Poor Paternalism

680px-Spool_of_stringIf you ever want to derail a conversation about poverty and the poor, you only need to accuse someone of being paternalistic. Merrian-Webster defines paternalism as “the attitude or actions of a person, organization, ect., that protects people and gives them what they need but does not give them any responsibility or freedom of choice.” Not a very flattering definition. It seems that paternalism has an image problem. Is it deserved?

Le’s turn to Do-Goodernomics to find out.

In any market, before a transaction can be completed, two questions are asked. The seller asks “Will I get paid?” And, the buyer asks “Will I get what I paid for?” Both need to answer “Yes.” Getting to “Yes”  and “Yes” in any market can be a challenge. In the market for good, it is downright difficult.

As a do-gooder, with your goal of moving as many people out of poverty as possible with your $100, you are a buyer in this market. The poor mother of two who has promised to use your $100 to send her two kids to school is a seller. Earlier you negotiated the following terms of trade: 3 hugs, many smiles, 1 kiss on the cheek, and a promise to send her kids to school in exchange for your $100. However, before exchanging the envelope full of cash, you each ask your respective questions:

  • You ask “Will I get what I paid for?”
  • She asks “Will I get paid?”

Given that your $100 is transferred immediately, she can easily answer “Yes.” Her hugs, smiles and kisses may follow shortly after receiving your $100; however, when it comes to delivering on her promise to send her kids to school, there is a delay. It could be a day, week, month or year. It really does not matter. Any delay, can keep you from saying “Yes.” And, it should.

During the delay, members of her household, extended family, and/or community may exercise a rightful or customary claim to the $100. Or, it could be stolen. Or, it could be “taxed” by local authorities, official or otherwise. So, how much of the $100 will actually find its way toward paying school fees? The answer depends on how much bargaining strength she has relative to others. This includes corrupt officials, local gang members, and her husband, children, siblings, parents, grandparents, cousins, nieces, nephews, uncles, aunts, in-laws, neighbors and friends. And, without a safe place to store the $100, Mother Nature could stake her claim as well. It could be swept away in a flood, lost in a landslide, or engulfed in an earthquake.

Even if we assume away all these other claimants, during the delay, she still has to bargain with herself. In the moment, when she is staring you in the eyes, her promise to send her kids to school may be honest and true. However, once she is holding an envelope full of cash, she may give into temptation and dedicate a portion of it or all of it towards the consumption of empty calories and entertainment. Or, there may be a crisis in her household or that of a family, friend, or neighbor. And, with limited access to formal insurance markets (auto, home, medical, life) and in the presence of inadequate public safety nets, lackluster infrastructure, and houses made of less than robust building materials, the lives of the poor are populated with crises. And, attending to those crises usually means turning to each other for financial assistance.

So, you may find yourself asking many questions. Does she have enough bargaining power in her household, extended family and community? Does she have a safe place to store $100? Does she have enough self-control to follow through on her promise? Does she have the strength to turn away others in their moment of need? Questions, questions, questions. All of them erode your trust. All of them make you question the credibility of her promise. How can they not?

We face similar trust and credibility issues when buying a car and hiring a plumber. However, when buying a car we can turn to Consumer Reports. When hiring a plumber we can turn to Angie’s List. And, when a seller does not follow through as promised we can report them to the Better Business Bureau, write a scathing review, or take away one of their stars on e-bay. Knowing that the seller knows that we have this recourse lends credibility to seller’s promises and helps us get to “Yes” in these markets.

In the market for good, however, you have no Angie’s List, e-bay rating system, or Consumer Reports. And, the poor have no Better Business Bureau Seal of Approval with which to signal their credibility to prospective do-gooders. The poor only have their promises, which as we have discussed lack credibility. So, in turn, we create conditions, attach strings, and transfer goods in kind instead of cash, if we decide to give at all. In other words, we delimit choices and curtail their freedom to choose. Paternalistic? Yes. Understandable? Yes.

Who knows, she may welcome some conditions and strings. Indeed, they may empower her to say “No” to herself and to others whether they are in need of her assistance or not. I know I welcome them sometimes.

So, does paternalism deserve its bad image?

Shawn Humphrey, the Blue Collar Professor (@blucollarprof)

Other posts in the Do-Goodernomics Series:

Post #1: Do-Goodernomics
Post #2: FS  DOGUDR ISO PR PERSON
Post #3: Making the Poor Pay

Stay tuned for more posts!

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