Morals? Can't afford them.

Noahpinion, Tyler Cowen and others have recently posted about the deserving poor. 

Bernard Shaw played with the idea of the deserving and undeserving poor in Pygmalion, written over 100 years ago.

Pygmalion, more familiar as My Fair Lady, tells the story of a young flower seller, Eliza Doolittle, who is transformed by the linguist, Henry Higgins, into a "lady."

Her no-good wastrel father, Mr. Doolittle, objects to Henry Higgins' adoption of his daughter, and demands appropriate compensation. Higgins, and his friend Pickering, are shocked, "Do you mean to say, you callous rascal, that you would sell your daughter for 50 pounds?...Have you no morals, man?"  "Can't afford them, Governor," Doolittle replies, "Neither could you if you was as poor as me."

Doolittle then goes on to lament the plight of the undeserving poor:

What am I...I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: "You're undeserving; so you can't have it." But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything. Therefore, I ask you, as two gentlemen, not to play that game on me. I'm playing straight with you. I ain't pretending to be deserving. I'm undeserving; and I mean to go on being undeserving. I like it; and that's the truth. Will you take advantage of a man's nature to do him out of the price of his own daughter what he's brought up and fed and clothed by the sweat of his brow until she's growed big enough to be interesting to you two gentlemen? Is five pounds unreasonable? I put it to you; and I leave it to you. 

 Incentives versus needs - there are no easy answers. 

Comments

[Nick Rowe]

"All I want is a room(?) somewhere
far away from the cold night air
ah wou.., ah wou.. ah wou..
Ah wouldn't it be luvverly."

I can almost sing the whole album, from childhood memory.

[vimothy]

The problem with refusing to tell people that they have responsibilities (because: that would be mean and judgemental) is that they end up acting as if they really don't have any responsibilities. With what results, etc, etc.

Unfortunately, this is generally regarded as no big deal by our political class, so long as the undeserving poor continue to vote for the undeserving elites, and the undeserving elites don't have to live anywhere near 'em.

[Phil Koop]

LOL! Nice quotation.

Technically, though, Noah's post was as much about the undeserving as the deserving. After all, his point was that we may wish to aid the undeserving - he's on Mr. Doolittle's side! And anyway, isn't there something a little bit irritating Mr. Domuch?

[Frances Woolley]

Nick: "I can almost sing the whole album" - I can almost sing it, too, ("warm 'ead warm 'ands warm feet...") but my nearest and dearest tend to object to "almost singing", preferring the real thing.

vimothy - "The problem with refusing to tell people that they have responsibilities..."

The undeserving poor don't have any monopoly on the shirking of responsibilities. One of my favourite political ironies is that the poor happily vote for candidates promising "workfare" because what they want, more than anything else, is a decent job; the middle class are opposed because creating jobs is more expensive than writing cheques, and paying people on social assistance a token amount to clean parks (say) takes away jobs from municipal or other employees. (lump of labour, etc. but still).

[Frances Woolley]

Phil "Noah's post was as much about the undeserving as the deserving."

Yes, absolutely, this post started out as a comment on his blog "Noah, you really should read this, I think you'd enjoy it" but got too long.

[vimothy]

Frances,

Agreed, to some extent, hence my reference to undeserving elites. On the other hand, if the phrase is to have any meaning, then there must be some relationship between the undeserving poor and the property of "undeservingness". Moreover, if other classes are also undeserving (and IMO British society has been in continuous moral decline for the last century), then it does beg the question "undeserving of what".

[Patrick]

Yup. Is the drug dealer a vicious criminal, or a resourceful entrepreneur? Undeserving is in the eye of the beholder.

Sorting out the deserving from the undeserving seems a hopeless business. Poverty sucks for the poor and it sucks for the rich, who have to live with the mess. Worst case you're giving money to the underserving as a bribe to not do e.g. a home invasion on you, break your skull, and steal your PS3 (something that happened 2 weeks ago to a friend of mine). Compared to alternative of stolen property, assault, psychological trauma, legions of cops, lawyers, judges, jailers, etc ... it might just be easier and cheaper to bribe the undeserving with unearned money and legal dope so they leave us alone.

[vimothy]

Yeah, but Patrick, who says that even if the "undeserving poor" are given unearned money and legal dope they're going to leave you alone? It seems to me that that might just make them hassle you more--assuming that they like free money and dope.

In the UK, we spent the last century liberalising every institution in sight, created an extensive welfare state, and experienced a concomitant 5000% rise in the crime rate. I mean, how much free dope and money is it going to take before it starts to have an effect?

[Frances Woolley]

vimothy "British society has been in continuous moral decline for the last century"

Though I suspect it was never as morally upright as portrayed in the "do the right thing" school of children's literature, nor is it that bad now, overall I agree with you - but suspect that it would take a lifetime of study to figure it all out. As an outside observer and frequent visitor, I have a bit of a love/hate relationship with the country. Every time I go there I find the amount that people drink staggering - I hate it - but then I end up going down to the pub because, basically, there's not much else to do. And Britain has such amazingly fantastic pubs. So I fall in love all over again.

[Bob Smith]

Patrick

"Compared to alternative of stolen property, assault, psychological trauma, legions of cops, lawyers, judges, jailers, etc ... it might just be easier and cheaper to bribe the undeserving with unearned money and legal dope so they leave us alone."

I believe David Simon and Ed Burns had a good line to that effect in "The Corner", i.e., that welfare was a cheap way to get the inner-city poor to head back to their ghetto and mainline themselves to oblivion while leaving the rest of "us" alone. And that it was a bargain at that. (Of course they also suggested (facitiously) that if the US government was really serious about eaging the "war" on drugs, it might consider napalm strikes on inner-city drug corners. Short of that, it wasn't going to win.)

That being said, you can see why your argument isn't likely to be all that compelling to Joe Q. Public (and why no politician frames the case for welfare that way). No one likes to be shaken down. Presented like that, the answer is likely to be "send in the army".

Patrick: "Is the drug dears a vicious criminal or a resourceful entrepreneur"

Can't he be both? I suppose if we stopped calling them criminals and started calling them entrepreneurs, the right would start lobbying to dereguate them and the left would look to put them all in jail and tax them out of existence.

vimothy: "I mean, how much free dope and money is it going to take before it starts to have an effect?

I don't know about money, but at some point the drugs will have a sedative effect.

[vimothy]

Frances,

I think that there's a danger that if you follow that argument along you can be lead to think that it's all semantic and there's really no difference between the Britain of today and the Britain of 100 years ago. In fact, the Britain of today doesn't really bear any resemblance to the Britain of 100 years ago. The Britain of 100 years ago has long since ceased to exist.

Now, if you think that there was nothing particularly moral about the Britain of 100 years ago, or that there's nothing particularly immoral about today's culture of unrestrained hedonism and social alienation, then that's a judgement call and this is probably of no real interest. Just because my grandparents found the country to be weird, foreign and hostile before they passed away doesn't mean that anyone should factor this into their calculus when trying to think about policy.

On the other hand, we all have to live here, and there might be a connection between quote-unquote "morality" and quality of life. Assuming that people in the past weren't totally misguided, then maybe their morals and mores had some kind of adaptive function. Personally, because I am quite poor, I tend to live in pretty horrible places in the North of England. Many of these places have always been poor, but they haven't always been horrible. The problems I see relate more to people not knowing how to live than people having unmet material wants. (By the strict monotonicity of preferences, people will always have unmet material wants).

Commonly held standards of behaviour (like taking a position on what constitutes "undeserving") would serve to both ameliorate this blight in our sink estates and re-establish currently non-existent social solidarity. All without increasing the deficit. Sadly, I don't think anything can alter our trajectory. And there's a lot of ruin in a nation, as someone once said...

[vimothy]

Did my comment just get eaten...?

[Shangwen]

It's pretty generous to assume that the welfare state really would have this palliative effect on the poor. The same machine that gives us welfare programs also gives us drug criminalization, (sometime) criminalization of the sex trade, and poverty-perpetuating policies like minimum wages, occupational licensing, and rent controls.

Let's remember too that when we talk about the social pathology associated with poverty, we are talking about (1) the permanent multi-generational underclass, and not the working poor who move in and out of poverty but often have a strong work ethic, and (2) criminal organizations that use the underclass. Most of that criminal activity would not exist if drugs and the sex trade were legal. We would have drug addicts and prostitutes, but far less violence and related crime encircling them.

[Patrick]

vimothy: Look, I'm a clumsy communicator but I think I'm really just trying to say that 'deserving' and 'undeserving' is all in the framing. Ruthless behaviour exhibited by the local pusher is criminal. Ruthless behaviour exhibited by a CEO is business acumen. Economic rents extracted by the poor are a shakedown. Economic rents extracted by a CEO is innovation.

BTW, A good example of bribing people to behave is the Canadian banking system. They get a monopoly to shakedown the public and in return promise to do what Finance and OSFI tell them to so as not to blow-up the economy and ultimately cost us all a lot more.

Bob: Yeah, of course it isn't going to fly as a campaign slogan. But it would be hilarious to hear Stephen Harper defending the rights of drug dealers on the grounds of natural freedom while the left argued to fill the (newly constructed) jails with the population of the Lower East side.

