Cash Transfers

Numerous studies have shown that the best way to help poor people in poor countries is to simply give them money.  Things like aid programs or free food really do not do much, compared to small regular income payments.  When you give people a little bit of extra cash, they spend it in things that improve their quality of life, or they use the money to start a small business.  Some of these programs make the cash contingent on things like medical checkups or having kids attend school, but often these restrictions are not necessary.

However, we also know that giving poor people in rich countries money is not nearly as effective.  Here's a good study that looks at lottery winners. The results:

 A comparison of Florida Lottery winners who randomly received $50,000 to $150,000 to small winners indicates that such transfers only postpone bankruptcy rather than prevent it... Furthermore, the large winners who subsequently filed for bankruptcy had similar net assets and unsecured debt as small winners. Thus, our findings suggest that skepticism regarding the long-term impact of cash transfers may be warranted.

Note that there is selection bias here.  The kind of person who purchases lottery tickets is not going to have the ability to manage money intelligently.  But even then, poverty in rich countries is fundamentally different than poverty in poor countries.

In places like India, you can be a sober, hard-working person and still be poor.  The problem is mainly lack of resources.  Giving people resources can end their poverty.  But in the United States, poverty is mainly an issue of skills.  People simply do not know how to manage money, or how to get and hold a job.  Giving them money will not solve any of their problems in the long run, as the study showed.

This does not mean that poor people here are inherently worse or stupider than poor people in India.  They never learned these kinds of skills because they do not really need to.  Natural selection is still operating in many parts of India: If you do not manage your meager resources well, you and/or your children will starve.  Thankfully we do not have that situation.  People here do not have to be clever just to stay alive.  We support their basic needs, but we leave them in a kind of limbo where they do not know how to improve their life beyond that level.

This is a hard problem.  Giving people skills is difficult, even when they know they lack the skills and want to learn.  If people do not know or do not want to admit that their own habits are a big part of the problem, it become almost impossible to do so.  If you simply take away all support, they will break rather than adjust.

A Logic Named Joe

Some time ago, I read this good short story in an anthology.  It is set in a future world with personal computers that act very much like ours.  I assumed that it had been written in the 70's or 80's, and that the author was intelligently extrapolating the trends of the time.

I just learned that it was actually written in 1946, before anyone was selling anything that resembled a modern computer.  They did not even have transistors in 1946.

You might be tempted to call it 'prescient' but that would be a mistake.  There were thousands of science fiction stories written in that time period.  Most of them were amazingly wrong about what the future would be like, especially where computers were involved.

There is a lesson here: prediction is incredibly difficult. But often, people will only remember the good predictions, and forget the bad ones.  This leads to hindsight bias, where people think that the things that did happen were obvious before the fact.

There is probably a story out there that accurately describes what the world will be like 50 years from now.  But we will not know which story is the accurate one until much later.

Future Shock 5

Here's something I never thought I would read:

 

But if each peasant has to scan her irises every time she picks up her ration...

It sounds like something from some kind of post-apocalyptic cyberpunk book, but it is actually happening right now in India.

Apparently the best way to make sure that people living in conditions of stone-age poverty get enough food to eat involves biometric scanning and massive databases.  We definitely live in a strange world.

The Dark Side of Creativity

Creativity is a common aspiration for individuals, organizations, and societies. Here, however, we test whether creativity increases dishonesty. We propose that a creative personality and creativity primes promote individuals' motivation to think outside the box and that this increased motivation leads to unethical behavior. In four studies, we show that participants with creative personalities who scored high on a test measuring divergent thinking tended to cheat more (Study 1); that dispositional creativity is a better predictor of unethical behavior than intelligence (Study 2); and that participants who were primed to think creatively were more likely to behave dishonestly because of their creativity motivation (Study 3) and greater ability to justify their dishonest behavior (Study 4). Finally, a field study constructively replicates these effects and demonstrates that individuals who work in more creative positions are also more morally flexible (Study 5). The results provide evidence for an association between creativity and dishonesty, thus highlighting a dark side of creativity.

