Home > Economics in Two Lessons > To help poor people, give them money (Draft excerpt from Economics in Two Lessons)

To help poor people, give them money (Draft excerpt from Economics in Two Lessons)

June 16th, 2015

Here’s another draft excerpt from my book in progress, Economics in Two Lessons. To recap, the idea of the book is to begin with the idea that market prices represent opportunity costs for the households and business who face them (Lesson 1), and then go on to explain why market prices won’t in general equal opportunity costs for society as whole (Lesson 2). A lot of the book will be applications of the two lessons, and this section is an application of Lesson 1.

As before, all kinds of comment and criticism, from editorial points to critiques of the entire strategy are welcome.

To help poor people, give them money

The problem of poverty is huge, in rich and poor countries alike. Around the world, nearly a billion people live in extreme poverty, living on less than $US1.50 a day. Even in the United States, on many measures the wealthiest country in the world, the Dept of Agriculture estimates that 14.5 per cent of the population experience food insecurity, defined as being ‘uncertain of having, or unable to acquire, enough food to meet the needs of all their members because they had insufficient money or other resources for food.’

Faced with images of the hunger and suffering caused by famines and extreme poverty, a natural and intuitive reaction is to send food. This reaction is often politically appealing in countries that happen to have large stockpiles of food, either because of unforeseen declines in market demand, or because of government policies such as price supports for farmers.

On the other hand, many advocates of development aid dismiss food aid as a short-term ‘band-aid’, and argue that the aim of aid should be to provide the ‘right’ kind of assistance, as measured by subsequent economic growth. Advocates of aid initially focused on economic infrastructure and industrial development, and have more recently turned their attention to health and education.

Similar debates have played out in the United States. The Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, has played a central role in US programs to assist low-income households since it was introduced in 1964. With cuts in other welfare programs, its importance has increased over time.

On the other hand, as with international food aid, the SNAP program is regularly derided as a bandaid approach. Liberals frequently point to education as the way to provide real opportunities for the poor.

Which of these approaches is right? Much of the time, neither. While support for health and education has a better track record than food aid, there is a growing body of evidence to say that, in both poor countries and rich ones, the best way to help people is to give them money.

To see why this should be so, ask: What would a desperately poor family do with some extra money? They might use to stave off immediate disaster, buying urgently needed food or medical attention for sick children. On they other hand, they could put the towards school fees for the children, or save up a piece of capital like a sewing machine or mobile phone that would increase the family’s earning power.

So, the poor family is faced with the reality of opportunity cost. Improved living standards in the future come at the cost of present suffering, perhaps even starvation and death. Whether or not their judgements are the same as we would make, they are in the best possible position to make them.

This is a straightforward application of Lesson 1. Market prices reflect (and determine) the opportunity costs faced by consumers and producers.

Exactly the same points apply in rich countries. Giving poor people assistance in kind, such as food stamps and subsidized housing, has a lot of political appeal. Not only does it meet an apparent need, but it appears to reduce the chance that the recipients will waste their extra income on luxuries, or on alcohol and tobacco. In addition, as in the case of the US food stamps program, it may also be possible to form a political coalition with producer interests, represented by the farm lobby.

Thinking in terms of opportunity cost, however, we can see that aid in kind almost inevitably results in waste. The opportunity cost of subsidized housing is the low rent paid for the house, while the opportunity cost of moving usually includes going to the back of the line. So having secured subsidized housing, people will stay there even if the house no longer suits their needs, because it is too big, too small, or too far away from a new job.

The same kinds of problems come up with food stamps. Families poor enough to get food stamps face all kinds of problems. They might, for example, need urgent medical or dental care, or be faced with eviction if they don’t make a rent payment.

Most of the time food stamps cover only part of a family’s food budget, so they are really just like cash. Families can meet some of their food bills with stamps, then use the money they save to meet other needs The opportunity cost of spending more on food is the alternative that can’t be afforded.

But it’s precisely when people need money most, to the point where they are prepared to live on a restricted diet, that the limits of food stamps start to bite. If poor families were given money, they could choose to pay the rent bill even if it meant living on rice and beans. That’s a hard choice, but it might be the best one available.

Unsurprisingly, then, poor people often try to change some of their food stamps for money. This is denounced as ‘fraud’ and used as a reason for cutting food stamps even further.

It is market prices that determine the opportunity costs of goods and services for individuals and families. So, when people choose how to spend additional money, the opportunity cost of one choice is the alternative that could be bought for the same amount.

The idea that poor people don’t understand this is patronizing and wrong. The tighter are the constraints on your budget, the more important it is to pay attention to them. Poor people often have less access to markets of all kinds, including supermarkets basic financial markets such as bank accounts and face complex and variable prices as a result. Nevertheless, many of them manage to find highly creative ways of stretching a limited budget to meet their needs. Additional constraints, in the form of payments that can only be spent in particular places and on particular goods, are the last thing they need.

These arguments have been going on for many years, but resolving them has proved difficult, since there are usually many different factors that determine good or bad outcomes for poor families. In recent years, however, a combination of improved statistical techniques and careful studies of experimental program pilots have allowed an assessment of the evidence to emerge. Overwhelmingly, it supports the view that giving people money is more effective than most, if not all, forms of tied assistance in improving wellbeing and life outcomes.

http://www.thebaffler.com/blog/blaming-parents/

http://www.nytimes.com/2013/08/18/magazine/is-it-nuts-to-give-to-the-poor-without-strings-attached.html?_r=0

If the best way to help the poor is to give them money, what is the best way of doing that? In a market economy there are two possible answers. The one that has been discussed most is redistribution; that is, using the taxation and welfare systems to transfer some market income from the rich to the poor. More difficult, but arguably more effective is to change the structure of markets and property rights to produce a less unequal distribution of market income — this is sometimes called ‘predistribution’. We will come back to this issue later.

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  1. davidp
    June 16th, 2015 at 16:43 | #1

    A related point is made by Steven Pudney in his book “Modelling Individual Choice: The econometrics of corners, kinks and holes” where he calculates the budget constraint for a low income person in the UK – he comments how complex it is with lots of kinks and gaps (nothing like even the more complicated ones in a micro class) saying it took him quite a bit of time using a spreadsheet. He said something like it was a bit of a sobering experience to do so.

  2. Jordan from Croatia
    June 16th, 2015 at 17:14 | #2

    As Ikonoclast often points out, there is not one solution that cures all problems and satisfy all needs. The best optuon would ba to use two prong approach, market pricing policy for labor and basic income guarantee. Or using MMT terminology: basic income gurantee suplemented by guaranty to work. Not one program im.plementation can do the change that you propose. Only together, BIG and GW can sufficientla force the market to provide pricing for trully free actionable options for poor and near poor. This alao provides the demand to firms to sell and invest more.

    Opportunity cost of creating more poor people is lack of demand to firms’production and investment. This is how secular stagnation is created.

    Another policy that could help poor a lot is to reverse credit scoring system. Presently poor pay considerably higher interet rates for loans then rich due to unjust credit scoring. This is another reason that over time near poor become poor, overcharging them for emergency loans. Payday loans are allowed to charge up to 700% rate and then allowed to sit on SS income of many pensioners. But nominally, biggest burden on near poor is through housing loans with low credit scoring putting higher burden on poorer then on rich for housing loans.

    Poor also need psycological education, not only counseling because dealing with so many calculations of opportznity costs drives stress and deppression affecting cooperation within famillies which almost guarantees a perpetual poorness. Yes, due to economic environment, poor are driven to constant anger and familly destruction, antisocial behaviour that also keeps them poor.

  3. Nevil Kingston-Brown
    June 16th, 2015 at 17:20 | #3

    * From an Australian author, some discussion of Australia’s history of Income management in its various forms – imposed by Government, imposed by community/government (Cape York Welfare Reform), or voluntary (Kimberley) would be well placed here. Particularly the argument advanced (and re-advanced by Forrest) that income management or quarantining is justified because addictive substances or behaviours (e.g. alcohol, drugs, gambling) or social obligations (kin-sharing, “humbugging”) will distort people’s choices.
    * More generally, among those who agree that cash transfers are better than food, there is an ongoing argument between advocates of conditional cash transfers (e.g. you get cash if you immunize your kids) or unconditional cash transfers (just give money without strings). There are studies arguing either way. Particularly important here is the gender dimension of who in a household controls the spending of the money – no strings cash is easier for men to squander, cash attached to children’s welfare measures tends to be more controlled by women within the household.
    * Another argument advanced against “just give money” that isn’t addressed here is that although it may be better for welfare in the short term, cash transfers provide a disincentive to seek work. There is a good study of Brazil’s Bolsa Familia Conditional Cash Transfer program, “Evaluating the Impact of Brazil’s Bolsa Família: Cash Transfer Programmes in Comparative Perspective” by Fábio Veras Soares, Rafael Perez Ribas, and Rafael Guerreiro Osorio of the International Poverty Centre, which showed that labour market participation actually increased by 3-5% among recipients. They don’t speculate as to why, but some reasons suggested by others include that better income security enables better planning by families to take up opportunities, or to gain the prerequisites of finding a job (e.g. a mobile phone, some good clothes to wear to work, etc). As receiving Bolsa Familia depends on school attendance, it could also be that children are being withdrawn from the labour force to go to school, and then their parents are entering the labour force to make up the lost income from child labour.

