Conglomerate Blog: Business, Law, Economics & Society

So, I've been traveling a lot the last month, and I tend to read the paper on the plane and think "I need to remember to blog about that." As I have nothing to add to current debates over futbol or Generals Gone Rolling Stone, I thought I would go back to an editorial in the May 23 NYT that still has me upset.

Nicholas Kristof titles his op-ed about African parents making good economic choices for their kids as "Moonshine or the Kids?" So, already you know where this is headed -- ignorant people drink "moonshine," so this must be about ignorant people. It's not "Pinot Noir or the Kids?" or even "Heineken or the Kids?"

Kristof recently went to the African Congo. There he saw families that were extremely poor whose children did not go to school because of the $2.50 monthly fee and did not have $6 malaria nets. But, he noticed the parents in these families had cell phones ($10 month for both) and that fathers still drank alcohol, sometimes to the tune of $12 a month. He then makes the following sweeping statement about "the ugly secret of global poverty, one rarely acknowledged":

It's that if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children's prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households."

I have a news flash for Mr. Kristof: African heads of households are not alone here. As my dad used to say when I would ask why high school kids I knew had really nice cars: "Anyone can make a car payment." I guess the analog now is "Anyone can make a cell phone payment." Let's think about Mr. Kristof's specific educational trade-off in terms of life in the U.S.

I have not been to the Congo, but I have been to Malawi, which is even poorer. Malawi is an agrarian society, where most people are subsistence farmers. There are some skilled professions, and of course some white-collar jobs in the cities. Most people in the poor areas make $1 a day. (The man in the Congo sells stools he makes for $1, so let's say he makes $1 a day also.) In the United States, (according to the Census Bureau for 2008), the mean income is $51,233. Assuming a five-day work week, 52 weeks a year, that's about $200/day. So, the Congolese man needs $2.50 a month to send a child to school, which might be the equivalent of $500/month for the same U.S. man. In Malawi, primary school is free, but secondary school is not.

In the U.S., public elementary education is free, but college education is not. In our information society, college education is arguably as important as a high school education in an agrarian society. How hard would we have to look to find a family in the U.S. who would say they couldn't afford $5,000 a year to send a child to college but smoked, drank alcohol, had cable, or had a cell phone? In New York, additional taxes are going to send the cost of one pack of cigarettes to $9-11, making a pack-a-day habit a $4000/year habit. Would Kristof really have to go to Africa before he found a parent who smoked, but didn't start a 529 plan? Would he feel as bad for the American kid who couldn't go to college or who graduated with a large student debt burden as he does for the African child?

In the U.S., we have a lot more things to waste money on besides "wine, cigarettes and prostitutes." I'm sure Kristof could come to my house and start pointing to Netflix, satellite TV, cell phone plans, organic milk and even a NYT subscription and chastise me if I said I couldn't afford something for my children.

Kristof is right that some of the vagaries of deep poverty can be alleviated by microbanking, which allows the unbanked to put cash out-of-sight and out-of-mind before temptations to spend come along, and also by focusing aid efforts on women, who tend to be savers, or at least "children first" in their spending. But the one thing that I realized when I was in Africa talking to microborrowers is that all wage-earners are the same: we are all tempted to use our wages, however small or large, on non-necessities. Particularly when necessities seem large ($75 a year to send three kids to primary school) and the luxury seems small ($1 for a night drinking with buddies).

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So, I've been traveling a lot the last month, and I tend to read the paper on the plane and think "I need to remember to blog about that." As I have nothing to add to current debates over futbol or Generals Gone Rolling Stone, I thought I would go back to an editorial in the May 23 NYT that still has me upset.

Nicholas Kristof titles his op-ed about African parents making good economic choices for their kids as "Moonshine or the Kids?" So, already you know where this is headed -- ignorant people drink "moonshine," so this must be about ignorant people. It's not "Pinot Noir or the Kids?" or even "Heineken or the Kids?"

Kristof recently went to the African Congo. There he saw families that were extremely poor whose children did not go to school because of the $2.50 monthly fee and did not have $6 malaria nets. But, he noticed the parents in these families had cell phones ($10 month for both) and that fathers still drank alcohol, sometimes to the tune of $12 a month. He then makes the following sweeping statement about "the ugly secret of global poverty, one rarely acknowledged":

It's that if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children's prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households."

I have a news flash for Mr. Kristof: African heads of households are not alone here. As my dad used to say when I would ask why high school kids I knew had really nice cars: "Anyone can make a car payment." I guess the analog now is "Anyone can make a cell phone payment." Let's think about Mr. Kristof's specific educational trade-off in terms of life in the U.S.

I have not been to the Congo, but I have been to Malawi, which is even poorer. Malawi is an agrarian society, where most people are subsistence farmers. There are some skilled professions, and of course some white-collar jobs in the cities. Most people in the poor areas make $1 a day. (The man in the Congo sells stools he makes for $1, so let's say he makes $1 a day also.) In the United States, (according to the Census Bureau for 2008), the mean income is $51,233. Assuming a five-day work week, 52 weeks a year, that's about $200/day. So, the Congolese man needs $2.50 a month to send a child to school, which might be the equivalent of $500/month for the same U.S. man. In Malawi, primary school is free, but secondary school is not.

In the U.S., public elementary education is free, but college education is not. In our information society, college education is arguably as important as a high school education in an agrarian society. How hard would we have to look to find a family in the U.S. who would say they couldn't afford $5,000 a year to send a child to college but smoked, drank alcohol, had cable, or had a cell phone? In New York, additional taxes are going to send the cost of one pack of cigarettes to $9-11, making a pack-a-day habit a $4000/year habit. Would Kristof really have to go to Africa before he found a parent who smoked, but didn't start a 529 plan? Would he feel as bad for the American kid who couldn't go to college or who graduated with a large student debt burden as he does for the African child?

In the U.S., we have a lot more things to waste money on besides "wine, cigarettes and prostitutes." I'm sure Kristof could come to my house and start pointing to Netflix, satellite TV, cell phone plans, organic milk and even a NYT subscription and chastise me if I said I couldn't afford something for my children.

Kristof is right that some of the vagaries of deep poverty can be alleviated by microbanking, which allows the unbanked to put cash out-of-sight and out-of-mind before temptations to spend come along, and also by focusing aid efforts on women, who tend to be savers, or at least "children first" in their spending. But the one thing that I realized when I was in Africa talking to microborrowers is that all wage-earners are the same: we are all tempted to use our wages, however small or large, on non-necessities. Particularly when necessities seem large ($75 a year to send three kids to primary school) and the luxury seems small ($1 for a night drinking with buddies).

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