A Philosopher's Blog

Are the Poor to Blame for Being Poor?

Posted in Business, Philosophy, Politics by Michael LaBossiere on October 7, 2011
NEW YORK, NY - OCTOBER 03:  Republican preside...

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When asked about the protestors occupying Wall Street, Republican presidential candidate Herman Cain said, “Don’t blame Wall Street, don’t blame the big banks,” he continued. “If you don’t have a job and you are not rich, blame yourself!” This does, of course, raise an interesting question: are the poor to blame for being poor?

Children make up a rather significant number of the poor, even in the United States. Using the federal definition of the poverty level $22,050 per year for a family of four), about 15 million children are poor. That is about 21% of all children. If poverty is defined as not having enough income to cover basic expenses, then the percentage increases to 42%. Given Fox News’ standard of $250,000 per year for a family of four, then the percentage of poor children would be vast indeed.

On the face of it, it would seem rather difficult to blame children for their poverty-even those that are old enough to legally work. After all, the wages for the sort of jobs that children are qualified to do tend to be rather low indeed. To be fair to Cain, his remarks were aimed at adults rather than children. Presumably he would blame these adults for the poverty of their children as well.

Some people are poor in the United States because they went bankrupt. While it is tempting to attribute these bankruptcies to overspending, over 60% of them are due to medical bills. There are no doubt cases in which people can be blamed for their illnesses (such as those relating to smoking or other lifestyle choices) and cases in which people could have paid their bills had they planned better. However, the majority of cases of medical bankruptcy seem to be cases in which the people are simply victims and not to blame.  “Unless you’re a Warren Buffett or Bill Gates, you’re one illness away from financial ruin in this country,” says Steffie Woolhandler, M.D., of the Harvard Medical School. “If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy…” True, they cannot blame Wall Street and the banks (except to the degree that insurance companies and medical costs are at fault), but it would seem that people who end up poor under these conditions cannot be blamed.

It might, of course, be objected that if the people who went bankrupt had been as rich as Bill Gates, then they would not have gone bankrupt. If it is their fault that they are not that rich, then their poverty would thus seem to be their fault. This, of course, assumes that the medical costs that caused the bankruptcies were fair and that it is just and right of private insurance companies to not protect the less affluent from medical bankruptcies. These are, of course, rather dubious assumptions.

Other people are poor because they were fired. In some cases, people do deserve to be fired and hence are to blame. However, if a person is fired because their company is sending jobs offshore to make more profits or because the financial meltdown resulted in the loss of their job, then it would seem that they would not be to blame. Also, the Republicans delight in talking about how Obama is destroying jobs. If this rhetoric were correct, then Cain’s claim that the poor are to blame for their poverty would not be true-at least in the cases in which Obama allegedly destroyed their jobs.

It could, of course, be replied that the people who were fired should have taken action to ensure that they had jobs that they would not lose or that they were rich. Since they did not make themselves indispensable or independently wealthy (or could not stop Obama from destroying their jobs), then they are to blame. This, one might note, seems a bit like how a victim of theft can be blamed for the theft. If he had, for example, only had armed guards protecting his house, then his possessions would not have been stolen.

To close the discussion, I will consider an analogy between being poor and failing  one of my classes.

On the face of it, if someone fails my classes, then they are to blame. Likewise, if someone is poor, then they are to blame. However, the analogy breaks apart fairly quickly.

One significant difference is that my classes are designed to compensate for the fact that students do not all come from equal backgrounds. While I have some students who have received top-notch high school educations, I also have students who went through schools that were woefully underfunded and in rather bad condition. While there are some attempts in life to compensate for such disparities, it hardly seems fair to blame a person for being poor if they start out in horrible conditions and little is done to provide chances to overcome this.

I will, of course, note that there are exceptional people who manage to overcome the most dire odds-but these people are very rare and their success does not prove that the system is a fair and just one. It just proves that there are people who are so exceptional that they can do amazing things.  To use the class analogy, if I make a class so hard that only the very best student has a chance of even passing, it would be odd to say that my class is fair because one or two people manage to pass it.

Another significant difference is that my classes provide an equal opportunity to each student. Everyone faces the same requirements. Everyone gets the same lectures, notes, and support material. Everyone has the same access to my office hours, phone, email and web site. In all but one of my classes the books are even free downloads. A person’s family, political connections, wealth and so on have no bearing on their grade-only performance matters. When students face dire problems (such as being deployed overseas by the National Guard) I work with them to ensure that legitimate problems do not prevent them from achieving the level of success they deserve. As such, if someone fails my class, they truly do have no one to blame but themselves.

