20 Apr 2008

Poverty IS Different

A brief article on a very interesting perspective that can change all our ideas about political and economic policies:
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.
Bottom Line: This argument can explain "hopelessness" and "poverty trap" problems that most people associate with homeless, "ghetto" people, and the developing world. They face so many problems at once -- tackling one will do no good -- that they just give up and cope. This argument is easy to believe.

What is there to do about it? Even more important, what can be offered that will be voluntarily taken up? Is there even a role for government, friends, church, community?

Feel free to comment.

1 comment:

  1. Thanks for mentioning my ideas about poverty favorably. I do have a chapter in the book (The Persistence of Poverty) on what we should do differently if we believe the basic theory--mostly addressed to government policy makers, but the corollaries for private citizens are plain enough. Charles Karelis


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