give

Poor people are not reality invariant, give them your money

On Monday I wrote about the reality invariant. Often these people are reality invariant because they can afford to be wrong. Nothing too bad will happen. They won’t be brutalised by the police if they crack down on non-existent crime. They won’t be detained at the border. They won’t discover themselves poor.

Some people can’t afford that level of detachment, people who are poor. In fact often they have few views on policy, they’re too busy. That’s poor people and they’re very practical. That is why I support Give Directly, a charity that gives money directly to poor people, no strings attached.

I’ve written about them on a number of occasions. Just search this blog for more. They find poor households in Kenya and Uganda in areas which have a mobile payments network and give them money. This seems personally the least patronising way of helping people and ideologically the most appealing to me.

But am I being reality invariant? Am I giving poor people money because I want to feel empowering and it reflects my anti-bureaucracy instincts? Well, as it turns out no. I was right all along. Which is a relief. As well as doing regular audits of measured outcomes the Give Directly people also speak to recipients and ask what they want.

It turns out they do want cash. If an NGO offers you a free cow shed you’ll say yes, but if you have the money yourself you might find it makes more sense to buy a water purifier. But if the purifier people are in the village next door and the cow shed people are in town, fuck it, have a cow shed. Why not?

That’s the story Give Directly tell (without the swearing, I added that, for colour) about why they’re efficient. And Give Directly are efficient, but efficiency isn’t all there is to life. Turns out its not just efficiency that the poor need. Giving them money may sound infantalising or like it would breed dependency but that is not the case. Recipients tell a totally different story.

Being given money means that goods which are bought are more valued. If you end up with a cow shed or a water purifier it is because you really wanted one. Rather than infantalising you, being given money is empowering. These aren’t lazy people, they’re often working constantly so the money gives them the power to respond to shocks and gives them the dignity to set their own standards. Rather than buying one big off the shelf NGO supplied thing recipients can shop around for the items they really want.

These people are empowered by money. Commerce and money are great liberators. Luckily a lot of evidence is building up that proves this and that also proves it is an easy gift for you, dear reader, to give. So if you are thinking about supporting a charity, and I believe lots of people are at the moment, then consider donating to Give Directly.

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Photo above taken from Give Directly’s 2013 report.

Making policy for the reality invariant

I like to call a lot of voters reality invariant. I’m definitely not saying they’re stupid, just that their opinions are reflections of their internal world, and are invariant to reality. Policy makers are treating these signals as true statements of their view of the world and want to change the world to satisfy them. Because some people are reality invariant this is doomed to fail. This is my suggestion for the converse of the Lucas critique.

The Lucas critique says that policy made using past observations won’t be effective. If you change policy from that which produced the predictions you’re using to change policy, the policy change won’t work as expected. Imagine FIFA is corrupt (!) and a team bribed it to make headers worth double, because in past competitions it would have advantaged them. Because rules change in a predictable way any previous advantage might vanish as other teams adjust their playing style.

In contrast, voters being reality invariant mean policy changes won’t work because people don’t care about policy. If you make policy to change a real outcome people say they care about but don’t, then a effective policy won’t be successful. You’ll change the targeted outcome, but not please voters. This can be misinterpreted as failing and so policy must double down on reality, even as the reality invariant remain oblivious.

One of the most obvious is immigration. For many people around the  world national immigration controls are not an issue. Around 10% of people think it is an issue at any one time. In the UK, that figure is around 45%.

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This is despite British people agreeing with the rest of the world about their local area. Britons think that immigration is a huge problem nationally, but if everyone went and visited each other they would find out it isn’t.

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For over a decade tighter and tighter immigration acts have been passed to the point where the immigration question has been solved. Short of Ukraine or Turkey joining the EU, or the UK leaving, immigration controls cannot get any tighter. And yet the British public are still not satisfied. [1]

It’s that second graph you should worry about if you’re a policy maker. The British don’t care about immigration. They care about the perception of immigration. British politicians have been very effective at reducing immigration. Only 1% of those who want to enter do so. The public don’t care.

They’re reality invariant. You can change reality but it will have no effect on their voting habits or opinions. You can lament the rise of spin, and I do!, but there’s a reason it’s so important. We’ve reached the effective limit of immigration restrictions and the public are still not satisfied.

Inequality is another area where people are reality invariant. Various policy changes have turned the US into a more unequal country, even as European states have held of the worst excesses of liberalisation. The FT have results of a survey that shows nobody understands how unequal their country is. Americans believe their country is more equal than it really is, and Europeans think their countries are more unequal than they really are.

“The results of the study suggest that, in the political debate on income distribution, it is often not the facts that count but [perceptions],” says Professor Michael Hüther, director of the Cologne-based IW economic institute, which carried out the research.

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In Hungary belief in widespread poverty is supporting the growth of Jobbik and Hungary’s slide into fascist politics. In America belief in egalitarianism prevents help going to the poor. The voters are reality invariant, they are discussing how they feel about reality, not reality.

Crime is the most famous example. Fear Of Crime™ is a major issue. Crime just isn’t.

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The reality invariant voter looks at this and sees fiddled numbers. By 2007 crime was the number one concern for British voters, briefly displacing “immigration” before being engulfed by “the economy.” Despite violent crime falling in half, fear of crime continued to increase.

