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“Evicted”, an ethnographic study of tenants in low-income housing (2016)

130 points by hamiltonians 10y ago

rayiner 10y ago
Because providing goods and services to poor people is evil! > Tobin Charney makes $400,000 a year out of his 131 trailers, some of which are little better than hovels. That monster! Charging about $3,000 a year in rent per trailer! Of course his actual return is lower than that, because he has to pay for the mortgage and taxes on the underlying property, as well as upkeep. Say say more like $200,000. But still! Earning about as much as a programmer managing a business that houses over a hundred people. Monster is the right word for sure.
- eropple 10y ago
  Man, I really, really like your posts--but come on. Nobody is saying that providing goods and services to poor people is evil. They're saying that there are capitalistic incentives to keep a poor population captured and that those outweigh the comforting-but-probably-pretty-wrong "just lazy" excuses. I am perhaps more disappointed in an internet name than I should be, but I am disappointed. You are better than this.
  - rayiner 10y ago
    The capitalist system writ large would much prefer that these people made $40,000 a year instead of $20,000, because then it could sell those people iPhones and whatnot. I'm being glib, of course, but that's because there is no rational point to be made here. There are almost zero barriers to entry to businesses that provide goods and services to poor people. Buying a trailer park requires extremely little capital investment. Thus, there is no reason to believe that the pricing is predatory. Instead, the article is trading entirely on the ickiness (some) people feel about running a business catering to poor people. I think limited housing options for poor people is a big problem. But it's not a problem created by business owners providing housing to poor people (or ones evicting poor people who cannot pay). It's a problem created by state and municipal governments that make it illegal to build dense housing, housing on small lots, housing that isn't to code, etc.
    - eropple 10y ago
      > The capitalist system writ large would much prefer that these people made $40,000 a year instead of $20,000, because then it could sell those people iPhones and whatnot. Only if the marginal cost of getting there is outpaced by the marginal return. If that wasn't the case, no volume-but-cheaper business could work. When you can have a ton of poor people, they are an exploitable resource for people who aren't selling iPhones (and if you pay attention to the description of eviction as a social problem maybe you'll catch a little more of the "exploitable resource" part). And it's nothing surprising--the historical examples abound of captive, poor populations who are used as revenue generators with no real recourse of their own. I get nothing out of the article that's "trading entirely on the ickiness" of selling goods and services to poor people. But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there."
      - rayiner 10y ago
        > But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there." Poor people might not have good options, because they have no money, but they have options. If the check cashing place on your block charges too much, you can go to the one down the street. The barrier to entry in these markets is so low that there is no argument that they are "gouging" customers who have no other options.
        eropple 10y ago
        ...Dude. The usurious, bullshit check-cashing places are one of the parts of the system that profits from keeping poor people where they are. The charges at all of them are effectively too much to not be a severe burden on folks who are too down to afford a bank account. You're not covering yourself in glory here with this sort of lack of empathy.
        rayiner 10y ago
        If banks could make a profit giving poor people bank accounts, they'd do it. Moreover, there is tremendous competition in the check-cashing market. Walk down a street in Baltimore and you'll hit one every few blocks. If one of those shops could get more of the market by charging lower fees than their competitors, they'd do it. Focusing your ire on check cashing places is the archetypal example of a bullshit solution crafted based on emotions rather than rational analysis. Forcing check-cashing fees below the market price is just going to reduce the number of check cashing places, taking away options from people who need them. Any real solution is going to either require the government writing a check e.g. by subsidizing bank accounts for poor people, or reducing regulation to lower the transaction costs in check depositing and withdrawals.
  - saint_fiasco 10y ago
    Any stupid theory can outweigh the comforting lie of "just lazy", but that doesn't mean we have to reduce our skepticism. The people who rent trailers to poor people would probably make much more money building nice houses and renting to richer people. It could be that one of the reasons poor people have so few affordable options is that people don't profit from serving them. The article does nothing to argue against that possibility. It doesn't even acknowledge any alternative theory that could explain the same data, except the "just lazy" strawman.
- yannyu 10y ago
  That's a pretty poor way of expressing the idea of the article. The point the article is making is that poor people often have their backs against the wall as far as the number of choices they have in food, housing, jobs, location, etc. They're effectively a captive audience, which makes them an easy population to exploit. Maybe this is considered acceptable in society's economic model, but at the least people should be more aware of how your options fall away as you go further down the socio-economic ladder.
  - enoch_r 10y ago
    This may be the book's point, but I don't think it's the article's. The author's claim that "the problem is that poverty is profitable" only makes sense if one believes that those profiting from the poor (like the landlords mentioned) are somehow responsible for their poverty.
    - deleted 10y ago
      [deleted]
    - yannyu 10y ago
      Yeah, fair. The article editorializes and seems to advocate for more culpability on the people delivering the services. Which feels a little short-sighted, since poor people wouldn't necessarily be any better off if they didn't have these services at all.
  - koolba 10y ago
    > Maybe this is considered acceptable in society's economic model, but at the least people should be more aware of how your options fall away as you go further down the socio-economic ladder. What rational person would expect your options to improve as you drop down the economic ladder? Less money, mo problems. The only situation I've seen where that's remotely true is applying for student aid where if you're parents saved money they're expected to pony it up, but if they spent it all on flat screen TVs and new cars (and hence are "cash poor") they're not expected to do so.
    - 10y ago
- ryandamm 10y ago
  You're assuming the author is reporting gross receipts, which he may well be. But your back of the envelope calculations aren't convincing, particularly given your tone. ("Monster" is your word. The text, which I've now heard excerpted on the radio and in this article, is painting a considerably more complex picture.)
  - rayiner 10y ago
    I am because I googled first to confirm average trailer rent is $200-300 per month, which is consistent with the number in the article.
    - Pica_soO 10y ago
      It would be even higher, if there where bigger handouts. Why not put a rent limit for "poor" peoples property size and location?
- AnimalMuppet 10y ago
  So he's charging $250/month rent per trailer. That sounds very different from "making $400,000 a year". The second sounds like exploitation; the first sounds very close to charity.
  - ceejayoz 10y ago
    This hinges a bit on whether "making $400k" means revenues or profits.
- 09bjb 10y ago
  I know. And that landlady that had enough money leftover to take a yearly vacation and attend real estate meetups for professional development! "Monster" may be too generous. If anyone here thinks you can take investment and usury out of any economy, I'd highly recommend David Graeber's book "Debt: The First 5000 Years". Totally viable, assuming we all go back to hunting and gathering. One way or another, the poor need to be able to afford the basic necessities in life, housing included. Making anything that vaguely sounds like "rent-seeking" illegal is not going to fix it. How will anyone retire if dividends are illegal? Do we go back to a communist system, where you're required to work for government (benevolent, of course) for a fixed number of years? Where will the money come from to invest in a trailer that's "squalid"?
draw_down 10y ago
Hmm, indeed, "what if".
rm_-rf_slash 10y ago
