Universe 25 And The Hood Showed Me The Real Reason Poor People Stay Poor

[00:00:00]We never free a mind once it reaches a certain age. It is dangerous. The mind has trouble letting go. Those were the words Morpheus spoke to Neo in the 1999 film The Matrix, the movie some of the teenagers in my boxing class describe as the one that came out last century where nothing is real. While that description is technically correct, it sure did make me feel a little old. And while yes, that movie where nothing is real came out 27 years ago, that line holds the key to understanding why the poor keep getting poor. If your parents were broke, there's a good chance you'll be broke, too. And not because they did something like put a phone bill in your name when you were five after they got the phone cut off and couldn't pay it off. This was a common occurrence in the hood, and it happened to me. I don't even know if they can do that anymore, but it certainly used to happen a lot.

[00:00:50]The real reason is that you picked up their habits and beliefs about spending money. And even as an adult, those stuck with you. To fully appreciate the significance of this, we have to revisit one of the more fascinating experiments in sociology. Universe 25. Before we go any further, here's a very quick top down a bridge TLDDR summary of Universe 25. Researcher John Cahoun created a mouse utopia with unlimited food, water, and shelter. The population exploded, but as the enclosure became socially crowded, normal behaviors began to break down. Mice started crashing out another mice. Mothers just abandoned their young. The mice stopped hooking up and having babies. And eventually, the entire colony died out despite ample food, shelter, and a complete lack of external predators. And I say external because the mice really did start going in on each other. I've made two other videos that go more in depth on Universe 25, covering the rise and fall of the mouse colony, the disturbing similarities between humans and the mice in the experiments, and the implications and predictions for society as a whole.

[00:01:55]I've put links to those in the description. Now, those videos sparked a lot of interesting replies in the comments. Everything from the mice aren't people to declarations that it was the inbreeding of the mice that caused Universe 25 to collapse to the well-intended but poorly thoughtout rebuttal of the experiment is bunk because it's never been repeated which by the way does not mean an experiment is bunk. History is full of experiments that were never repeated but not because they were worthless but because they were unique or ethically impossible to recreate. No one recreated the Dutch hunger winter to confirm that famine affects unborn children. And no one ran the Minnesota starvation experiment because intentionally starving people for science is just unethical at best.

[00:02:43]The same is true of some of psychologyy's most famous studies. The third wave classroom demonstration has never been recreated in its original form, and the Stanford prison experiment will almost certainly never will be repeated under the same conditions. Both are heavily criticized today. Yet, they still appear in virtually every introductory psychology textbook because they reveal important insights into authority, conformity, and the power of social environments to shape our behavior. That's how science usually works. An experiment doesn't have to be perfect to be valuable. It just has to reveal something worth investigating, and Universe 25 absolutely fits that criterion. But not all comments were so critical. In fact, most of them were appreciative, supportive, and a few were downright enlightening. The last category of comments, the enlightening ones, exposed me to some things I did not know about the experiment.

[00:03:36]Specifically, one user informed me that some of the mice's offspring, born into the dysfunctional, declining version of the Universe 25, were actually taken out and placed in a new normal mouse neighborhood and even set up with mice of the opposite sex in a sort of tender for mice setup. But it was too late.

[00:03:54]They carried their dysfunctional behavior with them into the new habitat where the mice weren't living in the hell of their own doing. The mice in the new environment not only could not behave like civilized mice, but they weren't even interested in swiping right for a little bit of fun with their potential mates. I've linked the notes of this experiment where he mentions this below. But when I read this, I immediately saw another parallel to human behavior. Poverty, crime, and social mobility.

[00:04:22]Now, let's start with something so obvious one of you is going to write in the comments, "No, the environment you were raised in and the people you were raised by have an incredibly powerful effect on how you turn out. You pick up the behavior, beliefs, preferences, and even the fears of the people around you.

[00:04:40]From the day you're born until about 10 years old, most of those influences come from your family. And then from 10 years on, 10 years old or so, you spend more time with peers. And those peers have a big impact on you. We're going to come back to that last part and just how big of an impact your peers have on you in a bit. But for now, I want to focus on family because like the mice, we learn a lot from our family in our early years.

[00:05:06]Yes, we are infinitely more complex with much more to learn. But many lifelong habits, skills, abilities, and perspectives are ingrained in us before we are even 10 years old. and the only thing you can do is become aware of them because they are still operating in the background. One of those habits we pick up from our family is our financial literacy. There's a tweet that makes the rounds every few months about how schools should teach financial literacy is if it's a complex skill and the only reason people are struggling is that no one ever taught people how to create a budget or balance checkbook. Well, if they still even use checkbooks anymore.

