The dented cars theory

This Boston Globe article from a couple Sundays ago highlights the thinking of philosopher Charles Karelis, who teaches at George Washington University. Karelis argues in his book, The Persistence of Poverty: Why the Economics of the Well-Off Can't Help the Poor, that being poor causes people to think differently about life, to the point where traditional economic theory can't properly explain the incentives that motivate the poor to act in certain ways:

Karelis argues that being poor is defined by having to deal with a multitude of problems: One doesn't have enough money to pay rent or car insurance or credit card bills or day care or sometimes even food. Even if one works hard enough to pay off half of those costs, some fairly imposing ones still remain, which creates a large disincentive to bestir oneself to work at all.

"The core of the problem has not been self-discipline or a lack of opportunity," Karelis says. "My argument is that the cause of poverty has been poverty."

The upshot, for Karelis, is that poverty relief programs can "actually make [poor people] more, not less, likely to work, just as repairing most of the dents on a car makes the owner more likely to fix the last couple on his own." He himself favors the Earned Income Tax Credit.

What might this mean for schools in deeply impoverished neighborhoods? For one, you can imagine that college-prep schools like KIPP, which offer much more support to their students than most public schools, would have a better chance of, to carry on Karelis's analogy, buffing out a lot of the dents.

On the other hand, schools that simply try to teach kids the 3 R's and send them packing at 3:30 pm may be doing the equivalent of installing a new rear-view mirror on a rusting hulk. The point is: the poor aren't just middle-class folks without money. They think differently, and they need different kinds of support. KIPP and similar school models get that.

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February 29, 2008
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