Economy

Is Poverty Man’s Inherent Weakness?

Poverty is known to be one of the most fundamental problems facing mankind. Half of the world’s problems originate from poverty and most of the world’s resources go into countering it. And yet the problem persists. It finds one way or another to move surreptitiously, propagate itself and project its presence with a deprecating grandeur.  Time and again, from one era to another, even leaders with a brain full of sound economic understanding and a heart full of noble intentions have failed at eliminating poverty. It makes some think, “Is poverty a disease?”, or “Is it a personality defect?”, as the British Prime Minister Margaret Thatcher once called it.

The Belief

The interpretation of Margaret Thatcher, of calling poverty ‘a personality defect’, puts forward the notion that there is something inherently wrong with people themselves and so they make poor decisions in their lives. It stems from a belief that no matter what you do, how much money you give them, or what facilities you provide; they will always end up spoiling everything and finding themselves at a disadvantage. “Lack of Financial Literacy” is what the author of the famous Rich Dad, Poor Dad series, Robert Kiyosaki puts it as.

However, to say that there is something wrong with the poor themselves is an elusive idea. It gives an excuse for the policymakers to shift the blame for their failures onto the basic human nature itself. Behind the guise of this notion is a truth that the policymakers seem to be escaping. And this truth comes from this idea– what if the circumstances that poor find themselves in has an impact on their cognitive functions which defers their ability to make better judgments?

This idea has now also found a scientific basis as researchers from Princeton, Harvard, and the University of Warwick have performed experiments that prove conclusively that poverty itself impedes our ability to make decisions about school, finances, and life; imposing a mental burden akin to losing 13 IQ points. In a series of experiments, it was observed that people who were primed to think about financial problems, performed poorly on a series of cognition tests, saddled with a mental load that was the equivalent of losing an entire night’s sleep.

The Breakthrough

The experiments that lead to these groundbreaking findings were performed in two steps. At first around 400 people from New Jersey from a varying income group of $20,000 to $70,000 were asked to see themselves in a scenario, where their car required either $150 or $1,500 in repairs. They were asked what they would do? Would they pay for the work in one go, look for a loan, or delay the repair? Before giving a response, they were run through a series of “common fluid-intelligence and cognition tests.” In the scenario where the cost was a minimal $150, both rich and poor performed equally well. However, when the number was $1,500, poor people performed far worse on those tasks, while wealthier individuals weren’t affected.

The second test was performed on Indian farmers who engaged in seasonal agriculture. This basically meant that they toiled in a particular season to generate all earnings at once, that would sustain them throughout the year. This meant that they were relatively poor one part of the year (pre-harvest) and rich the other part (post-harvest). It was found that in the state of pre-harvest poverty, they exhibited the same shortage of cognitive bandwidth seen in the American subjects in a New Jersey mall. It was also revealed that it wasn’t the stress that incurred the loss of mental capacity, but something different. The poverty imposed impeded them even when the biological markers of stress (like elevated heart rates and blood pressure) were absent.

The Implications

The implications of these studies can have a visible impact on the developing economies if the results are combined with perspectives that take into account the poor’s urgent needs. For a person who faces immediate challenges of survival, long-term gains are irrelevant. For such a person, a weekly paycheck can do a lot more than an annual basic support income can as proposed by the proponents of UBI. As the nations muddle with the thought of major changes in support policy systems and important decisions await on whether people deserve a service based support or a monetary one, the results of this research should be a major guiding light.

Picture Credits : medium.com

 



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