The Causes of Poverty (56): A Lack of Social Mobility

Is a lack of, or a low level of social mobility a human rights violations? No, of course not. There is no right to be socially mobile or to end up in a different – preferably higher – social class than your parents. However, indirectly there is a link between social mobility and human rights. For instance, there is a human right not to suffer poverty. Poverty can have many causes and so there can be many things that violate our right not to be poor. One of those things is hereditary poverty: many of us are poor because our parents are poor. If our parents are poor, they won’t be able to offer us a good education, a social network and other resources necessary to make it in this world. The wealthy marry the wealthy, invest a lot of time and money in the education and socialization of their children, while the poor often have to marry in their own class and send their children to low-quality public schools. In addition, poor children tend to live in crime infested neighborhoods where drugs and violence are a constant temptations and good role models are rare. There’s also a high probability that their fathers, having grown up in the same neighborhoods and having faced the same temptations, are in prison. Some may occasionally escape their poverty, but a lot of poverty is hereditary.

Hereditary poverty is just another word for lack of social mobility. If there is no or little social mobility in your society, if rules, institutions and mentalities make it hard for people to escape the social class of their parents, then this not only reduces fairness, just reward and opportunity, but it also determines the kind of poverty in society: poverty becomes something like a hereditary disease, the poor become a permanent underclass, and society no longer helps people to break the vicious cycle of hereditary poverty and to enjoy fair and equal opportunities.

But it’s not just the type of poverty that is very specific in a society with low levels of mobility. Also the beliefs about poverty take a particular form. The typical view is that the poor are poor because of a “culture of poverty“, because they are undeserving, because they are burdened with low inherited IQ etc. Stories such as these are necessary in order to explain and justify hereditary poverty in a society that has decided not to offer better opportunities to the poor. The fact that some poor people are indeed undeserving and stupid is then brandished as a pars pro toto argument that blackens the reputation of a whole class of people and excuses the lack of fairness of the rest of society.

More posts in this series are here.

Self-Defeating Human Rights Policies (6): The Social Effects of Incarceration

[T]he effects of [the] change in the imprisonment rate [in the U.S.] … have been concentrated among those most likely to form fragile families: poor and minority men with little schooling. Imprisonment diminishes the earnings of adult men, compromises their health, reduces familial resources, and contributes to family breakup. It also adds to the deficits of poor children, thus ensuring that the effects of imprisonment on inequality are transferred intergenerationally. … Because having a parent go to prison is now so common for poor, minority children and so negatively affects them, the authors argue that mass imprisonment may increase future racial and class inequality — and may even lead to more crime in the long term, thereby undoing any benefits of the prison boom. U.S. crime policy has thus, in the name of public safety, produced more vulnerable families and reduced the life chances of their children. (source, source)

This is an example of a self-defeating human rights policy: in an attempt to improve the protection of security rights and property rights of a population, a policy of increased incarceration rates has an adverse effect on the rights of the incarcerated, their families and children, and possibly even society at large (as increased inequality resulting from high incarceration rates among society’s most vulnerable groups will perhaps lead to more crime – although we can’t assume that increasing poverty and inequality will automatically provoke those who are impoverished because of incarceration to resort to crime).

The Causes of Poverty (40): A Culture of Poverty

It’s not uncommon to hear people claim that the poor shouldn’t blame “the system” for their poverty, but should look instead at their own values and behavior. Poor people, or at least some of them, show behavior that can be called a “culture of poverty“. They are the “undeserving poor“, the “stupid poor” who are poor because of their self-destructive lifestyle choices, their own stupid decisions, their self-chosen family situation, their involvement in crime, their drug use, their welfare dependency, their lack of effort in school, their lack of general discipline and their inability to plan for the long term.

Of course, we can all imagine some people who are “undeserving” in this sense, and some of us may know (of) some of them, but the adherents of the culture of poverty theory claim that such undeserving behavior is quite common among the poor and is the reason why the levels of poverty remain quite constant over time, even in some of the most wealthy and generous welfare states.

There are actually two versions of the culture of poverty theory, one more common than the other.