On the other side of the equation (at least regarding real estate), it can be difficult to make money from poor people without extremely low costs and tremendous scale. There is a reason many landlords refuse to accept Section 8 tenants. It's not because they're evil Scrooges, it's that Section 8 tenants are more likely to damage properties (I've heard firsthand accounts of Section 8 tenants letting their multiple dogs piss and shit on the floor while refusing to pay several months of back rent and utility bills, and others letting their units turn into such trash heaps that delousing was a regular occurance) and vacuum up administrative time. So the rent has to be high for the landlords to be able to make a profit. Maybe we could stop blaming the market for doing what it does and recognize that the economy and the livelihood of people is largely determined by government policy? Bring back the Works Progress Administration. Pay people to show up and work. I know it's unrelated to the article, but as long as private employers have little competition for wages, poor people will continually be forced to accept their place in a race to the bottom.
- Masacore 10y ago
  I agree 100% The article (I'm not sure about the book) painted landlords as evil for evicting women "Think of that next time you ask a woman why she doesn't call the police," but Crack doesn't come out of walls easily, holes punched in by that abusive man aren't fixed for free, and cops making an arrest care even less about your property than the tenants. There are insanely high cost to renting to low-wage families and most landlords I know that attempted it didn't last long doing so. Are there some sad stories of people truly trying to improve their lives? Yes, there absolutely are, but for every "Pursuit of Happyness" Oprah level story of overcoming poverty there are 20 people who've absolutely given up and don't give a crap about anything that's not physically attached to them. It's not the business owner's responsibility to try and spur the human spirit of the impoverished. This article is painting just a skewed of a viewpoint as the one it's trying to disprove, and I'm curious if the book is the same.
  - steven777400 10y ago
    To affirm your anecdote, I had a friend who bought a fourplex in a somewhat depressed area, lived in one unit and rented the other three. It was an unmitigated disaster and a terrible experience. I spent some time with him trying to help out around the units and also discussed his experiences with him. I concluded from that I would never, under any circumstances, want to be a landlord.
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enoch_r 10y ago
The assertion implicit in the headline ("poverty exists because it's profitable") is the article's assertion, not the book's. This is quite silly. Through all of human history the vast majority of people have been miserably poor, and it's only recently that a slice of humanity has managed to claw their way out of poverty. Poverty should be considered the natural state of humanity, not an anomaly that needs explanation.
- skylan_q 10y ago
  Poverty should be considered the natural state of humanity, not an anomaly that needs explanation. This is the truth. But for clarification that's not to say that we shouldn't fight it.
- danharaj 10y ago
  > miserably poor Poor as in not wealthy, sure. But miserable? No, I doubt that. Yes, if you compare wealth between different time periods many people have more wealth today than they did yesterday, but that's not important. Poverty is a measure of economic relationships: What matters is differentials in access to resources and means of production and how those differentials shape the structure of our society today. Even if an impoverished family in Appalachia today has more wealth than hunter gatherers several thousand years ago, their poverty marginalizes them, immiserates them, and drives the decay of the social structures around them. The issue is social relationships, not absolute wealth. It's about the dynamics of our society and how class structures form around economic relationships. Comparing wealth between time periods is always a red herring in discussions about poverty. Poverty certainly does exist because it's profitable because poverty is about class and economic relationships today, not the relative wealth between, say, a vagrant in San Francisco and a vagrant in Rome circa 50 CE.
- rpmcmurphy 10y ago
  I have first hand experience with this. After being swindled badly in the sale of a small business, I was forced into foreclosure and chapter 13 bankruptcy. For roughly 8 years, I was trapped in a situation where I had crippling debt, and had lost my primary source of income. This started in 2008 so finding a job that paid well enough to stop the bleeding was out of the question. What happens when you get in a situation like this? Every dirtbag on the planet who has an idea about how to profit off it will appear. This was especially true of real estate agents, as well as people peddling legit sounding loan restructuring programs. It is a huge pile on and it really wears you down (besides the stress of not knowing from week to week if you home is going to be auctioned off at the courthouse, not being able to pay for luxuries like basic dental care, and so on). If you have not been there, you have no idea at all how difficult it is to get out of that trap once you are in it.
saint_fiasco 10y ago
Compare and contrast: http://www.businessinsider.com/check-cashing-stores-good-deal-upenn-professor-2017-2 http://www.businessinsider.com/check-cashing-stores-good-dea...
ryandamm 10y ago
Important frame to consider, here in the comments: we're all reacting to an article that's reviewing a book. A long work of sociology. So the article isn't the ground truth; it's a tiny digest, plus a reaction by the article's author. The book itself is a project of research, which also isn't ground truth. But they bring up provocative points that most people haven't considered. And in some cases, won't consider. If your mental model for how the economy works somehow doesn't allow the situations described in the book or article, I'd hazard to say it's your mental model that's in error.
- williamtrask 10y ago
  standing ovation
- rayiner 10y ago
  > If your mental model for how the economy works somehow doesn't allow the situations described in the book or article, I'd hazard to say it's your mental model that's in error. What situations? People being evicted? People paying rent for trailers? What economic insight are you supposed to take away from those things? I would say that if your mental model of how society works does not include those things, yeah, it should. If everyone realized what was happening, maybe there would be more support for basic income, Section 8 vouchers, etc. That's my view--raise taxes and give more money to poor people so their lives are better. But that's an entirely different point, and not one that the article is making. The article is an archetypal example of what I call "well intentioned but economically ignorant liberalism." The folks who campaigned to make tenements illegal were not conservatives. They were liberals genuinely concerned about the living conditions of those residents. However, they were also ignorant about how economics works. So they tried to address the problem simply by making tenements illegal (i.e. taking an option away from poor people).[1] Calls to regulate check cashing places and payday lenders out of existence (or articles that demonize landlords who rent to poor people, like this one) fall into that same bucket. Reading the article, what kind of solution do you think the article is leading you to? Maybe making it harder for landlords to evict tenants, or limiting the rents that trailer parks can charge tenants. What does that do? Cause landlords to be less willing to rent to poor people, or less likely to invest in a new trailer park. I.e. it takes options away from poor people, and ironically reduces competition and raises prices in the markets that cater to poor people. Making some poor people better off (e.g. the ones that get the trailer park before the rent controls kicked in), but making poor people as a whole worse off. [1] https://fee.org/articles/the-hidden-war-on-affordable-housing/ https://fee.org/articles/the-hidden-war-on-affordable-housin...
MtotheThird 10y ago
This is an excellent book, but as other comments have pointed out, the review misrepresents its argument. I wouldn't say Desmond is exactly sympathetic to the landlords he profiles, but he does provide a well-rounded picture of them. The main thrust of his analysis is that eviction is a major cause of an inescapable cycle of poverty, and that preventing eviction would go further to reduce poverty and inequality than nearly any other government policy. IIRC his recommendations involve a huge bump in the federal housing voucher program, decoupling it from work requirements (since it's difficult to get a job without a permanent home), and tying federal aid to code reform in cities (simplifying and loosening the housing code so that landlords would be less likely to ignore it).
- rayiner 10y ago
  Those are great policy prescriptions: reduce eviction by giving poor people more money and more flexibility, as well as by making it cheaper and easier to offer housing to poor people. You're right that the article misrepresents that argument.
  - AstralStorm 10y ago
    How does it stop everyone from just squeezing more?
ryanobjc 10y ago
Competition is more than just another store offering the same goods and services at the same prices. I'm flabbergasted at these comments. You are as out of touch as a republican supreme court justice. Willfully out of touch even.
