Some Incomplete Thoughts on Solving the Persistent Poverty Problems In This Country
Posted on July 30, 2014
Published in the Christian Science Monitor Decoder Voices
Who (or what) is to blame for persistent poverty in this country?
Is it inequities in the marketplace?
Is it the inefficiency and corruption in government programs?
Is it the pathologies of the poor?
Is it systemic racism?
Liberals tend to believe in economic determinism, based on the old Marxist dialectic. To them, everything must be viewed in terms of capital. Marx posited in Das Kapital, according to Wikipedia,
that the motivating force of capitalism is in the exploitation of labour, whose unpaid work is the ultimate source of profit and surplus value. The employer can claim right to the profits (new output value), because he or she owns the productive capital assets (means of production), which are legally protected by the capitalist state through property rights. In producing capital (money) rather than commodities (goods and services), the workers continually reproduce the economic conditions by which they labour. Capital proposes an explanation of the "laws of motion" of the capitalist economic system, from its origins throughout its future, by describing the dynamics of the accumulation of capital, the growth of wage labour, the transformation of the workplace, the concentration of capital, commercial competition, the banking system, the decline of the profit rate, land-rents, et cetera.
Conservatives tend to believe that the government has made the situation worse, not better. Here is what Milton Friedman said about the proper role of government:
Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government-- in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.
Liberals also tend to blame systemic racism for persistent poverty. A UN investigator named Mutuma Ruteere made an explicit link between the two:
The persistence of discrimination against those groups and individuals remains a challenge to the construction of a tolerant and inclusive society, and only the guarantee of equality and non-discrimination policies can redress that imbalance and prevent those groups that are discriminated against from falling into or being trapped in poverty…
Conservatives think there is ample evidence that social pathologies, outside of race, help create social inequity. In other words, when poor people never get married, engage in casual drug use, have children out of wedlock, drop out of school and otherwise practice bad habits, inevitably they will fall behind economically, no matter what race they may be. Charles Murray explicitly studied this phenomenon in his book, Coming Apart. The Wall Street Journal summed up his book this way:
Focusing on whites to avoid conflating race with class, Mr. Murray contends that a large swath of white America -- poor and working class whites who make up approximately 30% of the white population -- are turning away from the core values that have sustained the American experiment. At the same time, the top 20% of the white population has quietly been recovering its cultural moorings after a flirtation with the counterculture in the sixties and seventies. Thus, argues Charles Murray in his book, the greatest source of inequality in America is now not economic. It's cultural.
There is probably a little bit of truth in all of the arguments.
The free-market system is not infallible. I know that is blasphemy to the ears of some. But a quick glance at our national history would prove that the marketplace can not exist without some government oversight. And the fact is that many businesses, big and small, want government to enforce common standards of business conduct.
It is naïve to assume that all actors in our market system act honorably and simultaneously both in their self-interest and in the interests of the entire marketplace. Some people act honorably, but some act with precious little regard for their customers or for the truth. Greed sometimes plays a healthy role in our economy, but often it plays a destructive role.
And if the financial crisis of 2007-2008 proved anything, it proved that a market unsupervised can crash down the whole economy.
But too much government intrusion can subvert the market and cause all kinds of unanticipated problems. When the government tried to shut-down alcohol consumption in the 1920’s, the result was a private, black-market, unsupervised by regulators and resulting chaos. Criminal mobs rushed in where the government stepped out, enforcing their own twisted rules. Prohibition didn't work then. And it doesn't work now.
Government works best when it works with industry to set common rules with a light touch. It works worst when it tries to dictate how private business should act against the will of those in the industry. It works best when it tries to punish bad actors. It works worst when it tries to stifle innovation and competition.
Government has also played an unhelpful role in poverty eradication, despite its best intentions. It destroyed the family in inner-city America by incentivizing people to have children out of wedlock. It didn't do enough to require behavior modification in exchange for welfare benefits. It helped to create a dependency class.
Racism and social pathology are inevitably intertwined in our minds, but they need not be.
The legacy of slavery lives on in the families torn apart by poverty, hunger and hopelessness. Anger towards the white power structure makes cooperation with the police to crack down on crime seemingly impossible. Employment opportunities and educational attainment are markedly different for black teenagers and white teenagers.
But it is hard to employ somebody who drops out of school or regularly does drugs or doesn't have the habits to be a decent employee.
Paul Ryan is taking a serious look at poverty and how to fix it. Rand Paul and Marco Rubio are looking seriously at how to grow the party outside its white political base.
There is not going to be any easy answers. Nor is one ideology going to fix a persistent problem that has plagued America for decades.
How do we keep families together? How do we create better, higher-paying jobs? How do make sure that race alone doesn't define us? How do we make sure that government programs are flexible enough to provide temporary but essential help without creating dependency and a culture of fraud?
How do we crack down on crime and lawlessness? How do we teach respect and basic moral values? How do we ensure that honest work gets honest pay and that big corporations don’t unfairly exploit labor? How do we create a better safety net and stronger communities?
A stridently conservative approach to fixing poverty will work just as well as a stridently liberal approach will work.
I would prefer a more practical approach to solving poverty that looks at the problems inherent in our economy and in government programs, a practical and personal approach to easing racial tension and attacking social pathology. I would prefer that policy makers come up with solutions that will work in the real world, not in some think tank or ivory tower.