PhronesisWe apply the Displacement Framework to poverty and poverty traps, formalizing the ground state as S0 = S0_material intersect S0_cognitive (both material sufficiency and cognitive bandwidth available for long-term planning) and poverty as displacement from both simultaneously. Seven formal propositions are derived with a coupled dynamical system (bandwidth B_t = B_max minus beta times f(shortfall); investment I_t; income y_t) demonstrating the poverty trap loop as a genuine self-reinforcing wrong attractor.
Mullainathan and Shafir's scarcity mindset is formalized as D(xi_bandwidth) — the cognitive tax of constant resource management that reduces planning capacity needed to escape poverty. Propositions cover: poverty as structural ground state deprivation (material plus cognitive), scarcity as bandwidth displacement (cognitive tax theorem), the poverty trap as self-reinforcing wrong attractor (y to B to I to y feedback loop), multiple equilibria (Azariadis and Bowles — poverty and prosperity as multiple attractors in the economic landscape), intergenerational landscape deformation (children born into poverty have ground states structurally displaced before autonomous choice), Universal Basic Income as floor-raising landscape restoration (Stockton SEED and Finland UBI experiments as empirical return-path tests — floor-raising changes attractor landscape topology), and predatory lending and rent-seeking as attractor-deepening forces.
Conditional cash transfers (Mexico Progresa, Brazil Bolsa Familia) and Sen's Capabilities Approach are analyzed. 30 citations including Mullainathan and Shafir, Banerjee and Duflo, Sen, Azariadis, Bowles, Heckman, Felitti, Piketty, Case and Deaton, Desmond, and Duflo.