Japanese poverty: Who's to blame?

Bryan Caplan is a thinker who is famous for his introspection. When he asks a question - "Why do people go to college?", or "Why are poor people poor?", his instinct is to carefully examine his own pre-existing ideas on the topic. Turning his own beliefs over and over, he examines them from every possible angle, mining his brain for insights.

This sounds like I'm making fun of Bryan, but really, introspection is quite a good technique for understanding the world in many cases. It can tell us much about how consciousness and reason work, about what is right and wrong (because morals = opinions), and other interesting topics. And to the degree that we accumulate knowledge incidentally or accidentally, introspection is valuable because it samples the influences we've accidentally aggregated. But, that said, there are questions for which introspection tends not to be of much use. One example is physics. Racking your brain for memories of how balls rolled down hills in your past is just not going to get you as far as actually going and rolling some real balls down some real hills.

I think that one of these questions is the question of why people are poor. Bryan is planning to write a book on this, called "Poverty: Who's To Blame?" Here are some blog posts that summarize Bryan's ideas on the subject: Post 1, Post 2, Post 3, Post 4, and Post 5. Bryan's main thesis about poverty is that the main cause of poverty is irresponsible individual behavior, chiefly:

1. Drug use (including alcoholism)

2. Single and unplanned parenthood

3. Crime

Bryan is not as clear about how he arrived at this conclusion. Was it introspection? It's easy to imagine that someone who has spent most of his life living in a self-described "bubble" might have had very little contact with actual poverty. But if you spend your life avoiding poor people and passively absorbing the thoughts of people like Charles Murray (a Caplan favorite), your ideas about poverty will be 9 parts stereotype to every 1 part fact. Asserting ideas about poverty that were derived from introspection will then lead to a feedback loop, in which conventional wisdom becomes divorced from extant reality.

Now, maybe Bryan has done more than introspection to come up with his thesis that poverty is the result of bad behavior. I'd like to see his data. And note that simply correlating poverty with bad behavior is not sufficient, because it can't distinguish cause from effect. Bad behavior might be a mechanism for coping with the pain of poverty. Or a third variable might cause both poverty and bad behavior.

In any case, what I really want to talk about in this post is Japan. 

Japanese people will often tell you "There is no poverty in Japan," but this is just false. Japan has significant poverty. Professor Koichi Nakano estimates the Japanese poverty rate at 16 percent - lower than, but generally comparable to, the rate in the U.S. If Bryan Caplan's grand thesis is correct, these Japanese people should be poor because they have children out of wedlock, abuse drugs and alcohol, and commit crime.

Here are facts: 1. The rate of single parenthood in Japan is miniscule compared to that in the U.S. 2. The rate of drug abuse in Japan, though higher than in the past, is far lower than in the U.S. 3. Crime rates in Japan are far, far lower than in the U.S. 4. Alcoholism is a problem in Japan; between 0.8 and 4.4 million Japanese people are alcoholics (out of a total population of somewhere over 120 million). 

So of the types of bad behavior listed by Caplan, only alcoholism is comparable between Japan and the U.S. Perhaps Caplan should narrow his focus - perhaps alcoholism is the main cause of poverty.

Or perhaps Caplan is just dead wrong. Perhaps his preconceived notions about poverty, developed in self-imposed isolation from the actual phenomenon, are simply not an accurate guide to extant reality. 

As it happens, I have had a fair bit of contact with the Japanese poor. In general, although they do engage in more bad behavior than other Japanese people, they engage in less bad behavior than middle-class people in America. In general, they work very hard, abstain from drugs, don't have children out of wedlock, and obey the law. Every day they get up, slave away diligently and conscientiously for 8 or 10 hours at a mind-numbing menial job at pittance wages, and every night they return to sleep on the floor of tiny bare rabbit-hutch studio apartments barely larger than my bathroom. They were born well-behaving and hard-working and poor, and they will die well-behaving and hard-working and poor. Every day, even as people like Bryan Caplan inadvertently mock their struggles, the Japanese poor make a mockery of Caplan's prejudices and stereotypes.

If I had never seen the Japanese poor - if my only contact with poverty had been with the American poor, who tend to bully and rob people like myself at alarming rates - then I expect I would find Bryan Caplan's thesis quite reasonable, and even obvious. But that is why, if you want to know what is actually going on in reality, you have to get outside your bubble. 

If we get outside the "blame-the-poor" introspection bubble, we find that income and wealth pretty much follow a Pareto distribution in every country - there are poor people everywhere. Not poor in the absolute sense - American and Japanese poor people generally have food and shelter and warmth - but poor in the relative sense. The real question of "Why does poverty exist?" is the question of "Why do income and wealth follow a Pareto distribution?". Bad behavior is not likely to be the answer.

Update: A commenter kindly pointed out this paper, which gives somewhat recent (year 2000) numbers on inequality and poverty in Japan. Key takeaway facts: 1. In 2000, the Japanese poverty rate without government benefits (the "market poverty rate") was 16.5%, compared to 18% in the U.S. and 18.2% averaged across a sample of rich countries. 2. Income inequality, measured by the Gini coefficient, was the same for the Japanese working-age population (15 to 64) as for the entire population. This provides strong statistical support for my thesis that poverty is not substantially less common in Japan, despite the far lower prevalence of "bad behavior" there. Bryan Caplan would do well to check out the numbers.