  4. J-D
    June 16th, 2015 at 18:37 | #4

    Money prices (even when they aren’t market prices) are definitional of opportunity costs when people are deciding how to spend money. The opportunity cost of whatever you spend a dollar on is whatever else you could have bought for a dollar (and this is still true for dollars spent, for example, on tickets for a public transport monopoly, where the prices aren’t market prices).

    But money prices don’t define opportunity costs when people are making other kinds of decisions, like what use to make of their own non-monetary resources, including their own time and effort.

    Or have I missed something here?

  5. June 16th, 2015 at 19:18 | #5

    Around the world, nearly a billion people live in extreme poverty, living on [emphasis added] less than $US1.50 a day.

    Beep. No, they don’t. Even with the most extreme discrepancy in purchasing power parity, that’s a physical impossibility.

    What is in fact the case, and which illuminates what is going on much better, is that many very poor people still have some non-cash subsistence resources for which their small cash incomes are a barely adequate top up.

    This insight should show that, when money from outside sources is given instead of food from outside sources but there is no way that money from outside sources can command food from outside sources, it is simply pointless as it can only move food from mouth to mouth. Now, that is a rare case, and giving money to people in Africa doesn’t present that problem; but it does in North Korea.

  6. Jordan from Croatia
    June 16th, 2015 at 19:20 | #6

    J-D
    Market prices do not have anything to do with people’s decision on how to spend money. People decide quantity produced, not the price except for something like iphone where monopoly pleys.
    Again, buying choices determine quantity produced not prices, at least not in very short term.

    Industrial policy determines prices, buying choices determibe quantity.
    Prices are determined by governments decision to spend into such sector raising incomes in that sector and lowering production cost at the same time.
    Again, use MV=QP. M determines Q and V (determined by income levels) decides on Q also. That is how it is between sectors of an economy and between any sectoral ballance.

    How much money will flow from one sector to other is pulled by initial government investment into a sector.

    Using competition that produces declining rate of profit a price will quickly setlle no matter buying choices except in monopoly being present and bbuying choices determine only the quantity in medium and long term. So, MV always determine only quantity while incomes determine V and quantity with it.
    This is how high social safety net and good incomes over time created developed world and unprecedented prosperity growth in post WWII with New Deal policies. There was no Secular stagnation with rising income that grows quantity and prices only as a sideeffect.

  7. Megan
    June 16th, 2015 at 19:21 | #7

    1. The paragraph that begins:

    To see why this should be so, ask: …

    has some wrong/missing words.

    2. What about the Utah solution to chronic homelessness: Give them a house to live in – no strings attached, no subsidy – just a safe place to live for free? In Utah they have been doing this for a decade and the results appear positive. There is lots of stuff about that program on the net but here is just one story:

    A simple solution to a vexing problem: In 2005, Utah’s leaders asked themselves what all chronically homeless people have most in common, and found a strikingly obvious answer: the lack of a home. Their remedy was astoundingly simple: give homes to people without them.

  8. Ikonoclast
    June 16th, 2015 at 19:49 | #8

    JQ, let us extend that thought. To help poor people give them money via government jobs. All that is needed is a Government Job Guarantee. If you crunch the numbers you will find a Job Guarantee is easily fundable.

    The Job Guarantee will pick up anyone who wants a full-time minimum wage and cannot get it from private enterprise. Clearly, it would require a rolling implementation but when fully running it could soak up all able-bodied / able-minded unemployed that private enterprise would not employ. It would amount to reserve employment at the minimum wage. There would still be proper requirements on participants just as any employer puts requirements on their workers. People who could not or would not meet those requirements would be able to stay on benefit instead.

    Standard minimum wage currently = approx. $34,000 p.a.
    Current unemployed = 750,000 (estimated)
    Raw Cost = $25.5 Billion p.a.
    Taxes recouped = $2,000 per person. (estimated)
    Taxes recouped total = $ 1.5 billion approx.
    Benefits saved = $ 9.0 billion approx.

    Net Cost of J.G. = $15 billion p.a.

    Cost of negative gearing to budget = $5 billion p.a. (phase it out)
    Cost of fossil fuel subsidies = $5 billion p.a. (phase them out)
    Future fund revenue p.a. = $12.7 billion so take $5 billion from this.

    Easy peasy, JG paid for.

  9. June 16th, 2015 at 20:17 | #9

    I’m a big fan of the “give them money without strings attached”. If you look at Centrelink, there are hoops to jump through, but inevitably you end up with money if you need it. But jumping through those hoops is hell. And it stops you thinking about what might actually make you happy and allow you to contribute to the economy.

    Galbraith pointed out that the rich are pretty universal in their belief that money is bad for the poor. But strangely enough, it does not have such a harmful effect on the rich.

  10. June 16th, 2015 at 20:32 | #10

    @Ikonoclast

    Rather than a guaranteed government job, I’d just have a base income of around $12,000 per year for everyone in Australia. OK, less for children. But you’d get it if you were poor or Gina.

    Adjust tax rates to balance the budget. And shut down Centrelink.

  11. ZM
    June 16th, 2015 at 20:34 | #11

    Ikonoclast,

    “JQ, let us extend that thought. To help poor people give them money via government jobs. All that is needed is a Government Job Guarantee. If you crunch the numbers you will find a Job Guarantee is easily fundable.”

    There was a review by Thomas Piketty in the New York Review of Books this week of the recent book “Inequality: What Can Be Done?” by Anthony B. Atkinson, where the author proposes guaranteed government jobs for people, along with other policies to reduce inequality:

    “The legendarily cautious English scholar reveals a more human side, plunges into controversy, and sets forth a list of concrete, innovative, and persuasive proposals meant to show that alternatives still exist, that the battle for social progress and equality must reclaim its legitimacy, here and now. He proposes universal family benefits financed by a return to progressive taxation—together, they are intended to reduce British inequality and poverty from American levels to European ones.

    He also argues for guaranteed public-sector jobs at a minimum wage for the unemployed, and democratization of access to property ownership via an innovative national savings system, with guaranteed returns for the depositors. There will be inheritance for all, achieved by a capital endowment at age eighteen, financed by a more robust estate tax; an end to the English poll tax—a flat-rate tax for local governments—and the effective abandonment of Thatcherism. The effect is exhilarating. Witty, elegant, profound, this book should be read: it brings us the finest blend of what political economy and British progressivism have to offer.”

    http://www.nybooks.com/articles/archives/2015/jun/25/practical-vision-more-equal-society/

  12. J-D
    June 17th, 2015 at 07:37 | #12

    @Jordan from Croatia

    I think I must have failed to make my point clear to you.

    You seem to think I was suggesting that people’s buying decisions control what prices will be. That’s not what I wrote and it’s not what I meant.

    You seem to be discussing how prices are determined. I was saying nothing whatever on that subject, so whatever you are saying about it is unrelated to the point I was actually making.

  13. Ivor
    June 17th, 2015 at 09:52 | #13

    This project will flounder if there is not a clear concept of what opportunity costs are, in theory and in practice. Lesson 1.

    From previous threads, this is still a mess.

    A good start would be to make it clear (if you are clear) that, economically, opportunity costs only apply to market commodities.

    This means that your judgement of different benefits then, is based only on your endowments and budget before and after a trade.

    You will avoid a lot of confusion.

    Maybe opportunity costs are useful – I doubt it, but if a good tight argument was presented maybe more people would agree?

  14. Ivor
    June 17th, 2015 at 09:56 | #14

    @John Brookes

    No, it must be a job producing goods and services for the community.

  15. Ivor
    June 17th, 2015 at 10:12 | #15

    P.M.Lawrence :

    Around the world, nearly a billion people live in extreme poverty, living on [emphasis added] less than $US1.50 a day.