[Frances Woolley]

vimothy: "In fact, the Britain of today doesn't really bear any resemblance to the Britain of 100 years ago." -It's complicated. There's a cultural continuity, e.g. listen to Franz Ferdinand and you can hear echoes of a distinctively British musical tradition. Britain has always been, I think, a pretty violent society - that's the edge behind the humour. I don't travel in the north of England much - I'll be doing so this summer, though. I'm struck by your comment about people not knowing how to live, but don't have time to reply (duty calls and all that).

[Min]

@ Nick Rowe:

"With one enormous chair." :)

[vimothy]

Frances,

Edwardian Britain was certainly not a violent place. We really did experience something like a 5000% increase in the crime rate over the course of the 20th century. No, that's not a typo--that's a five and three zeroes. I'm going off the govt's own figures here (using the rate of indictable offences, to be precise). I can dig up the source if you don't believe me.

In addition to the quantitative change in the amount of crime, there was also a qualitative change in the nature of the crime being committed and how that crime is prosecuted (which is sorta my point--there is a relationship between how society treats anti-social behaviour and the quantity and quality of anti-social behaviour that results). Today, it's possible to beat people to death in the street and be out of jail in only a few years. Where I live, there are signs plastered everywhere warning mothers that child snatchers and slavers are operating in the area. No one bats an eyelid! A century ago, people were being arrested for things that would be regarded as egregiously trivial today.

As one commenter (I forget who, perhaps Peter Hitchens) wrote, if we used the standards of our past today, practically the whole country would be in prison; if we used the standards of today in our past, practically no one would have been in prison.

[mcarson]

To allow this problem to be framed as undeserving vs. deserving is to loose the game. You must shut this crap down immediately. It's just more Regan talking about someone using the change from buying an orange on food stamps to buy vodka. You didn't get change with food stamps, you got a paper receipt with 27 cents written on it below the store stamp, and you had to keep track of that piece of paper until you went back to the store. Even not knowing that, why nobody asked him where they sell bottles of vodka for under 75 cents is beyond me.

Find jobs for everyone who wants one. Set a decent minimum wage, and hold people to it by eliminating all the 'private contractor' crap. Once you've done that, talk to me about the undeserving. Until then you're wasting everyone's time on some mythical crack head while some poor mother is trying to support herself on 27 hours a week at the local corner market.

You plan on eating cheeseburgers, buying new socks, going to the movies, having someone else take care of batty old Aunt Helen and changing your oil. Let them earn enough to eat, heat their home and buy their kids shoes.

[Frances Woolley]

vimothy: "Edwardian Britain was certainly not a violent place" - One thing that's remarkable when you read some of the less celebrated British children's literature from the last century is how often people slap or hit each other. You still see that in Britain - people hitting their children. If someone in Canada hits a child in a public space, the least they can expect is a gentle intervention from a well-meaning bystander - a citizens arrest and reporting to child services is as likely. Think of schools and corporal punishment - caning, the strap, etc. Corporal punishment of students in schools was routine in the Britain of 100 years ago. Is it still legal in Britain? It was banned here years ago.

This in many ways validates your point, however, that there has been a qualitative change in the nature of crime, and what we regard as crime.

Now I really must go or I'll be late for class and my students will be able to see from the time of the post why.

[Bob Smith]

"Ruthless behaviour exhibited by the local pusher is criminal. Ruthless behaviour exhibited by a CEO is business acumen."

I don't think that sort of moral equivalence works. I suspect most people aren't all too fussed by the fact that drug dealers typically don't pay their employees minimum wage or don't comply with Canada's product labelling or drug testing legislation (conduct that we would consider "ruthless" in the business context, when some CEO outsources his supplier to China). And I suspect that if the CEO of a large bank started collecting from defaulting homeowners by kneecapping the debtors (behaviour that we consider criminal in the drug dealer context), we'd all consider that to be criminal . The typical behaviour of the former is considered criminal because it's typically criminal, the typical behaviour of the latter isn't because it typically isn't.

[vimothy]

Frances,

Ah, I see what you mean. Thanks for clarifying.

[Shangwen]

@Nick & Frances: Do you know the Peter Sellers version of "Wouldn't it be Loverly"?? Hilarious.

[Shangwen]

Found it...I grew up listening to this from my anglophile Chinese grandfather:

http://grooveshark.com/s/Wouldn+t+It+Be+Loverly+1999+Digital+Remaster+/2x3Ojr?src=5

[Rick B]

Has anyone ever been to a poor neighborhood with a high crime rate...? I doubt it (though it is popular to pretend you have); because if anyone has, they would know that even in high crime neighborhoods the rate is understated by a large amount. When you give poor people in these neighborhoods money they begin to learn how to use the social infrastructure to their advantage, i.e. calling the police with the expectation that their property rights will be protected. Suprise the crime rates rise, because people are now following through with the reporting process. So increased crime is expected, not justification for calling people in these areas undeserving.

Most jobless ghettos have been around a while, and are going to need a generation of fiscal subsidy to beging to redevelop. For a caricature watch the wire season 4, there is a great dilemma illustrated by a conversation between police officers after they give amnesty to drug dealing within a green zone: it goes along the lines of "What do we do, arrest the guy who robbed the drug dealer?. Do I have to file a report?"

These areas have their own parllel political and economic structures; and they enforce a degenerate type of order. You can't criticize it just because it exists... and they don't develop on accident either, they develop out of necessity. I don't know any 5 year olds who aspire to sneak on to the subway at 11, drug run at 13, sell by 15, and start robbing and hustling as an adult, they are left with little choice in their development.

There is a great book called "When Work Disappear" by William Julius Wilson that outlines the criteria for this sort of thing. Should be required reading for all policy makers.

The deserving poor are school age children who need some help to access opportunity, and thus everyone is deserving at some point...

[Mandos]

And I suspect that if the CEO of a large bank started collecting from defaulting homeowners by kneecapping the debtors (behaviour that we consider criminal in the drug dealer context), we'd all consider that to be criminal . The typical behaviour of the former is considered criminal because it's typically criminal, the typical behaviour of the latter isn't because it typically isn't.

It's time to drag that old Anatole France chestnut out once again! "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

[Jacques René Giguère]

Callin the army? You meanhiring half the poors to beat up the other half?

Anyway. What we call "criminality" ( as distinguished from "high finance") is essentially restricted in area and population. The isolation is both physical and mental-socioogical but mostly the latter. To a boy in Hochelaga-Maisonneuve or the Bronx, the skyscrapers skyscrapers are farther away than the Rockies. To get to the Rockies, you can steal $ 1000 and buy a plane ticket. To get to the skyscraper, you steal an MBA? What's an MBA? Who has an MBA? No uncle or cousin of mine has that MBA thing.

As Peter Cook said:
"I could have been a Judge, but I never had the Latin for the judgin'. I never had it, so I'd had it, as far as being a judge was concerned..."

http://www.youtube.com/watch?v=ofUZNynYXzM

still as hilariously sad as it was in 1961.

[Bob Smith]

"Most jobless ghettos have been around a while, and are going to need a generation of fiscal subsidy to beging to redevelop."

Which is true, but I think the point that David Simon and Ed Burns were making in "The Corner" (those names will be familiar because they were the producers/writers of "The Wire", which was based to a large degree on the real-life experiences they recorded in "The Corner". That's why it was so good.), is that the conventional notion of welfare does nothing to promote the redevelopment of poor neighbourhoods, it just keeps the residents of those neighbourhoods from bothering the rest of us.

Another way of thinking about the "deserving poor"/"undeserving poor" distinction, is between those who cannot help themselves under any realistic set of circumstances (the elderly, children, the severely disabled - I suspect no one would dispute that those are the traditional catagories of the "deserving poor"), i.e., those who have no agency over their lives, versus those who may be able to help themselves with the proper assistance, incentives, guidance, etc. (young, able-bodies, working-age people - the tradidional "undeserving poor"), who have some agency over their own lives. Note, phrased like this, there's no suggestion that the "undeserving poor" should be tossed to the wolves, but there is a suggestion that the public programs designed to help them should be very different from those structured for the "deserving poor".

So, for example, traditional "welfare" programs make a lot of sense for the "deserving poor", i.e., those people who cannot otherwise help themselves. They make a lot less sense for the "undeserving poor". Quite the contrary, they're likely to have disastrous implications. A person might quite reasonably prefer collecting the dole to working a 30 hour week at 7/11. Such a person is, quite reasonably, exercising their agency in so doing (and truthfully, would any of us make a different decision?). But of course, the long-run implications of that choice are disastrous, both for the individual, and for society at large. In the case of the individual, the basic skills of being a productive adult (i.e., civility, showing up on time, etc.) are eroded or lost, increasing their dependence on the state. Moreover, in that circumstance, earning illegal money is a lot more palatable than earning legal money (since the latter causes you to lose benefits, while the former doesn't - again, given the choice of collecting the dole, and making a few bucks on the side slinging dope, versus making a few bucks slinging burgers, hey who are we kidding, we'd do the same thing). From a broader perspective, children grow up in communities with norms that are fundamentally at odd with being a productive member of the broader community (in "The Corner", Simon and Burns recount the experience of one of their protagonists, a moderately successful young drug dealer, who can handle the complex business aspects of the drug trade, but who lacks the basic social skills to keep a job at McDonalds. I think they used that incident as the basis for a scene in one of the earlier seasons of "The Wire").

