Greg Clydesdale: Why Jacinda Ardern’s Poverty drive failed

Jacinda Ardern came to power with the stated goal of reducing poverty. At the end of her tenure, we could comfortably state her achievements were under-whelming. In fact, when we compare her goals to what she achieved, we can say it more explicitly – she failed! This represents a long list of failures to reduce poverty including the ‘Working for Families’ program and ‘Closing the Gaps’.

I had the opportunity to speak to Ardern’s Child Poverty Unit (CPU) in 2020 and recognised at the time that they would fail. They were driven by the same ideologies behind other failed programs, that is the poverty cycle.

The poverty cycle argues that poverty in itself reduces educational outcomes of children so they end up in low-paying jobs and we have intergenerational poverty. However, if you have met the successful children of Vietnamese refugees, you can instantly recognise the problems with this theory. Cultural and parental practice can overcome the constraints of coming from a poor family.

Left-wing academics have produced no end of theories to support the poverty cycle. When I spoke to the CPU, they acknowledged that they were influenced by a theory which argued that people enduring poverty are constantly enduring stress. This stress reduces parent’s ability to think clearly. The parents operate outside their cognitive capacity (or cognitive band-width), with the result that they make sub-optimal decisions and this reduces their child’s development. Consequently, their children have poorer academic development, so when they start work, they get low-paid jobs and the next generation does not escape poverty. A description of this theory can be found in Mullainathan and Shafir’s book Scarcity.

This theory argues that poverty reduces effective decision-making, however it ignores some fundamental links between wealth and cognition. First, the jobs that are most likely to tax cognitive capacity are the ones that pay the most. In other words, the people who are most likely to suffer from cognitive stress are not the poor, but those on good incomes.

Labour economists have long noted that the poorest people are employed in low paid jobs with little cognitive content. They do low-paid, manual, repetitive jobs. It is the high-income jobs that have the highest cognitive component with irregular demands that raise stress levels.

I explained this to the CPU, but they argued that rich people can afford to hire people to make decisions for their children, so their parenting is not hindered by their stress. There are several problems with this view. First, the rich might be able to afford nannies but the middle classes can’t, yet they can still achieve good educational outcomes. In fact, I suspect most bureaucrats in Wellington have university degrees but were not brought up by nannies and maids.

The second problem with this view is that the work performed by nannies and maids does not include important cognitive decisions.

Third, the key inputs for a child’s development do not require high cognitive input. Simply, spending time with children and talking to them rank among the most effective strategies for a child’s future. When it comes to child development, time is an extremely valuable resource and it is here that the unemployed and solo parents have a huge advantage over those that are working.

Another problem with the prevailing ideologies is they assume that, when it comes to child development, all cultures are equal. Left wing advisors make glib claims like ‘all cultures have value’ but such views are patronising and simplistic. They ignore a huge body of research in anthropology that show a strong link between culture and the skills that children develop. For example, as far back as 1959, Barry, Child and Bacon noted that societies based on pastoral economies had very different parental practices and child development outcomes compared to societies based on agriculture.

Another study in the 1950s by John and Beatrice Whiting also noted the link between culture, parenting and child development, so much so that they coined the term ‘cultural learning environment’. These are seminal studies which have since been supported by a strong body of research, yet our governments refuse to accept the influence of culture on child development.

These studies reveal, that parenting and child development strategies reflect their underlying economy and resource base. If a culture’s food is gained from hunting, parents want their children to show initiative and freedom of spirit, but if they work in a field and must conserve harvests to last the year, it places a focus on discipline and restraint.

Today’s market-knowledge economy is different again but, many New Zealanders do not get the best preparedness because of their cultural parenting practices.

Cultures are human adaptations to their environment. They embody skills, knowledge, values and behaviours necessary to survive in their environment and given resource base. If the environment and resource base changes, the culture must also change to ensure the society’s welfare.

The idea that ‘all cultures have value’ also justifies conservative cultural policies. In which case, the government invests in policies that resist change and, if an ethnic group ends up in low-income jobs, ‘kind’ people like Jacinda Ardern will take money off you and re-distribute it.

The reality is that culture makes a huge difference to a child’s development outcomes and a culture that values education, discipline and technology is going to experience much less poverty than one based on motor-skill development and freedom of spirit.

If we are to reduce poverty in marginalised ethnic groups, there needs to be a significant change in policy from re-distribution to parental skills. Developmental psychologists have produced a large body of literature that focus on important child development outcomes for today’s world.

These include:

Cognitive skills
Academic socialisation
Growth Mindset (based on work by Dweck)
Discipline (self-regulation)
Structure and time management

To reduce poverty, policy must become more realistic about the differences in culture and their varying parental strategies. If parents do not know what behaviors generate success in a market-knowledge economy, their children will suffer, not because their parents don’t care. This problem is captured by one Samoan mother who said of her children…

“My desire for them is to have a high level of education but I don’t know what sort of support I should give my children.”

Mothers, such as this, deeply care for their children’s future and are keen to learn. This is where government can play a role but policy has been trapped by a socialist desire to re-distribute income. However, re-distributing resources does not ensure that this learning occurs. Time and time again, policies based on re-distribution have failed and Ardern is just the latest.

Parents play the most important role in determining where a child ends up in life. However, if their knowledge is limited by cultural heritage, the children will suffer. Parents are not just our first teachers. They are our most important teachers. Parental strategies are a huge determinant, not just of poverty, but many socio-economic outcomes and it is time government policy recognised its importance.

The evidence is now unequivocal. Maori and Pacific children begin school with less preparedness than other ethnic groups. They begin school behind other students and the gap gets larger with time. To close the poverty and educational gap, we need to close the parenting gap.

Successive governments have placed a lot of faith in bureaucrats writing papers on poverty, but we do not need any more policy papers. Policy oriented government agencies, like CPU, need to have their budgets shifted to front-line programs that actually make a difference.

Finally, in defence of Jacinda Ardern, I wonder how much the pregnancy and birth of her first child took her time away from her poverty campaign. Our left-wing media rejoiced in the fact that our PM was pregnant with the assumption it would not impact on her achievements – you can make your own judgement on this. 

Dr Clydesdale's expertise centres on the drivers of wealth and welfare including creativity, entrepreneurship and economic growth. His methodology differs to other economists in that he draws significantly on psychology and economic history. He is the author of six books. Those aimed at the popular market include Waves of Prosperity: India, China and the West; The Art of Business: How the Chinese got rich and The Politically Correct Economy which examines how political correctness is undermining the New Zealand economy.