Markets in Everything

Markets in Everything – even homelessness, in this case. The link goes to an interesting article about an internet marketing specialist who helped a homeless man double his begging takes with clever marketing.

The connection with this earlier post – about a “homeless” man near my day job who seems likely to be a huckster – may not be obvious, so here it is. I don’t know anything about this man (“Keith”) that our marketing expert helped out, so no comment on whether he did a good, bad, or merely interesting thing by helping him double his intake. The comment is merely that this highlights what should be obvious: homeless people ARE selling something. This is a market too. I won’t say it’s a market “like any other,” since what you get out of helping a homeless man isn’t very tangible. But the point remains: homeless people have to entice people to donate to them on some basis, which in turn implies that people don’t donate unless they think they are getting something in return – presumably a feeing of having proven that they are “good” or “caring.”

The way I see it, there are three things at work here.

(1) Put your money where your mouth is. The betting culture is ubiquitous (I recently posted a $1000 bet on Facebook as a way to prove to myself that supporters of the healthcare bill privately don’t actually believe most of the crap they say in public) – and in this case the implication is that if you care about homelessness, you need to be willing to help pay for it. So people who like to think that they care about homeless are willing to part with some money to help out – they just need to be given a nudge to do so.

(2) The illusion of fair exchange. It’s interesting that including a squirt of hand sanitizer with donations was effective. People are uncomfortable with charity, but they nevertheless understand that it is necessary. Actually, I think a lot of the motivation for support of welfare state programs comes from our awkward feelings about charity. Conservatives are happy to trumpet statistics that show that they are more generous with their money than leftists – and rightly so: giving to the needy is not only good, but necessary, as some people really do fall hard on their luck. At the same time, I think conservatives make too big a deal out of these numbers. It’s probably true that conservatives are slightly more generous, but this isn’t the whole story. Also playing a role is that a lot of leftists are distinctly uncomfortable with the implication of inferiority involved in giving someone a handout. Handouts come with strings attached, and let no libertarian pretend otherwise since one of the major reasons we prefer charity to government programs, after all, is that we trust individuals to be more perceptive in discerning who is deserving of their handouts and who is simply freeloading than government. Not all leftists are covertly scheming to make us wards of the state: many are simply trying to take the obligation out of the relationship by shifting it to an “entitlement” that the government gives, rather than something that is given or taken away at an arbitrary whim. They consider it an outrage that someone who has already fallen on their luck should be obligated to anyone to get back up on their feet. It’s a sentiment that we libertarians can understand, if not exactly share. And I think the hand sanitizer gimmick works on precisely the people who are uncomfortable with the implied power relationship between hander and hanout-recipient. They want to donate because they like to think of themselves as the kind of people who can make sacrifices (never mind that it’s actually just a nominal amount – whatever’s in pocket) to alleviate suffering, but they feel awkward about it, and the illusion of fair exchange helps them get around it. They’re not actually fooled that they’ve bought a service, mind you – the hand sanitizer just acts as a nudge, a pretext.

(3) The realization that the “homeless” are often frauds. Notice how the improved sign says “support the homeless,” rather than including any details about Keith’s personal life. It doesn’t get a comment in the linked article, but I don’t think I’m out of line in suggesting that the litany of details about Keith’s personal life on the original sign, true or not, read like a list of ad hoc excuses – the kind of thing that someone thinking of how to sell a fraudulent homelessness situation to passers-by might come up with. After all, the first question that comes to anyone’s mind in a society as historically affluent as ours is “how does anyone come to this? Surely he can get a job at McDonald’s if nothing else!” Honestly, it kind of stetches the imagination to think that with all the opportunities out there there isn’t already in place some solution to the problem of homelessness. We all suspect that people begging on the streets could get off their asses if they wanted to. So Keith started out with what looked like the right approach: address this head on. The problem, though, is that addressing it head on raises too many uncomfortable questions in our minds, calls attention to the wrong lines of thought. When you depersonalize it, however, make it about homelessness in general, as the marketing advisor does for Keith on his improved sign, then people can safely tuck these questions away. It isn’t about Keith personally anymore, it’s about homelessness in general. EVERYONE can agree that we’d like to help hard-luck cases, and the new sign neatly sidesteps the issue of whether Keith actually is one of those cases.

Of course the one question that’s burning in everyone’s mind by the end of the article doesn’t get answered: 100% increase in ROI over what? We’d all like to know what a standard-issue bum makes begging, but our marketer isn’t telling. Which rather raises the suspicion that it’s a greater number than most of us probably think it should be, and that a condition for being featured on the blog imposed by Keith was that no such disclosures should be made. Fair enough even if Keith didn’t actually impose the condition, actually: our interpid reporter probably doesn’t want to stand between legitimate beggars and their takes by giving information fodder to those who are looking for an excuse not to give. But it seems to me that that’s what he’s done nevertheless. I think if there is to be real social change on matters like this, it will need to start with an honest assessment of just how much fraud is at work here, and on giving we innocent bystanders ways to detect it when we see it. Far from hurting the homeless, I think such an endeavor would end up benefiting them: people would be more willing to donate if they could rely on their money going to an actual good cause. Proving that you can play marketing games with homelessness, obvious though it be in retrospect, doesn’t do much to inspire confidence here.

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