Of course, you could design better social assistance programs to avoid this fate - provide wage subsidies to make work more palatable (think the earned income tax credit that was part of the US Workfare reforms), require training as a condition of collecting welfare, so that recipients might have an alternative beyond the 7-11. But, those are the sorts of programs that critically depend on making a distinction between the "deserving poor" and the "undeserving poor" (there's no point making the elderly or the severely disabled attend training programs as a condition of collecting welfare). Ironically, by attacking the distinction between the "deserving poor" and the "undeserving poor", we don't do the "undeserving poor" any favours. Not only does that deny them their fundamental human agency (quite literally, treating them like children), but it ends up trapping them in public welfare schemes which neither addresses their needs nor develops their potential.

[vimothy]

Bob Smith,

That's a smart analysis--well written.

[Andrew F]

"And I suspect that if the CEO of a large bank started collecting from defaulting homeowners by kneecapping the debtors (behaviour that we consider criminal in the drug dealer context), we'd all consider that to be criminal . The typical behaviour of the former is considered criminal because it's typically criminal, the typical behaviour of the latter isn't because it typically isn't."

The drug dealer should go to small claims court to induce delinquent customers to pay? This is a bizarre point, as Mandos noted.

[just some guy]

The undeserving poor shirk their responsibilities, as opposed to the undeserving rich, who merely pay others to fulfill them. This is how America got its last Republican administration, the 'Tom and Daisy Buchanan" administration.

"They were careless people, Tom and Daisy--they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made."

F. Scott Fitzgerald, The Great Gatsby, Ch. 9

[Patrick]

Bob: Ah, but it does work. The CEO resorts to a system of violence sponsored by the state. He has parliament, the courts, bailiffs, and police to go do his kneecapping for him. What if we lived in a world were trafficking in houses was illegal, but selling processed plants like cannabis, coca, and poppy was perfectly legal? If the drug dealer could enforce his contracts in the same way that a CEO can, there would be no need for kneecapping.

[Frances Woolley]

Great comments and links, thanks - love the quotes from Antole France and the Great Gatsby.

Bob, thank you for those thoughtful comments.

In a sense the vision that you are articulating is a description of the status quo in Canada, where, for example, we've decided that over 65s deserve a basic income guarantee, and under 65s are perceived to be able to support themselves.

But we've decided, as a matter of policy, to reject that distinction - to let someone go because they're over 65 is age discrimination. If people over 65 are perfectly capable of working, just like anyone else, on what grounds are they deserving of OAS, GIS or any other special supports?

Even the idea of disability is becoming increasingly problematic. In an economy based on manual labour, it's pretty easy to figure out who is capable of working and who isn't. In an economy based on intellectual labour, who is disabled and thus deserving?

Our society's affluence also makes it hard to draw a line between needs and wants. Does someone need a cell phone? Sure, you don't starve without one. Lots of respectable middle class people manage perfectly fine with only a land line. But these days it's almost impossible to get a job if you don't have a phone number where you can be reached, and as a practical matter that generally means a cell phone.

Sure, we can agree on kids, moms and apple pie, but I don't know if that's going to help us make hard policy decisions.

[Phil Koop]

"I don't know if that's going to help us make hard policy decisions"

The thing about charity is that it's as much about the donor as the recipient. The act of giving rewards us with a good feeling; but that works best when we believe the recipient is "deserving." Unfortunately, that means that assistance doesn't have to be helpful to the recipient to be helpful to the donor, as this Onion squib puts it neatly: http://www.theonion.com/articles/kid-with-cancer-hopes-to-realize-dream-of-meeting,6899/.

So the first hard policy decision to sort out is, who are we trying to help? The poor? Or ourselves?

[Frances Woolley]

Phil, great link.

For astute economic analysis of problems relating to poverty, also for the latest in behavioural economics and addiction research, I turn to John Cheese of cracked.com. These ones are particularly relevant to the undeserving/deserving poor debate:

http://www.cracked.com/blog/5-reasons-money-can-buy-happiness/

also:

http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/

[Determinant]

First, on a 5000% crime increase in Britain: false. First, the 'lower classes' frequently did not call the police, they expected and were expected to deal with it themselves. In some cases the only thing that would get the police into a low income area (as we say now) is murder. Pickpockets were common. Gentlemen of the era did not carry canes as an aid to mobility, they were a weapon intended to be used in self-defence.

Second, at the end of the Edwardian era Britain was just about rid of the "Bloody Code" which at its height in the 1780's would see a death sentence imposed for theft over five pounds.

Yet only 20% of death sentences passed in this era of 'severe justice' were actually carried out. Pardons and clemency were very common, far more common than today. For an offence such as theft the local lord/squire/MP/gentry would approach the Home Secretary and ask for a pardon which was duly granted. The severity of the law was curtailed and the mercy of the ruling class displayed. The existing social order was reinforced.

As for deserving/undeserving poor: watch it. Everyone likes to value their own talents and thinks that the job market will mysteriously 'provide' and quickly at that. Further they expect that the person on the other side of the table will be fair, transparent and quick. Experience has shown me that all these expectations are wrong.

First, an employer can see you as a bad fit. Too educated? Might bolt at the first opportunity.

Fair? I've had racism directed at me, been invited and re-invited to an an interview a year apart and still no job and currently have one job get denied over a test whose marking stinks. It took me six months to get that far and now it's under appeal with the Public Service Commission. Later I found out that the whole Department is on probation for its lax merit practices (stage I had problems with).

People like to deny the existence of Job Search Purgatory but it surely exists.

Sorry Bob, your last post is way off-target.

[Bob Smith]

"If people over 65 are perfectly capable of working, just like anyone else, on what grounds are they deserving of OAS, GIS or any other special supports?"

Good point, yet another point in favour of pushing back the retirement age (i.e., what is the moral basis for providing 66 years old with free money when many of them are wealthier, and have greater incomes, than people younger and more disadvantaged than them? Answer: none - which makes the NDPs position somewhat curious).

Mind you, past a certain point people's health will deteriorate to the point where they can't (or shouldn't) work, so it may make practical sense to draw the line somewhere, ideally based on some reasonable estimate of how long people can be epected to be capable of working(because it's less costly that having to assess everyone on a case-by-case basis). Whether that point should still be 65 in an era where life expectancies (and health adjusted life expectancies) have increased by a good 10-15 years from when the OAS/GIS was introduced, is a wholly different question. Any line will be somewhat arbitrary, but it would be nice if the arbitrary line had some reasonable basis (other than having been chosen by a 19th century Prussian autocrat).

Moreover, while drawing that line may be a hard policy decision, the key point is recognizing that we have to make that hard policy decision. The old way of doing things didn't involve making hard decisions, you just cut a check once a month (or build "affordable" housing that no one who can afford better will live near, or pass minimum wage laws which price the poor out of the labour market, the list is long). It may have been ineffective (or, indeed, destructive), but it certainly wasn't hard. That links to Phil's point, much social welfare policy was "easy" precisely because it was intended to make "us" feel better, without regard to the needs or incentives for the poor. Sure, it may immiserate the poor, but hey, we tried, if they're still immiserated, that's their fault. But of course, that's not right. If we set up a system that helps immiserate the poor because it's easy and it makes us feel better, that says more about us than it does about them. Good social policy is hard precisely because it isn't enough for us to spend money, you have to spend money in such a way that actually empowers the poor - and to do that you have to believe that the poor can be empowered, that they have agency, that they can be the "undeserving" poor.

[Determinant]

I had a great post get eaten by the spam filter. I am not spam!

[Bob Smith]

Determinant: "Sorry Bob, your last post is way off-target."

I suppose that settles it then...

[Frances Woolley]

Determinant - in the spirit of earlier posts by Shangwen and Jacques Rene, the only response to "I am not spam!" can be...

http://www.youtube.com/watch?v=anwy2MPT5RE

[Shangwen]

Bob: great comments, all of them. Yes, we should distinguish between the deserving and the undeserving, most of the time.

One of the problems with programs for "the poor" is that efficient allocation of those resources (money and professional services that the individual then makes decent use of) is a whole lot of last-mile problems that programs cannot address not just because they are top-down and bureaucratic, but because a truly individualized system ultimately has to come up against the reality of people not just making crap decisions but also having incomprehensible preferences. I worked part-time in an occupational medicine clinic for years and we had hundreds of patients come through with all kinds of voc-rehab support--some of it quite lavish--and yet the percentage of people who failed to take advantage of benefits or even start them was huge--over a third, I think. Then I was talking to a colleague one day and he said, "A lot of them just say they want it because that's the socially correct thing to say to professionals. But what they have now is what they want."

I sometimes think of this as a Chinese Menu Problem. When I was growing up I noticed that when we went to Chinese restaurants, the non-Chinese customers got the English menu (lemon chicken, egg rolls, fried rice), while the Chinese parents also got the Chinese menu which of course was much, much better (braised duck with chestnuts, fried pork belly, steamed baby vegetables). When the real deal is not only so much better, authentic, and healthier (no egg rolls) than the fake stuff, why wouldn't every one want it? But not everyone wants to learn Chinese just to read a menu, and even if you translate it then it is another complex process to learn about what to order and how to enjoy it.

You can look pitifully on the English Menu class and lament their monotony and benightedness. You can look scornfully at them and say they are slobs just rolling up to the buffet to suck back more chicken balls. You can look at them with alarm and say they are destroying Chinese cuisine and ruining public health. You can pick any stereotype you want, but the problem is how do you find that fraction of the crowd that sees the transition as worth pursuing, to have access to the Chinese menu of comfy retirement, no mortgage, educated children, and status. They are there, but few policies allow them to come forward distinctively while leaving the rest to voluntarily exercise their own preferences. If policies want to hand out cash and human capital upgrades, they can do that: just write checks and send people to trade school. But if they want to distribute status and affiliation while lumping everyone into the same bourgeois fantasy, because the opposite belief is distasteful, they will fail.

