My new year’s resolution is to spend more time reading books and less time reading on the internet. Obviously, it would be dangerous to transition directly from screen to paper so, as an intermediate step, I’m reading Poor Economics on my wife’s Kindle.
I’m some way in and one thing that strikes me profoundly is that three very commonly held views about the poor are simply untenable based on the evidence:
1. The first of these is that the poor always make the right choices (or, at least that they’ll do so if they are free to do so). This view underpins the proposed solutions to under-development both of free-market economists and radical leftists, as well as (some of the) arguments used by those promoting participatory development. And yet it’s clearly wrong: poor people in developing countries make mistakes. Of course it doesn’t automatically follow from this that someone else ought to, therefore, be making decisions for them. People abuse this sort of power and experts make mistakes too. But it does suggest that simply giving the poor their say, either through market mechanisms, participatory planning meetings, or anarcho-socialism, isn’t going to solve the problems of under development.
2. On the other hand, the view – held mainly by armchair conservatives – that poor people are poor because of their mistakes, is also utterly wrong. We all make mistakes and if mistakes caused poverty we’d all be poor. What’s more there’s no evidence that the poor make more mistakes.
3. The idea, depressingly common in parts of academia, that people in developing countries are profoundly, culturally different from the rest of us – so different as to justify cultural relativism or anti-development thought – is also utterly wrong. Actually, it turns out that poor people have similar wants and preferences to everyone else. They are just less able to meet them.
I wouldn’t say that Poor Economics is a perfect book but, by reflecting the complicated realities or the lives of poor people, and for showing them to be remarkably similar to the rest of us, it is certainly a very good book.