Science of poverty

My friend Rajeev Mantri had sent this article some three weeks ago. But, I stumbled upon this only today. Most (almost all) things life are accidents. We do not make them happen. Even reading articles.

It is a very important article. Very interesting and useful. Most of us have heard of ‘poverty trap’. There is a reason why it is called a trap. It is hard to get out of, despite one’s best efforts. The odds are stacked against them, in many ways. What this article brings to us is scientific evidence that poverty is, indeed, a trap.

However, let me start with a (minor) criticism:

Quite how the science of poverty could be leveraged to help the poor come out of poverty is not explained. But, that is not his goal in writing the article. His purpose is to exhort fellow humans to take poverty as a disease and not as a voluntarily or willingly assumed condition or something that is wholly attributable to sloth, indolence and lack of effort.

His practical policy prescripton is to continue with anti-poverty programmes:

We should leverage the lessons of the science of poverty rather than ignore them. Poverty alleviation programs like conditional cash transfers, for example, reward parents or caregivers with direct payment for taking actions, like ensuring school attendance or arranging for preventative care. They encourage stress alleviation and long-term planning that is far upstream of doing well on an exam—they provide exactly the kind of certainty that the poverty-stricken brain needs.

This is THE UNIVERSAL TRUTH:

It’s easy to attach a post-facto narrative of talent and hard work to my story, because that’s what we’re fed by everything from Hollywood to political stump speeches. But it’s the wrong story. My escape was made up of a series of incredibly unlikely events, none of which I had real control over.

This is a hugely important philosophical statement. I am so glad he made it. That shows a highly evolved mind. Very, very rare.

Despite reading this or even while reading this, some of us continue to believe that we did it and we make things happen. At best, our effort are necessary conditions.

This is the important message for policymakers:

First, that the stresses of being poor have a biological effect that can last a lifetime. Second, that there is evidence suggesting that these effects may be inheritable, whether it is through impact on the fetus, epigenetic effects, cell subtype effects, or something else.

This science challenges us to re-evaluate a cornerstone of American mythology, and of our social policies for the poor: the bootstrap. The story of the self-made, inspirational individual transcending his or her circumstances by sweat and hard work. A pillar of the framework of meritocracy, where rewards are supposedly justly distributed to those who deserve them most.

What kind of a bootstrap or merit-based game can we be left with if poverty cripples the contestants? Especially if it has intergenerational effects? The uglier converse of the bootstrap hypothesis—that those who fail to transcend their circumstances deserve them—makes even less sense in the face of the grim biology of poverty. When the firing gun goes off, the poor are well behind the start line. Despite my success, I certainly was.

The bigger question is: Do goverments have resources for this?  Do they have the mind to do this? Do they have the moral authority and the courage to acquire (fiscal) resources to tackle this? Are the rich ready and willing to pay up for this? Even if the answers to all these questions are YES, how would it translate into reality – efficacy on the ground – in terms of results?

But, one thing is clear: given the scientific evidence that successive generations are poor not because they choose to or that they did not make the effort but because they are made to stand well behind the starting line, the society has both an economic and a moral obligation to help them in whatever ways they can.

Thanks for sharing the article, Rajeev.

Useful resources for poverty

Martin Ravallion’s new book, ‘Economics of Poverty’ released last year seems to have a website linked to it. I have not checked it out. But, sounds useful.

Related to the theme of poverty is the book on poverty in South Asia by Ejaz Ghani (ed.) titled, ‘The poor half billion in South Asia: what is holding back lagging regions’ published in 2010.

Separately, VoxEU had three volumes on the Long Economic and Political shadow of history. I have not read them yet. But, thought I should record their availability here. I might have recorded them already here. Does not matter.

On a related note, would strongly recommend, ‘Power and Plenty’ by Kevin O’ Rourke and Ronald Findlay. I have read parts of it. Delightfully written. It is a wonderful compendium of international economic history seen through international trade and the military conflicts that either accompanied them or preceded them. You can download the preface and chapter 1 here. Worth it.

In the preface, they write that most books are written for the authors and that there is much learning for authors during the writing of the book than there is transfer of knowledge from them to readers. Both are very true. I can vouch for both!

There is a website called ‘Booksforunderstanding.org’. Well, some of you might know it already. I did not know it until yesterday. The list of books under Financial Markets/Financial Panics/Market Regulation, etc., is quite long and leave one with a daunting feeling. Most titles sound interesting.