[Shangwen]

It seems I too am Spam...

[DavidN]

Shangwan@February 01, 2012 at 09:58 AM: 'Most of that criminal activity would not exist if drugs and the sex trade were legal. We would have drug addicts and prostitutes, but far less violence and related crime encircling them.’

Apologies in advance for this off-topic comment, but I feel I have to disagree with the above comment. I live in Victoria, Australia where prostitution is regulated by the ‘Sex Work Act 1994’ with one of the original aims of regulation being to eliminate criminal activity associated with the operation of brothels. Despite that by some estimate there are four times as many illegal brothels as there are legal ones. In fact criminal elements have been using legal prostitution as a cover for their illegal activities including bringing in sex slave from overseas to operate in their legal brothels.

From my understanding of it the legal trade is complementary to the illegal one. What we’ve seen in Victoria with legalisation is the expansion of the legal ‘industry’ over time with a corresponding disproportionate increase (from estimates) of the illegal trade. Legalisation has increased demand, with corresponding increase in supply, both legal and illegal. Not all illegal brothels employ sex slaves (it may even be a minority), but in my mind at least, legalisation has helped spur human trafficking.

Putting my amateur sociologist hat on, the attributes of prostitution industry include workers being overwhelmingly young, from low socio-economic backgrounds, and women, while consumers are overwhelmingly male which isn’t relevant per se except for power relationships between these two groups. Incidence of violence against sex workers are higher than other forms of employment (and it is probably an underestimate due to underreporting as reporting from street prostitution which is illegal and illegal brothels is low for obvious reasons). The labour movement in the prostitution industry isn’t particularly strong so while workers in other ‘low-skilled’ employment benefit from legally enforceable collective benefits (minimum wages and conditions), prostitutes don’t even though it’s legal. Employer-employee relationship is overwhelmingly in favour of the employer (as prostitution is only allowed in brothels and to operate a brothel you need to get local council planning approval which is almost impossible unless you got a bit of financial heft which the average sex worker isn’t going to be). So employers typically get 50-60% of each act (and in the case of slavery, 100%). Human trafficking and sex slavery is of course illegal and so is violence (sexual and otherwise) except in practice enforcement is difficult if not impossible (because of legal issues that I won’t go into).

If I was anymore cynical I would say this system was deliberately designed to exploit a economically and politically weaker group by a coalition of politicians, businessman, and criminal elements (not mutually exclusive) most likely disproportionately made up of men.

This outcome of legalisation may be specific to us, I haven’t look into the issue deep enough to conclude whether the failure to reduce associated criminal activities is due to poor regulation or otherwise, but I have my doubts about the merits of legalisation with regulation or not because of the complementary relationship between the illegal and legal trade + the fact it seems the political economy and sociology of prostitution seem to point to an overwhelming exploitation (of economic and social rent) from a politically/economically stronger group over another.

[DavidN]

This is a general comment, not responding to anyone in particular. The problem with the focus on whether the poor are ‘deserving’ distracts the focus away from possible structural reasons for inequality.

I wouldn’t be worried about inequality per se if in fact the world was truly meritocratic in the sense that we are all endowed with the same opportunities and our rewards in life was for the most part determined by our efforts and not by our postcode (country, skin colour, gender etc. etc.).

However if in fact our social-political-economic institutions are set up to favour one particular group over another leading to multiple equilibria (‘good’ and ‘bad’) then inequality becomes a structural/macro problem and not one down to effort or physiological attributes (which is a micro issue).

To be more specific, a person born in a poor country over the lifetime is probably going to be poorer than the same person born in a rich country no matter how much more effort they exert because they have different levels of access to education and health infrastructure, security (e.g. military conflicts, civil unrest), capital (physical and/or monetary), peer effect (think social norms/culture/peer pressure), and political institutions (e.g. exploitive vs representative) etc., and assuming the status quo is maintained their children are likely to be poor/rich, and their children’s children ... leading to diverging good/bad equilibria.

Now replace ‘country’ with ‘parents’ then you have an example of inequality in opportunities within a country. Other examples, think segregation, apartheid, or medieval society which are more blatant and extreme forms of inequality induced by certain arrangement of institutions.

Going back to the ‘poor/rich parents’ case, assuming the status quo is maintained, it can be seen the initial conditions, in this case birth to poor/rich parent, matter in the long run. Hence, you hear stories about multiple generations of unemployed or at the other extreme dynasties of affluent families.

My second point, which is implicit in the first, is effort/hard work/motivation is a function of many things including but not limited to culture/social norms/peer effect. If you are born to a poor family which you have no choice over, unfortunately you may not learn/inherit the ‘high effort’ attribute leading to better economic/social outcomes over your lifetime. In effect your lifetime utility comes down to luck. This might not matter in a world of low inequality, but if you live in a world of high inequality induced by the arrangement of certain social/political/economic institutions then trying to figure out whether the poor are ‘deserving’ becomes irrelevant as by ‘birth’ they are ‘low effort’ due to institutional arrangements outside their control.

There are of course variances in outcome between individuals because of variances in effort spent but if you accept the premise that institutions cause inequality then taking the position that the poor can only blame themselves for their predicament is contradictory.

[Rick B]

$586/month (Ontario Works)
$10.25 x 30 x 4.3 = $1332.50/month (7/11)Which is *essentially tax free

This is for an individual... kind of makes the "I'd rather sit at home than earn minimum wage" argument a bit silly; although, it still is a popular one amongst people who know a guy who knows a guy who has a big screen tv, audi, and still collects welfare.

I've actually heard MP's talk about the kid at a high school in North York they know who sells drugs because its more profitable and easier than getting a job at Subway... He is undeserving. Except

Middle man purchase of weed get can negotiate a price between $180 - $220 ounce (~28 grams) @ $7 - $10/g retail = $16 - $100 profit/ounce. And remember this is being sold to other kids in low volumes with high risk. These middle man purchases are usually financed and the retailer is on the hook if the product is stolen or confiscated. They might make $125 - $200/week if they have a "legit" business model with lookouts, contact men and muscle (all on payroll). The ones who don't often take losses and all of them have been robbed or beaten up on more than one occasion. So actually that kid doesn't exist.

And when presented with information its always... well I didn't talk to him, someone I know did...

But, what about parents on welfare who only have babies to game the system? They are undeserving. These kids always have Nike shoes and Ipods and lead indulgent lives on tax payers dollars.... Except that these same kids eat chips and koolaid for breakfast and lunch, and literally live on the streets until its time to sleep unless there are funded community programs that give them a place to interact socially, do homework etc. These people don't exist either.

But, what about the guy who talked to the guy who met a homeless man who gets assistance and wastes it on alcohol and crack.

But what about the guy who ...

These conversations always end up about fictitious poor people a representative population. Sad.

Unfortunately that's popular opinion.

[Bob Smith]

DavidN,

I suspect we don't disagree in substance. Perhaps when thinking about "deserving" vs. "undeserving" the question is: "deserving of what?". Because you're right, there's no moral distinction between being born, say, with a severe disability or being born to a poor family. Both may be, in their own ways, severe barriers to participation in the broader society.

On the other hand, once we ask ourselves "deserving of what", the distinction re-emerges. A person who cannot work (or otherwise effectively participate in society) under any circumstances is deserving of unconditional assistance from the broader community - they have no agency over their lives. On the other hand, while the person born to the poor family certainly has a claim to be deserving of assistance from the broader community, because they have some agency over their lives, the claim to assistance will be different from the person who cannot work, and will likely not be unconditional. They will be "undeserving" of the unconditional assistance offered to the person who cannot work, but that doesn't mean that they will not be "deserving" of any assistance.

"There are of course variances in outcome between individuals because of variances in effort spent but if you accept the premise that institutions cause inequality then taking the position that the poor can only blame themselves for their predicament is contradictory."

I don't think that those positions are contradictory. First, we have to be careful about conflating "poverty" with "inequality", since unless you define poverty solely as a relative concept, they aren't the same. Moreover, "poverty" can mean different things. One of the sad things about the "war on poverty" that's been fought by western countries since the end of WWII is that while in material ways they have been quite successful at eradicating, or at least reducing, poverty as understood by our parents or grandparents, in other ways the poor are worse off than they were 50 years ago. As a result, while the Western poor are often materially as well, or better, off than the third-world poor, in other respects their lives are more deprived (if not depraved).

Second, there's no contradiction there, because poverty, on its own, is not an insurmountable barrier to achievement, particularly in the presence of effective social institutions. The contrast between the native born poor in countries like the UK, the US or Canada and the immigrant poor is telling in this regard. As you correctly point out, there's no inherent distinction between beeing born into a poor country and being born into a poor family. And yet, its almost a universal experience that the native born poor do worse than their foreign born neighbours. The distinction is not one of poverty, but of culture, incentives, and expectations. One can be poor, in a material sense, and still share the values and expectations of the broader community. The question is, how do you develop social programs to assist the poor without creating a culture of dependence and helplessness, without establishing perverse incentives, and without denying them their agency as human beings (and the responsibility and expectations that come with that, which responsibilities and expecations we have of ourselves).