War is the last area I want to briefly touch on. War, what is it good for? Absolutely nothing, until it’s useful for absolutely anything. Intervening somewhere is a very bad idea, until it isn’t:

It doesn’t matter, how many times your Yazidis get off the mountain without significant UK aid or an entirely theoretical artillery seige of Bengazhi with rapacious house-to-house murders turns into an actual, person-killing, NATO-supported, civilians-running-everywhere seige of Sirte.  There’s always some compelling reason why this war, this intervention, this bombardment, is radically different to all the other invasions and occupations and airstrike campaigns, and why the horrible news always means that there’s no time for rational thought this time before we start blowing that shit up.

I’ve come to you with a problem, and a snappy term to describe it. Traditionally this is where a writer would offer a solution. But not me. Lucas didn’t have a solution, he had a critique. I am also merely pointing out that policy is today being made foolishly. The assumption of policy makers that changing reality will have the desired effect is based on a faulty model. It is a very rational model, but the model is wrong nonetheless. Lots of the public are reality invariant, and you can’t make policy presuming they’re not.

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[1] As Chris points out, the reality is that these policies kill and kill intentionally and purposefully. But this is also a reality most people ignore.

Sex and coal

Reading the below and Lori Adorable I was reminded of an old Chris Dillow post, coal not dole. What would happen if Sweden were successful and ended demand for paid sex?

Some say sex workers will find other work, Lori says this is ridiculous. Lots of sex workers say we need to end violence, not demand. I say, because I’m a bit weird, what’s the evidence from Britain’s coalfields?

Since the beginning of the 1980s the British coal industry has lost around a quarter of a million jobs, largely because demand for coal from deep mines vanished. The analogy isn’t great, but it crossed my mind and I haven’t had a decent idea for a blog post in five months. Sue me. So, it turns out, of the 213,000 mining jobs lost since 1985, 90,000 have not been replaced. The miners were promised that Thatcher’s glorious entrepreneurial Britain would find them new jobs. It did not.

The market failed Britain’s old labour aristocracy and the state did little better. When Thatcher’s job machine stalled at Watford Gap Blair’s public sector investment helped. Of the 90,000 jobs created, many came only because  of intensive investment by local authorities, development agencies, central government and the European Union. More than half of these 90,000 jobs were created since 2001.

If demand for something disappears it should reappear somewhere else. But that doesn’t mean those left without work will benefit. It might be easy to assume the market will allocate labour effectively if a job disappears, but much of the evidence we have suggests otherwise.

Miners were economically organised, politically powerful, physically healthy and ultimately received significant investment in jobs. Despite all this communities remain scarred to this day. What would be the result of a end to demand for sex workers who are more politically and economically isolated, more absent from the media, and often physically and mentally unable to do other work? I’ve had five months off, so I’m a little rusty. I will leave the rest of this nasty little thought experiment as an exercise for the reader.

Iain M Banks on Immigration

I strongly suspect the things people believe in are usually just what they instinctively feel is right; the excuses, the justifications, the things you’re supposed to argue about, come later. They’re the least important part if belief. That’s why you can destroy them, win an argument, prove the other person wrong, and they still believe what they did in the first place.

Iain M Banks Use of Weapons

Well, not actually Iain, and not about immigration, but you get the idea.

Great sentences of our time: sex-selective abortion bullshit edition

It is pretty obvious here that the Indie’s entire article stems from what has to be easily the most spectacularly misconceived and shoddily executed fishing expedition since Captain Ahab went off chasing Moby Dick – and yes, I know that’s fiction, but then so is Indie’s entire fucking analysis.

Unity on blazing form: read his take of the Indie’s sex-selective abortion nonsense.

.@Give_Directly to 1,300 Poor Households in Kenya

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Give Directly are my favourite charity and they should be yours too. They give money to poor people. Not just any poor people, but really poor people in East Africa. There’s a minimum of bureaucracy and they are innovating new ways to remove the bureaucracy which currently exists. It is simplicity itself, and it works. And you can donate this month and double your donation.

Supporting Give Directly gives you the warm glow of helping the most needy people imaginable, but more importantly it also gives you the warm glow of having your ideological predispositions confirmed. If you’re anything like me you just can’t beat it. Donate and you too can bask in the heroin-like glow of confirmation bias.

They regularly audit and they get amazing results. Business and agricultural income increased 28% of the average grant size, implying a 28% annual rate of return. With a doubled donation you’ll be getting a 128% rate of return. Plus mental health improves, crime and conflict doesn’t change, it doesn’t cause localised price inflation and it reduces domestic violence and increases female empowerment.

They’ve also begun using community-based targeting: in a subset of villages, they got the community to help them categorize households by poverty level. Wherever there’s cost and bureaucracy they’re looking for ways to remove it. Wherever there is local knowledge they’re looking to use it. So far:

  • Most people think housing materials are the best indicator of poverty — reaffirming the criteria we already use. Furniture and source of income were also popular.
  • People generally agree on how to apply the housing criteria. When we asked communities to categorize each household as “rich” or “poor”, they agreed in 9 out of 10 cases.
  • Engaging local leaders in the process can help, but also raises a risk that they will ask for “compensation” for tasks they are supposed to do for free.

Honestly, if you’re not supporting this charity (I think this would particularly suit Jackart, Chris and Frances) I don’t know what’s wrong with you. Oh, and they have no marketing budget, so yes, you will have to put up with regular half press release, half begging letter posts here, essentially, forever. Or until we end poverty. So its up to you really.