Obviously enough, the economic world is not like this. People do not get the same starting point, they do not get comparable resources, and so on. As such, it would seem rather unfair to place the full blame on the person who is poor. If the system was fair so that people had the same opportunity of success based on effort, then the poor would be to blame for their poverty. However, the system is rather obviously not a fair system and this surely mitigates the blame.

To use the class analogy once more, imagine that I ran my class a bit differently. The requirements and availability of resources  varied from student to student based on such factors as their wealth and political connections. For example, the very poor students would be denied access to the notes, the lectures, my office hours and so on but would be expected to do as well on the tests as the wealthy students who had access to everything. My assessment would, of course, be based on performance-at least in part. The wealthy and connected would get a bit of a bonus proportional to their wealth and connections. I would, of course, point to the one or two poor students who were able to do well as proof that my class is fair. But, of course, only the most deluded would really regard it as fair. In this scenario, a reasonable person would be hard pressed to blame the poor students for doing badly in the class-after all, they were at a terrible disadvantage relative to those who succeeded and the success of a few exceptional students would not chance the inherent unfairness.

To use a final analogy, the economic system can be seen as comparable to a marathon race that some people must run and others can use various vehicles. True, a good runner could even beat some people who used, for example bikes, but the fact that this can occur hardly shows that the competition is fair or that the runners who finish behind the cars and bikes are to blame for this.

Thus, while some poor people are to blame, it is an unfair and sweeping generalization to blame all (or even most) of the poor and jobless.

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Does Socialism Destroy Incentives?

Posted in Business, Ethics, Philosophy, Politics by Michael LaBossiere on April 6, 2010
Donald Trump in February 2009

Image via Wikipedia

Let us suppose that Obama really wants to ram socialism down America’s throat. Is this a bad thing?

It is generally assumed that socialism is bad because…well, because it is socialism. That is something that Europeans do, like eating quiche or losing wars. However, are there good arguments as to why socialism itself is inherently bad?

To keep the discussion focused narrowly, I’ll stick with the stock argument: socialism destroys incentive. If, the argument goes, the state owns everything then people have no incentive to strive and this will result in a wide variety of problems from individual laziness to a general economic decline. Interestingly, the same folks who make this argument also tend to be the same folks who argue against the minimum wage (or at least increasing it).

The argument is usually presented in the context of a form of socialism in which there is no difference in pay or rewards. That is, from each according to his ability and to each according to exact equality. However, this form of socialism is not the only form. State ownership of the economic system does not require that individuals cannot be paid more or less or rewarded more or less. All that state ownership requires is that the state owns the economic entities.

But, one might argue, if people cannot strive to own a company or corporation, then they would have no incentive at all. In reply, the truth is that the vast majority of people have no chance of ever owning a company or corporation. Rather, the odds are that they will be working for a business that is owned by someone else (and these owners are a small percentage of the population). Amazingly enough, these people still work even though they really have no chance of owning a company or corporation. Now, imagine that the state owns the company rather than Donald Trump or Bill Gates. From the employees’ standpoint, nothing has really changed. To use an analogy, claiming that state ownership will destroy incentive is a bit like saying that getting rid of pro sports would destroy the incentive to play sports or exercise. True, there would be some impact. But it would be much smaller than one might imagine.

In response, it could be argued that under socialism there would be no privately owned small businesses and this would destroy incentives. After all, while most people have no chance of owning a corporation (aside from a bit of stock, of course) a person can start his or her own business. Without such an incentive, disaster would ensue.

The same reply can be given as above: again, most folks do not own businesses and really have no realistic chance of doing so and hence most folks are not motivated by this. Rather, most folks are motivated to work because they need the money.

Aha, one might say, under socialism there will be no such needs. People will have all their needs taken care of and hence will have no incentive to work.

In reply, if this were true, then what would be the problem? This would be a “Star Trek” future of plenty and no want. This seems awesome.

But, one might say, this would not be an awesome world. Rather, it would be awful because everything would be crappy. When everyone’s basic needs would be met, the other needs would be left unfulfilled because people would lack any incentive to fill them because they could not make lots of money doing so.

While this has some appeal, it would seem that if people are suffering because their needs are left unfulfilled, then they would have an incentive to act to fulfill them-even if they could not make lots of money doing so. Also, people are often motivated by factors other than money. Think, for example, of all the free stuff on the web that people create and share without the hope of profit. Think, also, of community service and volunteer work. While profit does motivate, there are other strong motivators that would provide considerable incentives.

A final point to consider is the negative aspects of the profit motivation. Folks driven solely by greed tend to lead us into disasters. While a healthy desire for profit can be fine, it must be tempered by other motives as well or such a drive can become monstrous and damaging

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