Think of it this way, if you design social programs on the premise that poverty is an immutable barrier to achievement, that's likely to be a self-fulfilling prophesy. If you design social programs on the premise that poverty is a barrier, yes, but one that can be overcome, and further, that the poor are the people who have to overcome it and who have an incentive to overcome it (which should be self-evident propositions), the social programs you design are likely to look very different and are far more likely achieve that objective. Moreover, if you treat the poor like human beings, and hold them up to the expectations we have for ourselves, rather treat them like hamsters (i.e., give them food, water, a place to sleep (ideally where they aren't going to keep us awake at night), and clean up their shit - sound familiar?), such policies are less likely to have the corrosive effects that we've witnessed in the Western poor over the last half century.

[John]

"In its general influence on educated public opinion, orthodox [economics] teaching has not been merely feeble and confused but positively pernicious. It gives support to the view that expenditure by a government that is beneficial to the inhabitants of its territory is 'socialism' and must be prevented at all costs. This reconciles an otherwise more or less sane and benevolent public opinion to the arms race which seems to be dragging us all to destruction. ...

It seems to me that the whole complex of theories and models ... is in need of a thorough spring cleaning."

Joan Robinson

[Shangwen]

Bob: "If you design social programs on the premise that poverty is a barrier, yes, but one that can be overcome, and further, that the poor are the people who have to overcome it and who have an incentive to overcome it (which should be self-evident propositions), the social programs you design are likely to look very different and are far more likely achieve that objective."

Agree, also on the issue of "deserving of what". If you focus on the poor because of their unequal share, then everyone's inequality is up for grabs. My kids will be OK, but they aren't likely to go to Harvard and don't currently mingle with the elite of the Eastern Seaboard; should someone else fix that for me? It would sure boost my kids. But policies that go beyond relieving deficiencies in basic necessities are based on the idea that private social affiliation is somehow a public good. I agree with antipoverty types who are concerned about hunger and malnutrition--that is lifelong medical harm that is tough to correct. But you do not have to have a cell phone or internet access, even though the lack of those makes life dull and difficult.

Again, I think it is really important to distinguish not just on deserving/undeserving lines, but between those poor who move in and out of that rubric because of changes in the economy, personal health and fortune, and those who are the latest in a multi-generational pattern of dependency. The single mom working as a warehouse clerk is not the same as the person who has never known anything but the welfare office.

[Frances Woolley]

Awesome comments, keep them coming!

[Shangwen]

There are a couple of other un-cool but highly successful anti-poverty interventions that deserve mention: hypergamy, and joining the military. The US military is the most lavish welfare state in the world: it absorbs hundreds of thousands of people who come from low-income backgrounds and gives them a job, lifelong benefits, healthcare, child-care, and free education. It also confers tremendous status and affiliation benefits, some of which would be hard to get through other means. The Canadian military does likewise (with better health care than civilians get). Of course, people still have to take advantage of it, and there are many who leave the military with little additional human capital. But it is a fascinating natural experiment. My point is not to plug a military career, but to note that there is a huge number of people annually in both countries who are offered lavish anti-poverty treatments, yet you still see very unequal results including those human capital is unaffected.

Now, I understand that marrying up is much less common or available than it used to be, but it hasn't been banned either.

[Frances Woolley]

Shangwen - don't know if I'd agree with you about hypergamy, but strong family ties are a great anti-poverty strategy. Canada's income support policies don't have huge marriage disincentives compared to some other countries', but if a single parent allows someone earning, say, $20,000 a year to move in, the loss of child tax and other benefits can be substantial relative to the additional financial support available. I think this is one reason why we won't see the CTB enriched at all over the next few years - because this government is concerned with marriage taxes, and knows where all of the little ones lurk in the income tax and benefit system.

The US military is a really interesting one - and there have been quite a few studies of the economic impacts of joining the military.

What happens as a long-term consequence of the Iraq war will be worth watching, too, because of the relatively huge number of non-fatal yet cripplingly awful injuries that have left family at home with major long-term care giving responsibilities and vets with no possibility of supporting themselves.

[Patrick]

Shangwen: The military comes with that little caveat where you have to go die when your boss tells you to. Not sure that the price of escaping poverty should be pledging your life.

Really surprising level of paternalism here. Nanny state gone wild, and from the righties too! I'm shocked. A lot of this is middle and upper middle class moralizing and self-rightenous. The problem is almost completely imagined. See here, for example:

http://www.hrsdc.gc.ca/eng/publications_resources/social_policy/sasr_2008/page12.shtml

In AB, the number of long term recipients of welfare was ... about 3000 people. We're talking about 0.1 % of the population. The ON numbers look to be about the same. And a quick scan suggests that disability is a big part of what puts people on the welfare roles to begin with. No doubt some of it is self inflicted, but I doubt very much that they all got there via an attempt at first prize in the Darwin awards.

So I'm with Stephen: GAI. Level the playing field a little, and then let the chips fall where they may. Give poor people money and let them figure out what they need. So what if some people make dumb decisions. There no evidence to suggest that it'll be anything other than a tiny minority of people. And in that case call it a bribe to behave, call it respecting people's ability to make decisions for themselves, whatever floats your boat.

The lefty in me is doing the "Crying Game" shower seen.

[Russil Wvong]

Seconding the recommendation for William Julius Wilson's "When Work Disappears" (1996). Wilson: "The consequences of high neighborhood joblessness are more devastating than those of high neighborhood poverty. A neighborhood in which people are poor but employed is different from a neighborhood in which people are poor and jobless. Many of today's problems in the inner-city ghetto neighborhoods -- crime, family dissolution, welfare, low levels of social organization, and so on -- are fundamentally a consequence of the disappearance of work."

I'd suggest that policies aimed at reducing poverty should start by focusing on the working poor.

1. Minimum wage and refundable tax credits. The minimum wage is easy to enforce, but if it's too high, it's likely to reduce demand for low-wage labor. Refundable tax credits, like the Earned Income Tax Credit in the US, would be an alternate way to help the working poor without reducing demand. John Cheese's article on what it's like to be poor -- when your income isn't sufficient to meet basic needs, you spend money as soon as it comes in -- suggests that quarterly payments (like the GST credit), or even monthly payments, would be better than a single annual payment.

2. Macroeconomic policy to target full employment. As Matthew Yglesias has observed, this is an urgent problem: "We had, until recently, the Great Moderation Consensus that automatic fiscal stabilizers are a good thing and then beyond that the Federal Reserve has the ability to stabilize the macroeconomy by fiddling with interest rates. Well now here we are and the Federal Reserve can't stabilize the macroeconomy by fiddling with interest rates. That calls for the creation of a new regime. But it's clear that despite a few stabs in the direction of Quantitative Easing and communications management that Ben Bernanke isn't going to give it to us. It's not simply that the current recession isn't being brought to a rapid end, it's that nothing whatsoever is being done about the underlying weaknesses in the American economic system that it revealed."

3. Reduce marginal tax rates for the poor. My understanding is that in most provinces, if you're receiving welfare and you get part-time work, your wages are subtracted from your welfare payment. In other words, your wages are taxed at 100%! John Richards talks about this problem in "Retooling the Welfare State": reducing marginal tax rates is expensive (because you end up withdrawing the benefit at a much slower rate as you go up the income scale), but keeping them this high seems extremely short-sighted.

4. Richards also talks about family structure. I'd suggest that any programs to assist the poor should be neutral with respect to family structure (getting married shouldn't impose a financial penalty, and neither should getting divorced).

5. Maintain good public schools and health care, so that poor families in particular have access to education and health care.

What about the non-working poor?

In the Canadian context, my understanding is that welfare rates are quite low. Robin Boadway: "Those who must rely on social assistance, especially the disabled and employable singles, receive what can only be called a pittance with which to survive. Welfare incomes, including both social assistance and refundable tax credits, remain well below poverty levels and have been falling in real terms since the mid-1990s. This is a national disgrace."

[Determinant]

Yes, I may have volunteered for Her Majesty's Canadian Forces except with Type I Diabetes I am unfit to serve. Had that conversation at my first summer job actually, a coworker was a vet who upon learning I liked to travel said "join the Army, see the world!" I replied I was unfit for service. I looked me up and down and said there was nothing wrong with me. I said I was diabetic and then he shrugged. "That'll do it."

I knew several people in university who were taking COTC (Canadian Officer's Training Corps, get a degree on the Forces' tab in return for five years) and others who joined the Militia out of a desire to serve and for a bit of cash.

Second, Bob, your arguments make no mention of the fact when people's agency is denied. What happens when you do everything right and you still end up with nothing? Your arguments seems to assume that this doesn't happen; it most certainly does. Else I would not have an appeal before the Public Service Commission for a federal job recruitment process gone haywire. I like to think of it as overtime in a hockey game.

Your perspective of the system is generally shaped by what the system has done for you.

[Frances Woolley]

Russil Wong - excellent and constructive comments, but I'm afraid I'm going to have go to all world-weary and cynical on you.

"A neighborhood in which people are poor but employed is different from a neighborhood in which people are poor and jobless."

Substitute men for people and read that sentence.

Substitute women for people and read that sentence.

Sounds different, doesn't it? Unemployed men are way scarier.

it's a laudable set of goals: neutrality with respect to family structure, adequate support for people with no other source of income, tax rates low enough to provide adequate work incentives. I'd love to see it, but don't believe it's possible.

