropy wrote: post #123

unclebucknasty wrote: post #112

Earlier quoted context omitted.

Several years ago, I saw a replay of a news show from the 60s on which the guest was MLK Jr. The interviewer suggested that King's success, as well as that of a few other "colored" people was proof that nothing was wrong with the status quo. Segregation and all the other ills of the day had nothing to do with the challenges faced by "colored" people. They just needed to be smarter and work harder. Putting aside that…

You state two discrete events and in the next sentence talk as though they are causally related. Maybe economic mobility is harder in the US now than before. Could economic strangulation by regulation be the cause of it? Maybe the wealth transfer induced by central banking is? There are many unknown variables that could cause that. But people only cling to what fashionable prescription makes them looks good. The evid…

The liberalization of China's and India's economies proves beyond doubt what's possible when "economic freedom is increased", yet there are many unknown variables that could be suppressing economic mobility in the U.S.? Interesting that you find one so easy to explain, but not the other. But, then you seem to have figured it all out mid-comment! It's that dastardly regulation! Or is it? What, exactly, are you saying?

Whatever it is, you seem to suggest that the success of India and China has nothing to do with trade agrements. Nothing to do with currency manipulation. Nothing to do with technology. Nothing to do with the outsourcing of manufacturing and other jobs to these low wage countries. Just increase "economic freedom" (what does that even mean exactly) and voila!

And, why is it that even with regulation and suppressed "economic freedom", U.S. corporations realized record profits, while unemployment remained high, and wages low? Exactly whose "economic freedom" is being decreased here? How is it that we can pay CEOs so many times the average worker's salary even while that CEO is driving the company over a cliff? Meanwhile, full-time workers find themselves below the poverty line? No problems there, right? It's the workers' fault. Or perhaps it's the regulations, but which regulation(s)?

I'm just not following your argument. Are you saying there are no structural problems with our economy that cause the poor to be disenfranchised? And, what redistribution have I advocated, to which you are taking exception?

Re: To help poor people, give them money

#126

Post by dllthomas » Sun, Jul 12, 2015, 7:59 PM UTC

dragonwriter wrote: post #87

mangeletti wrote: post #33

This works in small experiments because when you give money to a small group of poor people (A) within a larger group of poor people (B), group A gains leverage compared to their prior position and compared to group B. When you give money to all poor people, the net result is simply inflation[1]. If transfer payments were made to taper up from max(wealth) (receives $0) to min(wealth) (receives $average(wealth)), disp…

> When you give money to all poor people, the net result is simply inflation Obviously, redistributive tax + BI schemes that result in some group having more money than previously increases demand and market clearing prices for goods disproportionately demanded by that group (and does the reverse for goods disproportionately demanded by the people who are net payers.) So, clearly, the increase in effective buying pow…

Moreover, there are a number of agricultural products where we're already keeping the price artificially high. Shifting demand toward these shouldn't see any increase in price for a while.

Re: To help poor people, give them money

#127

Post by clavalle » Sun, Jul 12, 2015, 11:38 PM UTC

pdeuchler wrote: post #113

clavalle wrote: post #89

Earlier quoted context omitted.

No, it is making decisions based on information you aren't considering. Poor people are making economic decisions not to come out ahead but to mitigate their losses. They aren't doing this because they want to, it is because it is the best decision they can make given their constraints. For example, they can either sell their time for minimum wage, far less than the value they create, or they can starve or go homeles…

>>> "Poor people are making economic decisions not to come out ahead but to mitigate their losses" It's not just those below the poverty line, all of humanity does this... even the rich. But where did I say they are dumb? I know some incredibly smart people that are horribly off financially. I also didn't say they were the only ones with poor decision making skills. Sometimes the situation is a product of their upbri…

>It's not just those below the poverty line, all of humanity does this... even the rich.

No they don't. If that were true no net value would ever be created.

