The poor: by chance or by choice?

[vanesch]

I think public vs private is a very important distinction. The various incentives they face are completely different, and their results are often very different. Come on, you guys have been to the DMV. Is that the kind of service you want? Who has better service, the post-office or UPS? I'm telling you, private schools would do a much better job at educating students because if they don't, parents will pay to send their children to other schools.

So what matters is not so much "private/public" but 1) choice by the "customer" and 2) personal incentive to do a good job with good results.

If the salary (or other advantages) of the service provider depends on the result, whether this is private or public money, probably the quality of service will improve. There's nothing more frustrating than doing a good job, and notice that this has zilch to do with your paycheck, while lots of futile things seem to have a major influence. I don't think that where the money comes from in the first place plays a major role. Of course, in the private sector, you are bound to have a feedback on results, while in the public sector, this is not mandatory. But what counts is the feedback.

 

[Dale]

I think public vs private is a very important distinction. The various incentives they face are completely different, and their results are often very different.

IMO, the main difference between public and private is competition. The lack of competition allows all sorts of inefficiencies to persist in the public sector. Innovation and cost reduction is inherently more difficult than simply throwing your competition in jail.

Btw, on the main topic I say "mostly choice". In the US that is mostly a personal choice (to the extent that "poverty" even exists in the US), in 3rd world countries it is mostly the result of the choices of corrupt government officials, but still mostly choice. Poverty caused mostly by nature is pretty rare now and is generally temporary. E.g. after natural disasters and before aid can arrive.

 

[Economist]

So what matters is not so much "private/public" but 1) choice by the "customer" and 2) personal incentive to do a good job with good results.

If the salary (or other advantages) of the service provider depends on the result, whether this is private or public money, probably the quality of service will improve. There's nothing more frustrating than doing a good job, and notice that this has zilch to do with your paycheck, while lots of futile things seem to have a major influence. I don't think that where the money comes from in the first place plays a major role. Of course, in the private sector, you are bound to have a feedback on results, while in the public sector, this is not mandatory. But what counts is the feedback.

It's just that in the private sector your much more likely to find the proper incentives. These incentives are also difficult to "create" sometimes outside of the private sector.

IMO, the main difference between public and private is competition. The lack of competition allows all sorts of inefficiencies to persist in the public sector. Innovation and cost reduction is inherently more difficult than simply throwing your competition in jail.

Yeah, competition is also a big part of it and it definitely ties into the incentives they face. Public sector usually tries to keep out private sector competitors, because otherwise they'd be put out of business. For example, it's illegal for anyone to deliver envelopes. One women in New York city was doing this for an amount cheaper than the post office and gauranteed same day delivery. Her business was set up in her small basement and she had 1 or 2 members of her family helping her run it. She delivered all the mail by foot (maybe she used a bike too, I can't remember). Her customers loved her service, but when the government heard about it, they immediately shut it down by telling her to stop or else.

 

[Economist]

Interesting blog article on the poor.

http://cafehayek.typepad.com/hayek/2007/11/more-progress.html

 

[drankin]

As far as the reasoning that a lack of education tends to lead to homelessness (earlier posts in this thread), you can't give people an education like you can give someone food. I believe it works the other way around, they didn't want an education so now they are destitute. The cause is the person, more so than a lack of society's offerings. Certainly, an education is available to those who are willing to work for it, no matter what part of town you grew up in or who your parents were, or if you had any parents at all for that matter.

 

[russ_watters]

Interesting blog article on the poor.

http://cafehayek.typepad.com/hayek/2007/11/more-progress.html

Yes, I've commented on that before (not in this thread). The poverty line moves with time, and what we consider "poor" today is nonetheless a much better physical condition than "poor" in the past. To me, that makes the current usage of the concept of "poverty" not much more than a political game.

That's not exactly on topic, though...

 

[russ_watters]

Certainly, an education is available to those who are willing to work for it, no matter what part of town you grew up in or who your parents were, or if you had any parents at all for that matter.

Yes, the quality of education complaints are somewhat of a smokescreen - if people aren't availing themselves of the education that is provided for them for free, they don't have any basis on which to complain about the quality of that education.

 

[vanesch]

As far as the reasoning that a lack of education tends to lead to homelessness (earlier posts in this thread), you can't give people an education like you can give someone food. I believe it works the other way around, they didn't want an education so now they are destitute. The cause is the person, more so than a lack of society's offerings. Certainly, an education is available to those who are willing to work for it, no matter what part of town you grew up in or who your parents were, or if you had any parents at all for that matter.

This sounds a bit as letting 4-year old kids cross freely the roads. You can say that those kids that wanted to play with their life and didn't pay attention to the traffic lights got crushed, too bad for them, but it was their choice. And forgetting to say that to some kids nobody ever explained them what the traffic lights meant.

However, that's forgetting that guidance, motivation, care and so on are exactly those factors that help build a desire for education, helps finding out what are the good and the bad ways to get higher up, and then there is of course the parental responsibility to prohibit certain "choices" by a youngster, and to guide him/her in the right direction.

