Picture this: A poor, single mother of two is deemed ineligible for government assistance because she did not meet the state requirements. On face value, the government saved a few thousand dollars in turning her down. Consequently, her two children grow up with an unhealthy diet, perform poorly in school, and are more likely to get arrested.
It should be easy to see that the hidden costs to society far outweigh the upfront cost of assistance in the case above. Yet, the rhetoric of the poor being lazy and undeserving has persevered even though it is unsubstantiated. Before diving into this, though, let’s explore the difficulty of climbing out of extreme poverty.
Gross Domestic Mental Bandwidth
In his groundbreaking book Thinking, Fast & Slow, psychologist Daniel Kahnemen explained how the mind makes decisions through a two-system model. System one, he explained, is intuitive, automatic, and prone to error. (Or, as most people come to know it: the brain on autopilot.) System two, on the other hand, is deliberate, unbiased, and notably slower.
Heather Schofield, an economist from the University of Pennsylvania, has researched how these two systems interact with the mental capacities of those under the stresses of poverty. She and her team discovered that mental bandwidth -- which is our ability to exert mental effort -- is severely compromised by factors that are associated with poverty. Examples include sleep deprivation, alcohol consumption, and malnutrition. This decrease in available bandwidth makes it less likely for a person to use system two, leaving it to the more impulsive system to carry out the majority of cognitive function.
Now, I know what you might be thinking: Why not just sleep more, work harder, and eat healthier?
It’s not quite that simple. The ability to interchange between systems one and two is not a matter of decisiveness. It’s a luxury that can only occur when you’re not worried about making your next rent payment or finding your next meal. To relate it historically: during the agricultural revolution (circa 10,000 BC), it was not the peasants working in the fields that philosophized about the meaning of life. The advent of scientific philosophy could only occur because others were doing the hard labor, giving the privileged aristocrats the ability to sit down and (literally) think. When thought of in scale, it becomes apparent that this tax on mental bandwidth affects the poor’s collective ability to climb out of poverty.
The Scarcity Mindset & Dehumanization
When people perceive something to be scarce, they act differently -- whether it’s time, money, food, or free swag at a conference. It is a reflection of human psychology, not of personal defect. When your focus is narrowed to immediate needs, long-term planning is done away with. Through this lens, we see that the issue is not that poor people are less intelligent but that the context in which they are living does not allow for strategic financial decisions to be made. We see this play out politically when programs fail to address the root cause of a problem. An analysis taken from over 201 studies of financial behavior concluded that financial training makes little to no difference. In the words of Eldar Shafir, a professor of behavioral science at Princeton, “It’s like teaching someone to swim and then throwing them in a stormy sea.” The context in which people are living is the issue.
The welfare system is a flawed concept. Instead of helping people by giving them what they need (money), we find it more fruitful to pay government workers to monitor the poor’s behavior. Along with these workers, we also pay auditors to ensure there is no foul play at any stage of the process. Ironically, both Democrats and Republicans agree that the current welfare system does not work. Republicans believe that it creates dependence, while Democrats see the increased restrictions on the ever-shrinking safety net as counterintuitive to its purpose. Both are correct, and the rising restrictions amplify a shroud of suspicion and degrade the self-worth of recipients who are constantly having their private lives exposed. Research has shown time and again that welfare does not slowly push people out of dependency, but rather discourages striving for life improvements for fear of losing benefits.
When the scarcity mindset is paired with dehumanization, we are left with a subset of society that is disempowered to help themselves.
A Dividend on Progress - Providing a Universal Basic Income
Helping the poor is not about lowering the ceiling. It’s about raising the floor for those below the poverty line. “Utopia” is a strong word that tends to be associated with delusions of grandeur. In the context of Universal Basic Income, though, remember that almost every social movement has been seen as “utopian thinking,” or implausible: democracy, the ending of slavery, or women’s suffrage to name a few. As Rutger Bregman said in his book Utopia for Realists, “It’s what capitalism ought to have been striving for all along. See it as a dividend on progress, made possible by the blood, sweat, and tears of past generations.” The idea is simple. Give a monthly allowance to civilians for their basic needs (e.g. shelter, food, and education) to be met. The key aspect: it must be completely unconditional.
With UBI being unconditional, the welfare trap is dismantled. No longer would poor people be caught in the spider web of the government, constantly having to prove their lack of assets or income. The research supports a staggering amount of benefits for cities that have test-run UBI:
People became richer, smarter, and healthier
Children’s performance in school improved
Hospitalization rates decreased
Domestic violence rates decreased
Rates of mental health complaints decreased
Crime was reduced
And to the surprise of many: people did not simply quit their jobs.
Only two subsets of society work less given a stipend -- children and new mothers. Even here, the long-term benefits can be seen. Children work less because they are able to stay in school longer, and new mothers are able to better care for their newborns.
Sometimes, what appears to be immediately gratifying (e.g. turning down a welfare recipient) has long-term consequences. By that same token, what may be best for society will take time to discern. As a collective, what have we been striving for, if not to make the lives of everyday citizens better? We now live in an era where it is possible to do so under a capitalistic umbrella.
A Fun List of Basic Income Advocates Both Historically and Presently:
Martin Luther King Jr - Civil Rights leader
Friedrich Hayek - Austrian economist
Milton Friedman - American economist
Thomas Paine - One of the Founding Fathers of the United States
Neil deGrasse Tyson - American astrophysicist
Mark Zuckerberg, Jeff Bezos, and Bill Gates - Facebook, Amazon, and Microsoft founders
Larry Page - Co-founder of Google
Andrew Yang - Presidential candidate
Elon Musk - CEO of Tesla
Pope Francis - Pope of the Catholic Church
Stephen Hawking - English theoretical physicist