    Beep. No, they don’t. Even with the most extreme discrepancy in purchasing power parity, that’s a physical impossibility.

    No, it is a fact.

    Recent World Bank data estimates the number of people living on under $1.25 a day at about 1.4 billion worldwide [see: Link ]

  16. Julie Thomas
    June 17th, 2015 at 10:27 | #16

    @Ivor

    Absolutely, jobs provide people with self-respect and a way of being part of the community.

    It is social capital that poor people lack and some good reasons why they would want to be part of this economy in which ‘leaners’ start so far behind the 8 ball that it’s a mugs game to even consider competing.

  17. Tom Davies
    June 17th, 2015 at 12:39 | #17

    “Poor people often have less access to markets of all kinds” e.g. to use Uber (which really is cheaper and better than Taxis, and has just cut their prices 10%) you need to have a smart phone with a data plan.

  18. Ernestine Gross
    June 17th, 2015 at 16:10 | #18

    @J-D

    I am on the same page as you @4.

  19. Robertito
    June 17th, 2015 at 16:55 | #19

    Whether or not their judgements are the same as we would make, they are in the best possible position to make them.

    That seems a bit of a reach. Why isn’t the government, the church or UQ School of Economics in the best position to make that judgement? (The answer strikes me as obvious – because they don’t know as much about the situation as the people who are in it – but still with briefly making explicit)

    The opportunity cost of subsidized housing is the low rent paid for the house, while the opportunity cost of moving usually includes going to the back of the line.

    The opportunity cost (to the occupant?) of subsidised housing is the cost of the next best option foregone, which strikes me as paying full rent, no? The cost to the occupant is the low rent paid.

  20. Robertito
    June 17th, 2015 at 17:30 | #20

    @Robertito
    Never mind, I’m confusing the government decision with the individual’s decision. The opportunity cost of my rental house is the rent I pay, as I could spend that on something else. It’s the same for subsidised housing, but the rent is lower. The opportunity cost is the benefit of the next best option, not the cost of the next best option.

  21. June 17th, 2015 at 18:08 | #21

    Ivor :
    P.M.Lawrence :

    Around the world, nearly a billion people live in extreme poverty, living on [emphasis added] less than $US1.50 a day.
    Beep. No, they don’t. Even with the most extreme discrepancy in purchasing power parity, that’s a physical impossibility.

    No, it is a fact.
    Recent World Bank data estimates the number of people living on under $1.25 a day at about 1.4 billion worldwide [see: Link ]

    Did you even read any further than the part of what I wrote that you quoted?

    No, those figures do not support that, they have been misrepresented as supporting that (including, misdescribed as that by sloppy and incorrect use of “living on” to cover those people in the various reports). They actually support the point I made – that there are many people living with that income, not on that income. The mere fact that they have that income and that they are living does not mean that they are living on it, any more than a small boy lives on his pocket money; that is an unwarranted misinterpretation of the data. Those poor people manage to survive by combining that income with non-cash subsistence resources, e.g. scavenging for wood or animal dung for fuel, begging for food that would otherwise be thrown out, maybe even having a tiny remaining plot of land they can work as a vegetable garden, and so on (if you had looked into that link that you mistook as supporting your position, you would have found “… though in some areas a large proportion of poor households own small plots of land … Common occupations were … small-plot agriculture …”). Of course, some others don’t manage to survive like that and are replaced by new poor people when those fall off the ladder, but that is even less reason to count them as living on under $1.25 per day.

  22. June 18th, 2015 at 00:55 | #22

    Among misplaced forms of aid in kind, the worst is subsidised fuel. Contrast subsidised public transport.

    As a possible exception to the cash rule, consider communications. Access to mobile phones and the Internet enables many other things and widens, rather than narrows, the options of the poor. Go-ahead public employment agencies in Denmark and the Netherlands will I believe supply basic mobile phones to indigent jobseekers, as without them they cannot today fond work.

    Many poor Africans are in fact ready to spend a high proportion of their income on mobile phone access, supplied unsubsidized by enterprising and hardy phone companies, two of them based in South Africa and Egypt. (I counted three mobile phone companies offering service in the war-torn Eastern provinces of the Congo; there are even more in Somalia.) The Internet lags behind. It is possible that pump-priming Internet cabling in favelas would pay off handsomely. One of the big downsides to the pacification of favelas in Rio de Janeiro was that the inhabitants instantly lost access to the extensive pirate cable networks, and now have to pay much more to legitimate operators.

    The other argument for conditional aid is justice for girls. The Bolsa Familia in Brazil has few conditions, but they include child vaccinations and sending girls to school. This is surely fair.

  23. hc
    June 18th, 2015 at 08:14 | #23

    Payments in kind make sense in the very short run when local supplies are inelastic – for example immediately after a natural disaster. I think a reason argument for in kind transfers is based on sympathy for the preferences of the giver. If someone is taxed to support a poor person them the preferences of the rich person for not having the money spent on pokies or booze matter – even if there is an inefficiency cost. Also certainly the household structure issues mentioned – e.g. kids not making schooling decisions – are important.

    Having made all these arguments for in kind transfers I have to say that in most situations monetary transfers make much greater sense.

  24. Julie Thomas
    June 18th, 2015 at 08:35 | #24

    @hc

    I find this a very weird way of thinking about taxation and what it is for.

    “If someone is taxed to support a poor person”

    Seriously? Is that the way you think?

    The tax you pay is ‘your’ money and you get to resent the fact that ‘the poors’ might choose to spend that money on a legal drug and gambling and thereby possibly find some relief from their depression, anxiety, physical health problems that have been caused by the economy they have been forced to live in by the rich and the aspirationals?

    And of course the entrepreneurs who provide gambling and alcohol to the poors are so upset that ‘these people’ are spending all their taxpayers money on a way to forget that they are ‘leaners’.

    And so obvious to you that the ‘rich’ person gets to force their preferences on the ‘poor’ person?

  25. Julie Thomas
    June 18th, 2015 at 08:43 | #25

    oh dear I have said something that sent my comment to hc into moderation.

  26. Nevil Kingston-Brown
    June 18th, 2015 at 10:26 | #26

    @hc
    The best argument for in-kind I’ve come across is that booze, drugs etc distort decision making and so those who have substance problems will blow the money. In a bitter twist, poverty itself also distorts decision making (http://www.sciencemag.org/content/341/6149/976), which could be taken as evidence for either side I suppose.

  27. hc
    June 18th, 2015 at 13:25 | #27

    Julie,

    I think the provider of funds to the poor is entitled to exert some weight on the way it is spent, yes. The person providing the funds is giving something up. Partly they can express their preferences through the ballot box on the level of redistributions that are reasonable. But they will be much happier if they know the monies provided are spent on education of children or good food for kids rather than the pokies or junk food. If you weight people’s utilities in an additive fashion then yes it makes sense to weigh these gains to the giver.

    I agree with Neville too that booze and drugs do distort decisions. Poverty too is often associated with a lack of skills. Some of these missing skills relate to budgeting.

  28. Jordan from Croatia
    June 18th, 2015 at 17:44 | #28

    J-D
    I can see now that your post at #4 is about something else then i originally tought. I appologise for not seing that your post is about: people with limited income have to choose what they spend money on. Dooooughhhh

    Only good use of opportunity cost is in deciding public policy. If it is about individual choices it invites authoritarian arguments that somene else should be choosing for individuals. Individuals are allready well aware of their opportunity cost they encounter. At least most of them except drug and alcoholic abusers, somwhat food abusers too.

  29. Julie Thomas
    June 18th, 2015 at 20:47 | #29

    hc

    When did people who pay tax start to believe that they were providing funds for the poor rather than contribution to the greater good? I don’t really think they are much happier to know that ‘their’ tax is being spent on the deserving poor. Those people have been manipulated to feel resentment by all the nasty ideas of individualism and rampant capitalism.

    I’d say the psych research shows that they would be happier if they had less stuff and more community in their lives.

    Are you old enough to remember when welfare was rightly called social security and tax was just the price good people who took responsibility for themselves paid for the benefits that come from living in an egalitarian society where there were no poor and desperate people?

    There was a time when there was a job for everyone who wanted one. There was no need for welfare and people who did not budget well may have been called names but they did not have to endure the sort of attitude that you have. It is also the case that this attitude creates more dysfunction and less of a willingness to budget properly.

    There was a time in my country when the ladder climbers and aspirationals were derided as money grubbers and social climbers. Before the transition to neo-liberalism and an economy that seems to be the right wing idea of a society, people lived in extended families and communities, children didn’t have to leave home to find work and brothers and sisters did not become estranged because some climbed the ladder successfully and others didn’t.

