I recently watched a very short but very interesting interview with Dr. Jordan Peterson which spoke of human nature, charity and the natural human desire to improve one’s situation in life. His hypothetical, which I provide below, echoes my own observations when it comes to ‘The Homeless Problem’ and why it will never be solved using charity and good feelings.

Dr. Peterson presented a scenario which comprised two people; let’s call them George and Gracey.  In this hypothetical, George is given $100 and Gracey is given none. As part of the deal to keep the $100, George must give some portion of it away to Gracey. If Gracey accepts George’s offer, they both get the money. But if Gracey declines George’s offer of free money, neither George nor Gracey receive anything.

So George must give Gracey enough to entice her to accept an offer, but not so much that it acts counter to his own self-interest. So the question for George is: What is the minimum amount that Gracey will accept? Pretty interesting, no?

According to Dr. Peterson, when test subjects are given this hypothetical, most ‘Georges’ give their ‘Graceys’ approximately 50% of the money; typically between 49% and 51%. Seems reasonable, right?

Well, up to this point, both George and Gracey are similar, if not completely equal, in their financial position. But what if George were rich and Gracey was poor? What would happen then?

When the economic standing of George exceeds Gracey’s (i.e. George is ‘rich’ and Gracey is ‘poor’) the likelihood of Poor Gracey accepting Rich George’s offer of a 50/50 split drops. Remember, there is no obligation on Poor Gracey’s part to accept the offer; she is refusing free money. 

But the reverse is not true.

What if it is Poor Gracey that is given $100 and she must split it with Rich George?

The research showed that George will accept literally any offer even one as low as $1. Further in the research, George rationalizes his acceptance of so paltry an amount by stating that any free money, regardless of the amount, improves his situation generally, such is his thinking. Darn interesting research into Human motivations and value hierarchies, wouldn’t you say?

Rich George based his threshold for accepting or rejecting Poor Gracey’s offer based on the objective value to his well-being. But Poor Gracey based her threshold, not on any relative improvement in her own situation that the amount might provide, but instead on the value to George!

My Personal, Real-Life Example in West Africa

Once upon a time, I worked in West Africa. One day, as I drove through a small town, I came upon a busy intersection without any traffic controls (stop lights, etc.). But, standing in the middle of this busy intersection, I spied a young, entrepreneurial, one-armed man who had taken it upon himself to direct traffic for tips. 

Yes, you read that right. A one – armed African was directing traffic to earn his daily bread. He signaled to drivers to stop, signaled to drivers to proceed. Some drivers heeded his direction, others ignored him (TIA, after all). But during the entire time that I watched, traffic flowed relatively smoothly and this guy was making money.  And I can tell you unequivocally, His one remaining arm was getting a real workout!

I had never seen such a thing and all I could do was sit in awe and marvel. By any standard in the West, these drivers were poor and yet they were giving this man their spare change.

Of course, as you might imagine, I compared THIS unemployed African to homeless Americans I see at intersections doing nothing more than holding a sign and literally begging. This man, in the middle of Africa invented a job for himself and was making it work.

Well, so impressed was I at this man’s entrepreneurship, I quickly looked in the truck for whatever change I might have handy and, as I passed through the intersection, I readily handed him that change; he had earned it.

But, as I slowly drove through the intersection to hand him 100% of my last remaining change, he looked at it and threw it all away.  Yup. He saw me drive pass, saw that I was a Rich White Man and judged my tip. So poorly did he regard my tip that he threw it in the bushes. I had just witnessed Dr. Peterson’s experiment play out in real life.

Which brings us to the ‘homeless problem’ here in the United States.

How can it be that any homeless exist anywhere in the U.S. with so many programs, missions, charities, etc? Why don’t these solutions ‘solve’ the homeless problem?

I have come to the very real conclusion that these well-meaning, but naïve, solutions do not and cannot solve anything, they only provide grist for the narcissism mill.

There are three primary reasons for Portland’s failure to solve their Homeless Problem, and it has nothing to do with not spending enough money:

1. Homeless programs provide emotional cover to donors and is the very definition of ‘virtue signaling.’ Giving money to charities or to ‘homeless’ people on the street give people the feeling that they somehow helped. People derive their own sense of self-worth by these ‘good works.’ It is a Leftist’s version of the consumerist’s ‘Keeping Up With The Jones’s.’ The irony here is that these ‘good works’ do nothing but exacerbate the problem.  “Don’t Feed the Bears or Homeless”
2. Significant industries have arisen to service this segment of the population and because of this, there is no financial incentive to actually solve the problem.  It very much is a Buggy Whip problem. I’d wager that if I invented an instant cure for drug addiction, I’d be assassinated by hitmen from St. Vincent De Paul. And, most importantly,
3. Human nature absolutely requires that an individual always look to improve his situation regardless of where he resides on the socio-economic range. Just as a rich man seeks to accumulate wealth, so too does a poor man also seek to accumulate wealth; it’s only a question of scale. This means that no city or charity can stop begging by giving beggars money, or housing or Ferraris or Fords. If a beggar has $20, he will always want $21. There is no remedy that makes a Human content with his current state.

Charities are not in the problem-solving business. Charities are in the money-raising business. They are only acting in their own self-interest to continue their enterprise and many cities and individual donors are all too happy to support them in this fruitless work. 

Narcissism is a mighty powerful drug. 

“I’m doing something! I’m a hero!”