In the same way as an attentive parent will not ALLOW his 4-year old to cross the road freely, in the same way a kid in a good social tissue will be motivated to care about learning and education, will be prohibited to do too many stupid things and will be guided by punishment, motivation and care in the right direction. Indeed, if these elements are present, I agree that if then things turn out sour, it is *his choice and fault*.
But if, as an impressionable kid, you get the *wrong motivations* (like hanging out with the local gang makes me feel good, and being at home getting beaten up by my drunk dad which makes it impossible for me to work for school makes me feel bad) from the start, you cannot say that that is the kid's choice, right ?
Now, it is my impression that most people who end up in terminal poverty and with a total lack of basic education went through the last road. It wasn't *their* fault to have been put on that track, right ?

 

[Economist]

Yes, I've commented on that before (not in this thread). The poverty line moves with time, and what we consider "poor" today is nonetheless a much better physical condition than "poor" in the past. To me, that makes the current usage of the concept of "poverty" not much more than a political game.

Exactly. The "poor" is defined as the bottom 20% or something, and there will always be a bottom 20%. The term poor is such a relative term.

By the way, I posted the article because I think I was talking about this sort of thing on this thread earlier. I apologize if that was a different thread.

 

[DaveC426913]

Exactly. The "poor" is defined as the bottom 20% or something, and there will always be a bottom 20%. The term poor is such a relative term.

Interestingly, it also means it is impossible, by definition, to eliminate it or even reduce it.

 

[Economist]

This sounds a bit as letting 4-year old kids cross freely the roads. You can say that those kids that wanted to play with their life and didn't pay attention to the traffic lights got crushed, too bad for them, but it was their choice. And forgetting to say that to some kids nobody ever explained them what the traffic lights meant.

We're not really talking about 4 year old kids here. By the time most kids are like 8, their parents don't worry about them crossing the road freely. By that age, most parents give their kids the responsibility to walk or ride their bike around the neighboor and trust that their kid knows not to go out in the road without looking both ways. Besides, a lot of people learn this even if they have irresponsible parents. When someone gets to middle school and especially high school, it seems that they should have some understanding of how important education is. In fact, if a parent has to motivate you to study, you might not care all that much about school. The hardest working people in college seem to be the people who really care about education. People who love studying physics, math, economics, or any other subject because they really enjoy it and learning the subject has intrinsic value to them.

Now, it is my impression that most people who end up in terminal poverty and with a total lack of basic education went through the last road. It wasn't *their* fault to have been put on that track, right?

This may be your impession, but you could also be wrong. Maybe the situation you just laid out (about the kid who hangs with gang bangers and gets beat by his dad) is not as strongly correlated with poverty as you think. I don't doubt that there is some relationship, but I don't know how strong. Just like I know plenty of kids who came from educated middle class households, who went to college mainly so they could get drunk, party, and meet people of the opposite sex. I'm definitely not saying your wrong, it's just that what you've stated is more of an empirical question, and one that I haven't seen seriously explored.

Besides, even if you do find some correlation, it doesn't tell you exactly why it exists. It seems very plausible that people from poor families may be much less educated because they go to the worst public schools. Maybe it's very difficult to succeed in college when you went to horrible schools your whole life. This is just anecdotal, but I've read stories about inner city high schools graduating honor roll students who only read at the 8th grade level. Imagine if you thought you were doing well in school your whole life, and you graduated with an A average, but then you went to college and found out that it was all a joke, and you weren't prepared to compete at the college level at all.

I believe that it's a combination of chance and choice, although choice seems to be more of a factor in my opinion. I think many people attribute poverty mostly to chance, and I often wonder if this perpetuates the situation. For example, when some poor kid is getting in trouble at school, and maybe even in some trouble with the law, and then he hears many people saying that "it's not his faulty" and "he can't be held accountable because it's not a choice," I wonder if this just perpetuates the situation. In a sense, he is not being held accountable for his actions, and even more importantly these people are convincing him that his actions are outside of his control, and telling him that he is destined to be an uneducated, troubled, poor kid because he grew up in the wrong environment. If he buys into all of that, then I can't imagine how he'd have any hope, motivation, or desire.

 

[Dale]

This sounds a bit as letting 4-year old kids cross freely the roads. ... Now, it is my impression that most people who end up in terminal poverty and with a total lack of basic education went through the last road. It wasn't *their* fault to have been put on that track, right ?

IMO, that is a facetious argument and also highly demeaning to the poor. Are you really trying to equate the mental capacity and ability to reason of a poor adult to that of a 4-year-old child?

A 4-year-old's brain has not finished developing, they still think magically, egocentrically, etc. Even a completely uneducated adult has at least developed the ability to think abstractly, reason, and assess risk/reward. If they have not developed those abilities then they are severely mentally retarded or mentally ill and, I agree, should be cared for like we would care for a child (and for the same reason).

However, if they are normal adults then they need to take responsibility for their own actions and lives. Many people (in the US) have made the choice to rise from "poverty", including myself and people with terrible parents and educations. The choice to avoid personal responsibility and blame their situation on parents or background is still a choice.