- rosser 10y ago
  I quite agree with your first line, but downvoted your comment for the second line. That's personal commentary, and HN strives to keep discussion at the level of ideas.
  - ryanobjc 10y ago
    HN strives, but fails. The quality of posts has massively declined over the last 5 years or so. One more for the pile. However, another commenter does make the same point but worded better: The person I'm responding to is over-generalizing toy models to the real world, then demanding that it's the world that is wrong, not them. It's a common reasoning fault in humans, and also one that seems to be common to republican supreme court justices. The insistence that the toy model of the world is appropriate, and applies and holds true even in the face of evidence that it is not. Along with personification of systems, as if a system has a conscious mind. eg: capitalist system writ large prefers people to make 40k a years, rather than 20k a year. Not only is this a unsubstantiated remark, it's even false, since we have a ream of evidence that our American capitalist system, writ large, does not seem to be good at turning 20k earners into 40k earners. Anyways, I wasn't even referring to any specific person, republican supreme court justices is a group of individuals, and not a single person in specific.
    - rosser 10y ago
      Please help me understand how, "You are as out of touch as a republican supreme court justice. Willfully out of touch even." isn't somehow about 'rayiner, personally, given that it was said in response to his comment. When I say "HN strives", I'm not talking about some sort of intentionality on the part of the community as a whole. That's not even a point worth debating (in this context, at least, though it might be fun after we've passed a joint around a few times...). I'm talking about every one of us, individually, and our specific contributions to the level of discourse here. When you say "HN fails", you're therefore saying you failed (for the specific, situationally appropriate value of "you" — in this case, you, specifically). Especially when you follow that with "One more for the pile." Being all, "Welp!" in the face of the degradation of discourse you complain about makes you part of the problem, not part of the solution.
pitaj 10y ago
I don't buy it. Increased wealth at lower levels benefits everyone. The main problem of poverty, at least in America, is that the welfare system traps poor people in government dependency. Another massive issue, homelessness, is due to terrible mental health treatment, which is especially sad.
- cauterized 10y ago
  Things that benefit everyone can still be worked against. Ever heard of a prisoner's dilemma? Yes, everyone would be better off if the poor did better. But each individual corporation and service provider interacting with them is individually better off if they extract as much as possible and leave people worse off. Not because they specifically want people to be worse off. But because extracting as much value as possible from the customer is in the provider's interest. And incidentally leaves the customer worse off.
- pillowkusis 10y ago
  Keeping people impoverished is a local maximum, not a global one. Yes, we as a people would be better off if we enriched the poor (this is why the middle class is so valuable). But it is in the interest of every corporation to make maximum profit (that is, part people from the most money possible) and make people poorer in the individual case. I.E. banks benefit from cycles of debt (mortgage, credit card). It would be better for everyone, including the banks, if the poor were not put in cycles of debt and allowed to become wealthier. But the most profitable thing for a single, individual bank to do is issue predatory loans.
- coldtea 10y ago
  >I don't buy it. Increased wealth at lower levels benefits everyone. That's irrelevant, since it's not "everyone" who decides, but the corporate elites and rich players. So if "Increased wealth at lower levels benefits everyone" but "decreased wealth" benefits them, they'll push for that. They also don't much care for long term effects -- short term gain is enough (they can always retire when the economy/society falls apart, and they don't have to mingle with the lower classes or send their kids to their schools etc, unless they want it).
- 10y ago
gaius 10y ago
Right, this is the same as the welfare trap. Keep the poor reliant on state largesse and count on their votes. Its still exploitation.
deleted 10y ago
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tomjen3 10y ago
There are people who are looking at the world and seeing how they can make money, but the more you make the more you can afford to pay, so in general capitalist prefer people to be rich.
- porpoisemonkey 10y ago
  > in general capitalist prefer people to be rich I'm not convinced that this is true. Poor populations allow for is the cheap accumulation of power - people who have less are easier to motivate with an offering of money or support. If you increase the distribution of wealth amongst the population buying that goodwill and loyalty becomes a lot more expensive. This power dynamic can be seen demonstrated in the dissemination of living assistance by profit-motivated groups that wish to accumulate political and social power such as organized crime. UPDATE: I'm leaving the old post as a historical reference but I wanted to take a second swing at explaining my disagreement coherently. The time and efforts of a person is a commodity and the price of that commodity is partially pegged to the accessible wealth of that person. As the average personal wealth of people increases the cost to purchasing their time and efforts increases. There are two ways to increase profit - increase the cost of the product or lower the cost of production. Increased average wealth helps with the former but (depending on how manually intensive your product is) decreased average wealth helps with the latter.
- dragonwriter 10y ago
  > in general capitalist prefer people to be rich. Capitalists prefer to be rich themselves (both absolutely and relative to others in society), and they prefer labor to be cheap, which is served by laborers being poor and insecure.
  - dllthomas 10y ago
    Rich customers, poor employees.
partycoder 10y ago
This video by CGP Grey, based on the book "The Dictator's Handbook" is very good at explaining why some countries are richer, even if they have plenty of natural resources: https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs Another view: https://en.wikipedia.org/wiki/Resource_curse https://en.wikipedia.org/wiki/Resource_curse
brianzelip 10y ago
Of course poverty is profitable.
the_cat_kittles 10y ago
haven't economists talked about how, in general, charging rent is not really creating economic value? patent trolls, landlords, rich investors, for example... all to some degree just rake it in based on what they already have. of course there is some strategy involved, and there is work too. but maybe the point is that the way things are set up now, the reward for the work goes on indefinitely, which makes no sense. you inherited a family property and are able to profit off it your entire life, since the cost of maintenance and property taxes is offset by rent you earn from some agency renting out your house? i dont see how you are personally contributing anything. some investors already have vast sums of money, so they are able to earn vastly more sums by putting it in an index fund? also not fair, though i suppose you are "taking a risk", but i dont really find that all too compelling. you just sit there and rake in dividends and ~3% roi. suing a company for using tech that they invented but didnt patent? you are just a pure minus on society in that case. these things are all rent-seeking behaviors, i dont see how they really do anything for the greater good. i think we need to tell people who try to make money by charging rent to basically fuck off. not that you are a bad guy for doing it in many cases, but we should recognize it for the unfair practice it is.
- jcoffland 10y ago
  > landlords, rich investors, for example... all to some degree just rake it in based on what they already have. This is a simplistic view that is demonstrably incorrect. For example, I rent out part of my house but do so to help pay the mortgage. So technically I do not fully own the property I rent. Furthermore, maintaining a property and assuming liability are not free.
  - the_cat_kittles 10y ago
    sure. not you personally then. but a lot of landlords.
- eof 10y ago
  The argument would be that the right to seek rent from your capital goods, whether created, bought, or inherited, is what drives people to create these rent-creating systems in the first place. If people didn't have the right to seek rent from the houses they build or inventions they come up with, why would they expend the effort in the first place? (note, I don't take that view exactly, I believe motivation comes from a whole lot of places)
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habosa 10y ago