Make up some numbers, and see what you come up with for a break-even point (e.g. if support = $1000 per year and the tax rate = 10%, the break-even income level, the point at which people start paying positive taxes, is $10,000; if support = $5,000 a year, at a 10% average tax rate the break-even income level is $50,000). Figure you're going to have to generate enough taxes from people above that income level to pay for the transfers to people below that income level, and also factor in that that you have to pay for health care, education, old age security, law and order, roads, etc also as well.

Doesn't add up. GAI estimates that make it add up are based on highly optimistic assumptions about labour supply elasticities.

[Determinant]

Speaking of welfare rates, I exhausted my assets and EI and had to apply for Ontario Works.

I was eligible for $61/month as a single young male.

I was living with a relative. I was therefore entitled to a pittance.

Try running a job search on that; you can't.

[Bob Smith]

Patrick: "The military comes with that little caveat where you have to go die when your boss tells you to. Not sure that the price of escaping poverty should be pledging your life."

Sorry Patrick, but how's that any different from taking a job as a fisherman, farmer, miner, logger, oil fire fighter, cab driver, construction worker or any of a number of other particularly dangerous occupation. Why is risking your life in the armed forces an unreasonable price for escaping poverty but risking your life as a fisherman or miner isn't? (And I's be curious what the relative fatality rates for those various occupations are - I would not be the least bit surprised if some of them were higher than for the military). Seems like a fairly arbitrary distinction.

And as an aside, at least in the militaries of liberal democracies, soldiers are rarely ordered to die - generally staying alive is strongly encouraged. Countries that do order their soldiers to die are generally the ones that lose wars.

[Bob Smith]

"I'd suggest that any programs to assist the poor should be neutral with respect to family structure"

Query how desirable that is. Do we really want a society that is indifferent between single parent families and two-parent families? Granted, that's better than penalizing the two-parent family, but if you take the view (as I do) that the latter is, generally, a much more robust social institution, I'm not sure that we really want to be neutral as between the two.

Mind you, I think this is an area where the "soft" power of non-state institutions (religion, culture, societal expectations) can be more effective, more subtle and flexible, than using state power to achieve this goal (since the latter will do so clumsily and probably do as much harm as it prevents). The rise of single parent families since the 1950s probably has less to do with social programs or the tax system than it has to do with changing social values. But changing values doesn't need to be a one way street.

[Frances Woolley]

Bob Smith: " I'm not sure that we really want to be neutral as between the two."

Which way does that go - to each according to his need, or to those that hath shalt be given?

[DavidN]

Bob Smith,

My comment was in response to Tyler Cowan’s and Noah Smith’s post (linked above). It is implied in both Tyler’s and Noah’s post that their is a moral distinction between ‘deserving’ and ‘undeserving’ poor. Tyler states that ‘the poor, in wealthy countries at least, are responsible for quite a bit of their difficulties’ and Noah’s argument that we should help the poor is based on the premise that ‘people are poor because of their own actions’. I disagree with those premises so my definition of poverty and inequality is within that context. But generally I agree with you and our differences are semantic.

You make the comment that 'there's no contradiction there, because poverty, on its own, is not an insurmountable barrier to achievement, particularly in the presence of effective social institutions’. But that is my point, if you accept that institutions aren’t effective, that the status quo institutions in fact are barriers to social mobility, then taking the position that the poor because of their actions deserve to be poor is a contradiction, so I think you actually agree with me, and our differences are down to semantics of grammar composition. I agree with your last two paragraphs that any policies to deal with poverty and institutionalised inequality has to address the right issues i.e. institutions that are barriers to social mobility. Of course at the micro level with any policy it might be important to make distinction between individual characteristics such as age or capacity to work but I don’t think it’s helpful to characterise them as ‘deserving’ or ‘undeserving’ characteristics. The deserving v undeserving tag implies a moral connotation which is the issue I was trying to address.

[DavidN]

*’[I]f you accept that institutions aren’t effective, that the status quo institutions in fact are barriers to social mobility, then taking the position that the poor because of their actions deserve to be poor is a contradiction’ because the premise implies poor have no control over institutions, and institutions is what make the poor poor.

[DavidN]

Maybe it’s time for me to use set notation.

[Patrick]

Bob: Don't be obtuse. You seriously don't see the difference between driving a cab in Toronto and being an infantryman in Helmand, or starring down the barrel of a Croatian howitzer in the Medak Pocket? I doubt very much that a soldier would agree.

[Determinant]

Bob, it's quaint you have a such a notion of families. It really is.

The trouble is that it was never reality. "The good old days of two-parent families" willingly ignored spousal abuse and had laws that were very unequal in their treatment of women. Not that that stopped people getting divorces if they really wanted one.

In all provinces except Newfoundland and Quebec, divorce was legalized through incorporating the English Matrimonial Causes Act into provincial common law, a barely legal tactic as divorce was specifically reserved to Ottawa under the Constitution Act, 1867. Under the Act the surest way to get a divorce was to prove infidelity. "Private Investigators" were paid witnesses to prove such infidelity. If the marriage had simply broken down and couple wanted to walk away, they could stage "infidelity" easily. There are records that show just that.

In Newfoundland and Quebec there was no equivalent to the Matrimonial Causes Act. In order to get a divorce you had to apply for a private Act of Parliament to grant you one. This would be introduced in the Senate; infidelity was the surest ground and again the use of investigators as paid witnesses and staged scenes of 'infidelity' were common and exist in the Journals.

The good old days weren't that good, they were just different. Divorce was made generally available in 1968 with the Divorce Act, the first Federal act under the Divorce Power granted to Ottawa under the BNA Act.

[K]

Frances: "Doesn't add up. GAI estimates that make it add up are based on highly optimistic assumptions about labour supply elasticities."

Really? Where were you when we discussed this a bit over a year ago? I thought Nick made a really excellent case that it all adds up fine and is a lot more efficient to boot. 

[Frances Woolley]

K "Where were you when we discussed this a bit over a year ago?"

Lurking and avoiding conflict. How fruitful is it to have a long debate basically goes "labour supply and demand are relatively elastic" "no, they're inelastic" "elastic" "inelastic"?

As an economist I believe there are no $20 bills lying on the sidewalk - and that applies to social assistance reform as much as anything else.

[Determinant]

Nick is an economist and he believes there are $20 bills lying on the sidewalk. He's said that many times. He believes that it is the responsibility of economists, er, central banks (same thing) to find the.

[K]

Frances: "that applies to social assistance reform as much as anything else."

Is this a corollary of the Efficient Government Hypothesis? Honestly, I have literally no idea why *as an economist* you would assume such a thing. The "efficiency" goal is to get the (non-voting) poor out of our faces and our middle class consciences as cheaply as possible. I don't see where the utility of the poor figures into the political incentives.

And I apologize for the snark which I usually reserve for righties. Your cynicism about the possibility of positive change is galling to me.

[Frances Woolley]

K - people's lives are complex. That's why social assistance is complex. Sure, there are things that can be done to make it better (or worse, like the Florida drug tests featured on tonight's Daily Show). In fact Canada has moved a substantial way in the direction of a GAI with CCTB, and is continuing to move in that general direction with WITB. (CCTB = canada child tax benefit WITB = working income tax benefit etc).

I expect we'll see some enrichment of WITB since it's a bit of a Harper baby. But to my mind GAI is a pretty low priority in terms of welfare reform. Child care is a big one, changing earnings exemptions is another one, rethinking asset tests is a third, providing decent support to families with children *as families with children* is one I'd like to see.

Look at the results of the SRDC minimum income experiment back in the 90s, that's some of the best empirical evidence we have. Also the recent paper by Evelyn Forget in Canadian Public Policy (Sept issue, I think).

It's like turning around a freighter - it happens slowly - but GAI isn't some magic bullet that's going to solve everything.

[Russil Wvong]

Frances: "It's a laudable set of goals: neutrality with respect to family structure, adequate support for people with no other source of income, tax rates low enough to provide adequate work incentives. I'd love to see it, but don't believe it's possible."

John Richards gives a concrete example of how clawback rates might be lowered on pages 270-277 of "Retooling the Welfare State" (1997)--by reducing current zero-earnings welfare benefits even further. Assuming the current clawback rate is 90%:

"Under this option, a province would seek to render employment more financially attractive for parents on welfare by augmenting earnings over a phase-in range. A province could partially offset the earnings supplement by reducing zero-earnings welfare benefits. To be specific, assume that annual provincial welfare benefits decline by $1,000. Simultaneously, the province would supplement earnings by 35 cents per dollar over the earnings range that permits welfare receipt ($0-$9,800), a range that effectively encompasses full-time work at minimum wage. The maximum value of the earnings supplement is $3,400, realized at earnings of $9,800. With a 25 percent average taxback rate applied to the earnings supplement and CTB in the $9,800-$26,000 range, the supplement disappears at an earnings level of $26,000.

"... the chief rationale [of this option] is to make work pay.... For those simultaneously receiving provincial welfare, the combined tax-back rate would decline from the prohibitive (90 percent) to the reasonable (55 percent, which is the 90 percent welfare tax-back less the 35 percent earnings supplement). [This option] is clearly less redistributive for the very poor. For the minority in the phase-in earnings range who do not receive provincial welfare, the supplement would augment earnings by 35 percent, effectively compensating them for the decline in real earnings among the bottom quartile and for the increase in marginal tax rates, two trends that have adversely affected the poor over the past two decades."

