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Innovation

"The sting of poverty" is a Boston Globe article about an innovative economic philosopher Charles Karelis who aptly compares poverty to a much-dented car--when you get your fifth dent, you're less likely to get it taken care of than you are your first dent. This is because when you have lots of problems, it is more difficult to isolate and deal with each. This runs counter to the common economic idea that welfare causes poverty by creating reliance; instead, Karelis argues, poverty creates poverty:

Karelis argues that being poor is defined by having to deal with a multitude of problems: One doesn't have enough money to pay rent or car insurance or credit card bills or day care or sometimes even food. Even if one works hard enough to pay off half of those costs, some fairly imposing ones still remain, which creates a large disincentive to bestir oneself to work at all.

"The core of the problem has not been self-discipline or a lack of opportunity," Karelis says. "My argument is that the cause of poverty has been poverty."

I agree with the comment from the article that, while these ideas are not yet well-developed, they are important because they make intuitive sense and are innovative deviations from standard economic theory. I have one immediate criticism of the theory as quoted above--it seems to me that Karelis ignores context. In other words, the problems above are all caused by individual choices as much as they are by societal problems. Perhaps one doesn't have enough to pay rent because one is renting an apartment that is beyond one's means, and perhaps one can't afford one's credit card bills because one overextended one's credit. These are individual choices, and the consequences rest with the individual rather than society. This critique seems to require an empirical rather than philosophical response. My own response would be sympathetic to Karelis, but based more on intuition and experience than on data.

On a completely different note, here are nine innovative designs for houses, from the Architectural Record. Click on each and view the slideshow; they are quite interesting.