The long term discussed in that article is multiple generations, and there's still evidence there that wealth does transfer to children and further (e.g. the Swedish doctors). It has little to say about the relative efficacy of social programs vs. direct cash grants in alleviating poverty today.
comment by Desrtopa
· score: 7 (9 votes) · LW
The evidence with the Swedish doctors versus the lottery winners though, is that it's something other than just the amount of money they have that leaves their descendants better off.
If the reason that the poor are poor is only that they don't have enough money, then it shouldn't be necessary to keep funneling in more money to keep them from being poor. That is, if a person has a low-paying job, but has income supplementation which gives them the same level of money as someone with a better job, then their children should be as likely to be well off as the children of the person with the better job, because both have the same access to money. But in practice this appears not to be the case.
There's a lot of middle ground between "the poor have less money because they're morally lacking and deserve to have as little as they do" and "the poor have less money only because they started out with less money, and the key to being able to make money is already having money.
Having worked as an educator for some persistently poverty-stricken school districts, I have to say that there being a "human capital" element is definitely attested to in my experience, and I don't mean this simply as a euphemism for "genes." I've seen plenty of intelligent, conscientious young people who are going to be seriously disadvantaged in achieving future financial success, because they
Haven't been exposed to standards and expectations that prepare them for how hard they'll have to work to compete with similarly intelligent people from more functional environments.
Have absorbed disadvantageous social norms about how to manage money (flaunting it via conspicuous consumption, living ahead of paychecks, not investing for future needs or building up a buffer for unforeseen situations, etc.) because these were the examples that everyone they knew who had any money set with it.
Engage in a lot of avoidable conflict, because high conflict interpersonal styles are the norm in the social circles they grew up with (but are not the norm in the social circles they're going to have to move in in more lucrative careers.)
Have had their learning opportunities sabotaged, because even when they were capable and willing to engage in a high level of learning, they were surrounded by peers who disrupt their teachers' attempts to create an educational environment.
...And so on.
Not just on a personal level, but on a community level, there are different reasons for being poor, and some poor communities may have very different social norms and values (see Kiryas Joel for instance,) but the norms still tend to perpetuate poverty.
I can't claim it constitutes a large data set, but I've watched a couple of people in these communities regress from being financially well off (due to payouts from having won lawsuits) to being poor again in just a couple of years. And I tried to talk them out of the money management habits that were inevitably leading to that. But while they recognized my cause for concern, they made it clear that they wanted to use the money to gain a few short years living in a way that would make them pinnacles of admiration in their community. Neither of them were dumb, but they were reasoning according to the social norms they'd grown up with.
I don't think program paternalism is necessarily a good solution, since being forced to use resources pragmatically doesn't mean that people will learn to use their resources effectively when they have autonomy over them. But I think it's incorrect to suppose that poor people and more affluent people in general are separated only by the amount of money they have access to, and not by any sort of cultural gaps that act to perpetuate their differences in wealth.
As far as simple wealth transfers having a lasting impact, I think it's likely that the impact will tend to be different in different places. With the cash transfers to poverty-stricken Ugandan women, for instance, as the article says, most of them used the money to set some kind of retail operation in motion. They had the motivation to use the money entrepreneurially, but also, crucially, they had access to markets with relatively low competition and barriers to entry. Give a couple hundred thousand dollars to a poor person in an American city, and they might want to use it to start a business, but not many would be able to start a business with those resources which would turn a profit given the level of existing competition they'd have to face.