    People looked after each other. The old people tell me this, that in this town whole families used to come and work on the community hall on weekends for nothing, for no pay, just the fun of building something that would be good for everyone.

    How did people like you take over my country and turn it into a place where those who have the skills to take advantage of others, do that and then resent the fact that they need to share some of their wealth with those others who didn’t have those skills?

  30. Donald Oats
    June 19th, 2015 at 00:28 | #30

    With respect to the change in people’s decision making when destitute, as opposed to financially stable, I have the odd thought (or think oddly, not sure).

    The distortion could be a change in a person’s perception of risk against time, in the sense that a slight change in the environment can make it impossible for them to accomplish something, because their options are so constrained in the first place. They focus on the present much more so than those who have some spare cash and a job, they focus on getting some enjoyment out of the immediate future, and not out of some unknowable distant future. The ol’ do it today because I could be dead tomorrow logic applies.

    Or, perhaps the change is a reaction to a circumstance all animals can confront: a lack of sufficient food to sustain them adequately, i.e. energy-poverty. In this case, my guess is that the reason the distortion in decision making looks bad to those of us (not in dire straits) is because we evolved from social animals but became people operating in an economy which sprung up inside a few thousand years, a mere blip in the history of humanity. To be impoverished pre-civilisation was to be energy-impoverished, i.e. lacking the minimum necessary food to get by: it is quite reasonable for the body’s organs, especially including the brain, to retreat to minimum necessary functions, as a response to energy shortage. The brain in full flight consumes 20% or so of our basal metabolic rate, so cutting back on the pre-frontal cortical functions and relying on the more instinctive cognitive functions would shave off some of that energy demand. I wonder if any scientists have looked at changes to other organs and their energy consumption in people who are destitute? Perhaps it isn’t just the brain which goes into a (conjectured by me) low-energy mode? Furthermore, this could be a partial explanation as to why we are more tempted by sweets and fatty foods, fast foods, when we are destitute: it isn’t just about the cheapness, it is about the high caloric density of junk foods compared to healthier alternatives. Each day of poverty (in a free market society) is one in which we unconsciously seek the high caloric density food over the healthier alternative. Just a hypothesis…

  31. Julie Thomas
    June 19th, 2015 at 08:11 | #31

    @Donald Oats

    Being poor totally negates any rational cost benefit analysis that even a very high iq economist could make. Budgeting failures is just so not the problem for the poor who ‘fail to pull themselves up by their bootstraps’ like the better people do.

    The problem is that the mean spirited welfare provided with the attitude that hc epitomises does not provide the ‘linen shirt’ that provides people with self-respect.

    The problem is that the choice poor people have to make when ‘budgeting’ is between things like giving the kids something important now – eg a school excursion – or taking out insurance for the future. The latter would be the most rational choice – given the assumptions that rational economists make about life and human nature – but has no immediate benefit for the family.

    So some people reason that it is a better choice to choose to look after their child now and take a chance that they will be lucky in the future and the house won’t burn down.

    If we did live in an egalitarian society in which each child received the same support and equal access to all the benefits that the rich provide to their children, we would see that we do not live in a meritocracy and that those who imagine they are where they are because they are smarter and work harder would be revealed as not the deserving rich.

    I don’t think we need to go back to our hunter-gatherer origins to see that we can create egalitarian societies or at least more egalitarian societies; as far as I can see the old people I meet out here still live in the ’60’s society that has gone and the poor suckers don’t understand that they have voted to change that way of life.

  32. Ikonoclast
    June 19th, 2015 at 09:18 | #32

    @Julie Thomas

    It’s interesting that many “complex system” economists would agree with you, from Marx to Keynes to Krugman to Stiglitz. On the contemporary Australia scene, Bill Mitchell, Ernestine Gross and Steve Keen would all agree with you.

    This list of economists is very disparate in political economy terms and even in technical views. The one thing however that they do have in common is that they are essentially system thinkers. Their work (in my opinion) explicitly or implicitly acknowledges that there is a complex system involved and that some outcomes are therefore systemic and systemically conditioned.

    This is in contrast to crude and neoconservative thinkers who essentially deny there is a system (“there is no such thing as society”), who deny there are other possibilities (TINA – There Is No Alternative) and who simplify everything down to personal agency. What they imply is there are no greater forces, there are no accidents, no contingencies, no luck, no history, no inheritance of goods and ills. I wonder if they have ever considered the contradiction in claiming that all individuals have multiple and fair choices in a structured, hierarchical and inherited-fate system to which there is no alternative?

  33. Ivor
    June 19th, 2015 at 11:56 | #33

    @P.M.Lawrence

    This makes no sense.

    What is your point?

  34. Julie Thomas
    June 19th, 2015 at 12:50 | #34

    @Ikonoclast

    My honours thesis was a project in which we looked at an example of human movement and attempted to describe this movement and the way it changed under conditions in which the timing of the task was varied, using Dynamical Systems Theory. We even found evidence of a phase transition.

    I don’t remember much at the moment about the specifics of the study we did; it was in 1994 but I do remember that the idea of this way of understanding behaviour made a lot of sense as soon as I began to read about the topic.

    I had never heard of Dynamics or non-linearity before I was asked by the new Professor who came to our regional uni to be his student. At the time a standard leftie psychologist who wanted to work with the moochers and help them to learn to budget properly.

    My prof came during the Dawkins years when there was so much money for the institutions that were supposed to compete with the sandstones and do research and he was not all that impressed with the new ideas that involved ‘dynamics’, having done most of his research work using information processing theories which require the existence of mechanisms and causality to explain how coordinated intentional behaviour comes about.

    Happily the prof also brought post-docs who were very good with theory and the maths. I had to do a lot of work to pick up enough maths including sitting in on the dynamics lectures given by the other international researcher who came to our uni and was working in climate dynamics.

    Anyway, I really liked the ideas and there are people working in all sorts of academic disciplines who are also interested in this way of understanding ourselves and our universe but I have no recent knowledge of what is happening in the area.

    There seem to be a number of recent papers available to read if you google economics and dynamical systems theory.

  35. rational liberal
    June 19th, 2015 at 14:23 | #35

    Sure, by all means give poor people money. Charity is a good thing. Just don’t steal it off the “rich” to give to the “poor”. Over time, as history and evolutionary psychology/biology shows, forced redistribution just results in populations who can’t compete and take little action except to commit crime and get more free stuff doled out by some ruling elite. These are the lessons of Socialism. Lets not ignore them. Want another Greece?…an Argentina?…a Cuba?….A North Korea?

  36. J-D
    June 19th, 2015 at 14:53 | #36

    @rational liberal

    You don’t know as much about history as you think you do; nor as much as you think you do about biology/psychology, either.

  37. Ikonoclast
    June 19th, 2015 at 15:09 | #37

    @J-D

    We can agree on that J-D. I always like to note when I agree with persons, especially when I have disagreed with them on other matters in the past. It is always useful and solidarity inducing to find areas of agreement.

  38. rational liberal
    June 19th, 2015 at 15:10 | #38

    J-D
    I’m not here to trade schoolyard insults. I’ll leave that to those who rarely seem to rise above personal abuse and character assassination as debating tactics. You have no idea who I am, what experiences I and my family have been through, nor what I have formally studied. If you want to rebut my points, go ahead. I’m open to learning. Otherwise, stop wasting everyone’s time.

  39. Troy Prideaux
    June 19th, 2015 at 15:32 | #39

    @rational liberal
    Just one question though – how do you explain the top marginal tax rates in the US from the early 40s through to the early 60s that appeared to coincide with the evolution of the superpower they are today?

  40. Julie Thomas
    June 19th, 2015 at 15:32 | #40

    @rational liberal

    What points have you made? You have stated that you agree that poor people should be given money but why is this? What is your argument here? Let’s see how rational it is.

    Then you say Charity is a good thing but you haven’t provided any rational argument for this statement. What are your premises?

    We can start there to decide what you know but I think it is quite clear that you are lacking in a whole lot of knowledge about all the things you apparently ‘know’.

  41. Julie Thomas
    June 19th, 2015 at 15:34 | #41

    @rational liberal

    and if you are not here to trade schoolyard insults what are you here for?

  42. rational liberal
    June 19th, 2015 at 15:37 | #42

    Ikonoclast,
    Are you agreeing with J-D’s attempt (unsuccessful) to belittle me without any supporting evidence or rationale, or are you just someone who avoids conflict and constructive competition at every turn, preferring the deluded comfort of agreeableness instead?