Everybody here should read the book that this article is reviewing: Evicted by Matthew Desmond. It's an incredible accomplishment in sociology and one of the most insightful works on poverty I have ever encountered.
m12k 10y ago
To the vast majority of companies, poverty is not profitable (prison industry and loan sharks being notable exceptions). In fact to most companies it is critical to have an affluent market to sell things to. It's just not profitable for them to be the ones ensuring that this affluent market exists rather than let it be someone else's problem. It's a classic tragedy of the commons.
- macawfish 10y ago
  If affluence itself is defined in its relationship to poverty, then yes, then making money off of affluence is in essence making money off of poverty. Any kind of market that plays to peoples sense of status is playing into class dynamics born out of the existence of relative poverty.
- tclancy 10y ago
  >In fact to most companies it is critical to have an affluent market to sell things to. I think you may be describing what you see around you. Plenty of companies make plenty of money specifically because of people being in need. Think of all the fast food and microwaveable crap that gets sold simply because the buyer either doesn't have a good way to keep food or doesn't have the time to make a "real" meal as they get off of one job and have to go right to the next.
  - TeMPOraL 10y ago
    Or, in general, lots of cheap crap products that sell well because poor people are extremely price-sensitive and unable to accumulate enough money to buy a better (and in the long run cheaper) product.
- cortesoft 10y ago
  Yeah, sadly, the reason things are often so expensive for poor people is because it ISN'T profitable to service them. This means that there is little competition for their business and things cost a lot. For example, rent for poor people is way too high. So why don't other people come in and offer to rent to them for less? Well, poor people have trouble paying their rent a lot of the times. They have a high chance of failing to pay, and that is costly to a landlord. So that risk is priced into the rent. What this ends up meaning, though, is that if you are poor but always pay your rent on time, you are paying for all the people who fail to pay their rent.
jacquesm 10y ago
Not only that: poverty ensures a steady supply of cannon fodder for the military. So there is a big %age in keeping people poor if you want to have a large military.
- ryanmarsh 10y ago
  That doesn't match recruitment data for the US Army. We have a volunteer professional military with standards for recruitment that require above average individuals. There are still plenty of poor people in the Army, quite frankly I can't think of anything better for poor people. Where else can you get housed and fed and your college paid for? Only a small portion of the military is war fighters. Most are doing boring relatively safe jobs like filling gas tanks and counting bullets.
  - jacquesm 10y ago
    > We have a volunteer professional military with standards for recruitment that require above average individuals. Those could easily be poor. Poor != dumb. > There are still plenty of poor people in the Army, quite frankly I can't think of anything better for poor people. How about a normal civilian life? > Where else can you get housed and fed and your college paid for? In countries with a functioning social contract this is not an issue. > Only a small portion of the military is war fighters. Most are doing boring relatively safe jobs like filling gas tanks and counting bullets. Right, but they're still part of the same machine and even if the %age that ends up on the front lines is not 100% that holds true historically. So that's not a counter argument, it's just a function of how the military is organized. Note that 'volunteering' if it is your only option at a reasonably affluent life is not really volunteering.
- mcbruiser2 10y ago
  not only that, poverty ensures a steady stream of voters for the democratic party
rdiddly 10y ago
Ain't no "what if" about it son. Every economic transaction between two parties benefits the seller slightly more than the buyer; that is the definition of profit. Sure, the buyer is getting whatever good or service they paid for, but they are ordinarily paying slightly more than it's absolutely worth. If that element isn't present (i.e. if the transaction does not incrementally impoverish the buyer and enrich the seller by some amount), the seller won't continue to sell that good or service. Edit: except non-profits, subsidies, and Uber
- WalterBright 10y ago
  The buyer and seller both profit, or they would not engage in the trade. Each has something the other needs more than they do.
  - rdiddly 10y ago
    I agree and I acknowledged this ("the buyer is getting whatever good or service they paid for"). But I still tend to frame it as the buyer having incurred a cost, not having profited. The seller is the one who ends up with money in hand, that can be invested elsewhere. The buyer usually ends up with something that either starts off with no resale value, or that depreciates, or that (if you're poor) does nothing but keep you alive -- like a roof over your head let's say. Mind you, since that last category consists of things one really needs a lot, it makes one that much more eager to engage in the trade and pay the stated price. If you can afford to walk away from a negotiation, your position is a lot stronger.
    - WalterBright 10y ago
      Consider the farmer and the blacksmith. The farmer makes more corn than he can eat, and the blacksmith shoes the horses. The blacksmith trades shoeing the farmer's horse for corn to eat. They are both better off. There is no buyer/seller. Money is just a medium for making trading more efficient. A "buyer" and "seller" is an artificial construct, and framing things as the "seller" always gets the upper hand has no real basis. I buy things and sell things all the time. It's pretty clear that the seller has no inherent advantage.
frgtpsswrdlame 10y ago
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance. -Rothbard I'm seeing all sorts of economic flailing in these comments. Is it okay to make a reading recommendation? I think people who read them will have a better understanding of how economics actually works in the real world. Economism by James Kwak Economic Ideas You Should Forget by Bruno Frey & David Iselin
- therpe1 10y ago
  It really does seem like "economic thinking" is a very rare skill. Many people seem to have a very simplistic model of economy ("Econ 101") while making all sorts of category errors (cue panic on government debt.) The discussion on renters above indicates that even simple concepts like Economic Rent[1] aren't well understand. And very few people are capable of doing serious economic analysis and/or research. Given the dearth of such economic understanding I think the next step might just be getting people to appreciate their economic ignorance. [1] https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent
- ue_ 10y ago
  I would also recommend Wage Labour and Capital by Marx, and the classical political economists like Smith and Ricardo. A good introduction to contending schools of economics is Contending Economic Theories: Neoclassical, Keynesian, and Marxian by Wolff.
eagsalazar2 10y ago
Man people in this thread are really biting hard on the extreme straw man arguments. It is really pretty simple: (Poverty is profitable for some people) + (Doing anything about poverty is not profitable for most people) + (Poor people are disempowered) => poverty
- tbrownaw 10y ago
  Sounds like it would depend heavily on what exactly the "some" and "most" are and how extreme the disempowerment is, and on how many people do things for reasons other than profit. So no, not all that simple.
anarchochossid 10y ago
“Crystal and Trisha are fragile young black women whose upbringing was violent and chaotic; Lamar is a genial black father of two who lost both his legs to frostbite when he passed out on crack in an abandoned house; Scott is a white male nurse who lost his licence when he stole opioids from his patients; Larraine, also white, is a slightly brain-damaged sweet soul.” clearly examples of poverty caused by rich-people oppression
Overtonwindow 10y ago
I'm iffy on this book but I think there is a very interesting point/perspective to be made on the profitability of housing. It's expensive, and it's that way because of economics, mostly. People will charge what the market will bear. I am renting out a house in Atlanta, and I've decided I would rather have stable, good tenants, over profits. The apartment communities I've lived in are the other way around: profits over tenants. Each year apartment rates go up for most people. They never go down. Even if they did go down, they wouldn't go down for the tenant, they would go down for a new tenant. What we're seeing in places like California, Portland, Seattle, and other dense, urban areas with limited housing, is that people are being pushed out because of ever increasing rent prices. So yes, I do think that housing is high because it's profitable, and I think something should be done about that. Unfortunately I don't have an answer. I don't think it's "build more" because that will just lead to more of the same.
andrenth 10y ago
Poverty is certainly profitable for politicians.

