Wednesday, 9 February 2011

Incentives matter: the poor and poor incentives file

The most compelling explanation for the marked shift in the fortunes of the poor is that they continued to respond, as they always had, to the world as they found it, but that we — meaning the not-poor and un-disadvantaged — had changed the rules of their world. Not of our world, just of theirs. The first effect of the new rules was to make it profitable for the poor to behave in the short term in ways that were destructive in the long term. Their second effect was to mask these long-term losses — to subsidize irretrievable mistakes. We tried to provide more for the poor and produced more poor instead. We tried to remove the barriers to escape from poverty, and inadvertently built a trap. - Charles Murray, Losing Ground, p. 9

2 comments:

Stevil said...

do you think its a fair statement to say"the gap between the rich and poor mid class has risen. due to incentives not to save.the goverment will pay my pension ect.

Stevil said...

or would the incresed specialization of the work force be the main factor.