[00:05:40]Either way, I bring this up to point out that while it may feel like financial literacy is something learned and thus teachable, the reality is that it's more like something absorbed and assimilated.

[00:05:51]Long before you understand compound interest, credit scores, or investing, you've already spent thousands of hours watching how the adults around you earn money, spend money, react to emergencies, think about the future, and define success. Those patterns become the default operating system you're building any programs on, regardless of their sophistication, effectiveness, or efficiency.

[00:06:13]If you're a frequent viewer of this channel, you've likely heard me mention the moving to opportunity study before.

[00:06:19]Don't worry if you haven't, because I'm going to tell you what it's all about and why it's relevant to this idea and universe 25. But first, let's talk about a tool I use to help me with my research for this video. Today's sponsor, Short Form. Short form is a platform that offers detailed guides to thousands of nonfiction books. Rather than just summarizing what the book said, Ally Chat, GPT or Claude, short forms book summaries are guides that are written by real people. I know because I actually auditioned to be one of those real people. And people have a way of synthesizing and making connections that your favorite LLM just can't do. Short form doesn't just summarize the books.

[00:07:01]It breaks down the key ideas, adds helpful context, draws connections to related concepts, and even includes recommendations for other books to read if you want to go deeper. If you don't have the time to read the whole book, the great thing about short form is that it lets you keep pulling on a thread way after a video like this is finished without committing to a college level reading list afterwards. If this video got you thinking, I'd start with The Psychology of Money by Morgan Hel, The Righteous Mind by Jonathan Height, and Thinking Fast and Slow by Daniel Canaman. They all tackle the same question from different directions. Why we behave the way we do long before we think we're making conscious decisions.

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[00:08:22]Now, the Moving to Opportunity study was a landmark experiment conducted by the Department of Housing and Urban Development. You probably know this as HUD, but you can also think of them as the landlords for America's public subsidized housing projects, aka the projects and section 8. From 1994 to 1998, the Moving to Opportunity study tracked 4600 lowincome families in high poverty public housing projects across Baltimore, Boston, Chicago, LA, and New York who were randomly assigned to three groups. One group received housing vouchers that could be used only in low poverty areas for the first year along with counseling to help them find housing. Then after that year was complete, they could use their vouchers anywhere. The second group received vouchers that could be used immediately and anywhere regardless of poverty level, but they received no counseling.

[00:09:17]The third group, well, they got nothing but the same government benefits they were already receiving. Not great for them, but I guess every experiment needs control group. Well, 10 years later, Raj Shetty, a man who has made a career out of studying how childhood environments shape adult outcomes and a name that will come up a few more times in this video, by the way, followed up with the children who had participated in the study. And what he had found was remarkable. Children who moved from higher poverty public housing to lower poverty neighborhoods before adolescence, specifically the age of 13, earned significantly more money as adults, were more likely to attend college and were less likely to become single parents than children who remained in high poverty neighborhoods.

[00:10:03]The younger the child was when they moved, the larger this benefit was. The part about this I found most fascinating is that the only thing that changed was the neighborhood. Aside from the housing vouchers, the participants received no extra benefits, no new jobs, and the same families that lived in the hood now lived in parts of the city where you didn't have to worry about crackheads snatching your kids bag of candy when they went trick-or-treating. If trick-or-treating even happened because of that pesky gang violence. And go back to those mice, specifically the ones that were put in a new environment but carried some of the same habits. Those mice were between 300 and 350 days old.

[00:10:41]the equivalent human years would be between 25 and 30. Hearkening back to Morpheus, you can't free after a certain point. This idea seems to hold regardless of the species. But it's fascinating to see just how the mice carry their lack of survival skills into a calmer environment. And it's also fascinating to see that humans do the same. The moving to opportunity study also showed this. In fact, the original purpose of the study wasn't to evaluate the future impact on the children involved. It was to examine the impact on the adults. And if you've been following along thus far, the results will not surprise you. There was no increase in educational attainment, earnings, or employment in either group that relocated. In fact, there was actually a slight decrease in employment. It turns out that you can take the out the hood, but you can't take the hood out.

[00:11:37]All jokes aside, the reason for this socioeconomic stalemate in the adults is the same reason for the upward mobility that so many of the relocated children experienced.

[00:11:48]To understand this, think about the neighborhood you live in for a moment.