  43. rational liberal
    June 19th, 2015 at 15:54 | #43

    @Troy Prideaux
    Thanks for the question Troy….I’ll give an answer a go…..I’m no economist, but I would guess there were other forces at play such as trade freedom, the rise of incorporation as a vehicle for doing business and the need for the early baby boomers to work hard (despite heavy taxes) to raise their new born kids that mitigated the high marginal tax rates and supported the boom. I feel though, you may already have an answer for me. If yes, I’d love to hear it. It does seem like a contradiction.

    @Julie Thomas

  44. Collin Street
    June 19th, 2015 at 15:59 | #44

    I think the provider of funds to the poor

    Is the government representing the community. Not the tax payer: once you’ve paid the money you hand over passes beyond your control. That’s what “payment” means.

  45. rational liberal
    June 19th, 2015 at 16:09 | #45

    @Julie Thomas
    Hi Julie,
    Thanks for your questions. I’m here to learn, like I said. There’s a lot of people much smarter than me here. To your questions;

    Poor desperate people do desperate things like resort to crime to live. Voluntary charity alleviates this problem. Continued entitlement leads to the problems I’ve mentioned though.

    Please, just because I used the moniker “rational liberal” does not imply I feel everyone else here is irrational.

    Please also, can we just chill with the immediate attempts to put yourself in a superior judging position over me. It just locks you into an emotional set against me and prevents you from really reading and considering what I write. This is why you asked me what I am here for, when plain as day I said it in my post.

    Thanks for taking the time to respond.

    Please, just because I used the moniker “rational liberal”

  46. rational liberal
    June 19th, 2015 at 16:17 | #46

    Julie,
    One more thing. I would consider for someone to NOT be voluntarily charitable to be a profoundly cowardly posture to take. The opposite for charity by force – it’s not at all brave to advocate the taking of others money by force, without doing it yourself and inviting the risk of being hurt for your troubles.

  47. David Irving (no relation)
    June 19th, 2015 at 17:22 | #47

    @rational liberal
    The problem with voluntary charity is that there’s a tendency to only target the deserving poor. A guaranteed income, enabling the recipient to live in decent comfort, should be provided to all by the government, paid out of the receipts of a progressive tax system.

  48. hc
    June 19th, 2015 at 18:56 | #48

    I don’t believe in communism – in legislated common property. But i do believe in redistributions to help the very poor to an economic level that enables them to live a frugal though decent life. I strongly agree with “rational liberal” that taking money by force from one person and giving it to another (the tax-transfer mechanism) does infringe on individual liberties. Still I favour doing it though with care. The redistribution should be just enough so that (in T. Scanlon’s contractualist terms) poor people could not “reasonably” reject it as unfair.

  49. J-D
    June 19th, 2015 at 19:28 | #49

    @rational liberal

    I am confident that you cannot adequately substantiate your assertions by reference to history and/or biology/psychology, and that is the basis on which I assert that you don’t know as much about those subjects as you think you do.

    If you can supply a basis for your conclusions (from history, biology/psychology, or anything else) you are free to do so. If you don’t, I shall abide by mine. I’m not going to attempt to present a rebuttal when there’s been no attempt at making the affirmative case stand up.

  50. Ikonoclast
    June 19th, 2015 at 19:37 | #50
  51. Donald Oats
    June 19th, 2015 at 19:47 | #51

    One thing I learned a long time ago is that you don’t have to like the people to whom you provide assistance. If finding someone agreeable were the basis on which charity were provided…oh, wait, we are at that place now.

  52. hc
    June 19th, 2015 at 19:57 | #52

    Donald, Care ethics says exactly what you deny. That you do (and should) place above average weight on those you like – those close to you. It’s why all people show greater charity towards their own children to those equally deserving children down the street. Its also why we have nations.

    My own view is that care ethics is right but needs to be supplemented by deontological ethics that applies to those more distant. Its still a fact that we will give more generously to those close to us who we “like”.

  53. Collin Street
    June 19th, 2015 at 21:05 | #53

    > I’m here to learn, like I said.

    Sure. But we aren’t here to teach you.

    If you can learn, that’s fine. I don’t think anyone doesn’t want you to learn. But “oh maybe this other guy I don’t know can learn something” isn’t a big part of anybody’s motivations.

    [one thing it’d be good to think about: if a person’s acting in honest good faith any mistakes they make are a result of limitations on their knowledge and judgement. Until they’ve overcome their own internal limitations their mistaken conclusions will be the genuine best they can do. You cannot expect to understand why your mistakes are mistaken — or even that they are mistakes — until you’ve grown past them.

    When you have the skills and knowledge to avoid a particular mistake, you won’t have to force yourself to see it: that mistake — at least — will be obvious to you. Until then, trying to force yourself to see it, demanding that people show you where you’re wrong and struggling to see how, is futile and even counterproductive. Like playing musical pieces or attempting skateboard tricks your skills aren’t up to.]

  54. Donald Oats
    June 20th, 2015 at 00:58 | #54

    @hc
    Actually, I am consistent with Care ethics. I have stated that it is not a necessary condition that you like the people to whom you (ultimately) give charity. You may well rank the charity you provide on a basis of family ties, relationships important to you, and fanning out to the more abstract charity of aid for homeless people (who it isn’t necessary to like), unemployed people (who it isn’t necessary to like), etc.

    In not so many words, I was trying to convey that we shouldn’t only give charity to those we have a strong affinity for, or a bond or some kind; and in more words, just because we give someone (whom we might not like) charity, we shouldn’t expect their gratitude as a necessary condition for that charity. I can pay taxes with the reasonable expectation that some of it contributes to unemployment benefits—and sometimes, the people who get it might not appear amiable to me. I still want unemployment benefits to be there for people who require it.

    Admittedly, I was being flippant in the second sentence, but I was quite precise in the first sentence.

  55. June 20th, 2015 at 19:44 | #55

    @hc

    I don’t believe that “taking money by force from one person and giving to another” infringes any liberties. It might do if you assumed that property rights were somehow god given, but I think they are a social construct and are thus open to such rules as society chooses – including taking them.

    Of course my sort of thinking was popular in Australia in 1788.

  56. June 20th, 2015 at 19:47 | #56

    @Ivor

    There are enough goods and services in the community already. In redistributing income there is no need to confuse things by making people “earn” stuff.

  57. Julie Thomas
    June 21st, 2015 at 09:24 | #57

    @hc

    You talk about belief and think of yourself as rational? Whatever.

    It is increasingly clear that you and people like rational liberal can’t or won’t understand motivated cognition; you seem to be in denial and can’t even see that it is quite clear to others who do understand the concept that your beliefs are based on your own individual self-serving preferences and are not rational.

    But I don’t think it matters any more because the people who have been foolishly voting for neo-liberalism are now waking up to the fact that they have been voting against their own interests.

    You won’t see this because you don’t get out enough.

    But here on the ground I see big changes taking place in the thinking of, and about the ‘poor’ people, and a more insightful realisation that they have given up things that are really important about life and living a good one and that it hasn’t make them happier.

    Those social climbing, money-grubbers who thought they were doing well, following all the rules for getting ahead, sacrificing their community involvement to send their kids to private schools, criticising the stupid and lazy who won’t budget efficiently, and feeling themselves to have superior genes and superior abilities, are falling apart now and finding that all those things have not brought them any happiness or satisfaction.

    The main thing that is challenging their beliefs and breaking their hearts, is that it has not been all worth it for their children who are not managing even to get a foot on the ladder despite all the sacrifices they have made in the name of the version of liberty that conceptualises taking responsibility for your society as being ‘forced’ to pay tax.

    Charity is an insult to a free human being; put yourself in that place and then tell me how it feels.

  58. Ikonoclast
    June 21st, 2015 at 10:42 | #58

    @Julie Thomas

    I can offer some anecdotal evidence about all this. Firstly, I was educated in a state high school in Qld. Not THE Brisbane State High which is part of GPS (Great Public Schools). (NB. It’s pretty clear that GPS people think they are “Great” isn’t it? The correct useage would be “Greater Public Schools” which has a slightly different connotation though still somewhat elitist.)

    My ordinary state public school education in the late 1960s and early 1970s was excellent. My kids went to a state primary but then we became a bit worried about standards in the local state high (rightly or wrongly) so we sent our kids to a private school, though not a GPS school. Perhaps we deserve some criticism as class traitors, I admit this.

    However, my observation was that the education in my kids’ private high school was as good but no better than the education I got free at a public school. There was some information around to suggest that the standard public school education had declined somewhat (mainly because of starvation of funds and favoritism towards private schools).

