Hey. It's been a while. I'm trying to get in the habit of writing every day, so I'm starting up the blog to see this can factor into that whole process. If you're not familiar with my obsession with the visual artist beeple, then you should check out his talk here (warning: long and absolutely hilarious video). His advice is to pick something you can do in under 30 minutes, if need be. That suits blogging pretty well, so here goes. Oh yeah, and most of these are going to suck. And I'm not doing them on weekends or days where I'm away.
Financial literacy has always been an issue for me in graduate school. As an advocate of social welfare programs who give money directly to the individual with as few restrictions as possible, a common objection I hear to these programs is that individuals receiving them lack the necessary knowledge of financial matters to effectively and appropriately manager their own funds. This argument takes two general forms. The first is a normative argument that relies on that's persons's impression of how people on social welfare spend their money. The second is a theoretical argument that individuals do not possess the economic information necessary to make the choice that will be in their best interest. I will try to address each below.
The normative argument is largely based on general impressions of people--be they from personal experience and cultural messages--and these are usually easily countered by offering my own personal experience and cultural messages about my social work clients who were endlessly effective at economizing their subsistence living from the government. Clients with severe mental illness, multiple severe traumatic experiences, and who were still experiencing substance abuse issues were able to make rational choices so screw you for stereotyping them (or something). Furthermore, when individuals are shown to be incapable of managing matters that are necessary for their survival, there are less paternalistic approaches in place that still allow that individual to live a safe self-determined life in the community while having their basic needs assured by an individual or non-profit organization directing a part of their funds for them.
The normative question is also an empirical objection. I haven't delved into the financial literacy literature yet, and I don't really have time to now. My general impression here is that this literature, to the extent it provides a clear argument for widespread financial illiteracy, will likely be unpersuasive to me. I have good theoretical reasons to doubt financial illiteracy as a major issue in social welfare. I will probably do at least one follow up post about this issue. I should also figure out a good counterargument based on citations from the self-direction and basic income literature base.
Anyway, the theoretical question. The main objection I have with financial literacy it its foundation in neoliberal economics. The idea, as presented in my health economics class, was that individuals lack perfect information, face entry and exit costs, etc. (among many other idiotic assumptions about markets) and therefore would be unable to effectively make economic decisions for themseleves. This is where the Austrian approach to economics is instructive. Of course social welfare consumers are unable to pass the test of having perfect information, existing in a market of perfect competition, no entry and exit costs, etc. because these are assumptions that can never reasonably be met. More importantly, individuals do not need to possess anywhere near perfect knowledge. The emergent, iterative process of individual economic decision-making brings the market towards its ideal equilibrium point, but it is in constant flux--always imperfect, always becoming.
From a social work perspective, when you look to implement social welfare policies that apply a neoliberal approach to understanding of the social world, you eventually arrive at a form of centralized paternalism. This may be paternalism that is focused on reinforcing positive economic decisions, as determined by a central authority, as in asset-building policies (baby bonds, CDAs, IDAs). Or paternalistic ideas might be focused on punishing bad behaviors, again as determined by a central authority, often through formal sanctions, cost-sharing, and discontinuing services (as in TANF sanctions). The ultimate idea behind both forms of paternalism is that other systems--usually political systems, bureaucratic systems, or non-profit service monopoly systems--know better what a person should value, need, or do than the individual themselves. When asset theory proposes that people in poverty should receive modest college savings funds, they are taking away the agency from that family in poverty to spend that money on whatever they feel they need at that time. Why? Because we the researchers/theorists/funders determined that every family in poverty needs to spend money on college savings rather than housing, food, or healthcare. This is the type of thinking that just pisses me off to no end. I have zero patience for it. In a social work classroom, I can usually argue that on a moral level, this line of reasoning supports the oppression of people on social welfare. But outside that classroom, if I were in a room full of economists, I don't think that argument flies as far as I think it should.
Alright, I need to do some more research on financial literacy. Maybe I will keep that going tomorrow. I suppose I need to present some empirical evidence for financial literacy, as well. I'll try to do that too, maybe. Hope you enjoyed reading this. It was fun to write. :)
No comments:
Post a Comment