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

Re: To help poor people, give them money

#131

Post by clavalle » Mon, Jul 13, 2015, 2:27 PM UTC

dragonwriter wrote: post #130

clavalle wrote: post #129

Earlier quoted context omitted.

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.

Which is the more reasonable assumption, then: that people will choose an option that will leave them worse off or better off assuming viable and known alternatives?

Is it not worth asking why they would choose less for themselves? And, if so, doesn't the act of asking why suggest that we assume there must be an explanation that makes sense? Or do we assume that one out of eight human beings are simply not as rational as the rest of us?

I don't know. I wouldn't let the requirement for perfection completely override the reasonable. The alternative is that there is an underclass of irrational human beings. I think we'd be living in a much different world if that were the case.

Re: To help poor people, give them money

#132

Post by JoeAltmaier » Mon, Jul 13, 2015, 2:34 PM UTC

clavalle wrote: post #131

dragonwriter wrote: post #130

Earlier quoted context omitted.

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.

Which is the more reasonable assumption, then: that people will choose an option that will leave them worse off or better off assuming viable and known alternatives? Is it not worth asking why they would choose less for themselves? And, if so, doesn't the act of asking why suggest that we assume there must be an explanation that makes sense? Or do we assume that one out of eight human beings are simply not as rationa…

Absolutely folks are not rational. The entire existence of the 'payday loan' industry proves that.

Rationality is also subjective. What you'd do, with your safety net and well-off family and house with no mortgage, is entirely different from what someone one check from homelessness may choose to do. And it may look irrational.

Re: To help poor people, give them money

#133

Post by clavalle » Mon, Jul 13, 2015, 3:23 PM UTC

JoeAltmaier wrote: post #132

clavalle wrote: post #131

Earlier quoted context omitted.

Which is the more reasonable assumption, then: that people will choose an option that will leave them worse off or better off assuming viable and known alternatives? Is it not worth asking why they would choose less for themselves? And, if so, doesn't the act of asking why suggest that we assume there must be an explanation that makes sense? Or do we assume that one out of eight human beings are simply not as rationa…

Absolutely folks are not rational. The entire existence of the 'payday loan' industry proves that. Rationality is also subjective. What you'd do, with your safety net and well-off family and house with no mortgage, is entirely different from what someone one check from homelessness may choose to do. And it may look irrational.

>Absolutely folks are not rational. The entire existence of the 'payday loan' industry proves that.

Not necessarily. It can also mean that there are fates worse than dealing with usury. Car break down that you need for your job and you need $1200 bucks and you have $27 that's supposed to pay for your groceries for the next week? A payday loan starts to look like a very good option considering the consequences of not taking that deal.

>Rationality is also subjective. What you'd do, with your safety net and well-off family and house with no mortgage, is entirely different from what someone one check from homelessness may choose to do. And it may look irrational.

Which is my point. Even though what that person that is one short paycheck from homeless does may look irrational, it likely is not considering the information they have and the choices available to them. When someone is making decisions with what amounts to a gun to their head, those decisions are going to look irrational to those that don't consider the gun.

Many people see the decisions the poor make and say "Oh, well I would have just negotiated based on my value to the business rather than settling for minimum wage." Which is a good response and perfectly valid if you can walk away from a deal with no negative repercussions. But the poor are negotiating with a gun to their head. They either have to take the deal or go hungry or homeless or not pay for their medication or what have you. Their decision is rational when all of the information is taken into account. It just looks irrational to people who generally don't have to deal with negative utility when they walk away from a given deal.

As a society I think we should strive to minimize how many of these life and death or pain on the line financial decisions people have to make. I'd like to see us strive for a nation where no one is negotiating for their life. I'd like everyone to have the freedom to walk away from a deal that doesn't create value for them. Simple as that. It will be better for everyone because it removes value destroying distortions.