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I have always thought that by focusing on income or wealth--e.g., the power to purchase rival goods--we've overlooked the importance of nonrival goods on people's well-being. A poor kid who lives next to a library and a park is much better off than a poor kid who does not. And yet, giving kids access to libraries and parks doesn't move the needle if you're only focusing on income.

However, I find the specific examples mostly bizarre. Yes, the market provides ubiquitous wifi and free video games and in this way the market provides for the poor. But most of these examples assume a large, anonymous community. If you live near one or two stores, you can loiter for a while but eventually people will learn you're not spending much money.

If a lot of non-payers begin to use the nonrival good, stores can and do make choices to turn their nonrival goods rival--requiring bathroom keys, sharing wifi passwords only with paying customers, requiring hotel keys to get into the lobby, or simply asking loiterers to leave. In these scenarios, poor folks benefit from nonrival goods provided by the market only if a preponderance of people are payers.

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The public libraries in Baltimore would get overrun with homeless or rowdy youth.

Open to the public = think of the worst people you know nearby.

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The truly poor people I know would not recognize the world you're describing. They would not feel comfortable sitting in the lobby of a Four Seasons as one example. And being truly poor is extremely time consuming.

I found this post highly perplexing, as in if this is his worldview, how can I have confidence in other posts.

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David you have succumbed to mood affiliation. “He’s saying being poor in a market economy isn’t all bad! He must think it’s easy to be poor!”

No one said that. The point is that it’s better to be poor in a free market than the other options. What can you compare it to?

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All his examples are unrealistic. He's comparing his experience as an academic to the experience of what I called the truly poor.

What threw me off was his imagining that the impoverished had all the options he listed available to them. As a practical matter they really don't.

Yes, it's better to be poor in America than in many other countries.

But I read the post again and i found it even more stunningly ignorant.

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He also started by saying alittle money can go along way plus one can find income in a market economy.

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Jul 12, 2023
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As i've said in other comments, in addition to money, for the truly poor time is a scarce resource. Many poor people are also ashamed of being poor.

For example, the number one reason the food insecure do not go to food pantries is the stigma. the number two reason is it consumes too much time.

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A lot is hinging on “truly poor”. Are there people who are so poor that they can’t hang out in a mall or a barnes & noble? Perhaps, but I suspect the intersection of that group and addicts/extremely mentally ill is large and these issues are likely more salient than income.

A better working definition of “poor” for this discussion would be income in the bottom quartile or perhaps eligibility for antipoverty benefits like section8, food stamps, medicaid, etc… As a PhD student in the early 00’s, my family was in this category- family of four living on 15k/yr. Wic and medicaid were really helpful. Our outings were to the mall, bookstore, library, and other stores largely to have a safe and comfortable place to hang out.

Are there people who are worse off than we were? Sure. I don’t doubt that, but the lower quartile of people have access to a lot of great things for free because of our capitalist society. It’s not perfect, but it’s pretty good.

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I wonder if you have any sense of what “poor” means in America. It doesn’t mean that the poor will always be poor, or that the poor have no options available to them. Where this gets more complicated is for those who have serious drug dependencies or mental illness - in these cases there are indeed far fewer options.

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I think you are correct that (many) poor people would not be comfortable there. Where is this discomfort coming from? Some possibilities:

(1) They are genuinely worried about being asked to leave (a fear can be genuinely held even if not justified).

(2) Wealthy patrons will be rude/condescending to them. This seems unlikely to me; far more likely that the wealthy patrons just ignore them -- which may not be the peak of Charity and virtue, but isn't a dramatic problem that would ruin the space.

(3) They are concerned with relative poverty more than absolute poverty, and the nice, wealthy setting emphasizes their relative poverty.

Other ideas?

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There's a weird difference between College student poor and Blue collar poor, where college students are actually poorer in terms of family members/$ earned yet college students feel "richer" in some hard to measure intangible way.

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Doesn't seem intangible to me. It's the difference between a social network filled with highly productive personalities willing to help, and a network filled with dysfunctional personalities asking you for help. Most of what keeps people poor is their family and other social ties, and the cycle of crises that results.

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We all make choices some good some bad but how do you know which you made? Sit in the four seasons and listen to your thoughts.

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With regards to malls, I can attest that this is not just in the first world. The mall industry is actually thriving in the Philippines! Unlike North America.

They search your bags at the door, but I have never noticed anyone being turned away or kicked out for looking or smelling too poor. In Canada, I've seen people kicked out of malls but that seems to be mostly related to drunk or disorderly conduct, not for being poor in and of itself. Maybe Filipinos are just more well behaved than Canadians. They deserve their free aircon! 🙂

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I think its easier to be poor when:

1) You are not the archetype of someone that would be poor.

2) You know that your poverty is only a temporary state of affairs.

