The Persistence of Poverty: Why the Economics of the Well-Off Can't Help the Poor (Hardcover)

~ Prof. Charles H. Karelis (Author)
Key Phrases: behavioral factors, equimarginal allocation, helping conundrum, New Way, United States, Some Theories (more...)

Editorial Reviews

From Publishers Weekly

Starred Review. This slim volume presents a radical analysis of poverty that turns conventional understandings of the subject upside-down. Karelis, a philosophy professor at The George Washington University and former president of Colgate, begins with a brief overview of the received wisdom on and conventional arguments regarding poverty, which he argues have been shaped in large part by middle- and upper-class sensibilities of thrift, discipline and long-term thinking; as a result, public policy initiatives have proven largely ineffective. With rigor and passion, Karelis offers a radical reconsideration of the problem, resting on twin premises: the importance of distinguishing between enjoyment and relief (e.g., eating ice cream vs. taking aspirin for a headache), and acknowledging that these motivators/rewards have a different effect on the poor than they do the well-off. Karelis argues that while the middle and upper classes seek an even distribution of "pleasers" to increase "positive satisfaction" over the long-run, those acting from a position of insufficiency work for "relievers... goods that reduce pain, unhappiness, or misery" in the moment. As such, what is rational or efficient behavior for the poor is not so for the well-off, and vice-versa. Though rich with insight on a subject with broad appeal, Karelis's treatise is not an easy read, particularly for those unfamiliar with economic theory; readers unafraid of technical forays into the Law of Diminishing Marginal Utility and the Epicurean Fallacy will find this important work quite rewarding.
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Review

"I am very enthusiastic about Charles Karelis''s book. It is powerful and important. After a number of years as a senior official dealing with social policy in Washington, this thoughtful philosopher argues impressively for a fundamental shift in perspective in economics. He then goes on to trace the consequences for dealing with poverty clearly. The work merits serious attention from economists, who may well resist at first, but who I suspect will in time be persuaded and excited."-Gordon C. Winston, Orrin Sage Professor of Political Economy, Williams College (Gordon C. Winston )

"This book is astonishingly lively. It ranges from the facts of life among the American underclass to deep philosophical puzzles about what does and does not count as ''rational'' behavior, and will make economists, philosophers, and ordinary engaged citizens rethink just about everything they took for granted about the causes and cures of poverty."-Alan Ryan, Professor of Politics, Oxford University (Alan Ryan )

"The Persistence of Poverty is an original and enlightening book with a startling thesis. Written with verve and inviting clarity, it will be of interest to philosophers, economists, and public policy planners alike. Its theoretical arguments and practical proposals are sure to be the subject of debate for years to come."-Anthony Kronman, Sterling Professor of Law, Yale Law School (Anthony Kronman )

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Product Details

• Hardcover: 208 pages
• Publisher: Yale University Press; 1 edition (June 26, 2007)
• Language: English
• ISBN-10: 0300120907
• ISBN-13: 978-0300120905
• Product Dimensions: 8.4 x 5.6 x 0.7 inches
• Shipping Weight: 12.8 ounces (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (3 customer reviews)
• Amazon.com Sales Rank: #96,700 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

20 of 22 people found the following review helpful:

5.0 out of 5 stars Economics of poverty: Redefined, August 30, 2007

By	Guido Deboeck "author "Flemish DNA & Ance... (Arlington, VA USA) - See all my reviews (REAL NAME)

In the late seventies serious attempts were made to distinguish "absolute" from "relative" poverty. In 1972 the annual speech of the President of the World Bank, then Mr Robert McNamarra, a speech delivered in Nairobi, was entirely focused on the fight on poverty.
Twenty five years later there are tons of WB reports written about world poverty as well as progress reports how poverty has been reduced in a at least a few countries. Nevertheless a vast number of people in the world keep living with $2 (or less) per day.
Charles Karelis' book does not concentrate on world poverty (although what he wrote could very well be applied), but on poverty in the US. He comes up with some revolutionary new ideas that economists as well as politicians should take seriously.
His main argument is that at levels below the meeting of basic needs, the marginal utility of extra dollars or resources is not decreasing, but increasing. Hence, the tendency of poor people not to work, not to stay in school, to over consume drugs or alcohol and/or get in trouble with the law.
This relatively short book, contains a wealth of interesting insights and examples that explain why traditional economic thinking about decreasing marginal utility of transfers to the poor is just wrong.
In the last chapter of his book Professor Karelis discusses economic justice and the challenge of balancing between market driven, free market forces and a society based on transfers to the needy. How much should the rich really be taxed to help the poor, without shrinking the incentives to work or the overall economic "pie"? Without explicitly talking about the US and Europe, Karelis clearly demonstrates the different choices made between the more free-market oriented US and the European zeal for more leisure, fixed working hours per week (e.g. France), higher taxes and more welfare programs for the poor in Europe. Karelis provides some specific policy advice at least for the US as to how to keep more poor people on the job, in school, away from crime or drugs. A lot of what he wrote would however also be applicable to Europe or the rest of the world. This book provides very refreshing thinking about poverty and the reasons why old economic thinking and policies have not worked in the past.

2 of 2 people found the following review helpful:

2.0 out of 5 stars One single idea, not well supported, March 22, 2009

By	Vancouver Breton - See all my reviews

Karelis has exactly one idea to contribute in this book---the idea that perhaps marginal utility increases rather than decreases with income down at the low end of the income vs utility curve. This may be true, but could have been presented in 20 pages just as easily. Frustratingly little quantitative data is presented to support this argument, which instead relies mostly on introspection (aka anecdotes). While Karelis presents an interesting idea, he fails to support it adequately, then perversely creates a strawman argument that blames Epicurus of all people for misleading economists on the shape of the marginal utility function. This strawman is based on a complete misunderstanding of what Epicurus actually taught, and borders on slander. The basic idea of this book is important and should be followed up with actual research, but this book offers no more insight than you'd hear in a short comment at a conference.

2 of 4 people found the following review helpful:

3.0 out of 5 stars At First Glance..., May 31, 2008

By	M.E.C. (Washington, D.C.) - See all my reviews

I agree that Karelis is brilliant. I am not an economists, so I found some of his theory cumbersome to get through... nonetheless, I think I understand the main concepts that he presents. However, throughout the book, I was frustrated by "false assumptions" that were not backed up by data or further explained. For example, "Like many poor people in modern times,it seems that the famine-oppressed Lydians did little work." (p. 66). I can't argue about teh Lydians - but is it fair to compare the poor of the day to Lydians who were "playing games all day long"? According to my studies, over 40 percent of those who are currently homeless in the United States work. The percentage is even higher for those who are living in the US below the poverty line. Over 6 million Americans are considered the "working poor" (according to the 2000 Census). Again, a similar idea is stated, "poverty itself lowers motivation to work and smooth consumption" (p. 132). Where does Karelis get that information? Has it been studied? I have done extensive reading on domestic and global poverty - and I don't know that such blanket statements are accurate. Perhaps he is guilty of starting with false assumptions - just as he suggests policy makers start with false understandings of marginalism.