Myopic Regulators Hurt the Poor

To help simplify this analysis, imagine that there are only two components of a good life: agency and material goods. Agency is the ability to make choices and have those choices be capable of enabling real change at least in a person’s immediate circumstances. While an individual doesn’t need agency in every part of life, most people would prefer to have some level of agency over the things that are important to them. Material wealth is a combination of physical items that keep people alive and fulfill their various wants. Most people want some combination of agency and physical well-being with most wanting a lot of both. This is why people with an extremely demanding job that pays them very well do not feel satisfied. They have nearly endless money, but they don’t have the agency to use it effectively. Regulators conflated both of these factors and ended up making the poor worse off through their inability to understand. Most regulators experienced lives with an unusual amount of agency. Whether or not they try to, regulators have lives with a much higher level of personal agency than most of society, and in particular the poor. Because this is something that cannot be observed, externally they are unable to see the poor’s lack of agency as clearly as their lack of material resources. All of their solutions systematically overemphasize creating a fixed state of material provision while not accounting for the underlying lack of agency that causes the other share of the poor’s discontent.

Regulators evaluate the welfare of the poor through examining their material welfare. While this is sensible, this approach alone can lead to a worsening of the initial problems that caused the poverty. An understanding of material problems faced is important, but without changing the obstacles to agency, poverty will never improve. Many people are poor because they feel that they have an extremely constrained set of options. If they’re not willing to make massive sacrifices, then they feel they can never escape their poverty. Although the world itself is constrained, some governments and systems create environments that are very difficult for people to act in and other regulatory environments give people the freedom they need to act in a wide range of situations. The wealthy assume that if they transfer resources, then poverty will be solved. For most regulators, they never experience this sickening lack of agency and can’t understand why people with stable government payment streams do not feel capable to succeed. …