"Charging" is a dry goods column launched by Chuangbang, with the theme of sharing excellent books, movies, business history, management theory, and wonderful speeches, to help you find the most valuable ideas and contents in the massive amount of information.
Wen 丨 Rain Joe
Image source 丨 Figureworm
There are 1 billion people around the world living below the poverty line of $0.99 a day.
Living at 99 cents a day means that their access to information is limited — newspapers, television, mobile phones and books all cost money to buy. As a result, they often become ignorant of the information available to other people in the world.
It also means that many of the world's institutions are not built for the poor. For illiterate people, how do you read a health insurance product that contains a lot of awkward names? How to make a decision based on many details in the case of illiteracy?
Over the past 15 years, in order to find out why poverty is poor and what specific problems poverty will lead to, so that the poor can not escape the "poverty trap" of the strange circle, two professors from the Massachusetts Institute of Technology in the United States have gone deep into the world of the poor in many countries on five continents, surveyed the 18 countries and regions with the highest concentration of poor people, and explored the real root causes of poverty from many aspects of the daily life, education, health, entrepreneurship, aid, government, and NGO of the poor.
The book The Nature of Poverty reveals the economic lives of the poor, which contains rich economic principles.
"The Poverty Trap"
In the movie "I Am Not a Medicine God", it was said, "There is only one disease in this world, called the disease of poverty."
For poverty, most people feel that there is no money, and when there is money, everything is solved. However, poverty creates a range of problems, entering a vicious circle called the "poverty trap".
In terms of planning, the poor will be less concerned about the future, such as vaccinations, insurance, etc., they do not like "delayed gratification", more addicted to "timely gratification". This makes it weaker for the poor, both in terms of safe sanitation and the ability to fight risks, and it is more difficult to accumulate wealth.
On the family side, the poor will have more children, thus satisfying the quantity but reducing the quality, the children will receive fewer educational resources, it will be more difficult to obtain wealth, and so on, never seeing the light of day.
In the economic aspect, in order to control the risk of loans, formal financial institutions such as banks are more inclined to lend to people with controllable risks, while the poor are often excluded, because they have poor ability to resist risks, and they are more likely to fail to pay. Therefore, they can only borrow "usury", because of the high interest rate, it is more difficult to get out of poverty.
In terms of self-control, the poor have relatively worse willpower and self-control, and the book quotes the theory of "willpower depletion", that is, poor people are more likely to "exhaust" their "willpower" because there are too many things that require self-control.
"Self-control is like a muscle: we feel tired when we use it, so it's not surprising that it's hard for the poor to save money," the book says. In addition, the poor live under enormous stress, and the cortisol produced by the pressure makes us make more impulsive decisions. ”
Poverty is a cycle, because the various situations and reactions caused by poverty make it more difficult for them to get out of poverty, and if they want to get out of this cycle, an important point is to improve their cognitive level, read and study, broaden their horizons, and there is a Chinese saying, called: "Poor what can not be poor education."
Amartya Sen, an economist, philosopher and Nobel laureate in economics, argues that poverty leads to an intolerable waste of talent. Poverty does not just mean a lack of money, it deprives people of the opportunity to tap into their potential.
A poor girl from Africa, even if she is smart, may only be able to attend school for a few years at most. She most likely won't be able to grow into a top athlete in the world due to malnutrition, and even if she had any good ideas for doing business, she didn't have start-up capital.
"Ladder of Poverty"
The "ladder" to escape the "poverty trap" exists, but it's not always placed in the right place, and people don't seem to know how to step on the "ladder", or they don't even want to do it at all.
In real life, there are many "strange" phenomena.
Why do poor people buy televisions when they don't have enough to eat? Why do their children go to school year after year and don't learn? Why are they able to start a business but find it difficult to keep their jobs? Why can't the poor end up benefiting from the health care system? Behind this lies a profound economic principle.
The world of the poor, as we see it, is often a land of lost opportunities. Why don't they save up the money to buy those things and put it into places that really make them better off? However, the poor become more skeptical of those imaginary opportunities and of any radical change in their lives.
