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Comment by nabla9 | Hacker News Reader

Dealing with poverty would be much easier if everyone would see it as an investment.

If you consider a young baby as a investment and future taxpayer, it's easy to justify large investments into the poverty reduction. If we improve someones situation so much that he/she pays $100 more taxes per month during his/her lifetime, or alternatively consumes government resources less, it will have huge compound effect over the lifetime.

$100 per month justifies at least $50,000 in additional investment, $100,000 if you count compound effects, externalities and human capital as a factor in economic growth.

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> if everyone would see it as an investment.

From a rational perspective a baby born today might never, ever pay back any investment of this sort. His or her potential employment opportunities may very well be eaten up by automation. If fact, this is most likely the case 20-30 years from now as AI and robotics continue to advance in some/many industries.

Instead, we should be seeing all humans as worthwhile creatures and the state as a method for us to live compassionate lives. Policies like guaranteed incomes are the saner solution here because they don't depend on seeing people as investments, often investments they can't pay off.

Not to mention the sick, disabled, elderly, etc who can never ever pay off these hypothetical investments.

Guaranteed income schemes (basic income, negative income tax) are economically sound policies because the makes it possible for low productivity workers to contribute without incentive traps. Politically they are relatively stable because everyone gets the same treatment and interests are aligned.

Appeal to humanity is not sound political approach to get things done. If the only argument is idealistic appeal humanity, poor will get only scraps. We should use mechanism design (reverse game theory) to design society where the interests of the majority are tied into the interests of the poor.

We here in the Nordic countries reduce poverty effectively using wealth transfers. The reason for this is not better morals or humanity. Instead we have created a wealth transfer system were majority of benefits go to the middle class and poverty is reduced because poor are part of the same system. When every kid below 10 is given certain amount of money, not just the poor, it becomes politically hard to cut that money because majority of people like free money.

The economic fate of a random baby born in a developed country is absolutely not "most likely" nil due to automation. I think you are drastically overestimating the rate and scope of AI and robotics.

I'm skeptical we'll need as many workers for $threatened_industries in 2040-2050. I think its a little unrealistic to think we can keep up this ponzi scheme of employment as-is. Even now a great deal of unemployment is kept in check by various tax incentives to corporations paid for by taxpayers. Mary is paying Bob to employ Jane. That's not very sustainable in general, let alone with automation keeps chipping away at jobs.

I believe worklife in 2050 is going to be very different today. The same way my dad worked 10-12 hour days normally and I do 7.5 with Friday 'work from home' which is almost a day off.

I think the problem with thinking of it like an investment is there is a 0% chance of personal, direct, return on your investment. It may benefit society and you may even benefit indirectly due to the benefit of society, but you would not be entitled to direct return on your investment. In that case to me it seems like a non-starter purely as an investment. There would also be very ambiguous (if any) accountability of the ROI with lots of hand-wavey things for ups and downs. You also can't re-invest anything that is invested in this manner, like you can with other investments. You can't rebalance or shift investment around once it's happened. So there seems to be a huge sunk cost the principal is unrecoverable.

Maybe it's just too complex (right now) to calculate an expected ROI so it tends to sit more on the side of speculation than investing. It may seem like a good thing to do, but we're really just guessing.

> $100 per month justifies at least $50,000 in additional investment, $100,000 if you count compound effects

That seems like a total guess without a source.

The chances of return are higher than 0%. They are just causally disconnected.

Consider that muggers are likely to be people in desperate need of money. Investing in kids now reduces you chance of being mugged later.

The same disconnected causality is at work in a ton of other ways. Chronically poor people will not invent a product you are likely to buy. Chronically poor people contribute less tax money, increasing your relative tax burden. Chronically poor people <contribute more> to <bad thing> and <contribute less> to <good thing>.

This is extremely hard to measure with something like single study, but the mechanism is clear and easy to understand. And data does bear this out. Educated and wealthier areas have less of the problems I touched on here.

> The chances of return are higher than 0%. They are just causally disconnected.

You're leaving off an important clause that I had:

> 0% chance of personal, direct, return on your investment.

Which is the most important part. I agree that essentially dumping money at the problem will help, but I disagree that it should be considered an investment in the traditional sense. I'm not sure what to call it other than charity.

It sounds like we both agree it would improve the future in tangible and measurable ways, even for those paying the taxes. I would rather not argue the semantics of the word "investment", not all investments need to be financial.

This is exactly why poverty should be a governmental concern: a societal cost for societal benefit.

The problem is that people don't care about or trust information that proves the investment is worthwhile - and part of that is an active disinformation campaign against anything government-positive by the wealthy/corporate elite that wants to defang the government from interfering in it's profits.

There's also the fact that the riches pay less (in %) towards taxes than the middle-class or poor. When your "betters" don't pay their fair share, why should you?

Does it not strike you as incredibly naive to suggest more spending is the solution to a complex problem like this?

The same thing can be done with almost any liberal policy. Why don't people see raising school taxes as an investment? Why don't people see spending more in infrastructure as an investment? Why don't people see grants for alternative energy projects as an investment? The same argument is made over and over.

They do! We just have disagreements on whether or not that's the best way to solve the problem, and there always seem to be significant diminishing returns as you spend more and more money on these things. If solving complex societal issues were as simple as, "See if you spend $100 more per month, it pays off $50k later," these wouldn't be issues. But it's not that simple.

Everything you're saying is true, and yet, I think that relying mostly on this line of reasoning to justify poverty reduction leads to discounting the importance of supporting disabled people and old people. I think most people believe that just because you cannot work, doesn't mean you deserve a basic but dignified standard of living.

>reasoning to justify poverty reduction __leads to__

This is slippery slope argument.

You are essentially saying that using economic argument for taking care of poverty can be used to justify not taking care of poverty and we should not use it.

It's hard to connection between importance of supporting disabled and old and economic argument for reducing poverty. Reducing overall poverty is net positive also for disabled and elderly.

I thus think that you have succumbed into logical fallacy.

Are you including TVM in that calculation?

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