130 points by hamiltonians 10y ago

Because providing goods and services to poor people is evil! > Tobin Charney makes $400,000 a year out of his 131 trailers, some of which are little better than hovels. That monster! Charging about $3,000 a year in rent per trailer! Of course his actual return is lower than that, because he has to pay for the mortgage and taxes on the underlying property, as well as upkeep. Say say more like $200,000. But still! Earning about as much as a programmer managing a business that houses over a hundred people. Monster is the right word for sure.

eropple 10y ago
Man, I really, really like your posts--but come on. Nobody is saying that providing goods and services to poor people is evil. They're saying that there are capitalistic incentives to keep a poor population captured and that those outweigh the comforting-but-probably-pretty-wrong "just lazy" excuses. I am perhaps more disappointed in an internet name than I should be, but I am disappointed. You are better than this.
- rayiner 10y ago
  The capitalist system writ large would much prefer that these people made $40,000 a year instead of $20,000, because then it could sell those people iPhones and whatnot. I'm being glib, of course, but that's because there is no rational point to be made here. There are almost zero barriers to entry to businesses that provide goods and services to poor people. Buying a trailer park requires extremely little capital investment. Thus, there is no reason to believe that the pricing is predatory. Instead, the article is trading entirely on the ickiness (some) people feel about running a business catering to poor people. I think limited housing options for poor people is a big problem. But it's not a problem created by business owners providing housing to poor people (or ones evicting poor people who cannot pay). It's a problem created by state and municipal governments that make it illegal to build dense housing, housing on small lots, housing that isn't to code, etc.
  - eropple 10y ago
    > The capitalist system writ large would much prefer that these people made $40,000 a year instead of $20,000, because then it could sell those people iPhones and whatnot. Only if the marginal cost of getting there is outpaced by the marginal return. If that wasn't the case, no volume-but-cheaper business could work. When you can have a ton of poor people, they are an exploitable resource for people who aren't selling iPhones (and if you pay attention to the description of eviction as a social problem maybe you'll catch a little more of the "exploitable resource" part). And it's nothing surprising--the historical examples abound of captive, poor populations who are used as revenue generators with no real recourse of their own. I get nothing out of the article that's "trading entirely on the ickiness" of selling goods and services to poor people. But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there."
    - rayiner 10y ago
      > But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there." Poor people might not have good options, because they have no money, but they have options. If the check cashing place on your block charges too much, you can go to the one down the street. The barrier to entry in these markets is so low that there is no argument that they are "gouging" customers who have no other options.
      - eropple 10y ago
        ...Dude. The usurious, bullshit check-cashing places are one of the parts of the system that profits from keeping poor people where they are. The charges at all of them are effectively too much to not be a severe burden on folks who are too down to afford a bank account. You're not covering yourself in glory here with this sort of lack of empathy.
        rayiner 10y ago
        If banks could make a profit giving poor people bank accounts, they'd do it. Moreover, there is tremendous competition in the check-cashing market. Walk down a street in Baltimore and you'll hit one every few blocks. If one of those shops could get more of the market by charging lower fees than their competitors, they'd do it. Focusing your ire on check cashing places is the archetypal example of a bullshit solution crafted based on emotions rather than rational analysis. Forcing check-cashing fees below the market price is just going to reduce the number of check cashing places, taking away options from people who need them. Any real solution is going to either require the government writing a check e.g. by subsidizing bank accounts for poor people, or reducing regulation to lower the transaction costs in check depositing and withdrawals.
- saint_fiasco 10y ago
  Any stupid theory can outweigh the comforting lie of "just lazy", but that doesn't mean we have to reduce our skepticism. The people who rent trailers to poor people would probably make much more money building nice houses and renting to richer people. It could be that one of the reasons poor people have so few affordable options is that people don't profit from serving them. The article does nothing to argue against that possibility. It doesn't even acknowledge any alternative theory that could explain the same data, except the "just lazy" strawman.
yannyu 10y ago
That's a pretty poor way of expressing the idea of the article. The point the article is making is that poor people often have their backs against the wall as far as the number of choices they have in food, housing, jobs, location, etc. They're effectively a captive audience, which makes them an easy population to exploit. Maybe this is considered acceptable in society's economic model, but at the least people should be more aware of how your options fall away as you go further down the socio-economic ladder.
- enoch_r 10y ago
  This may be the book's point, but I don't think it's the article's. The author's claim that "the problem is that poverty is profitable" only makes sense if one believes that those profiting from the poor (like the landlords mentioned) are somehow responsible for their poverty.
  - deleted 10y ago
    [deleted]
  - yannyu 10y ago
    Yeah, fair. The article editorializes and seems to advocate for more culpability on the people delivering the services. Which feels a little short-sighted, since poor people wouldn't necessarily be any better off if they didn't have these services at all.
- koolba 10y ago
  > Maybe this is considered acceptable in society's economic model, but at the least people should be more aware of how your options fall away as you go further down the socio-economic ladder. What rational person would expect your options to improve as you drop down the economic ladder? Less money, mo problems. The only situation I've seen where that's remotely true is applying for student aid where if you're parents saved money they're expected to pony it up, but if they spent it all on flat screen TVs and new cars (and hence are "cash poor") they're not expected to do so.
  - 10y ago
ryandamm 10y ago
You're assuming the author is reporting gross receipts, which he may well be. But your back of the envelope calculations aren't convincing, particularly given your tone. ("Monster" is your word. The text, which I've now heard excerpted on the radio and in this article, is painting a considerably more complex picture.)
- rayiner 10y ago
  I am because I googled first to confirm average trailer rent is $200-300 per month, which is consistent with the number in the article.
  - Pica_soO 10y ago
    It would be even higher, if there where bigger handouts. Why not put a rent limit for "poor" peoples property size and location?
AnimalMuppet 10y ago
So he's charging $250/month rent per trailer. That sounds very different from "making $400,000 a year". The second sounds like exploitation; the first sounds very close to charity.
- ceejayoz 10y ago
  This hinges a bit on whether "making $400k" means revenues or profits.
09bjb 10y ago
I know. And that landlady that had enough money leftover to take a yearly vacation and attend real estate meetups for professional development! "Monster" may be too generous. If anyone here thinks you can take investment and usury out of any economy, I'd highly recommend David Graeber's book "Debt: The First 5000 Years". Totally viable, assuming we all go back to hunting and gathering. One way or another, the poor need to be able to afford the basic necessities in life, housing included. Making anything that vaguely sounds like "rent-seeking" illegal is not going to fix it. How will anyone retire if dividends are illegal? Do we go back to a communist system, where you're required to work for government (benevolent, of course) for a fixed number of years? Where will the money come from to invest in a trailer that's "squalid"?

draw_down 10y ago

Hmm, indeed, "what if".

rm_-rf_slash 10y ago

On the other side of the equation (at least regarding real estate), it can be difficult to make money from poor people without extremely low costs and tremendous scale. There is a reason many landlords refuse to accept Section 8 tenants. It's not because they're evil Scrooges, it's that Section 8 tenants are more likely to damage properties (I've heard firsthand accounts of Section 8 tenants letting their multiple dogs piss and shit on the floor while refusing to pay several months of back rent and utility bills, and others letting their units turn into such trash heaps that delousing was a regular occurance) and vacuum up administrative time. So the rent has to be high for the landlords to be able to make a profit. Maybe we could stop blaming the market for doing what it does and recognize that the economy and the livelihood of people is largely determined by government policy? Bring back the Works Progress Administration. Pay people to show up and work. I know it's unrelated to the article, but as long as private employers have little competition for wages, poor people will continually be forced to accept their place in a race to the bottom.

