Saturday, April 11, 2015

Poor People Don't Have Money

Poor people don't have money, and that's a problem for the free market. That's a problem, because, well-- don't think of money as a way to buy stuff. Think of money as a way to attract people's attention so they will come give you things or do things for you.

For people with money, the dance is a simple pas de deux between the person with the money and the person with the goods or service. "I see you have money. Let me convince you to give it to me," says the person with the goods. "Make it worth my while to give you my money," says the person with the money.

It can be a complicated dance at times, but it's relatively straightforward. But the four-cornered dance of the poor is different.

"Make it worth my while to provide this for you," says the person with the goods.

"I can't," says the poor person.

At this point the dance could be over, but in some cases, the government steps in. "To have a smoothly functioning country," says government, "we need to make sure everyone has access to this service." Like food, healthcare, clean water, mail delivery, roads, a standing army.

Sometimes government and corporations do a dance of their own. "I'm going to take the people over here, the ones with money, the ones who can make this worth my while," says the corporation. "You can keep those people over there. The poor ones. The ones we can't make money from." Our mail delivery right now is very much this model. UPS and FedEx and the rest only sort of compete with the United States Postal Service. In fact, when you hire one of the non-USPS companies to deliver a package to East Bumswoggle, Nowherevania, a place so far out that nobody wants to drive on over in search of tiny money, you know who actually delivers it? The USPS, working as a subcontractor for the private corporation. (Fun fact: the USPS has financial problems largely from a Congressional requirement that they pre-fund the retirement of people who don't even work there yet.)

Imagine that a free maket economy consists of taxis, passengers and a government. Passengers attract taxis by standing curbside, waving piles of money. But poor people don't have anything to wave. So the government, either out of altruistic reasons or because they want to get all those poor people off the curb, gets their own batch of taxis to carry the poor home.

Eventually, corporations notice that the government taxis are carrying around big piles of money of their own. And TaxiCorp HQ, somebody says, "That big pile of money has attracted my attention. I wonder how we can get them to give it to us."

Money's a funny thing. When you have a bunch of it, people see you. They acknowledge you. They want to make you happy. But remember-- poor people don't have money. The government has the money.

So the people with the goods and services enter the dance-- but they don't come to dance with the poor folks. They come to dance with the government. This dance can take many forms. (We can make it worth your while to let us do that for you. We can do that better than you.) Or they can bring a fourth party into the dance-- the taxpayers whose money the government collects to pay for things. Look at what those guys are spending your money on! It's wasteful! Go give them hell!

Now there's a weird variation of the dance, because the corporations can mostly only sense money, and poor people don't have any. The machinery needs a way to detect this new kind of resource, a resource that has no money, but which attracts the government's money. If only there were something, some instrument that would both detect the "customers" ripe for plucking and which simultaneously helped make the case that the government needs help.

Voila. Big Standardized Tests.

BS Tests fulfill the function of identifying the market opportunity. BS Test scores tell edupreneurs when a school is ripe for takeover, turnaround, or charter replacement. That is why someone like Merryl Tisch can say, "Never mind testing the high score schools." Because those schools are filled with people who have money, and corporations can find them just fine, thank you.

When people claim that BS Tests make the poor visible, that's true. But they're visible like the people who moved were visible to T Rex in the first Jurassic Park. The poor do not have money. They are not the customers. They do not have leverage. And corporations and government are back to the same old dance. "We'll take those customers, the ones over there, the ones we can make a profit with," say the corporations. "You keep the rest."

When you're trying to make sense of some of the privatizing reformy nonsense loose in the world, just remember this-- poor people don't have money. To get rich, nobody needs to make them happy. You need only pay attention to the people who have money, and that's the government, and those guys are already dancing happily with the corporations like a couple that's had a lot to drink and has already rented a room for the night.

There are many, many well-meaning people who have the best interests of poor people at heart, but to the kinds of economic systems and engines that have been set loose, the poor do not matter-- they are at best tools to be used to move money around, but they have no money. A free market system can move around them and over them, but it can't really respond to them unless they find a way to make it worth someone's while. But they have no money, and at the free market ball, that's the only way to pay the dj.

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