Innate moral deficiencies

Usually, the culture of poverty is believed to be a symptom of innate moral deficiencies among the poor. Or, euphemistically, the poor have a “unique value system”. It’s the depraved morality of the poor, and the self-destructive attitudes and behaviors that result from it, that keep them poor, period. All other possible explanations of poverty – discrimination, the membership theory of poverty, the bee sting theory, economic structures and processes, the business cycle etc. – go on the dump of politically correct academic claptrap.

This version of the culture of poverty theory is in essence a form of classism, akin to racism. Like a racist who claims that the depravation and inferiority of people of another race is entirely the fault of those people and should not be blamed on racism, adherents of this version of the culture of poverty theory claim that the poor are a separate group of people that make their own lives miserable, quite independently of external causes. The theory is also classist in the sense that it assumes one coherent culture among the poor, a culture that they simply “have” and that doesn’t contain major internal differences.

Acquired moral deficiencies

A more moderate but less common form of the theory maintains the moral opprobrium directed at poor people, but also sees some external reasons for their self-destructive values and behavior. The poor are still a separate group of people with a distinct culture, but this culture doesn’t result from some form of innate or genetically determined moral depravation that’s typical of the poor. The moral depravation that the adherents of this second version of the theory witness among the poor isn’t innate but is produced by generations of poverty. The poor classes and their offspring have responded to the ongoing burden of poverty by developing values and attitudes that perpetuate their poverty, and they socialize the next generations into these values and attitudes.

For example, decades of generational or hereditary poverty instill in people feelings of powerlessness, inferiority, victimhood and marginality, and these feelings in turn produce self-destructive values and behavior. They work as a kind of self-fulfilling prophecies. So, according to this second version of the theory, the self-destructive attitudes and behavior patterns that are the essence of the culture of poverty aren’t shaped by innate or genetic moral deficiencies. The observed moral deficiencies and the resulting self-destructive attitudes and behavior patterns are produced by internalization and socialization following decades of generational poverty.

The opposition to welfare inherent in the culture of poverty theory

Whatever the causes of self-destructive behavior – innate or genetic moral depravation on the one hand, or internalized self-destructive values on the other – the adherents of the culture of poverty theory claim that it’s only better behavior and values that can help people escape from poverty. The adherents of the “innate depravity” version of the theory will just have some more difficulties explaining how we can change the behavior and values of the poor.

And because it’s only better behavior that can help them, we shouldn’t give poor people money, unemployment benefits, healthcare insurance, child benefits etc. We don’t need a welfare state. Instead, the poor should be more diligent in their pursuit of a good education and a good job, they should lead healthier lives and have less children, especially out of wedlock etc. Some claim that money doesn’t matter for poverty (really!). The poor will do well even without money, as long as they change their value system. So, money doesn’t matter for poverty, like ice doesn’t matter for ice-skating, or something.

The fatalism inherent in the culture of poverty theory

According to the adherents of the culture of poverty theory, the poor aren’t just like all the rest of us minus the money. No, they are completely different, and just throwing money at them won’t change one iota. On the contrary, welfare benefits will just confirm them in their sense of victimhood and inferiority and will therefore perpetuate their destructive value system. However, closing the welfare tap and forcing them to pull themselves up by their bootstraps isn’t likely to work either, since they don’t have the discipline and the other values needed for that, and neither do they have the values necessary to get the education necessary to acquire a superior value system (were such an education provided to them).

Hence, even those adherents of the culture of poverty theory who don’t believe in innate moral deficiencies tend to conclude that poverty is permanent and that nothing can be done. Only those among the middle classes who have internalized the right values but for some reason or other become destitute (a widow for example, or a wounded soldier) will have the resources to recover. They might therefore also benefit from some form of welfare support. The generational poor, however, will remain poor even with tons of cash. Maybe the shock of near-starvation will help them, but also that is unlikely given their lack of moral resources and the difficulty of helping them to acquire those resources.

This is why the adherents of the culture of poverty theory claim that this theory explains the persistence of poverty much better than racism, discrimination, the inadequacies of the welfare state, the “creative destruction” of the business cycle etc.

A self-interested theory?

