So there is a problem with this picture, but in so far as school fees are a purely positional good—and in so far as we’re in Econ-101-land—the problem isn’t “giving poor people money that they spend on school fees fails to raise net utility”, it’s “even if we give them money that we might expect them to spend on school fees, the price of those will rise and they’ll end up spending it on something else”. The “something else” will be a good that isn’t purely positional (else it too would increase in price until the poor people can’t buy it) and giving poor people money to spend on that will be a clear utility gain.
There’s the additional problem of reallocating more resources from wherever they’d have gone before to a zero-sum signaling game. If you shift more poor people into the rentier class, maybe the rest of the poor people have to work even harder to support the rentiers.
There’s the additional problem of reallocating more resources from wherever they’d have gone before to a zero-sum signaling game. If you shift more poor people into the rentier class, maybe the rest of the poor people have to work even harder to support the rentiers.