[00:11:52]What makes it feel like home? It's not just the stuff in your house, but the people you've come to know. Assuming that you don't live next to psychos or someone on the sex offender registry, most people are at least on a firstname basis with a few people on their street, regardless of how rough that street is.

[00:12:10]Those connections make the address or make the home more than just an address and more than just a neighborhood or even an entire city. It makes it feel like home. The interactions between you and the people who inhabit that space are what define that space. The adults who moved to a new neighborhood, although it was safer and nicer, not only didn't know anyone, but also struggled to fit in. Their minds were well past the point of being freed. So, assimilating into the neighborhood and benefiting from the people around them was probably limited to a simple hi when you see someone putting the trash on the side of the road. But kids, on the other hand, well, that's something a bit different. Unlike adults, kids don't have the luxury of not interacting with their peers. I mean, they're certainly antisocial loners, but they are few and far in between. Plus, you have to remember this research was done in the '9s. You couldn't just hang out all day watching guys break down mouse experiments and socioeconomic theory on YouTube. Even the video gaming experiments was experience was different. When I went to school, out of the hood across town, I met my best friends because we were talking trash about who's better at Marvel vs. Capcom.

[00:13:24]We went to the arcade, put a quarter on the sticks, and settled it, and we became friends that way. It's way easier for kids to integrate into the world around them, and when they do, they become more like the kids they're surrounded by. And again, Ra Shetty demonstrated this. In another study in 2022, Shetty and his team analyzed data on 72.2 million Facebook users aged 25 to 44. To be included, users had to reside in the United States, have been active on Facebook within the previous 30 days, and have at least 100 US-based Facebook friends, and have a known zip code. That gave them a data set representing roughly 84% of the Americans in that age range. Without getting into the weeds, and I've linked to the paper below if you want the full methodology, they developed a way to estimate people's socioeconomic status and map the friendships between people from different income levels. They were trying to answer a simple question. What is the strongest predictor that a kid won't stay poor if he's born poor? Or if you want to take a more cynical angle, what's the strongest sign that you ain't going to make it? It turns out that the single greatest predictor that you won't be poor when you grow up, assuming that you grew up poor, was whether or not you had become friends as a child with people who weren't poor. And I want to be very clear here because the researchers were very clear. The effect was not observed if you merely went to school or did activities with kids who had more money. Only the kids who built legit friendships, the type where you're over their house so often parents could claim you on their taxes with more fluent kids experienced the effect.

[00:15:05]Also, much like the moving to opportunity research, the effect was stronger the early in childhood those friendships were made. Now there are a number of reasons why this could be. It can be anything from seeing examples and gaining mentorship to being offered networking and employment opportunities and most people default to the latter explanation. After all, the old saying goes, it's not who you know, not what you know, and that's certainly true, but in this case, it's not true in the way that most people expect. Now, networking certainly helps. I won't insult your intelligence by suggesting otherwise. If your friend's father owns a plumbing company and offers you a summer job, or your roommate tells you about an internship before it's posted online, those are real advantages. And we know that a majority of jobs are filled before they even get posted. The posting is more of an HR courtesy to give the illusion of purely meritocratic hiring.

[00:15:59]But if networking were the primary explanation, we'd expect simply attending the same schools or living in the same neighborhoods as wealthier children would produce the same results.

[00:16:09]But Cheddy's team found that it didn't.

[00:16:12]The effect appeared only when children form genuine friendships across socioeconomic lines, not when they merely occupy the same physical space, even if it was 4 to 7 years or in many cases longer.

[00:16:26]What's really happening here is something deeper called calibration.

[00:16:31]Every person develops an internal gauge for what a normal life looks like. Long before we're old enough to even think about our beliefs and values and begin consciously developing them, they're being modeled and shown to us. We internalize what work, money, and relationships look like before you even know what those things are. You learn how much money is enough, how to handle debt, or plan for emergencies, and even whether you should look for work, start a business, or just live off the system.

[00:16:59]You don't get answers to those questions from a textbook. You absorb them by watching the people around you.

[00:17:06]Psychologist Albert Bandura spent much of his career demonstrating that children learn through observation. In his famous bubble doll experiments, children who watched adults behave aggressively became more likely to behave aggressively themselves even without explicit instruction.

[00:17:23]They weren't taught aggression in the classroom. They just watched what adults considered acceptable behavior and calibrated their own behavior accordingly. Money works the same way. A child growing up in a family where saving for retirement, paying bills on time, and discussing college or routine doesn't view those behaviors as exceptional. That's just regular life.