Masacore 10y ago
I agree 100% The article (I'm not sure about the book) painted landlords as evil for evicting women "Think of that next time you ask a woman why she doesn't call the police," but Crack doesn't come out of walls easily, holes punched in by that abusive man aren't fixed for free, and cops making an arrest care even less about your property than the tenants. There are insanely high cost to renting to low-wage families and most landlords I know that attempted it didn't last long doing so. Are there some sad stories of people truly trying to improve their lives? Yes, there absolutely are, but for every "Pursuit of Happyness" Oprah level story of overcoming poverty there are 20 people who've absolutely given up and don't give a crap about anything that's not physically attached to them. It's not the business owner's responsibility to try and spur the human spirit of the impoverished. This article is painting just a skewed of a viewpoint as the one it's trying to disprove, and I'm curious if the book is the same.
- steven777400 10y ago
  To affirm your anecdote, I had a friend who bought a fourplex in a somewhat depressed area, lived in one unit and rented the other three. It was an unmitigated disaster and a terrible experience. I spent some time with him trying to help out around the units and also discussed his experiences with him. I concluded from that I would never, under any circumstances, want to be a landlord.

deleted 10y ago

[deleted]

enoch_r 10y ago

The assertion implicit in the headline ("poverty exists because it's profitable") is the article's assertion, not the book's. This is quite silly. Through all of human history the vast majority of people have been miserably poor, and it's only recently that a slice of humanity has managed to claw their way out of poverty. Poverty should be considered the natural state of humanity, not an anomaly that needs explanation.

skylan_q 10y ago
Poverty should be considered the natural state of humanity, not an anomaly that needs explanation. This is the truth. But for clarification that's not to say that we shouldn't fight it.
danharaj 10y ago
> miserably poor Poor as in not wealthy, sure. But miserable? No, I doubt that. Yes, if you compare wealth between different time periods many people have more wealth today than they did yesterday, but that's not important. Poverty is a measure of economic relationships: What matters is differentials in access to resources and means of production and how those differentials shape the structure of our society today. Even if an impoverished family in Appalachia today has more wealth than hunter gatherers several thousand years ago, their poverty marginalizes them, immiserates them, and drives the decay of the social structures around them. The issue is social relationships, not absolute wealth. It's about the dynamics of our society and how class structures form around economic relationships. Comparing wealth between time periods is always a red herring in discussions about poverty. Poverty certainly does exist because it's profitable because poverty is about class and economic relationships today, not the relative wealth between, say, a vagrant in San Francisco and a vagrant in Rome circa 50 CE.
rpmcmurphy 10y ago
I have first hand experience with this. After being swindled badly in the sale of a small business, I was forced into foreclosure and chapter 13 bankruptcy. For roughly 8 years, I was trapped in a situation where I had crippling debt, and had lost my primary source of income. This started in 2008 so finding a job that paid well enough to stop the bleeding was out of the question. What happens when you get in a situation like this? Every dirtbag on the planet who has an idea about how to profit off it will appear. This was especially true of real estate agents, as well as people peddling legit sounding loan restructuring programs. It is a huge pile on and it really wears you down (besides the stress of not knowing from week to week if you home is going to be auctioned off at the courthouse, not being able to pay for luxuries like basic dental care, and so on). If you have not been there, you have no idea at all how difficult it is to get out of that trap once you are in it.

saint_fiasco 10y ago

Compare and contrast: http://www.businessinsider.com/check-cashing-stores-good-deal-upenn-professor-2017-2 http://www.businessinsider.com/check-cashing-stores-good-dea...

ryandamm 10y ago

Important frame to consider, here in the comments: we're all reacting to an article that's reviewing a book. A long work of sociology. So the article isn't the ground truth; it's a tiny digest, plus a reaction by the article's author. The book itself is a project of research, which also isn't ground truth. But they bring up provocative points that most people haven't considered. And in some cases, won't consider. If your mental model for how the economy works somehow doesn't allow the situations described in the book or article, I'd hazard to say it's your mental model that's in error.

williamtrask 10y ago
standing ovation
rayiner 10y ago
> If your mental model for how the economy works somehow doesn't allow the situations described in the book or article, I'd hazard to say it's your mental model that's in error. What situations? People being evicted? People paying rent for trailers? What economic insight are you supposed to take away from those things? I would say that if your mental model of how society works does not include those things, yeah, it should. If everyone realized what was happening, maybe there would be more support for basic income, Section 8 vouchers, etc. That's my view--raise taxes and give more money to poor people so their lives are better. But that's an entirely different point, and not one that the article is making. The article is an archetypal example of what I call "well intentioned but economically ignorant liberalism." The folks who campaigned to make tenements illegal were not conservatives. They were liberals genuinely concerned about the living conditions of those residents. However, they were also ignorant about how economics works. So they tried to address the problem simply by making tenements illegal (i.e. taking an option away from poor people).[1] Calls to regulate check cashing places and payday lenders out of existence (or articles that demonize landlords who rent to poor people, like this one) fall into that same bucket. Reading the article, what kind of solution do you think the article is leading you to? Maybe making it harder for landlords to evict tenants, or limiting the rents that trailer parks can charge tenants. What does that do? Cause landlords to be less willing to rent to poor people, or less likely to invest in a new trailer park. I.e. it takes options away from poor people, and ironically reduces competition and raises prices in the markets that cater to poor people. Making some poor people better off (e.g. the ones that get the trailer park before the rent controls kicked in), but making poor people as a whole worse off. [1] https://fee.org/articles/the-hidden-war-on-affordable-housing/ https://fee.org/articles/the-hidden-war-on-affordable-housin...

MtotheThird 10y ago

This is an excellent book, but as other comments have pointed out, the review misrepresents its argument. I wouldn't say Desmond is exactly sympathetic to the landlords he profiles, but he does provide a well-rounded picture of them. The main thrust of his analysis is that eviction is a major cause of an inescapable cycle of poverty, and that preventing eviction would go further to reduce poverty and inequality than nearly any other government policy. IIRC his recommendations involve a huge bump in the federal housing voucher program, decoupling it from work requirements (since it's difficult to get a job without a permanent home), and tying federal aid to code reform in cities (simplifying and loosening the housing code so that landlords would be less likely to ignore it).

rayiner 10y ago
Those are great policy prescriptions: reduce eviction by giving poor people more money and more flexibility, as well as by making it cheaper and easier to offer housing to poor people. You're right that the article misrepresents that argument.
- AstralStorm 10y ago
  How does it stop everyone from just squeezing more?

ryanobjc 10y ago

Competition is more than just another store offering the same goods and services at the same prices. I'm flabbergasted at these comments. You are as out of touch as a republican supreme court justice. Willfully out of touch even.

