As if we needed more evidence that rationality is a good thing, it now seems like irrationality is not just something that will lead you to have crazy beliefs and not understand how the world works; it can also kill you (among other things).
Scott Beaulier and Bryan Caplan argue in a paper titled Behavioral Economics and Perverse Effects of the Welfare State that the traditional explanation about crime being more attractive to the poor because their legal options to improve their situation are limited is unsatisfactory.
It might seem intuitive that more poor people commit crimes because they are trying to get out of poverty, but evidence shows that most crimes are not very lucrative.
What’s my alternative? Crime is just one of many, many “social pathologies” that are over-represented among the poor: alcoholism, drug abuse, smoking, obesity, illegitimacy, etc. None of these are good escape routes from poverty. So instead of trying to explain why “poverty causes crime” or “poverty causes obesity,” it makes sense to look for common causes of poverty and social pathologies.
Like what? In a paper just accepted by Kyklos, Scott Beaulier and I point to a simple candidate: irrationality. People who have biased beliefs about practical matters, and/or exercise poor impulse control, are likely to screw up their lives across the board. So it’s hardly surprising that poverty and self-destructive behavior go hand in hand. Rather than being a natural response to poverty, a lot of crime can be seen as objectively self-destructive behavior that happens to have an unusually large amount of collateral damage. (link)
This seems consistent with anecdotal evidence that poor but educated people aren’t as likely to suffer from these social pathologies (and by educated I most certainly am not talking only about formal schooling).
It’s not about how much is in your wallet, but how much is in your head. So get smart (you can if you have a growth mindset).