    So, the final analysis is that I and my wife had to, or chose to, pay full private fees to get the same standard kids’ eduction for our kids that was obtainable public and free 40 to 50 years ago. This is what has happened. This is what neoliberalism has given us. Everything of a SOCIAL nature costs more (not cars, computers and TVs of course) than it did in the 1960s and 1970s but is NO better in quality. If this ain’t inflation and exploitation of working people then I don’t know what is.

    In terms of the changes you see, Julie, I unfortunately don’t see them yet. Maybe I am too insulated in my middle class enclave. All I can see still is that neo-liberalism getting worse and worse. I admit I am in a protected and cossetted class so it doesn’t hurt me too much yet. But poor people are hurting badly now.

    I can also see my twins now 21 (despite being ready to soon graduate with excellent profession qualifications) will struggle to get jobs. Graduate employment is getting harder and harder to get. And our economy is going into a nose-dive with the idiotic neoliberal austerity economics of Abbot and Hockey. My twins will also need my help (I feel) to pay of their HECs. It’s not fair they remain saddled with that when I and my wife got free tertiary educations. In addition, with house prices where they are, my twins can forget buying houses, flats or units for at least the first 10 years of their professional working lives. It will not be possible and would not be wise anyway. A crash has to come at some point.

    So all in all? “Things are crook in Tullarook,” as they say. The current young adult and youth cohort will have a tough row to hoe after the neo-liberals have destroyed and laid waste to much that was good about our economy, society and community. In the future, history will rightly revile the baby boomers (me included) as a most selfish, purblind and world-wrecking generation.

  59. J-D
    June 21st, 2015 at 11:21 | #59

    @John Brookes

    I agree with the point you’re making but I suggest you might want to think a little more carefully about how you express it.

    To write ‘There are enough goods and services in the community’ is to suggest an unrealistically static view. Take just one example of a service: haircuts. Are there enough haircuts in the community? How many haircuts are in the community? Does the question make sense?

    I am confident you could modify your choice of words to avoid this unrealistic implication without impairing your general point.

  60. Julie Thomas
    June 21st, 2015 at 12:21 | #60

    @Ikonoclast

    The changes I see are happening all around the town. The changes are small and all over the place and probably only I can see them although youngest son who still lives at home says he sees the same thing in his friends.

    I think I mentioned in a thread that he has this gun loving friend who used to hate the Greens until my son gave him some truthful info about the greens policies, and now he hates David Leyonhjelm instead.

    I’ve been here in town, long enough and I’ve done enough ‘good deeds’ to have earned some respect, despite not being a church goer and being one of those greenies. They can see that I am not a raving ratbag or a communist and that I don’t want to take their way of life away from them.

    So recently I have started to argue with them during craft group and if they disagree – often they just change the subject lol – I google things for them to prove my point. That doesn’t always work because they distrust academic knowledge and there is a general disrespect for what ‘they’ say.

    But at the same time they know that they are supposed to send their kids to uni if they want them to be part of the economy and get a job. They hate computers and yet they know their kids have to have that knowledge. There are some difficult decisions for kids in regional areas to make and no clear path for them to take.

    We also have a growing number of young couples who are moving out here because they want to raise their kids in a small town with a small school. They want to be part of the community and are coming to the craft group and it is when we women of all ages, talk about raising children, that we find we agree on a whole lot of really important foundational things for what a good society looks like.

    I also see changes in the young relatives I have on my fb page; they are part of a sub-culture of 20 somethings who have never registered to vote, being free range libertarians – perhaps some sort of anarcho-libertarians – who knows? They each have hundreds of fb friends!

    They hate Tony Abbott and the sort of man he is; they say they are registering to vote next election.

    I’m well aware that I may be delusional though. 🙂

  61. Julie Thomas
    June 21st, 2015 at 12:24 | #61

    @J-D

    Are there enough haircuts in the community? Yes there are. Let your hair grow.

    And don’t criticise my profligate use of commas in the above.

  62. rational liberal
    June 22nd, 2015 at 09:12 | #62

    @David Irving (no relation)
    Thanks for your comment David. It seems you are agreeing that there is a class of people called the “undeserving poor” If this is correct, but what moral reason should anyone be forced by tax to support them if they are undeserving? You can if you like, but I’ll choose to give my money to those who really can’t help themselves.

  63. rational liberal
    June 22nd, 2015 at 09:19 | #63

    @hc
    Thanks for your thoughts HC. I too have struggled with the notion of whether the unfortunate would get the help they need under a true laissez faire capitalist system. I could be wrong, but I choose to believe that people in general are a compassionate bunch and they would be looked after. My only evidence for such a belief though it that even now, as we are heavily taxed, people are generally extraordinarily generous. This view of people as fundamentally good though is in direct contrast to the collectivist/socialist view of them as needing “guidance” from an all-knowing ruling elite who knows what is good for all of us.

  64. rational liberal
    June 22nd, 2015 at 09:25 | #64

    @Ikonoclast
    Thanks for your reply Ikonoclast…I didn’t think you’d have any game.

  65. rational liberal
    June 22nd, 2015 at 09:36 | #65

    @J-D
    JD, in my original post I pointed out that forced distribution which is a cornerstone of the socialist ideology has resulted in a host of failed societies. The mechanism is a progressive loss of motivation/productivity of the population. You’re telling everyone here you can’t even have a go at rebutting that? Are you serious? Harden up and have a go! How embarrassed you must be. We’re not presenting and defending PhD’s here.

  66. Julie Thomas
    June 22nd, 2015 at 09:42 | #66

    @rational liberal

    Why have you ignored my request that you explain why charity is rational? Are you unable to start from this statement and construct an argument that leads to this conclusion?

    And tell me why a free person should be forced to accept charity rather than be able to make their own way in the world without having to suck up to stupid people who happen to have more money? How can we poor people be free from the impositions of the rich who convince themselves that charity, this monstrous way of taking liberty from ‘unfortunate’ people, is a good thing.

    Have you read Adam Smith’s book “The Theory of Moral Sentiments”?

    He says ‘Nature, when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard.

    The reason poverty causes pain is not just because it can leave people feeling hungry, cold and sick, but because it is associated with unfavourable regard.’

    As he explains:

    ‘The poor man … is ashamed of his poverty. He feels that it either places him out of the sight of mankind, or, that if they take any notice of him, they have, however, scarce any fellow–feeling with the misery and distress which he suffers.

    He is mortified upon both accounts; for though to be overlooked, and to be disapproved of, are things entirely different, yet as obscurity covers us from the daylight of honour and approbation, to feel that we are taken no notice of, necessarily damps the most agreeable hope, and disappoints the most ardent desire, of human nature.

    The poor man goes out and comes in unheeded, and when in the midst of a crowd is in the same obscurity as if shut up in his own hovel.’

    Does Smith recognise that there are undeserving poor you think?

    In the Wealth of Nations he wrote:

    ‘A linen shirt, for example, is, strictly speaking, not a necessary of life.
    The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct.’

    What would a linen shirt be today?

  67. Julie Thomas
    June 22nd, 2015 at 09:44 | #67

    @rational liberal

    You seem to suffer from the Reds Under the Bed syndrome.

  68. Nevil Kingston-Brown
    June 22nd, 2015 at 09:56 | #68

    @hc
    You know what “frugal comfort” means? It means you can afford to turn on the heater every second night in winter. It means you have somewhere to live, but you attempt to fix the leaking roof yourself and don’t do it well, because you’re scared that if you complain to the landlord he’ll evict you and you can’t afford a tradesman’s fees. It means jam tomorrow, but never jam today.

  69. Nevil Kingston-Brown
    June 22nd, 2015 at 09:58 | #69

    @rational liberal
    Every Western country practices large scale forced (that is, through compulsory taxes) redistribution. We are also the most economically successful set of nations on the planet. QED.

  70. rational liberal
    June 22nd, 2015 at 10:20 | #70

    @Collin Street
    Thanks for your note Collin Street. I’ve asked nothing of anyone on this blog in relation to teaching me and I’ve in good faith tried to answer every polite challenge thrown to me. Your post therefore makes no sense. You make some good points, but they’re not relevant to the circumstances.

  71. rational liberal
    June 22nd, 2015 at 10:28 | #71

    @John Brookes
    Thanks for your note John.