Source (technical academic paper)

From what I have seen, most parent of young children have experienced this. The smarter and more creative your children get, the more likely they are to be dishonest and manipulative.

A word of caution: this does not necessarily mean that creative people are inherently worse people. In a world where everyone had exactly the same morality, and the same desires to do bad things, then creative people would do more immoral things, simply because they had the ability to get away with it. They get the same 'benefit' from immorality as everyone else, but the expected costs are lower because of their cleverness. It is basic economics that when the costs of something go down, people do more of it.

Globalization

We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010.

Source 

This is huge.  In the last five years, a number of people greater than the entire population of the United States has escaped desperate poverty.  The increase in total human well-being is larger than if everyone in this country had their income doubled.  Even if every bad thing that people say about the global economy was true, it would have been worth paying that price to make this happen.

This amazing improvement in people's lives did not come from aid or charity.  It came from trade.  The best thing that you can do for poor people in other countries is to buy things that they are making.  Thanks to trade and the global economy, and the side effects from more wealth flowing into poor countries, more people than you can possibly imagine now have better lives, better jobs, more self-respect, and a better future.

Anyone who wants to stop trade to protect a few American workers threatens this prosperity.  It is morally wrong to produce something in the United States when it could be produced more cheaply in a poor country.  Doing so means taking money away from poor people and giving it to rich people. It also means wasting the planet's resources; paying American wages means subsidizing an American's ecological footprint.

The world is changing in a lot of ways, and almost all of them are improvements.  This century, like the previous two, will generate more prosperity than we can possibly imagine, and this time the gains will be shared with almost everyone on the planet.

Recycling Idiocy Part 2

Earlier, I talked about how they removed the trash cans from our offices.  Last week, they implemented a permanent change.  They took out the old trash can and replaced it with a large paper recycling bin and a small trash can.  Some people complained, but I did not have a problem with it.  The smaller trash can was a minor inconvenience, but I figured it would not hurt to go along with it.

But then I learned that they are not going to empty the small trash cans.  A janitor comes by and empties the recycling bin, but leaves the trash untouched.  We are supposed to go out and empty it ourselves.

So of course I now have a very strong incentive to dump all of my trash in the recycling bin.  That is the only way for it to get emptied out.  We are basically going to ignore the trash can now.

I really do care about keeping a healthy ecosystem and using resources efficiently.  I always applaud useful initiatives that reduce waste.  When they asked for budget-cutting proposals, I sent an email recommending implementing a system to force people to pay for printing.  All people should pay the cost of their activities, and letting people print for free was creating a mountain of waste.  We now have such a system, and it has worked well.

But paper recycling is useless.  It is actually worse than useless; it is a costly waste of resources.  Trees are a renewable resource.  You plant them, they grow up and suck carbon out of the atmosphere, and then you chop them down and make paper.  Recycling paper is a messy, polluting, energy-intensive process.  It is actively harmful to the environment, and it wastes money that could be used for better things.

Originally I had thought that throwing trash in the paper bin would annoy our janitors, which is never a good idea.  But now that I think about the paper recycling process, I am fairly sure that our janitors would not be affected at all.  They will just empty my bin into a big recycling bin, which will get tossed into a truck and taken to a recycling center.  That recycling center will face increased labor costs from sorting things out, especially if lots of people act like I do.  This will serve the dual purpose of hiring some local who needs a job and making paper recycling look less attractive.

Admitting Waste

I just got an email from the administration that included the following:

We have remained focused on our core mission and our commitment to academic quality even as we managed the loss of nearly $75 million in state support. As a result, we continue to be a university with high quality and high demand.

So basically, they are saying that we were able to cut $75 million a year without any real negative effects on the university.  We were wasting $75 million each year for the past decade or so.

The rest of the email was asking for volunteers to lobby the government for more money.  This is a farce.  The email basically admits that they did not really need the money.  We would have been fine without it.  They threw away massive amounts of money each year, just because they could.  There was no reason to make cuts, so waste just just building up.

Any organization will become wasteful over time.  You need the occasional burst of pressure to shake things up and restore efficiency.