Young future professionals know their poverty is a temporary state of affairs on their way to a full and enriching life. They may even enjoy the free time that comes with little responsibility at that age.

But imagine being in a dead end loser job at forty all alone. Would walking around the mall and watching Netflix be satisfying? We tend to think of poor people sitting around watching TV all day as living unfulfilling lives.

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I agree that such a life would be unfulfilling, but the issue wouldn't be absolute material poverty. No economic system (capitalist, communist, or otherwise) can guarantee meaning and fulfillment; if such a system provides abundant material wealth it is doing its job.

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I'm not refuting any of that. It's never been better to be poor.

I'm simply saying that the entire post seems to dodge the question of what is so dissatisfying about being poor today by saying "well, when I was a poor young college student I enjoyed going to Barnes and Nobles, so what's everyone complaining about."

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The point of the post isn't to claim that everything's fine for poor people. It's just to show that capitalism does provide some things for free to the poor. This partially undermines the claims coming from communists that capitalism hangs the poor out to dry.

But I think that last point is really self-evident. Through a combination of charity, opportunity, and whatever you call the things described in this post, the poor in America are far better off than those in communist countries. The results speak for themselves.

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Does anyone important claim that communism provides a better standard of living for the poor than capitalism? Is this an idea that has major political sway affecting our lives? Is anyone reading Bryan Caplan's blog considering if communism is good for the poor?

I think talk like this seems out of touch and pointless. There is a link below to what its actually like to raise a family on not a lot of money, and I don't think "free wifi" is at the top of a persons mind when they spend 50% of their income to try to live in a tiny apartment outside the hood, have to constantly worry their beat up old car will die on the way to work, and can't afford their medical deductible if they get sick.

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Poverty IS relative, and that's more of a problem than a solution. We're social creatures, and the average person is hardwired to be miserable even in luxurious abundance if everyone he perceives around him is doing far better. I'm not using the masculine third person singular just for grammatical concision - I speak particularly of the average man, whose opportunities for mating are determined more by relative than absolute poverty.

As someone I read many years ago was saying about poverty in the modern world, "Three bowls of rice a day somewhere everyone else has two bowls is abundance. Three bowls of rice a day somewhere everyone else has a fully rounded and varied diet is poverty."

Note that I'm not advocating for non-market solutions to this problem, and in fact I'm not sure solutions can exist: even if every man had exactly equal material wealth, the half of below-average height would be immiserated without the possibility of earning enough to make up for it.

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It is the combination of a respect for individual liberty with the enforcement of peacefully-acquired ownership rights that raises people above poverty, not merely a freedom to buy and sell.

The misery that flows from not having basic needs met is qualitatively different from not being able to afford the latest iGadget, etc., so the category of "poor" does mean something specific in a subjective psychological sense, even if economic theory only sees income levels in relative terms. For some people, not having a sufficient earnings is a real problem.

However, for adults not being in control of one's own life is a source of misery too. The notion that a welfare state can eliminate poverty by guaranteeing a minimum level of benefits to everyone runs afoul of the fact that being dependent on patrons (especially an impersonal bureaucracy), especially if you haven't earned their good will, doesn't really give an impoverished person a fuzzy-warm feeling of security about where their next dinner is going to come from or that they will get to keep a roof over their head.

Economic security is not simply a question of getting enough money to satisfy one's essential needs; it is having confidence in one's ability to _earn_ enough money without having to be at the beck and call of a particular master. Laissez-faire capitalism offers no guarantees of economic security, but the personal autonomy made possible by liberty and property is the only social condition that is consistent with the full elimination of the misery of poverty. From a psychological point of view, treating adults like dependent children is not a solution to the problem of poverty.

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You kind of need a car oftentimes to go to the mall so you can’t be that poor

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You can take a bus. Or a jeepney. In my experience, a Jeepney to the nearest mall is rarely more than 20 pesos. Unless you're REALLY out in the Province! 😛

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Not if sufficiently poor

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Well, if you're "sufficiently poor", you can sleep in an underpass or make a home from scraps in an "informal settlement" within walking distance from a mall.

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Fair point but they might throw you out eventually especially if you smell in a certain way

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>“Markets are great… if you have money to spend.”

For virtually all of mans 300K years, virtually all were dirt-poor, mortality averaged late teens-30 years and near-starvation was a daily experience. 300 years of markets decreased that to less than10% globally. Amazon did not deliver daily meals to hunter-gatherers. The hidden pseudo-scientific context of anti-market views is the Garden Of Eden, later known as communism and Progressivism. It's impossible and it causes sustainable poverty. Markets are morally and economically justified because they provide the maximum possible benefit to productive people. They indirectly, unintentionally, provide the maximum possible benefit to unproductive people also because of their benevolence and vast productivity. Try being poor and sick in a non-market economy. And look at all the stuff given away free on sidewalks and on the Craigslist Free site. The anti-market view is the hidden claim that anything less than egalitarian prosperity is immoral. Such a claim should be made explicit and ridiculed, not studied w/science. It has no more scientific validity than a "master race" or "God." Rightists fear the markets requirement for independent minds. Leftists are simply nihilist destroyers.