Bob [regarding family structure:] "Mind you, I think this is an area where the 'soft' power of non-state institutions (religion, culture, societal expectations) can be more effective, more subtle and flexible, than using state power to achieve this goal--"

I'd agree with that. One factor here is that when you make benefits dependent on family structure, then the state has to know what your family structure is (and has to be able to tell if you're lying). It seems better to try to make the system neutral.

[K]

OK. Well that sounds more like there could be big benefits to be had but it's risky to do everything all at once. I'm fine with that, though I'm far more optimistic about the potential for non means tested programs (eg citizens' dividend) and the potential additional benefit of reduction in deadweight loss than you seem to be. But no objection to government run childcare (public school for toddlers) or other government services where there is a likelihood of market failure. There is an excellent case for special treatment of families and others who, like children, don't have agency. But I don't see a reason to means test any of these programs. Just let everyone in the relevant category have them. Then tax it back in the most efficient way possible.

[Frances Woolley]

K " But I don't see a reason to means test any of these programs."

Let's say a minimum wage job generates just enough income for a single parent family to get by, not taking into account child care costs. Without generous child care subsidies and/or very large cash transfers it's not possible for someone to take that minimum wage job, even if he/she wants to.

Giving everyone generous child care subsidies and/or very large cash transfers bankrupts the system (see Quebec where child care is "universal" in theory but tightly rationed in practice, current debate around OAS), without some kind of means testing the most needy will probably end up getting the fuzzy end of the lollipop.

People don't like being given benefits and then having them taxed back - the psychology of it doesn't work.

Now I remember why I didn't join in that debate about GAI.

[Nick Rowe]

We already have a psuedo GAI. It's called "welfare" (plus a host of other programs like OAS, disability stuff, etc.). The only difference between a true GAI and welfare is that you get a smoother Marginal Tax Rate profile. GAI is no magic bullet. It's just a smoother bullet.

The "correct" answer to all these questions will be some (unknown) convex combination of:

1. Akerlof on "tagging"
2. Rowe and Woolley on "Universality"

One other thought:

vimothy's comment resonates strongly with me. What percentage of the population would have to be like 'Enry 'Iggins before you said "enough is enough"? 1%? No worries, we can handle that. What about 10%? 50%? 90%? What if the growth of that percentage is endogenous wrt policy? What is the percentage, or the growth elasticity, at which you would join Lee Kwan Yew (Singapore chap)? Lefties from an earlier century weren't afraid to tackle these question. I think Determinant's (theological) ancestors weren't afraid to tackle the distinction too.

[Nick Rowe]

Damn! For "'Enry 'Iggins" read "Mr Doolittle".

[K]

Frances: "Giving everyone generous child care subsidies and/or very large cash transfers bankrupts the system"

High quality universal daycare (see northern Europe, France) and high quality public education in general is the opposite of bankrupting the system. It's one of the best investments we can make in the future productivity that will fund our retirements.

And Nick's point that we barely need to even raise anybody's effective marginal tax rates to institute a flat tax plus a large *universal* cash transfer was never refuted by anyone in that thread. So labour elasticity has nothing to do with it. The point is to smooth the effective tax curve and eliminate outrageously high marginal tax rates on low income earners. It would have been nice if someone had at least made an attempt to refute the data and arguments that were put forth by Stephen and by Nick in the comments. Instead we were left with Kevin Milligan claiming in the press that it's too expensive, but apparently unable to make any headway against Nick's (admittedly back of the envelope but very coherent) analysis.

"People don't like being given benefits and then having them taxed back - the psychology of it doesn't work."

*All* benefits get taxed back. That's how we fund them.

"Now I remember why I didn't join in that debate about GAI."

Sorry I brought it up.

[Britmouse]

The BBC managed to dig out a modern day Mr Doolittle, to liven up the U.K.'s current debate about welfare. This family is getting welfare worth the equivalent of about £40K gross per annum. What disturbs me about lefties in the U.K. is that they see "workfare" as a return to workhouses, and they have campaigned vigorously against it. In effect the position is that welfare must be unconditional; if people are still poor, well, we must redistribute more from the bankers. I don't know how we move on from there.

[Mandos]

Agree, also on the issue of "deserving of what". If you focus on the poor because of their unequal share, then everyone's inequality is up for grabs. My kids will be OK, but they aren't likely to go to Harvard and don't currently mingle with the elite of the Eastern Seaboard; should someone else fix that for me? It would sure boost my kids. But policies that go beyond relieving deficiencies in basic necessities are based on the idea that private social affiliation is somehow a public good. I agree with antipoverty types who are concerned about hunger and malnutrition--that is lifelong medical harm that is tough to correct. But you do not have to have a cell phone or internet access, even though the lack of those makes life dull and difficult.

Poverty (and wealth) is strictly relative. If in some unimaginable future some people can travel freely to the stars and back due to their economic status, and some people just have a good life here on earth, then the latter are in abject and deeply immoral poverty.

I find this discussion really strange and/or backwards. I can't think of a moral justification why the CEO and the janitor who cleans his office should make a different amount of money. Almost all the usual justifications are ex post facto (the organizational power of the former, the skill level, etc, etc). If we must have a difference for some practical reason, then let us instead discuss how big this difference ought, under the assumption that otherwise they should be the same. That discussion is going to have a very different character and assumptions from this one, where we argue over whether we should correct for differences assumed natural and therefore morally justified.

[Mandos]

What disturbs me about lefties in the U.K. is that they see "workfare" as a return to workhouses, and they have campaigned vigorously against it.

Most of the examples in your link are essentially private industry getting free labour from the government. This sort of "workfare" is very much anti-labour.

[Nick Rowe]

K: "And Nick's point that we barely need to even raise anybody's effective marginal tax rates to institute a flat tax plus a large *universal* cash transfer was never refuted by anyone in that thread."

I don't think that's exactly what I said (or did I?). You take that very spiky 3-D graph of effective marginal tax rates (EMTR on the vertical axis, income on one horizontal axis, other attributes on the other horizontal axis/axes), and put an bulldozer on it. Scrape off the hills, and use the material to fill in the valleys. Then hope that the incentive effects allow you to do some mix of: increasing the intercept income; lower all EMTRs.

[Britmouse]

Most of the examples in your link are essentially private industry getting free labour from the government. This sort of "workfare" is very much anti-labour./blockquote>

In what sense is it anti-labour? Don't welfare payments for people in work also subsidise the price of labour, or is there something special about subsidising the price down to 0?

[Nick Rowe]

Mandos: "Most of the examples in your link are essentially private industry getting free labour from the government."

But this begs the questions:

1. Who is "private industry"? Is that a person?
2. Why is "private industry" getting the free labour rather than government? Might it be that public sector unions won't allow it?
3. Would it be "pro-labour" to take some percentage of the labour force and ban them from working, to reduce the total supply of labour and increase wages for the remainder?

[Nick Rowe]

Mandos: "I can't think of a moral justification why the CEO and the janitor who cleans his office should make a different amount of money."

I can think of two:

1. Libertarian: because people should have the right to alienate their own labour at whatever prices they agree on.

2. Pragmatic: because attempts by governments to pay people according to the government's own estimation of their moral worth or need haven't worked out so well in practice.

[K]

Nick: "I don't think that's exactly what I said (or did I?)."

No you're right. What I actually meant was that (assuming a bit of savings from elimination of dead weight losses) the *top marginal rate* wouldn't have to go up very much. The other rates are, as you point out, all over the place. Some would rise, some would fall.

[Nick Rowe]

K: yep. The hope/expectation is that more would fall than would rise, once the incentive effects kick in.

[Nick Rowe]

K: though actually, since there must be a Laffer Curve out there somewhere, and EMTRs at or near 100% must be over the top of the Laffer Curve, you could presumably shave off those EMTR peaks without having to raise any other EMTRs.

[Mandos]

I can think of two:

1. Libertarian: because people should have the right to alienate their own labour at whatever prices they agree on.

2. Pragmatic: because attempts by governments to pay people according to the government's own estimation of their moral worth or need haven't worked out so well in practice.

Yes, but these are the ex post facto claims to which I was referring which don't relate to a discussion of "deservingness". The libertarian is claiming that people have the right to abjure what they deserve. Since I believe that what we call the "free" market is usually not a product of free exchange but necessarily one of relentless violence, I don't agree---but it's a separate discussion from deserving. The second one is orthogonal to deserving by definition.

How we approach the problem of deserving is purely a function of political preference. If you decide that there is a distinction between the deserving and undeserving poor, you have adopted a priori a particular moral and political understanding of work and wealth. Making this assumption plain puts the various proposed solutions into stark relief.

[Mandos]

Mandos: "Most of the examples in your link are essentially private industry getting free labour from the government."

But this begs the questions:

1. Who is "private industry"? Is that a person?
2. Why is "private industry" getting the free labour rather than government? Might it be that public sector unions won't allow it?
3. Would it be "pro-labour" to take some percentage of the labour force and ban them from working, to reduce the total supply of labour and increase wages for the remainder?

1. Entities whose economic decisions are set by law at a further remove from democratic review.
2. I'm sure that the public sector unions would be happy to allow if it were the case that the workers were hired at public sector union wages and permitted to become members of the public sector unions. I have no principled objection to that form of "workfare".
3. It would be "pro-labour" (or at least neutral) to employ them at wages that do not compete with existing workers.