    @Julie Thomas
    Ha ha…to an extent Julie, to an extent for sure. Comes from first hand experience and I see aspects of it in Australian politics and society. It concerns me greatly. Don’t forget how many tyrannies start….the population is offered something for nothing, get used to it and then naturally clamor for more….it never ends well and I would hate to see Australia move even a little down that path. Sure, we’re a long way away ATM, but the slide always starts somewhere…

  72. rational liberal
    June 22nd, 2015 at 10:33 | #72

    @Nevil Kingston-Brown
    We are Neville…and we’d be even stronger if we practiced forced distribution less. I see trend of bigger, more intrusive government. It’s making us progressively weaker.

  73. J-D
    June 22nd, 2015 at 10:45 | #73

    @rational liberal

    In your original comment you made a series of unsupported assertions. You’re telling everyone here you can’t even have a go at making an affirmative case for your conclusions? Are you serious? Harden up and have a go! How embarrassed you must be. We’re not presenting and defending PhDs here.

  74. rational liberal
    June 22nd, 2015 at 10:47 | #74

    @Julie Thomas
    But Julie, free human beings can choose how to respond to charity. They can choose to be grateful, insulted, motivated…your problem is YOU choose to believe it is insulting and that gives you the right to tell other people what to do…by force….Now THATS motivated cognition….hahahahaha!..BTW, I give to charity voluntarily because it makes me feel good and harms no one else – does life get any more rational than that? Last thing, I used the moniker “rational liberal” because i knew it would wind up certain types of people. I TRY to be rational, but don’t always succeed. Thanks for your posts. i enjoy them tremendously.

  75. rational liberal
    June 22nd, 2015 at 10:59 | #75

    hi All,
    Thanks for all your posts. I learned a lot. There’s evidence in the psych literature that although “conservatives/right wing” very rarely become “democrats/left wing”, the opposite happens under particular conditions quite readily. That is, when the chips are down, property and physical safety under threat, lefties turn into righties and see the value of competition, loyalty to the group/family and freedom to keep the fruits of their labor. They do that, or they don’t survive. Which one will you be? Let’s hope we never get there. Good-bye and good luck.

  76. rational liberal
    June 22nd, 2015 at 11:04 | #76

    @J-D
    JD, you’ll be one of the ones that will have a hard time surviving.

  77. Nevil Kingston-Brown
    June 22nd, 2015 at 11:04 | #77

    @rational liberal
    DLTDHYAOTWO

  78. Megan
    June 22nd, 2015 at 11:19 | #78

    @rational liberal

    It seems from your comments that you are talking about two things, tax and the “poor”.

    Are you against all taxation?

    Are you against all government expenditure?

  79. David Irving (no relation)
    June 22nd, 2015 at 11:25 | #79

    @rational liberal
    No, I don’t believe there’s such a thing as the undeserving poor. (Clearly your irony detector is broken.)

    I do, however, believe that there’s such a thing as the undeserving rich.

  80. Julie Thomas
    June 22nd, 2015 at 11:35 | #80

    @rational liberal

    Oh he’s gone!

    So many questions and so few answers from rational liberals. Sigh.

    Never mind, I’ll keep talking to you, rational liberal, and asking questions because I am going to print out this exchange and post it on the notice board at the local pub and the post office and I can’t see any of my neighbours being impressed with your rationality or your liberality.

    All you’ve got is all ideological stuff and it doesn’t make sense to them any more because we the people are seeing what small government really means and it is affecting those people who have been so irrationally angry about government taxing rich people and so foolishly voted against their own interests.

    You may want to comfort yourself that there are only right and left but this is not so, there is a large centre and they are looking back to the vibe that was happening – 🙂 – in the 60’s and ’70’s and Tony’s tradies and Howard’s battlers now have kids who are not doing as well as they ‘should’ be.

    It is very clear now that small government means fewer services and that it will make life more difficult not only for the poor, but for the poorer.

    Just one example.

    A service that provided support for new mums who do not have any family support handy, had it’s funding cut. If we all had a mum available, as I did when I had my first baby, funding for services such as this would not be required. But when people have to move to get a job, they leave behind grandma’s and aunties and all sorts of family support that is not provided by charity or that invisible hand in which you seem to place such blind faith.

    Do you think that all mothers come hard-wired to look after their babies ‘properly’ and that children just naturally grow up to become good adults who take responsibility for themselves if they make the right choices or poor people if they make the wrong choices?

    And actually when the chips are down, people who are part of a cohesive, diverse, community will have the best chance of survival.

  81. J-D
    June 22nd, 2015 at 12:32 | #81

    @rational liberal

    Ah. Abuse.

  82. Nevil Kingston-Brown
    June 22nd, 2015 at 15:09 | #82

    @J-D
    It’s astonishing how @rational liberal can exist in anything that small.

  83. June 23rd, 2015 at 12:00 | #83

    As far as charities go, givedirectly.org facilitates direct cash transfers to the poorest of the poor in Kenya and Uganda. They’re also currently researching the macroeconomic effect of this kind of aid. https://www.givedirectly.org/pdf/General%20Equilibrium%20Effects%20of%20Cash%20Transfers%20Pre-Reg.pdf

  84. rational liberal
    June 24th, 2015 at 14:55 | #84

    An evil capitalist and a compassionate leftie are walking down the street when they come across a homeless man. The evil capitalist gives him 5 dollars and tells him to come and see him about a job. The compassionate leftie pickpockets $10 from the evil capitalist, gives it to the homeless man and tells him where to find the dole office

  85. Julie Thomas
  86. J-D
    June 24th, 2015 at 15:52 | #86

    @rational liberal

    So you’re looking for somebody to analyse your dreams for you? There are people who claim expertise in that, but I doubt this is the best place to look for them.

  87. rational liberal
    June 24th, 2015 at 16:24 | #87

    Julie/JD …..I imagined you two would be the only few here with no sense of humour….

    JD, your lame attempt at return humour (dreams?) makes you a double loser. No prizes for second in the real world. But you could pat yourself on the back and tell yourself it doesn’t matter.

  88. J-D
    June 24th, 2015 at 16:38 | #88

    @rational liberal

    Ah! More abuse.

  89. Julie Thomas
    June 24th, 2015 at 16:43 | #89

    @rational liberal

    What was the funny thing you did?

    I took you seriously and went to the trouble of writing this for you.

    Why would your capitalist pick a homeless person? Is this your idea of *good* charity?
    Lots of people who do have a home or a rental property want a job.

    You’d need to give most homeless people a lot more than $5 to get them ‘job-ready’ as they call it in the industry. Very few homeless or long term unemployed are ‘normal’ or capable of working and living in a way that would make them good employees; it takes a lot of years of abuse about being lazy and stupid to turn people, mostly men, into a homeless poor you know.

    Let’s take just one example of the many things that need fixing in people who have not been able to construct their ‘self’ into a respectable individual or managed to fit into a respectable community; teeth. If you look closely at a homeless person and I’m sure that is something that you are not motivated to do, you will not see a lot of nice white teeth or in fact many teeth at all.

    Often the teeth that are there are rotting and the person lives with constant pain and the consequent quite serious health problems that come from having rotting teeth and bad gums. Drugs, particularly alcohol which is the cheapest drug and makes a lot of money for those who sell it, dulls the pain, physical and emotional and existential.

    Do you know much does a dentist cost? Do you think poor families just neglect their kids teeth or is that they don’t have the money to send them to the orthodontist. Schools used to provide basic dental care but apparently those rational liberals with a tax fetish don’t think this is worth spending public money on.

    But if you came across a younger homeless person, they are more likely to still have more teeth although they won’t be white and straight. The younger homeless person will be more likely to be an ice user so they will have bad skin, probably sores from picking themselves and will need some support to be able to manage the cognitive problems that are created by ice.

    What jobs do you think there are for young people with no references from a well connected family, no contacts or experience, no idea how to behave ‘properly’ because they have never interacted with a functional family, never mind the sort of superior family that a ‘rational liberal’ would be part of.

    This young person will possibly be mal nourished, probably from early childhood because the fake food that has made so many people so fat is so cheap and easily available. The mother of that family or the loose collection of people who live together in rental properties that never are homes, is ignorant of the need to choose ‘good’ food and desperate to try and provide her family with the things the things and experiences that everybody else seems to have. So she buys what they like and what is the cheapest.

    And so it goes…..

    What did I do to make my previous comment into a link?

  90. hc
    June 24th, 2015 at 16:56 | #90

    No one objects to your values Julie. Indeed some endorse them. I think that people dislike having them forced down our throat simply on the grounds that you think they are a good idea. You can paint such critics as heartless liberals but some may think of you as a fanatic who has the view that the only reasonable transfer to the poor is one that is set by the tax code.