rosser 10y ago
I quite agree with your first line, but downvoted your comment for the second line. That's personal commentary, and HN strives to keep discussion at the level of ideas.
- ryanobjc 10y ago
  HN strives, but fails. The quality of posts has massively declined over the last 5 years or so. One more for the pile. However, another commenter does make the same point but worded better: The person I'm responding to is over-generalizing toy models to the real world, then demanding that it's the world that is wrong, not them. It's a common reasoning fault in humans, and also one that seems to be common to republican supreme court justices. The insistence that the toy model of the world is appropriate, and applies and holds true even in the face of evidence that it is not. Along with personification of systems, as if a system has a conscious mind. eg: capitalist system writ large prefers people to make 40k a years, rather than 20k a year. Not only is this a unsubstantiated remark, it's even false, since we have a ream of evidence that our American capitalist system, writ large, does not seem to be good at turning 20k earners into 40k earners. Anyways, I wasn't even referring to any specific person, republican supreme court justices is a group of individuals, and not a single person in specific.
  - rosser 10y ago
    Please help me understand how, "You are as out of touch as a republican supreme court justice. Willfully out of touch even." isn't somehow about 'rayiner, personally, given that it was said in response to his comment. When I say "HN strives", I'm not talking about some sort of intentionality on the part of the community as a whole. That's not even a point worth debating (in this context, at least, though it might be fun after we've passed a joint around a few times...). I'm talking about every one of us, individually, and our specific contributions to the level of discourse here. When you say "HN fails", you're therefore saying you failed (for the specific, situationally appropriate value of "you" — in this case, you, specifically). Especially when you follow that with "One more for the pile." Being all, "Welp!" in the face of the degradation of discourse you complain about makes you part of the problem, not part of the solution.

pitaj 10y ago

I don't buy it. Increased wealth at lower levels benefits everyone. The main problem of poverty, at least in America, is that the welfare system traps poor people in government dependency. Another massive issue, homelessness, is due to terrible mental health treatment, which is especially sad.

cauterized 10y ago
Things that benefit everyone can still be worked against. Ever heard of a prisoner's dilemma? Yes, everyone would be better off if the poor did better. But each individual corporation and service provider interacting with them is individually better off if they extract as much as possible and leave people worse off. Not because they specifically want people to be worse off. But because extracting as much value as possible from the customer is in the provider's interest. And incidentally leaves the customer worse off.
pillowkusis 10y ago
Keeping people impoverished is a local maximum, not a global one. Yes, we as a people would be better off if we enriched the poor (this is why the middle class is so valuable). But it is in the interest of every corporation to make maximum profit (that is, part people from the most money possible) and make people poorer in the individual case. I.E. banks benefit from cycles of debt (mortgage, credit card). It would be better for everyone, including the banks, if the poor were not put in cycles of debt and allowed to become wealthier. But the most profitable thing for a single, individual bank to do is issue predatory loans.
coldtea 10y ago
>I don't buy it. Increased wealth at lower levels benefits everyone. That's irrelevant, since it's not "everyone" who decides, but the corporate elites and rich players. So if "Increased wealth at lower levels benefits everyone" but "decreased wealth" benefits them, they'll push for that. They also don't much care for long term effects -- short term gain is enough (they can always retire when the economy/society falls apart, and they don't have to mingle with the lower classes or send their kids to their schools etc, unless they want it).
10y ago

gaius 10y ago

Right, this is the same as the welfare trap. Keep the poor reliant on state largesse and count on their votes. Its still exploitation.

deleted 10y ago

[deleted]

tomjen3 10y ago

There are people who are looking at the world and seeing how they can make money, but the more you make the more you can afford to pay, so in general capitalist prefer people to be rich.

porpoisemonkey 10y ago
> in general capitalist prefer people to be rich I'm not convinced that this is true. Poor populations allow for is the cheap accumulation of power - people who have less are easier to motivate with an offering of money or support. If you increase the distribution of wealth amongst the population buying that goodwill and loyalty becomes a lot more expensive. This power dynamic can be seen demonstrated in the dissemination of living assistance by profit-motivated groups that wish to accumulate political and social power such as organized crime. UPDATE: I'm leaving the old post as a historical reference but I wanted to take a second swing at explaining my disagreement coherently. The time and efforts of a person is a commodity and the price of that commodity is partially pegged to the accessible wealth of that person. As the average personal wealth of people increases the cost to purchasing their time and efforts increases. There are two ways to increase profit - increase the cost of the product or lower the cost of production. Increased average wealth helps with the former but (depending on how manually intensive your product is) decreased average wealth helps with the latter.
dragonwriter 10y ago
> in general capitalist prefer people to be rich. Capitalists prefer to be rich themselves (both absolutely and relative to others in society), and they prefer labor to be cheap, which is served by laborers being poor and insecure.
- dllthomas 10y ago
  Rich customers, poor employees.

partycoder 10y ago

This video by CGP Grey, based on the book "The Dictator's Handbook" is very good at explaining why some countries are richer, even if they have plenty of natural resources: https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs Another view: https://en.wikipedia.org/wiki/Resource_curse https://en.wikipedia.org/wiki/Resource_curse

brianzelip 10y ago

Of course poverty is profitable.

the_cat_kittles 10y ago

haven't economists talked about how, in general, charging rent is not really creating economic value? patent trolls, landlords, rich investors, for example... all to some degree just rake it in based on what they already have. of course there is some strategy involved, and there is work too. but maybe the point is that the way things are set up now, the reward for the work goes on indefinitely, which makes no sense. you inherited a family property and are able to profit off it your entire life, since the cost of maintenance and property taxes is offset by rent you earn from some agency renting out your house? i dont see how you are personally contributing anything. some investors already have vast sums of money, so they are able to earn vastly more sums by putting it in an index fund? also not fair, though i suppose you are "taking a risk", but i dont really find that all too compelling. you just sit there and rake in dividends and ~3% roi. suing a company for using tech that they invented but didnt patent? you are just a pure minus on society in that case. these things are all rent-seeking behaviors, i dont see how they really do anything for the greater good. i think we need to tell people who try to make money by charging rent to basically fuck off. not that you are a bad guy for doing it in many cases, but we should recognize it for the unfair practice it is.

jcoffland 10y ago
> landlords, rich investors, for example... all to some degree just rake it in based on what they already have. This is a simplistic view that is demonstrably incorrect. For example, I rent out part of my house but do so to help pay the mortgage. So technically I do not fully own the property I rent. Furthermore, maintaining a property and assuming liability are not free.
- the_cat_kittles 10y ago
  sure. not you personally then. but a lot of landlords.
eof 10y ago
The argument would be that the right to seek rent from your capital goods, whether created, bought, or inherited, is what drives people to create these rent-creating systems in the first place. If people didn't have the right to seek rent from the houses they build or inventions they come up with, why would they expend the effort in the first place? (note, I don't take that view exactly, I believe motivation comes from a whole lot of places)

deleted 10y ago

[deleted]

habosa 10y ago

Everybody here should read the book that this article is reviewing: Evicted by Matthew Desmond. It's an incredible accomplishment in sociology and one of the most insightful works on poverty I have ever encountered.