[00:17:44]And they at least expect to maintain the status quo. On the flip side, a child who grows up surrounded by chronic unemployment, payday loans, frequent eviction notices, or constant financial crisis doesn't necessarily think that those things are good. They just think they're normal. And there is a subtle but significant distinction between what a person thinks is right and what a person is used to. And it's one of the most powerful forces shaping our future.

[00:18:12]The idea extends beyond finance to every aspect of your life. If no one around you has ever attended college, college feels less like an obvious next step and more like something that other people do. If someone in your social circle works 40 hours a week, that's what adulthood looks like. If everyone hustles multiple jobs or relies on gig work, that becomes your reference point instead. Behavior economists have long recognized that people evaluate their circumstances relative to a reference group rather than against some objective standard. We instinctively compare ourselves to the people around us. Our ambitions, expectations, even our definition of success are calibrated by our peers far more than by abstract ideals. The children who escape poverty didn't simply gain access to wealthier people. They gained access to a different version of normal. The affluent Friends and Shetty study likely did much more than provide networking opportunities. They demonstrated, often without realizing it, what life look like in households, where college expectations exist, where careers are planned years in advance, and retirement accounts are a thing, and financial emergencies aren't just something that happens on days of the week that end in the letter Y. These children weren't ready or weren't merely exposed to more resources. They were exposed to different assumptions about how life works. And once you change someone's definition of normal, you don't have to convince them to pursue a different future. They'll often begin pursuing it on their own because from their perspective, that's simply what people like them do. So when Morpheus tells Neo, "We never free a mom once it reaches a certain age," he isn't really talking about computer simulations. He's really talking about identity. By the time we're adults, the world isn't just something we live in. It's a set of experiences we've absorbed and something we've built. Following the subconscious lessons we've taken from those experiences, the voices of our parents become our inner monologue. The habits of our peers become our instincts. Our friends expectations become the standards by which we judge ourselves.

[00:20:22]What began as an environment becomes our identity. And it's nearly impossible to separate the two. I always tell people that moving to escape your problems won't help because you are the source of them. No matter where you go, you will recreate them. I figured out that intuitively, but it seems like there is a psychological or at least a philosophically verifiable, if such a thing exists, confirmation of the idea that manages to piss a lot of people off when I point it out. The adults in the Moving to Opportunity study were given safer neighborhoods, better schools, lower crime rates, and cleaner streets.

[00:20:57]But they didn't suddenly become different people because the neighborhood around them changed. They had already internalized one version of reality. The children on the other hand were still writing the software. They hadn't yet decided what adulthood was supposed to look like. Their expectations and identities were still under construction. So, the new environment became part of who they were instead of something they merely lived beside. The same pattern emerged in Calhoun's mice. When adult mice from the collapsing colony were placed into healthier environments, they didn't instantly begin behaving like mice that had grown up there. The old colony had become part of them. They carried it into the new enclosure. Their physical surroundings changed overnight, but their behavior did not. Perhaps that's the most unsettling lesson of Universe 25. The experiment wasn't simply showing that environments influence behavior. We already knew that. Rather, it suggested something far more profound. That given enough time, an environment ceases to be external and becomes internal. Again, you can take the out the hood, but you can't take the hood out of the nick.

[00:22:05]That's why escaping poverty is about more than just earning money. Changing the scenery is relatively easy.

[00:22:12]Rewriting the version of the world you've carried around with you for years, that's the real challenge. Now, if you grew up poor, this might sound like a downer, but there is a message of hope in all of this. If our identities were purely genetic or fixed after a certain point, there will be very little we could do about them. But the evidence points in another direction. We become the people our environments repeatedly ask us to be. That means we can also become different people by repeatedly placing ourselves in different environments around different expectations and among people whose version of normal is better than our own. The process is slow because identity changes slowly, but it changes nonetheless. So maybe Morpheus was only half right. Freeing a mature mind is difficult. It may even be dangerous, but it isn't impossible. It simply requires recognizing something most of us never realize. The most powerful environment in your life isn't the neighborhood you live in today. It's the one you still carry around inside of your head. Now, it's one thing to talk about poverty, but another thing entirely to grow up in the projects and see firsthand how it affects your family and friends. In this video on the screen right here, I talk about the neuroscience of poverty, personal experiences growing up in the projects, and how I blew $55,000 in life insurance because I was stuck in a poverty mindset.