Their behavior often reflects the idea that any change worth making will take a long time. This may also explain why they only focus on the present, make the day as pleasant as possible, and participate in celebrations on the occasions necessary.
Poor people often reject the perfect plans that people come up with because they don't believe they will have any effect. This is also a theme that runs through the book.
In June 2009, the United Nations Organization for Agriculture (FAO) issued a statement that more than 1 billion people around the world are starving. The "poor" is basically defined as a person who does not have enough to eat.
In his book The Road to Wigan Docks, Orwell points out, "When you're unemployed, you don't want to eat boring healthy food, you want to eat something that tastes good." ”
In the book, he describes how the poor escape frustration: "They do not become angry with their fate, but increase their endurance by lowering their standards." However, they do not necessarily focus on necessities as a result, nor do they necessarily reject luxury goods. As a result, during a period of extreme depression of up to 10 years, the consumption of all cheap luxury goods has increased. ”
These "hobbies" are not impulsive consumption, but their deliberate choices, regardless of how the inner impulses drive them and how the outside world pressures them.
Is aid useful?
For the problem of poverty, can people donate love and more money together to solve it?
Danbiza Moyo, an economist who has worked for Goldman Sachs Investment Corporation and the World Bank, said in his book", "The Death of Aid", that aid does more harm than good: aid stops people from finding their own solutions, corrupts and weakens local institutions, and renders some aid institutions useless.
For poor countries, he argues, it is best to follow a simple principle: with free markets and appropriate incentive mechanisms, people can find their own solutions and avoid accepting handouts from foreigners or their own governments.
What are the ultimate causes of poverty? What role can external assistance play?
Jeffrey Sachs, United Nations consultant and director of the Earth Institute at Columbia University, is also an expert on poverty. His answer to the above question is:
Poor countries are poor because they tend to have hot climates, poor land, malaria and surrounded by land. As a result, it will be difficult for these countries to increase their productivity without substantial primary investment to help them solve these endemic problems. However, these countries are unable to pay the return on investment because of poverty, which is again trapped in the "poverty trap".
In his 2005 book The End of Poverty, Sachs argues that if rich countries provide $195 billion a year to aid poor countries between 2005 and 2025, poverty could be fully solved by the end of 2025.
Why do people fall into poverty? Will one-time assistance make a huge difference in people's lives?
In fact, the really useful way is to think from the perspective of practical problems and find targeted solutions to specific problems, rather than talking about external assistance.
Malaria killed about 1 million people in 2008, most of them children from Africa, ACCORDING TO WHO. Studies have shown that in areas where malaria is highly transmitted, getting people to sleep under insecticide-treated mosquito nets can cut infections in half.
This is also the fundamental philosophical concept behind Jeffrey Sachs's Millennium Country Plan. In the lucky villages, villagers receive free fertilizer, free school meals, free medical services, etc., and each village consumes $500,000 a year.
According to the project's website, the significance of the project is that "the economy of a thousand-year-old village has undergone a period of transition from farming that is only enough for the hukou to self-sufficient commercial activities." ”
Write at the end
Whether aid is useful or not is actually a question of fairness and efficiency. Xue Zhaofeng once put forward two views on this: first, encourage people to create wealth, and society will get better and better; second, behind justice is the consideration of efficiency.
When we discuss the issue of justice, the implication behind it is often that it meets the criteria for efficiency. It is often the rules that make everyone in society active to accumulate wealth, or the rules that enable society to develop healthily, which are the rules of justice. That is, because it works, it is fair.
Fairness and efficiency are often two sides of the same coin.
We can make the world a better place, which may not be achieved tomorrow, but it will certainly be achieved in the future within our reach.
Author of The Nature of Poverty
Abhijit V. Banerjee is a professor of international economics at the Ford Foundation at the Massachusetts Institute of Technology. Esther Duflo is an Abdul Latif Jameel Professor of Poverty alleviation and development economics in the Department of Economics at the Massachusetts Institute of Technology. In 2003, Bannaji and Dufro jointly created the Abdul Latif Jameel Poverty Action Laboratory (J-PAL) and have been guiding it together. The mission of the J-PAL Laboratory is to ensure that the formulation of pro-poor policies is based on scientific evidence, thereby reducing poverty.