I mean, there are instances where it is true even for the rich (insurance, for example) but most decisions, especially the larger ones, are based on getting something of more value to them than what they are trading. And they are hardly ever bargaining for their life, the ultimate loss, as poor people do routinely.

Re: To help poor people, give them money

#128

Post by clavalle » Sun, Jul 12, 2015, 11:48 PM UTC

csentropy wrote: post #99

clavalle wrote: post #89

Earlier quoted context omitted.

No, it is making decisions based on information you aren't considering. Poor people are making economic decisions not to come out ahead but to mitigate their losses. They aren't doing this because they want to, it is because it is the best decision they can make given their constraints. For example, they can either sell their time for minimum wage, far less than the value they create, or they can starve or go homeles…

Minimum wage is an artifact of economic folly. If you are voluntarily selling your labor, it means that you are getting the best value for it. If you could get more for your labor, you would. If no one else wants your labor, it means that the price you get is the most for your labor. It does not mean that that is all you will "ever" get. It just means that is all you can get until you can figure out a way to be more…

> If you are voluntarily selling your labor, it means that you are getting the best value for it.

I hold a gun to the head of someone you love. I tell you you will deliver something or I will kill them. You start to negotiate for how much you will be paid for your labor...do you think you will get the best value for your labor, overall? Or will you simply prevent the loss of life of your loved one?

You'd likely just be happy to prevent that grievous loss.

The poor are under the same terms except instead of a gun it is starvation or homelessness that is the threat to themselves or their loved ones.

This is just the simplest and most apropo example of misbehaved transactions. Not all voluntary transactions result in the best value for each party. You are correct that they would get more for their labor if they could but the deviant nature of the transaction keeps it from being a value trade and creates, instead, a struggle to lose the least amount they can -- a destruction of value for that party but, if mitigated, the best possible destruction of value from their point of view. It is not a healthy part of the system.

Think of a protection racket -- are those people getting the best value? Or simply getting the least amount of destruction of value given the circumstances? Those two things are not the same.

Re: To help poor people, give them money

#129

Post by clavalle » Sun, Jul 12, 2015, 11:50 PM UTC

dragonwriter wrote: post #106

csentropy wrote: post #99

Earlier quoted context omitted.

Minimum wage is an artifact of economic folly. If you are voluntarily selling your labor, it means that you are getting the best value for it. If you could get more for your labor, you would. If no one else wants your labor, it means that the price you get is the most for your labor. It does not mean that that is all you will "ever" get. It just means that is all you can get until you can figure out a way to be more…

> If you are voluntarily selling your labor, it means that you are getting the best value for it. If you assume (as do most Econ 101 models) that humans are pure rational actors in the sense of the rational choice model, which there is considerable empirical evidence that they are not. And also assume that the market for purchase of the kind of labor that the subject is selling is perfectly competitive on the buyer-o…

Perfectly rational actors are not strictly necessary. Often it is enough to assume people will act in their own best interest as best they can in aggregate more often than not.

Re: To help poor people, give them money

#130

Post by dragonwriter » Mon, Jul 13, 2015, 2:06 PM UTC

clavalle wrote: post #129

dragonwriter wrote: post #106

Earlier quoted context omitted.

> If you are voluntarily selling your labor, it means that you are getting the best value for it. If you assume (as do most Econ 101 models) that humans are pure rational actors in the sense of the rational choice model, which there is considerable empirical evidence that they are not. And also assume that the market for purchase of the kind of labor that the subject is selling is perfectly competitive on the buyer-o…

Perfectly rational actors are not strictly necessary. Often it is enough to assume people will act in their own best interest as best they can in aggregate more often than not.

Perfectly rational actors are necessary for the claim that was made. The kind of aggregate best-effort utility maximization you offer is not sufficient for the blanket universal claim made upthread, which requires that every (not the average) voluntary labor exchange is inherently for optimal (not best-effort given the laborers current information) value.