Twenty years worth of research found that the lives of poor families improved when they earned more money annually. This outcome surprised no one but Roberto Ferdman of The Washington Post who apparently doesn't recognize the benefits of capitalism when he sees it. He took to the Wonkblog to tell the world "the remarkable thing that happens to poor kids when you give their parents a little money."
Ferdman immediately puts the wrong foot forward, stumbling past the obvious. The parents in this poor community weren't "given" more money, they earned it at a job. It was detailed in The Great Smoky Mountains Study of Youth which followed the quality of life of Native American families in North Carolina. The study found that once an Indian casino opened up on their reservation, incomes went up by $4,000 per year, and thus, the families' lives improved greatly.
But this bit of simple capitalistic cause and effect was deemed "remarkable" by the writer, who stated:
Not only did the extra income appear to lower the instance of behavioral and emotional disorders among the children, but, perhaps even more important, it also boosted two key personality traits that tend to go hand in hand with long-term positive life outcomes.
The study found that these Native American children benefited greatly from their parents' improved income by becoming more conscientious; they lied less, broke fewer rules and even paid more attention to their surroundings. It also found that they became more agreeable and increased their participation in team activities, all of which correlate to better success later in life.
Ferdman found it even more "remarkable" that the children who were worse off than some of the others improved the greatest. Yet, he, nor the researchers apparently, could figure out "why exactly this happened with the children."
"Not even Jane Costello, a professor at Duke University who was part of the team that initiated the original study and co-authored the recent paper can say," Ferdman writes. "But they have a few ideas, based on observable changes in the families after the casino was built and the extra money started to flow in."
It's not clear at this point why any further "expert" advice is needed. It's simple capitalism. It just works. But Ferdman was left astonished and blinded by "intervention" via handouts:
Experts have known about the power of intervention for some time. A lot of previous research has shown that educational interventions can have sizable impacts on personality traits and, in turn, life outcomes. But rarely, if ever before, have researchers been able to observe the impact of a change in income across such a large group.
The takeaway isn't that casinos are inherently benevolent institutions. But rather that money—even modest sums—can be a pretty powerful thing. And for reasons most would likely overlook.


