Guest Post: Charles Karelis

On paternalism and poverty

Photo by Sincerely Media on Unsplash

People have always succumbed to temptation. Asking God not to lead us into temptation hasn’t worked, and since the beginning of time, men have in fact been drinking alcohol and eating too much, spending prodigally, lusting after forbidden women; since the Surgeon General’s report on smoking, we can add smoking to the list as well. Intemperance is perennial.

In each of these cases, bad consequences flow from giving in to the temptation. Pleasant as it may be to indulge in the short run, we have strong incentives to resist the temptation—monetary, reputational, medical, and so on.

But all of us do give in sometimes. We read the warning labels, literally and figuratively, but we go ahead anyway. We see the good and do the bad. Sometimes this requires us to turn a blind eye. The government makes the warning labels bigger, our friends caution us about our drinking more bluntly, and we manage not to see and hear. But deliberately turning a blind eye or a deaf ear presupposes we do perceive what deliberately ignore, or why would we be ignoring it? So here too, we see the good and do the bad.

Why are the incentives sometimes not enough to keep us from giving in to temptation? The ancient answer was weakness of the will, or akrasia. Today we are likelier to talk about being irrational, or losing our head. Modern psychology has elaborated a bit on this. According to the modern theory, incentives and willpower both play a role in resisting temptation. The strength of the incentive does matter, of course. Few alcoholics would take a drink if the certain result was instant, painful death, any more than they would drink a fast-acting poison. What’s newer is the insight that will-power isn’t just a static capacity. Some weakness is baked in at the factory, but willpower can also be depleted like a muscle through too much exercise. Saying no to the second dessert makes it harder to say no to the third drink. The good news is that again like a muscle, will-power can also be increased through exercise over time. Practice saying no to the second dessert and eventually it becomes easier to say no to the third drink.

The classic social response to weakness of the will is paternalism, which is to say, keeping people from succumbing to harmful temptations by limiting their choices. It’s called paternalism because society or government figuratively acts like a father trying to save his child from making irrational, self-destructive decisions. Think of banning hard drugs. Of course adults don’t like being treated like children, and up in the red county where I live there are lots of angry yard signs calling for abolishing the helmet law for motorcyclists. Part of the problem is resentment of the people who take on this parental role, who are seen as power-hungry elitists, claiming to know what’s best for everyone else. To mitigate the bad politics of this, economists have advocated something called soft paternalism, or choice architecture, which means guiding choices without coercion. Mayor Bloomberg’s proposed ban on big soda drinks would have made it harder to consume more than 16 ounces at a time. The cookies are hard to reach in the school cafeteria line, while the fruit is easy to reach. Putting aside part of one’s wages for retirement has become the default option, with spending now the less convenient choice. Thus too, we have sin taxes on tobacco and alcohol.

As tricky as the politics of paternalism always are, they’re made much worse by the widespread belief that lower income people have less will-power than middle-class people, making paternalistic policies more appropriate for them. That idea is a paradigm case of political incorrectness, but from what I can see the idea is widely held, even by people who consider themselves liberal.

This politically incorrect notion that poor people need paternalism more than members of the middle class rests on two assumptions. The first assumption is that more than middle-class people, lower-income people, in general, drink, smoke, and overeat more, and more often spend in a boom bust pattern. This is not true in every case, obviously, but as a generalization it is well-supported by statistics. For instance, a recent study showed that sweetened beverages account for almost ten percent of the food budgets of families receiving SNAP or food-stamp benefits, much more than the percentage of the budget spent by non-SNAP families. Studies have also found that neighborhood poverty is significantly correlated with heavy drinking, and people on SNAP drink much more alcohol than others. As for smoking, nearly three-quarters of smokers come from low-income communities.

The second assumption is that poor people have even greater incentives than middle-class people to resist the very temptations we’re talking about. For instance, it is the man with little money who can least afford to show up at work drunk and risk having his pay docked. Likewise it is the man with little money who can least afford the medical expenses that often stem from smoking and obesity. From these premises it is a natural inference that poor people have inherently weak or weakened will-power. In a nutshell, they have more reason to restrain themselves, but they restrain themselves less. From this it’s natural to infer that they most need to be saved from the consequences of their own irrational choices.

