Wednesday, 13 May 2020

Short-term thinking and poverty

I watched a very interesting TED talk a while ago, about poor people and short-term thinking. It doesn't seem to matter - according to the presenter, Rutger Bregman (14 Jun 2017) - if we are short of time, money, food or sleep: when we are 'poor' in these areas, our time horizon shortens, and we make worse decisions than we would make if we weren't poor.

Rutger talked about a study done in India with sugar cane farmers who had 60% of their income delivered at harvest time. For half the year they were comparably wealthy: for the other half the year they were relatively poor. The researchers measured the IQ of the farmers at the time of greatest wealth, as compared to the time of greatest poverty, and found that their IQs had decreased 14 points when they were poorest.

What the researchers found is that with poverty of any type, we become short-term thinkers, and appear less able to plan for the future, to defer what we can have now, for a mythical time which may never come. I am guessing that poverty triggers a type of flight or fight response in our little button heads. Rutger (14 Jun 2017) referred to this as the scarcity principle (Shafir, 2017).

Rutger (14 Jun 2017) quoted George Orwell, who wrote in Down and Out in Paris and London, "the great redeeming feature of poverty: the fact that it annihilates the future" (1933, p. 20). As you can see, George thought that obliterating the future was a good thing. The rest of us, not so much.

Overall, what Rutger (14 Jun 2017) presented was a compelling initial argument for a universal basic income, citing a town in Canada, Dauphin, which had done just this in the 1970s (until the Canadian national government changed). Health costs were lowered, educational markers increased, crime decreased, and people were happier. The data is there (Forget, 2011).

I have written about a universal basic income before (here), and personally would like to see it happen. However, it needs to be a country which has a strong sense of social responsibility, and a drive for equality. I suspect it is going to be Denmark, Norway, or Finland, which finally takes the first step. I hope it might be New Zealand, but that is wishful thinking.

Sweden has experimented with it. Switzerland voted on it. Someone simply needs to do it, and the rest of the world - except the Americans - will follow, because it is the right thing to do.


  • Bregman, R. (14 Jun 2017). TED: Poverty isn't a lack of character; it's a lack of cash.
  • Forget, E. L. (2011). The town with no poverty: The health effects of a Canadian guaranteed annual income field experiment. Canadian Public Policy, 37(3), 283-305.
  • Orwell, G. (1933). Down and Out in Paris and London. Harcourt Brace Jovanovich, Inc.
  • Shafir, E. (2017). Decisions in poverty contexts. Current Opinion in Psychology, 18(12), 131-136.

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