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Chapter 10 - Poverty
Poverty can be defined as a condition of deprivation due to economic circumstances.
It has both geographical roots such as high disease burden and shorter grwoing
seasons in the tropical regions of the world and the social cause ranging from war to
corruption, from segregation and ghettoization to the sometimes perverse
incentives of social policies
This deprivation may be absolute or relative but is generally thought to be severe
enough that the individual in this condition cannot live with dignity in his or her
The culture of poverty
The culture of poverty argument was that poor people adopt certain practices that
differ from those of middle-class, "mainstream" society in order to adapt and survive
in difficult economic circumstances.
These practices may includes illegal work, multigenerational living arrangements,
multi-family households, serial relationships in place of marriage and the pooling of
community resources as a form of informal social insurance (swapping)
The argument is that people are in the lower class because they have the personality
traits of people in the lower class. This is called a circular argument
Many were relieved that the society wasn’t to blame but the people in the lower
class were responsible for their own pathological poverty.
Welfare was one of the supposedly self-defeating cultural practices of the poor.
Reliance on the government created a sense of helplessness and dependency, and
hindered entry into the formal labour market when the economy picked up. (not
Negative income tax
The negative income tax experiment: in the late 1960s and 1970s the U.S. conducted
its most ambitious social experiment.
Scientists enrolled poor people on treatment and control groups. The control group
got their welfare checks or their wages as before, whereas the treatment groups
received a guaranteed check.
The government reclaimed the money through taxation until a certain crossover
point at which households would start paying "positive" taxes hence the term
negative income tax
The study's results confirmed the worst political fears of the left: in the treatment
group, women left their marriage in droves because they were no longer financially
dependent on a man and unemployment spells increased in duration.
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