My own view is that this politically incorrect conclusion is not only politically incorrect but incorrect, period. Poorer people do not have weaker will-power and a greater need for guidance in choosing what is best for themselves. The argument I have just been laying out is fallacious. Specifically it goes wrong over the question of incentives. Far from having the strongest incentives to restrain their drinking, smoking, and over-eating, the incentives of the poor to restrain that behavior are very weak. They don’t have much reason for self-restraint. Therefore we don’t have to hypothesize any poverty-linked weakness of the will to account for the fact that there is more drinking etc., among the poor despite stronger incentives not to. And if we don’t hypothesize more weakness of the will, we don’t have to impose paternalistic rules on the poor to counteract it. Other responses are much likelier to work.

The late Barbara Ehrenreich was a middle-class woman who embedded with the truly poor, to see what it was like to try to get by on a minimum wage job. Her account, Nickel and Dimed: On (Not) Getting By in America, became a bestseller. She tells a story of trials and tribulations—exhausting walks to work, back-breaking hours scrubbing floors, repeated humiliations, endless bureaucratic runarounds, and filthy living quarters. In sum, she depicts poverty not as an empty plate, but as a plate heaped high—with troubles, miseries, hassles. One convenient metaphor is a multiply dented and scratched car. Another might be a sink full of dirty dishes. Now these analogies make it easy to see that the subjective difference created by a small change in the objective situation of the poor person will be negligible. Would one even notice the difference if a single dent were hammered out, or a single dish were washed? Would one notice if a single dent or a single dirty dish were added? Probably not.

It’s only when we get down to the last few unfixed dents or unwashed dishes that hammering out one dent or washing one dish would bring noticeable relief, and so on. By the same token, if the poor man indulges his taste for drink and has his pay docked, he may barely notice the difference. What’s one more dent in the dented car? What’s one more dirty dish in a sink full of them? For the same reason, if the poor man resists his craving and avoids these consequences, or even gets a little raise, what difference does that make? His basket of troubles is not noticeably lighter. So his incentives are small, and we don’t have to postulate a special inability to resist temptation, a special weakness of the will, to explain his indulgence in the face of incentives to do the opposite. If the appetite itself isn’t small, indulging it may be perfectly sensible. I will spare you the application of this thinking to smoking, obesity, and the other indulgences we started with, so there will be time for an after-dinner drink in the bar.

What policies we should prefer to paternalistic ones if we believe all this? Some people prefer libertarian policies instead, or rather, non-policies. Not me. Cirrhosis, diabetes, lung cancer and their financial effects are problems that mustn’t be ignored. They require a response from society. My alternative to paternalism is changing the incentives for self-control by raising the impact of self-control on the subjective condition of the poor. And that means that the state should try metaphorically hammering out a few more of the poor man’s dents and washing a few more of his dishes, so that the exertion of will that’s not worth it now begins to make a felt difference. Far from undermining the will to resist temptation, this change would fortify it by enlarging the impact of existing incentives.

Now the practical people here may be thinking at this point, “Nice theory, but how about an empirical test?” If what I am saying is true, then giving a little more to the poor ought to reduce the purchase of temptation goods, since the gratuitous cash we donate should increase the impact of the money saved by not smoking, drinking, etc. We’re washing some of the dishes in the sink for them and thereby increasing the value of the will-work needed to finish the job. We’ve enlarged the perceived value of the incentives for self-control. But the conventional wisdom predicts the exact opposite, that free money for the poor will decrease the impact of the money they would save by not purchasing temptation goods, and therefore that free money will increase the purchase of temptation goods. Who cares if I lose my job by showing up drunk, because I’ve got a big fat government hand-out to fall back on?

Two opposed theories, with two opposed predictions. So what do we actually find? I located a number of studies on this, including one from the World Bank, and they agreed. The study from the University of Chicago focused on the universal basic income idea and concluded that “on average cash transfers have a significant negative effect on total expenditures on temptation goods... A growing number of studies therefore indicate that concerns about the use of cash transfers for alcohol and tobacco are unfounded.”

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But even if the theory is true, you may still wonder, who pays for this extra gratuitous dent-hammering and dishwashing? I am tempted to answer in one of the Scandinavian languages, or I would be if I spoke any of them. But my better judgment prevents me from succumbing to self-destructive appetites, so I will leave the topic here.

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Charles Karelis is a heterodox economist. He was a professor of philosophy at Williams College and George Washington University, and president of Colgate University. He is the author of The Persistence of Poverty: Why the Economics of the Well-Off Can’t Help the Poor.

1. https://www.journals.uchicago.edu/doi/abs/10.1086/689575