The Ezra Klein Show

If you’re a Parks and Rec fan, you’ll remember Ron Swanson’s Pyramid of Greatness. Right there at the base sits “Capitalism: God’s way of determining who is smart and who is poor.” It’s a joke, but not really. Few want to justify the existence of poverty, but when they do, that's how they do it. People in poverty just aren’t smart enough, or hard-working enough, or they’re not making good enough decisions. There’s a moral void in that logic to begin with — but it also gets the reality largely backward. “The poor do have lower effective capacity than those who are well off,” write Sendhil Mullainathan and Eldar Shafir in their book Scarcity. "This is not because they are less capable, but rather because part of their mind is captured by scarcity.” They show, across continents and contexts, that the more economic pressure you place on people, the worse their cognitive performance becomes. Mullainathan is a genius. A literal, MacArthur-certified genius. He’s an economist at the Chicago Booth School of Business