Free to choose (unless you’re poor of course)

Source: Epic Times
The freedom to choose is a privilege of the wealthy

Money buys you choice. It means you get to shop at Gap, where it’s easy to navigate the tidy rails of clothing, rather than Goodwill*, where you have to sift through every item on a rack to find what you’re looking for. It means you get to live in a home that doesn’t open directly on to the street, instead of a tightly packed row house where people can see into your living room when they walk past. It means you can ponder the vast selection of items on offer at a ‘make your own’ salad bar, instead of taking a pre-made tray of food at a dining hall that doesn’t take special requests. The freedom to choose* is a privilege of the wealthy.

There’s some indication that the state thinks that none of us are good at making the right choices. That’s why they make some decisions for us. Like making high school education compulsory, because it’s good for our future well-being. Or putting fluoride in drinking water because it’s good for our teeth.

The state leaves it up to us to decide what we do and how we spend our money. That is, unless you’re poor

But beyond that, the state leaves it up to us to decide what we do and how we spend our money. That is, unless you’re poor. Then you’re told what to eat (dining hall). You’re told where to shop (Goodwill). You’re told where to live (public housing).

Is mandating the best way to support those living in disadvantage? There is evidence that donors who want to help those in need like that their money is tied to a specific action or end-goal. HandUp, a tech start-up provides $25 gift cards that donors can give to the homeless in place of cash. These cards are exchanged for vouchers that can be used to buy groceries, clothing or bus/train tickets but have no other cash value. I’ve given these cards out myself and enjoyed the process of meeting with folks on the street, learning their names and knowing that the card will go towards basic needs like food and clothing. HandUp also offers a platform where individuals can raise money to address specific challenges they are trying to overcome, like paying for rental assistance, car repair or basic needs.

The key to better choices is to remove the poverty constraint, not to make choices on behalf of the poor

Imposing how money can be spent would be the right step if we think the poor make worse decisions than the wealthy. And some have been quick to jump on the research that the experience of poverty lowers a person’s IQ by around 14 points. But what these experiments also show is that if a person doesn’t feel poor, then their decision-making capabilities are the same as everyone else’s.

So the key to better choices is to remove the poverty constraint, not to make choices on behalf of the poor. Only then would we give people the freedom to choose. That lays credence to the case for providing unconditional cash assistance or a basic income. If it was set at a level that removed the poverty constraint then we should see an improvement in decision-making.

You may be concerned about the work incentives of a basic income. If so, think of it as a negative income tax, that pays out to people below a certain level of income and tapers off as they start to earn more. If you still like the idea of linking money to action, then experiments have shown that enrolling parents in unconditional cash assistance at their children’s school and calling it an educational support program, can increase attendance, even if the receipt of cash is not explicitly tied to school participation.

However it is set out, a basic income would target the philosophical difference between how we treat those with money, and those without. Choice would no longer be an option available to purchase only by the wealthy. It would be a basic right.

*Goodwill provides invaluable work opportunities for disadvantaged communities and goods at affordable prices. My challenge is about the experience offered to patrons of their stores versus ‘higher-end’ outlets.

**The economist Milton Friedman wrote that state intervention should be limited to enable private citizens to have the freedom to choose. In practice, that would only appear to be the case if private citizens are considered sufficiently wealthy. If you’re resource-constrained, decisions appear to be taken for you.