Utopia for Realists: And How We Can Get There

Bregman starts this chapter by describing the opening of a casino in North Carolina under the management of the Eastern Band Cherokee people. Many feared that a casino would breed bad habits or place the tribe at the mercy of criminals, but it raised both average incomes and overall quality of life for the community. A nearby expert noted an improvement in the mental health of young Cherokee people and significant decreases in antisocial behavior. In addition, adults showed greater abilities to manage their personal finances and parent their children. These results provide evidence for the conclusion that poverty leads to social ailments such as crime and drug abuse. Conventional wisdom has long held that poverty is the consequence of poor choices and moral failings, and thus the poor deserve their lot; this view concludes that trying to help people who lack the wherewithal to manage their own lives is pointless. A leading proponent of an alternative viewpoint is Princeton psychologist Eldar Shafir, who has shown how poverty exacts a high mental toll on those experiencing it. The constant need to satisfy immediate needs inhibits the faculties necessary for long-term planning. Wealthier people tend to make better decisions not because they are inherently smarter but because they are not subject to the same levels of anxiety, especially regarding finances.

Broad-based efforts to address poverty might seem prohibitively expensive, but they have the potential to pay for themselves by investing in people so that they are more productive and less of a drain on social welfare programs. Educational programs for the poor are as expensive as they are unproductive because job skills do little to alleviate the crushing weight of poverty. This also explains why the poor are least likely to apply for the programs designed to benefit them—they are already stretched so thin that entering into a complex bureaucratic tangle presents little appeal and can be overwhelming. Providing a basic income can help, but the impact will be limited unless policymakers also seek ways to address inequality. Studies regularly show that large gaps between the rich and poor contribute to a host of social ills. Inequality degrades social trust by encouraging citizens to see one another as competitors for relative status, and the more powerful the rich become, the better able they are to bend institutions to serve their interests.

For centuries, many of society’s leaders believed that some people had to be poor in order for others to be rich. At the height of the Industrial Revolution, low wages helped decrease the costs of a country’s exports, thereby giving it a competitive advantage over its economic and military rivals. Now it is evident that wealth begets wealth, along with greater social stability. The state of Utah initiated a program of free housing for its homeless population, which took people off of dangerous streets while saving the public enormous sums of money. A similar program in the Netherlands worked well until the financial crisis of 2007-2008 vastly increased the number of people on the street while sapping the political will to address the problem. Despite this setback, the evidence clearly shows that efforts to remediate poverty work and ultimately save money.