    I’d be interested to know whether you ever voluntarily give much to help the poor. Or are your principles only strong when others are forced to abide by them because you think they are a good idea? Honesty appreciated.

  91. Julie Thomas
    June 24th, 2015 at 17:58 | #91

    How are they forced down your throat hc?

    I don’t think you aright wing people are heartless. I think you are ignorant; deliberately ignorant and so blinded by your faith in your ideology that you cannot see your hypocrisy.

    I’d say that you significantly misunderstand leftie psychology because you think everyone has motivations that you can understand. Perhaps though, leftie psychology is something that you are not currently qualified to understand because your current fundamental assumptions about human nature are wrong?

    Honestly, hc I am one of the poor. I am on a disability pension and I live in a regional area that has one of the lowest income levels in Australia. Most other people who live in this small town that is so small it doesn’t even have a postal delivery, are also over 50 and are on a pension.

    I certainly do give to the poor. Youngest son has been living with me for a couple of years while looking for a job and to run a car needed to get into town for interviews and for work if he ever gets one, newstart is not enough to live on so I give him what I can.

    I am appreciated in my community despite it being known that I am sucking at the teat of the taxpayer and forcing good free people to pay tax and even worse it is known that I am a greenie.

    In fact, I am so much appreciated that I have received invites to the Mayor’s breakfast – the mayor is in the next larger town – we don’t have a mayor – for my services to the community. I’m currently working on getting computer lessons for the old people in town who need to contact centrelink.

    We could do these groups at the local hall; that would help the hall which needs repairs but we need the council to pay for the internet connection an d councils have no money when we get small government. I point that out all the time at the PO and the pub.

    It is a good thing that we have to pick our mail up at the PO because that is the way we get to know each other. And these days I walk into the PO and talk to my also poor right wing voting neighbours and make fun of the people they voted for.

    And you know what? They laugh too now instead of being grumpy.

    That do it for you?

  92. J-D
    June 24th, 2015 at 18:08 | #92

    I wonder how many homeless people have been given jobs by employers who happened on them by chance in the street. It would make an interesting research project.

  93. ZM
    June 24th, 2015 at 19:58 | #93

    Before this thread closes I just wanted to note Marcia Langton’s recent essay in The Monthly, I am not sure whether I agree or not, but she certainly gives reasons to not rush to condemn the idea of limitations on what can be purchased and limitations on cash for vulnerable people, including but not limited to Indigenous people:

    “Recently, I was driven to comment that the Greens prefer their Aborigines “drunk and stupid”. One of the party’s senators, Rachel Siewert, had frothed in the media that the government was planning to “force” Aboriginal communities “into using an authoritarian cashless welfare card”. She elaborated on this with more fear-mongering: “The Healthy Welfare Card is income management on steroids, authoritarian action has not worked in the past and will not work in the future.”
    ….
    What solutions do the Greens and inner-city progressive “luvvies” have, apart from arrogantly and heartlessly accusing these leaders of being “assimilationist”? The simple answer is none.

    They have never encountered scenes like this, a regular occurrence at ATMs in poorly policed towns (that is, most in rural and remote Australia that have large Aboriginal populations):

    A woman goes to withdraw cash and is met by a line of male “relations” who threaten and intimidate her for money. This is the only ATM in town, so in order to obtain some cash for shopping, the woman pays an amount to each man. The men promptly head to the pub, and the woman is down one or two hundred dollars. Her children and other dependants will go hungry before the end of the fortnightly payment cycle.

    “Those who object and say that special circumstances apply to first Australians,” Forrest concludes, “are in fact applying their own soft bigotry of low expectations.”

    The cost of enforcing compliance would be enormous, and moreover largely ineffective. In these circumstances, the smart card approach makes good sense. It gives people the power to help themselves.”

    http://www.themonthly.com.au/issue/2015/may/1430402400/marcia-langton/health-and-welfare

  94. Megan
  95. June 24th, 2015 at 20:40 | #95

    Ivor :
    @P.M.Lawrence
    This makes no sense.
    What is your point?

    Sorry for the delay replying.

    Taking those in reverse order:-

    – My point was to back up my original assertions that those people typically live on other resources as well as their small cash income. I did this by showing that the material you offered in rebuttal not only doesn’t rebut it, it actually supports it (apart from also misusing “living on” their small cash income to misdescribe “living with” it).

    – If that doesn’t make sense to you, I regret that, but it is actually quite logical. Perhaps a concrete historical example from our own under-developed world past might help clarify it. Consider the better off Irish peasants of two centuries ago who owned their own land (my maternal ancestors were probably among these). It was practical for them to live off their own cabbages, potatoes, cow’s milk and pigs, while raising and selling a small amount of cash crops to provide for needs supplied from outside. Contrast that with the lot of those even poorer, who had to pay rent to landlords: they survived in much the same way, although with less as they had to work on the landlord’s land to work off the rent or had to grow more cash crops to sell to pay it (cottiers and gombeen men mediated that then in arendator fashion, much like tax farmers who organised cash advances and putting out work as well as collections); those even poorer people notionally had even higher incomes, just not higher disposable incomes, and scarcely used any of that to live on at all; the slightly better off were better off with lower incomes but lower burdens overall.

    To end, some years ago in the Spectator Petronella Wyatt cited a Hungarian curse she had heard through her mother’s family: “may you live off bread bought in the market”. The significance was that it was wishing that the accursed would have to eat through their savings by not being able to grow their own food and having to pay cash for it instead. That illustrates the norm in places that aren’t fully cash economies. (If all else fails, think back to the very recent tradition of chooks in the Australian back yard.)

    Ivor :
    @P.M.Lawrence
    This makes no sense.
    What is your point?

    Trying again.

    Sorry for the delay replying.

    Taking those in reverse order:-

    – My point was to back up my original assertions that those people typically live on other resources as well as their small cash income. I did this by showing that the material you offered in rebuttal not only doesn’t rebut it, it actually supports it (apart from also misusing “living on” their small cash income to misdescribe “living with” it).

    – If that doesn’t make sense to you, I regret that, but it is actually quite logical. Perhaps a concrete historical example from our own under-developed world past might help clarify it. Consider the better off Irish peasants of two centuries ago who owned their own land (my maternal ancestors were probably among these). It was practical for them to live off their own cabbages, potatoes, cow’s milk and pigs, while raising and selling a small amount of cash crops to provide for needs supplied from outside. Contrast that with the lot of those even poorer, who had to pay rent to landlords: they survived in much the same way, although with less as they had to work on the landlord’s land to work off the rent or had to grow more cash crops to sell to pay it (cottiers and gombeen men mediated that then in arendator fashion, much like tax farmers who organised cash advances and putting out work as well as collections); those even poorer people notionally had even higher incomes, just not higher disposable incomes, and scarcely used any of that to live on at all; the slightly better off were better off with lower incomes but lower burdens overall.

    To end, some years ago in the Spectator Petronella Wyatt cited a Hungarian curse she had heard through her mother’s family: “may you live off bread bought in the market”. The significance was that it was wishing that the accursed would have to eat through their savings by not being able to grow their own food and having to pay cash for it instead. That illustrates the norm in places that aren’t fully cash economies. (If all else fails, think back to the very recent tradition of chooks in the Australian back yard.)

  96. Julie Thomas
    June 25th, 2015 at 07:57 | #96

    @ZM

    If people choose the welfare card; there is no problem; if it is forced on them, it will make life more difficult.

    Humbugging is only one of the problems in those very diverse communities where the traditional respect for women and the traditional laws that governed men’s behaviour are no longer enforced and white men have not provided any alternative way to live than this male dominated hierarchical individualistic selfish and greedy economy.

    Marcia Langton has made quite a few changes in the way she thinks about how her people can survive our ‘settlement’. I expect she has a long way to go yet.

    I read the monthly article until I read this: “Forrest advises that the card would need to be introduced sensitively and that individuals with “existing addictions to alcohol, drugs or gambling would require professional support”.

    And then I just cracked up at the thought of Forrest understanding ‘sensitively’. Have you every listened to this mean and fully understood how lacking in sensitivity he is, or is it that he lacks the ability to understand that his idea of sensitivity is the same sort of faux concern that guided the early Australian racists as they sought to smooth the pillow of the dying race.

    Where are all these sensitive psychologists, social workers to come from?

    They lost a society; what they need is to construct a society and a way of life that can incorporate the essential spiritual beliefs of their traditional culture and provide them with something meaningful to do with their lives.

  97. Julie Thomas
    June 25th, 2015 at 07:58 | #97

    I have replied ZM but my comment is in moderation.

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