m12k 10y ago

To the vast majority of companies, poverty is not profitable (prison industry and loan sharks being notable exceptions). In fact to most companies it is critical to have an affluent market to sell things to. It's just not profitable for them to be the ones ensuring that this affluent market exists rather than let it be someone else's problem. It's a classic tragedy of the commons.

macawfish 10y ago
If affluence itself is defined in its relationship to poverty, then yes, then making money off of affluence is in essence making money off of poverty. Any kind of market that plays to peoples sense of status is playing into class dynamics born out of the existence of relative poverty.
tclancy 10y ago
>In fact to most companies it is critical to have an affluent market to sell things to. I think you may be describing what you see around you. Plenty of companies make plenty of money specifically because of people being in need. Think of all the fast food and microwaveable crap that gets sold simply because the buyer either doesn't have a good way to keep food or doesn't have the time to make a "real" meal as they get off of one job and have to go right to the next.
- TeMPOraL 10y ago
  Or, in general, lots of cheap crap products that sell well because poor people are extremely price-sensitive and unable to accumulate enough money to buy a better (and in the long run cheaper) product.
cortesoft 10y ago
Yeah, sadly, the reason things are often so expensive for poor people is because it ISN'T profitable to service them. This means that there is little competition for their business and things cost a lot. For example, rent for poor people is way too high. So why don't other people come in and offer to rent to them for less? Well, poor people have trouble paying their rent a lot of the times. They have a high chance of failing to pay, and that is costly to a landlord. So that risk is priced into the rent. What this ends up meaning, though, is that if you are poor but always pay your rent on time, you are paying for all the people who fail to pay their rent.

jacquesm 10y ago

Not only that: poverty ensures a steady supply of cannon fodder for the military. So there is a big %age in keeping people poor if you want to have a large military.

ryanmarsh 10y ago
That doesn't match recruitment data for the US Army. We have a volunteer professional military with standards for recruitment that require above average individuals. There are still plenty of poor people in the Army, quite frankly I can't think of anything better for poor people. Where else can you get housed and fed and your college paid for? Only a small portion of the military is war fighters. Most are doing boring relatively safe jobs like filling gas tanks and counting bullets.
- jacquesm 10y ago
  > We have a volunteer professional military with standards for recruitment that require above average individuals. Those could easily be poor. Poor != dumb. > There are still plenty of poor people in the Army, quite frankly I can't think of anything better for poor people. How about a normal civilian life? > Where else can you get housed and fed and your college paid for? In countries with a functioning social contract this is not an issue. > Only a small portion of the military is war fighters. Most are doing boring relatively safe jobs like filling gas tanks and counting bullets. Right, but they're still part of the same machine and even if the %age that ends up on the front lines is not 100% that holds true historically. So that's not a counter argument, it's just a function of how the military is organized. Note that 'volunteering' if it is your only option at a reasonably affluent life is not really volunteering.
mcbruiser2 10y ago
not only that, poverty ensures a steady stream of voters for the democratic party

rdiddly 10y ago

Ain't no "what if" about it son. Every economic transaction between two parties benefits the seller slightly more than the buyer; that is the definition of profit. Sure, the buyer is getting whatever good or service they paid for, but they are ordinarily paying slightly more than it's absolutely worth. If that element isn't present (i.e. if the transaction does not incrementally impoverish the buyer and enrich the seller by some amount), the seller won't continue to sell that good or service. Edit: except non-profits, subsidies, and Uber

WalterBright 10y ago
The buyer and seller both profit, or they would not engage in the trade. Each has something the other needs more than they do.
- rdiddly 10y ago
  I agree and I acknowledged this ("the buyer is getting whatever good or service they paid for"). But I still tend to frame it as the buyer having incurred a cost, not having profited. The seller is the one who ends up with money in hand, that can be invested elsewhere. The buyer usually ends up with something that either starts off with no resale value, or that depreciates, or that (if you're poor) does nothing but keep you alive -- like a roof over your head let's say. Mind you, since that last category consists of things one really needs a lot, it makes one that much more eager to engage in the trade and pay the stated price. If you can afford to walk away from a negotiation, your position is a lot stronger.
  - WalterBright 10y ago
    Consider the farmer and the blacksmith. The farmer makes more corn than he can eat, and the blacksmith shoes the horses. The blacksmith trades shoeing the farmer's horse for corn to eat. They are both better off. There is no buyer/seller. Money is just a medium for making trading more efficient. A "buyer" and "seller" is an artificial construct, and framing things as the "seller" always gets the upper hand has no real basis. I buy things and sell things all the time. It's pretty clear that the seller has no inherent advantage.

frgtpsswrdlame 10y ago

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance. -Rothbard I'm seeing all sorts of economic flailing in these comments. Is it okay to make a reading recommendation? I think people who read them will have a better understanding of how economics actually works in the real world. Economism by James Kwak Economic Ideas You Should Forget by Bruno Frey & David Iselin

therpe1 10y ago
It really does seem like "economic thinking" is a very rare skill. Many people seem to have a very simplistic model of economy ("Econ 101") while making all sorts of category errors (cue panic on government debt.) The discussion on renters above indicates that even simple concepts like Economic Rent[1] aren't well understand. And very few people are capable of doing serious economic analysis and/or research. Given the dearth of such economic understanding I think the next step might just be getting people to appreciate their economic ignorance. [1] https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent
ue_ 10y ago
I would also recommend Wage Labour and Capital by Marx, and the classical political economists like Smith and Ricardo. A good introduction to contending schools of economics is Contending Economic Theories: Neoclassical, Keynesian, and Marxian by Wolff.

eagsalazar2 10y ago

Man people in this thread are really biting hard on the extreme straw man arguments. It is really pretty simple: (Poverty is profitable for some people) + (Doing anything about poverty is not profitable for most people) + (Poor people are disempowered) => poverty

tbrownaw 10y ago
Sounds like it would depend heavily on what exactly the "some" and "most" are and how extreme the disempowerment is, and on how many people do things for reasons other than profit. So no, not all that simple.

anarchochossid 10y ago

“Crystal and Trisha are fragile young black women whose upbringing was violent and chaotic; Lamar is a genial black father of two who lost both his legs to frostbite when he passed out on crack in an abandoned house; Scott is a white male nurse who lost his licence when he stole opioids from his patients; Larraine, also white, is a slightly brain-damaged sweet soul.” clearly examples of poverty caused by rich-people oppression

Overtonwindow 10y ago

I'm iffy on this book but I think there is a very interesting point/perspective to be made on the profitability of housing. It's expensive, and it's that way because of economics, mostly. People will charge what the market will bear. I am renting out a house in Atlanta, and I've decided I would rather have stable, good tenants, over profits. The apartment communities I've lived in are the other way around: profits over tenants. Each year apartment rates go up for most people. They never go down. Even if they did go down, they wouldn't go down for the tenant, they would go down for a new tenant. What we're seeing in places like California, Portland, Seattle, and other dense, urban areas with limited housing, is that people are being pushed out because of ever increasing rent prices. So yes, I do think that housing is high because it's profitable, and I think something should be done about that. Unfortunately I don't have an answer. I don't think it's "build more" because that will just lead to more of the same.

andrenth 10y ago

Poverty is certainly profitable for politicians.