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Being poor puts great stress on time. Time for them is money in a more brutal way than a college student or lawyer, accountant, etc.

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I think you need some data, even anecdotal, to back up your claim that a poor person can enjoy free unlimited WiFi in malls or hotel lobbies. My assumption is they are often asked to leave. But I don't know. I just finished Orwell's Down and out in Paris and London and I'd love to see something like that written in the 21st century.

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I see what you mean about the Smithsonian article. Orwell would have done a better job. But still, thanks for the recommendation.

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The resident contrarian post was great! Thank you. Now on to the Smithsonian article...

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I agree with everything but still contrary to you I think I still think some form of income distribution is necessary. Mostly some form of UBI. It’s a tax relief for rich segments of society and provides more utility for the poor classes than the cost burdened by it on rich classes

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Selfishness is a virtue....There has never been a rational defense of altruism.

-Ayn Rand

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On the individual level. True except for the case it’s selfish to be altruistic and it gives you good feelings, but for a government this doesn’t matter. It matters more to maximize the utility of its citizens with the limited resources it has

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Agreed, in your hidden context of social subjectivism, ie, social approval. If, however, you focus your mind onto reality, selfishness is furthering your life as a long-range whole. And altruism is self-destruction, rationalized by the intention to help others even when it hurts them. The economics of altruism applies as sustainable poverty.

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It is rational to be selfish but who is actually rational. I am not to that extent even though I am aware that I am not and I know no one who really is in that sense rational.

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IF you want to live you SHOULD focus your mind and reason, ie, put your experiences into logical categories to guide thought and action. This is a fact of common human experience. You can attempt to escape it w/mysticism and subjectivism but reality is real. Either a farmer knows how to farm or he dies.

MORAL VALUES

REASON: IDENTIFICATION AND INTEGRATION OF PERCEPTIONS

PURPOSE: CONSCIOUS GOAL-DIRECTEDNESS

SELF-ESTEEM: INVIOLATE CERTAINTY THAT ONE’S MIND IS

COMPETENT TO THINK AND ONE’S PERSON IS

WORTHY OF LIVING AND HAPPINESS

MORAL VIRTUES

RATIONALITY: FULL MENTAL FOCUS IN ALL ISSUES

INDEPENDENCE: LIVING BY THE WORK OF ONE’S OWN MIND

INTEGRITY: LOYALITY IN ACTION TO ONE’S CONVICTIONS AND

VALUES

HONESTY: REFUSAL TO FAKE REALITY

JUSTICE: OBJECTIVELY JUDGING MEN’S CHARACTER AND ACTIONS

AND ACTING ACCORDINGLY

PRODUCTIVENESS: RATIONALLY SHAPING MATTER TO FIT ONE’S

PURPOSE

PRIDE: COMMITTMENT TO ACHIEVE ONE’S OWN MORAL PERFECTION

CONFIDENCE: PRACTICAL FORM OF BEING TRUE TO ONE’S

CONSCIOUSNESS

COURAGE: PRACTICAL FORM OF BEING TRUE TO EXISTENCE

TRADE: VOLUNTARY EXCHANGE OF MATERIAL AND SPIRITUAL VALUES

Atlas Shrugged-Ayn Rand

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Do you follow your own advice? Like I know I am nice even if I don’t profit from it or even end up being hurt by it. I wouldn’t respect someone else too who would for example hurt people even if it’s rational for them. So I see that problem with what you described

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“that’s why billions globally want to move to the world’s most market-oriented countries.” A migration which will make those countries markedly less market oriented!

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Anyone with any money to spend is a market. People all over the world are making and selling valuable products just for people with very little money to spend.

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A PhD student is not truly poor. it's a passing phase.

Of course you were comfortable wherever you wanted to go.

True poverty has to do with the lack of any prospects of ever escaping poverty.

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If the arrow of fortune continues its multi-century trajectory, in several years when any fast food worker can buy teslas as cheap as an iPhone (ok, so wherever it is that they will then “work”), we’ll still be hearing just how much better off the incredibly influential rich people really are. And, they will say this as if none of us were ever bothered to listen to the argument. They’ll be teaching us something we never heard before.

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The leading quote makes an implicit comparison that fails when you make it explicit. Pick some non-market and try to make the sale statement. “Communism is great ...” well, no, it wasn’t. Ever. So it pretty much becomes “‘Non-market isn’t great ... even if you have money to spend.”

My one exception is “Non-market is great ... if you already have political power.”

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