[Shangwen]

It's worth noting that Doolittle's argument is not in support of the idea that charity should "ennoble", or require the adoption of bourgeois values. He just wants fair compensation; in other words he wants trade, not charity. Here is the rest of the exchange, where he settles on a mere 10% of his original ask:

HIGGINS. I suppose we must give him a fiver.

PICKERING. He'll make a bad use of it, I'm afraid.

DOOLITTLE. Not me, Governor, so help me I won't. Don't you be afraid that I'll save it and spare it and live idle on it. There won't be a penny of it left by Monday: I'll have to go to work same as if I'd never had it. It won't pauperize me, you bet. Just one good spree for myself and the missus, giving pleasure to ourselves and employment to others, and satisfaction to you to think it's not been throwed away. You couldn't spend it better.

HIGGINS [taking out his pocket book and coming between Doolittle and the piano] This is irresistible. Let's give him ten. [He offers two notes to the dustman].

DOOLITTLE. No, Governor. She wouldn't have the heart to spend ten; and perhaps I shouldn't neither. Ten pounds is a lot of money: it makes a man feel prudent like; and then goodbye to happiness. You give me what I ask you, Governor: not a penny more, and not a penny less.

Higgins wants to give Doolittle more than he is asking for, to compensate him for the verbally clever part of his character that signals, unexpectedly, that the poor man is more "like them". Doolittle wants fair compensation unhitched to affiliation. Were Deirdre McCloskey arbitrating this, it's possible she'd defend neither Higgins nor Doolittle, but she might hold out more hope for Doolittle.

[Patrick]

"What percentage of the population would have to be like 'Enry 'Iggins Mr. Doolittle before you said "enough is enough"? 1%? No worries, we can handle that. What about 10%? 50%? 90%? What if the growth of that percentage is endogenous wrt policy?"

If the rate of doolittle-ism is independent of policy, then I don't suppose there is much policy can do.

FWIW, as a lefty, I *am* sympathetic to concerns over incentives. Just driving to and from work I see innumerable examples of people engaging in all kinds of rude, anti-social, and downright dangerous behaviour, and I don't believe the problem would be solved by gov't giving everyone a luxury car. But in a world where economic policy is designed to thump doolittle-ism into submission, I worry about the Eliza's who don't have a Mr. Higgins to shield them from collateral damage.

[Nick Rowe]

Mandos:

1. If I and you both agree, why should the other 99% of the population get to vote on it first? Is there any private sphere in your worldview, where we can do what we want without having to get it OK'd by the whole elctorate?

2. But maybe the rest of us don't *want* to hire more government workers at union wage rates. Are you saying we should? What about if union wages for unskilled labour were $50, $100, $1,000...? At what point would you say "No"?

3. But if people and firms *wanted* to hire more labour at existing union wage rates, they would already be doing it, so we wouldn't be asking this question in the first place.

[Britmouse]

Why is "private industry" getting the free labour rather than government? Might it be that public sector unions won't allow it?

Labour did do that, a "Future Jobs Fund" which created public sector jobs to get people out of work, and the unions did support it. The new government is... less confident in the multiplier effects / not trying to increase public sector output at the moment / Doing Things Differently Because They Know Better, delete as appropriate.

[Nick Rowe]

Patrick: "But in a world where economic policy is designed to thump doolittle-ism into submission, I worry about the Eliza's who don't have a Mr. Higgins to shield them from collateral damage."

Agreed. But at this point Lee Kwan Yew (sp?) would ask the question that makes us very uncomfortable: "OK, and how many more Eliza's do you think you can handle, Mr. Higgins?"

[Nick Rowe]

Russil is stuck in spam.

[Patrick]

I suppose it then becomes a test of Mr. Higgins morality. What's more important to him: thumping doolittle-ism or protecting Elizas?

[richard]

Perhaps we need a post on 'deserving' and 'undeserving' economists. After all, we need to fire someone to free up taxpayer cash in order to provide job training funds for the 'undeserving' poor.

I nominate the monetarists. Proven wrong and therefore 'undeserving'. Fire 'em all and create some job-retraining programs for them. Starbucks needs baristas.

[Mandos]

Nick:

1. I gave you a definition. I didn't give you (directly, at least) a judgement on what I thought of private enterprises that aren't subject to democratic review. Let's say that that the private sphere extends to the point where we cannot determine significant externalities from human choices. However, my definition of an externality is probably much broader than yours, and is yet again dependent on political ideology and moral preferences. In the case of employing welfare recipients in a manner that competes with union wages and undermines collective bargaining, I'd say that the externalities are "quantit.

2. The fact that some people don't vote the way I think they should doesn't pertain to whether I think it's good or fair.

3. See my answer to your statement about libertarians. The "want" part is extremely one-sided, where one sides wants have more weight than the other side. I don't agree that this weight has an a priori moral case if we have anything more than the most trivial belief in the equal dignity of persons.

[Mandos]

I forgot and didn't finish this sentence (distracted):

1. I gave you a definition. I didn't give you (directly, at least) a judgement on what I thought of private enterprises that aren't subject to democratic review. Let's say that that the private sphere extends to the point where we cannot determine significant externalities from human choices. However, my definition of an externality is probably much broader than yours, and is yet again dependent on political ideology and moral preferences. In the case of employing welfare recipients in a manner that competes with union wages and undermines collective bargaining, I'd say that the externalities are both "quantitatively" and "qualitatively" notable. (See many extant discussions on growing inequality...)

[Mandos]

Look, there are two kinds of arguments we can use to justify the existence of relative poverty: a priori and a posteriori. The a posteriori arguments are the ones that Nick originally used to respond to me. You know, the practical reasons, it just is, and so on and so forth. If we want to focus on those, then the question of deserving or undeserving becomes irrelevant. And we'd be discussing, instead, what size of inequality we should tolerate before we need to take some form of ameliorative action. Then the discussion returns, at least partly, to the realm of the measurable and empirical.

If we want to talk about a priori reasons---whether or not someone deserves to be poor due to their own actions and errors---then we enter a completely different discussion and are at risk of begging the question: should particular actions lead to poverty and what are these actions.

But instead, because the mainstream economics profession as a group has made apparent assumptions about these things, we are instead discussing how to ameliorate the condition of the undeserving poor, and precluding a discussion of whether our current system of distinguishing deserving from undeserving has itself led to, well, systemic poverty.

[Bob Smith]

Patrick: "Bob: Don't be obtuse. You seriously don't see the difference between driving a cab in Toronto and being an infantryman in Helmand, or starring down the barrel of a Croatian howitzer in the Medak Pocket? I doubt very much that a soldier would agree."

Well, let's think about the difference. According to this (http://www.latesttopten.com/top-10-most-dangerous-jobs-in-usa-highest-casualty-rate) the fatality rate for US servicemen is less than it is for fisherman, and not that much larger than the corresponding rate for loggers or pilots. And it's easy to see why that is. The fatality rate IN COMBAT, may be higher for soldiers, but at any given time most soldiers aren't serving in combat roles. Fort Hood, Texas, is a lot safer than the Bering sea. If one focused only on the fataliy rate of miners at the bottom of collapsed mines, I could say that that's the most dangerous profession (and I doubt the coal miner would disagree with that proposition). Mind you, that would be misleading, but by focussing on the perspectives of soldiers in combat, that's precisely the exercise you're engaged in.

So again, to go back to your question, while is it intolerable for someone to take a 1 in 1000 chance with their life to be a soldier, but it isn't intolerable to take a 1 in 1000 chance with their life to be a fisherman or logger (or a 1 in 5000 chance with their life to be a cabbie). Perhaps you can tell me the distinction between those two choices, but I don't see it. (Not true, I do see the distinction, soldiers tend to get better benefits than fisherman, and definitely have better benefits than cabbies.)

[Patrick]

Bob: Sorry, not buying it. When the fish start shooting back maybe we can talk. A miner or fisher have an explicit right to refuse to do anything obviously unsafe. It's up to them. A soldier who packs it in when things get dicey ... well, at least they don't shot them anymore as far as I know, but no miner or fisher ever got life in prison for refusing unsafe work.

[K]

Nick: "1. Libertarian 2. Pragmatic"

3) Utilitarian. The welfare theorems say that there is a competitive equilibrium that maximizes utility... Subject to a lump sum wealth transfer. And notwithstanding some pretty major technical conditions such as absence of market power, information asymmetry and externalities.

But still, those are important insights. The left would say that power distorts outcomes in a way is unrecognizable as a perturbation of our toy model and that we therefore need to balance power with more brute force power, thus (possibly) rectifying some of the inequality but making little progress on output. The real answer, of course, is to go after and eliminate the sources of power such as regulatory capture, to eliminate corporate welfare (e.g. government guarantees) and to tax finite resources (land) and other externalities. And to empower labour by paying citizens an equal share of the collected rents as a citizens' dividend. And maybe some people will work less, as Stephen pointed out in his piece, and so what, if that's what makes them happy.

And really excellent point about the 100%+ marginal rates. Laffer's a dirty word (and I'm pretty sure the man was totally wrong about the peak of the curve), but it's got to kick in somewhere. That is some majorly inefficient taxation.

Bob: Fisherman have the right to quit. Soldiers, not so much. My right to change my mind *after* I figure out what I've gotten myself into is pretty valuable to me. It's my freedom. It's of such great value that we don't even permit people to contract it away. Except to the military. The big toll from service is family breakdown, depression, PTSD. Not casualties. I'm sure fishing is tough, but you can always move to Fort McMurray.