The culture of poverty theory, because it places the blame for poverty at the feet of the poor themselves, logically entails the claim that if those who are poor had acted differently they would not now be poor. And this entails yet another claim, namely that those who are not poor are so because of the way they acted. Hence, the wealthy deserve their riches. I can agree that they do to the extent that they work hard to earn their wealth. But wealth creation isn’t a solipsistic effort, it depends on cooperation. And it also depends on endowments such as talents, good and wealthy parents etc. and no one deserves any of those endowments. Many people who come into life with few endowments also work hard, and yet don’t achieve wealth.

I have the impression that the culture of poverty theory is just a tool for the wealthy to justify their own wealth and discredit the efforts to redistribute a part of that wealth in order to help the poor. I don’t mean that there are no individuals who are themselves the primary or even sole cause of their poverty, or that there aren’t any “cultural” explanations for poverty (“acting white” comes to mind). Neither do I underestimate the pernicious effects of a negative self-image or of welfare dependency. And I certainly don’t want to dispossess the wealthy simply because they can’t be said to deserve their wealth in any coherent sense of the word “deserve”. What I want to point out here is the tunnel vision of the culture of poverty theory, blocking out all other causes of poverty (mostly of a more structural nature), as well as the classism inherent in the theory, a classism that I believe is motivated by economic self-interest. And, finally, the fatalism of the theory is likely to be self-fulfilling.

More posts in this series are here.

The Causes of Poverty (35): The Membership Theory of Poverty

When you read about the causes of poverty you’ve probably convinced yourself that there are causes, and that the poor don’t have only themselves to blame. What you’re most likely to find are the following causes:

  • culture
  • geography, climate, resources (most notably in the work of Jeffrey Sachs)
  • institutional, political and governmental causes (e.g. the resource curse, the role of the rule of law and economic freedom etc.)
  • education
  • sociological causes (e.g. family structure)
  • etc.

It’s less common to find discussions about group affiliation as a cause of poverty. The group membership theory of poverty states that some people are poor because of the dynamics of the group(s) to which they belong. The groups may be residential areas (“ghettos”), schools, ethnic groups, workplaces etc. Poverty in this sense is “contagious”, hereditary, and self-perpetuating. It’s an example of a poverty trap.

This membership theory of poverty has a certain intuitive appeal to it. Group membership influences individual behavior and individual outcomes in various ways, so it wouldn’t be surprising to see that it influences economic status as well.

How do groups exert a negative influence over their members’ economic status? Peer pressure plays a role. The choices of some members of the group become the “natural” thing to do. The desire for social acceptance can force individuals to mimic their peers. Something similar occurs with role models. The behavior of older group members or members with some form of authority becomes standard behavior. Furthermore, when people witness high rates of failure among members, this will negatively affect their aspirations and effort. Finally, social and economic activities are highly complementary. When few group members start businesses for example, few other members will have the opportunity to work for them or trade with them. Conversely, when many members engage in economically destructive activities such as crime, other members may have no other economic opportunity than to collaborate.

You may ask, if groups are so bad, why don’t people just get out? Of course, it’s not always as easy as that. When you live in a crime infested ghetto, you don’t just move uptown. People will need some form of help. In order to break negative group dynamics, you can either work on these dynamics themselves (provide better education, crime protection, economic opportunities, affirmative action schemes etc.), or you can try to influence the prior group affiliation. How do people end up in a harmful group in the first place? There may be some room for government intervention. There’s the example of school desegregation through busing in the U.S. (not highly successful however). Governments can also tweak their social housing policies. Such policies are often called associational redistribution. One should be careful, however, not to cause harm elsewhere. There’s still a right to freedom of association and a right to privacy. Governments shouldn’t mess too much with group membership.

If you want to read more about the membership theory of poverty, I recommend two papers by Steven Durlauf, here and here. Those papers also contain an overview of the empirical evidence.

