A Case For Giving Money To Those Who Are Bad With Money

This is a short lesson, but one I return to again and again — a lesson I learned from Rutger Bregman in his book Utopia for Realists.

The Assumption

It’s easy to believe that poor people are poor because they make bad decisions.

Firstly, this assumption helps us make sense of why poverty exists, because we know from experience that bad decisions lead to bad outcomes. It gets us off the hook for living happily alongside poverty, after all, we are where we are in life because we have made better decisions than those who are not doing as well…

“Poverty is a personality defect.” — Margaret Thatcher

Secondly, we see evidence of poor people making bad decisions. We see homeless people being unproductive, we see poor teenagers dropping out of high school at a higher rate, and we see crime and anti-social behavior accruing in low socio-economic regions. However, as discussed in Saving Lives Reduces Over-Population, correlation isn’t causation, and sometimes a counter-intuitive cause is at play.

The (counter-intuitive) Reality

But, while bad decisions can lead to poverty, it turns out people in poverty might also make worse decisions because they are poor.

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