Do you think the homeless respond to incentives? If so, one of the most basic tenets of economics holds true. All of us, including the homeless, are assumed to be pursuing our own self interests. I've always enjoyed this aspect of economic thought -- we don't all need to be pursuing the same self interests for economic theory to work. Economics is not the study of automatons running around doing the state's bidding. So how does this work, you might ask? Much of economics is about "maximizing" or "minimizing" something. In this case, you and I are assumed to be living our life "maximizing" our "happiness," but there's a problem. My life might be much "happier" if I had a Ferrari, don't you think? Unfortunately, this desire runs into the cement wall of my budget. Therein lies the rub -- you try do the best you can, but you're constrained by your individual budget. The bottom line becomes the pursuit of the highest "bang for the buck!" I need to be spending my limited budget in the best way possible.
In my world, if you want to sell more gas, lower the price. My customers get more "bang for the buck," from purchasing more gas. Suddenly, that road trip they've been exploring seems much more doable. If I give my employees a wage increase, performance tends to improve (imagine that)! On a more personal note, when I started my current career after leaving the Air Force almost 30 years ago, most of my employees were not married. So what's the big deal? Well, most of them were living with women who were not their wives. Having come from the Air Force, where white picket fences, 2.5 kids, and one dog were the norm, this intrigued me. Was I simply facing a new reality, or was economics somehow at work here? The answer may surprise you! My employees were actually perfectly rational economic actors! If you marry your girlfriend (who has children with her previous husband/boyfriend), you lose certain welfare benefits. Being a single mother opens the pandora's box of government benefits, getting married jeopardizes this. Why not stay single, live together, keep getting benefits, while enjoying the additional benefits of a well paying job? Ignoring the moral/ethical considerations, this makes perfect economic sense. Now, here's where my personal convictions come into play. I am a Christian man, I believe the heart is inherently wicked and in need of redemption. Apparently, some of this has rubbed off, as all of my truck drivers are now happily married! However, think about this dilemma in the broader context of society. Should society reward marriage? You bet! Many economic studies show that marriage is a net gain for society, yet here we are creating incentives to stay single. This is precisely why I agree with the following statement made by Steven E. Landsburg in the Armchair Economist:
"Speaking very broadly, I tend to be optimistic about the power of markets to do good, and skeptical of the power of government to do better."
So, could the homeless respond similarly? I remember reading an article on the San Francisco homeless problem. Apparently at the time, the city was giving $300 cash/ month/person to the homeless. Any wonder why there are so many of them? In fact, there are so many that an App exists to locate their feces so you won't step in it! I love San Francisco, but our last trip ended with a tutu wearing man urinating on the sidewalk. Never been back, very sad. So as not to sound overly harsh with the homeless, I've actually got first hand experience trying to help. Housing is rarely the issue. Drug use, mental illness, etc. is the root cause. I was speaking with a police detective recently who worked the homeless task force. He related that those who really wanted to get off the street could do so instantly. The local rescue mission has a "one stop" help shop: social services, support services, etc., all at one location. What most of us never realize is that our cash handouts actually enable bad behaviour. It wasn't until I quit giving the local homeless man cash, that he finally made progress in getting the real help he needed. He's now on his own in low income housing and he let's me know if he needs anything, and Amazon delivers it to him!! If you want to help the homeless, give directly to your local rescue mission.
So, can it be that everyone responds to incentives? Economists believe so, and view human behavior through that "lens." Whenever I see "odd" behavior, I'm prompted to do a little more digging...
cadobbs, spot on! Your dog analogy is exactly right, these broken people need help. They need to be hospitalized and cared for, even if it is against their will Cities/municipalities are so afraid of resulting lawsuits, that they just shrug their shoulders, and look the other way. I wish I had a picture of the current situation along Hwy 41 over here. CHP is responsible for patrolling the right of way next to the freeway; however, as a result of Covid, are not doing it. The homeless have discovered this and there are tents/camps everywhere. They've set multiple fires and it's only a matter of time until someone gets killed.
I agree that someone jacked up on Meth is capable…
Yes. Heartbreaking is that exact right word. I can't help thinking of how our society treats dogs better than this. If a dog, she would be taken to the pound, given medicine and medical treatment, food, and shelter. And then kept until a home could be found. How about we do that. Lot's of answers out there to this and good people working everyday to help. As the doctor in the story says, it's mainly a lack of resources. My son relates a program in santa cruz where the county public health/mental health has a team he can call to deal with a homeless issue that does not need a law enforcement solution. but they do not work nights or…
https://apple.news/AAu8swmKCSbCGP3RT1mDVVQ
Cadobbs--Ironic that this article came up on my feed! This is heartbreaking and speaks to the very issue being discussed. Beyond the economics, what should society do here??
Cadobbs, I didn't mean to be outright dismissive of SF's homeless policy, however, I think it's important to point out that when you incentivize anything, don't be surprised when you get more of it! Interesting aside, I actually know an individual who became homeless in NYC. He left California in the middle of winter to visit/move to NYC. He was eventually cited for being homeless/loitering in Central Park. NYC paid for airfare for him to return to California! That's one way to combat homelessness.
Until we can get to the root cause of homelessness, which in my opinion is addiction/psychological issues, we'll never make progress. For instance, here in Fresno they just proposed repurposing the old "Smuggler's Inn" on Blackston…
Scott - Still thinking about this post re: murky public policy. I think you went right past the economic question of interest from this post. Was S.F. giving $300.00 dollars to homeless people ( or whatever the actual arrangement was ) an economic "good" decision. Efficient, market-based, personal choice, reduced public safety costs etc. Why dismiss it out of hand as a contributor to homelessness.