Interesting Perspective on Poverty

I find this proposal to be very interesting. That it comes from a philosopher makes it even more interesting to me.

Here is a bit from an article in the Boston Globe newspaper. It is over two years old, but this is the first time I've encountered it and it makes sense to me. Most real insights are this kind of "lateral" move where you change the paradigm (think of the book The Structure of Scientific Revolutions by Thomas Kuhn):

Imagine getting a bee sting; then imagine getting six more. You are now in a position to think about what it means to be poor, according to Charles Karelis, a philosopher and former president of Colgate University.

In the community of people dedicated to analyzing poverty, one of the sharpest debates is over why some poor people act in ways that ensure their continued indigence. Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work.

To an economist, this is irrational behavior. It might make sense for a wealthy person to quit his job, or to eschew education or develop a costly drug habit. But a poor person, having little money, would seem to have the strongest incentive to subscribe to the Puritan work ethic, since each dollar earned would be worth more to him than to someone higher on the income scale. Social conservatives have tended to argue that poor people lack the smarts or willpower to make the right choices. Social liberals have countered by blaming racial prejudice and the crippling conditions of the ghetto for denying the poor any choice in their fate. Neoconservatives have argued that antipoverty programs themselves are to blame for essentially bribing people to stay poor.

Karelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn't apply to the poor. When we're poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.

Poverty and wealth, by this logic, don't just fall along a continuum the way hot and cold or short and tall do. They are instead fundamentally different experiences, each working on the human psyche in its own way. At some point between the two, people stop thinking in terms of goods and start thinking in terms of problems, and that shift has enormous consequences. Perhaps because economists, by and large, are well-off, he suggests, they've failed to see the shift at all.

Go read the whole article.

This comment is consistent with the fact that Karelis has reformulated the problem and is working from a new paradigm:

Few economists are familiar with Karelis's work, and when it's presented to them, they tend to be skeptical of its explanatory power.

The article does cite one economist that finds it interesting:

"There's not much evidence in the book, and there are a lot of bold claims, but it's great that he's making them," says Tyler Cowen, an economics professor at George Mason University. It "was a really great book, and it was totally neglected."

I find Tyler Cowen to be an interesting economist because he is more open to new ideas than mainstream economists. Time will tell if Karelis's work is a breaktrhough or a false lead. I, for on, think it is a breakthrough.