The Causes of Poverty (29): Overview

Our research shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children. If you do all three, your chances of being poor fall from 12 percent to 2 percent, and your chances of joining the middle class or above rise from 56 to 74 percent. (We define middle class as having an income of at least $50,000 a year for a family of three). Isabel V. Sawhill and Ron Haskins (source, source)

However, that seems to be a bit reductionist. There are many other possible causes of poverty. Some more convincing than others. For example, here’s Montesquieu according to whom people in hot places are simply too lazy to become rich:

In Europe there is a kind of balance between the southern and northern nations. The first have every convenience of life, and few of its wants: the last have many wants, and few conveniences. To one nature has given much, and demands but little; to the other she has given but little, and demands a great deal. The equilibrium is maintained by the laziness of the southern nations, and by the industry and activity which she has given to those in the north. (source)

According to Thomas Malthus, poverty is caused by overpopulation. Food and other resources are limited, and a population growth that exceeds a certain pace will inevitably hit a resource ceiling, and will result in decreasing standards of living, poverty, conflict over scarce resources, famine etc.

Max Weber believed that protestant work ethic put protestant nations at an advantage compared to other nations. Certain values, such as the opinion that God will reward those who work hard and save money, or the belief in predestination—getting rich is a sign of God’s approval—make some nations rich and others, that lack these values, poor.

Jeffrey Sachs focuses on geography and weather. In the poorest parts of the world, the soil is nutrient-starved, making it difficult to produce food. Moreover, tropical climates foment disease, particularly malaria. The UK, on the other hand, the country where the Industrial Revolution started, has a fertile soil, a lot of coal, and good waterways.

Daron Acemoglu states that nations are not like children — they are not born rich or poor. Their governments make them that way.

People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. … if you wish to fix institutions, you have to fix governments. [People should be able to] enjoy law and order and dependable government services — they can go about their daily activities and jobs without fear for their life or safety or property rights. (source)

There are obviously many more explanations of poverty, both “exotic” and sensible ones. And regarding the latter, it’s extremely difficult to say which ones are more important. Poverty is surely one of the most complex and intractable problems facing humanity. However, if we look at the country that has been most successful in the reduction of poverty – China – then the last quote above seems to be the most convincing one. China still has institutional and legal weaknesses today, but it did start to develop only after it abandoned the follies of the Cultural revolution and communist rule in general, and started to protect property rights and build its government institutions. Which doesn’t mean that institutions are a “silver bullet” solution to the problem of poverty. There’s no such thing, unfortunately.

The Causes of Poverty (26): Hereditary Poverty, Another Poverty Trap

For you always have the poor with you, and whenever you wish you can do good to them; but you do not always have Me. Mark 14:7

For the poor will never cease to be in the land; therefore I command you, saying, “You shall freely open your hand to your brother, to your needy and poor in your land”. Deuteronomy 15:11

As a result of having parents who are poor, children

  • receive substandard education because they enroll in substandard schools (if at all)
  • may be forced to quit school early and start working
  • do not receive quality healthcare (because of the costs)
  • are more likely to be obese, with negative consequences for their health
  • have a lower birth weight, something which also has a negative impact on health.

Growing up in poor families has negative effects on children’s education and health, and these effects in turn make it more likely that these children grow up to become poor as well. And their children will go through the same process, and so on. Hence the concept of hereditary poverty.

Just a few more words on the effect of substandard education. The quality of schools (or better the cost of good schools) and the element of child labor aren’t the only factors limiting the education levels of children in poor families. An interesting article in The Economist points to effects discovered by neuroscience. It seems that stress, induced by poverty, lowers memory capacity, and this lowered memory capacity makes it more difficult to learn and to obtain a good education as a means to escape poverty traps. It’s been well known for a while that stress lowers memory capacity (it reduces the volume of the prefrontal cortex and the hippocampus, parts of the brain associated with memory). However, Evans and Schamberg (see the paper here) showed that stress caused by poverty reduces memory capacity. First they showed that poverty is correlated with higher stress, and then that higher stress is correlated with lower memory capacity. Comparisons of the memory capacities of poor and middle class people showed indeed a difference in memory capacity, and this is caused by poverty induced stress rather than other elements of poverty. Poverty causes stress, which reduces memory, which in turn makes it harder to learn, which in turn makes it more difficult to escape a poverty trap. How does poverty cause stress? Well, there’s the obvious cause: financial insecurity. But low self-esteem caused by poverty (including for children in poor families) also seems to contribute. See this paper for instance.

The poor indeed will always be with us. At least if we don’t help them to get out of the traps in which they find themselves.