WAR ON THE POOR: The Welfare State Has Eroded the Culture of Individual Initiative

 

Ladies of the night: Prostitutes also populated the Bowery, plying their trade with johns who wandered in. Here, a man negotiates the price for a prostitute while two others walk past

What’s old is new again: New York in the 1970s, the city’s decay and the welfare state’s failures became film legend

John C. Goodman, Ph.D. writes:  One of the biggest differences in how the left and the right view the world concerns the welfare state. Currently, the federal government spends about $1 trillion a year on 126 means tested welfare programs. That amounts to almost $22,000 for every poor person in America, or $88,000 for a family of four.

What difference does all this spending make?

Among people on the right, there is little doubt. These programs are destroying the culture of the recipient communities. They are replacing a culture of self-reliance and self-help with a culture of dependency. Amazingly, a record 91.5 million people of working age—almost one third of the entire population—are not working and not even looking for a job.

Among conservatives I have met who were once poor (and I have met a surprising number of them), the view that welfare subsidizes and encourages dependency is almost a self-evident truth. I’m not sure I have ever met a liberal who was once poor. But then again, the liberals I encounter are all in the academic and public policy world―far away from the poverty population they so often talk about. I think this is a fascinating sociological phenomenon. If my experience is different from yours, weigh in in the comments section.

[BTW, I am ignoring the shakedown artists―Jesse Jackson, Al Sharpton and the like. We have no idea what these folks really think, since (as Juan Williams has documented) they routinely use liberal causes to line their own pockets.]

New York Times columnist Paul Krugman claims that Republicans who want to trim back welfare spending are waging a “war on the poor.” Most people on the right think it’s the other way around: It’s the welfare state and its apologists who are really harming the poor.

Who is right?

How Culture Matters

Let’s be clear about what we are talking about. The Dallas Independent School District recently announced that every student in the school district will now get a free breakfast and a free lunch. The reason? So few students qualified for “full price” or “reduced price” meals that trying to identify them cost more than it was worth. And as I pointed out in a previous post, kids who receive free lunches and breakfasts are increasingly getting a free supper as well. Think about that. We have decided that the parents of every single child attending public school in Dallas are too poor to feed their own kids.

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Reality Check: Free Market Myths Debunked

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Just as there are timeless truths, there are also timeless falsehoods.

Here are a few of the latter that I’ve recently encountered, but there are, of course, plenty more. Some libertarians may not agree with me (at least at first) on all of them.

1) The free market creates scarcity and higher prices. In any economic system—socialist, interventionist, or free market—the quantity of a good will typically not be enough to satisfy demand when the price is zero. In a free market, in which people trade their legitimate claims to those resources, prices will tend to rise or fall to the level where the quantity supplied equals the quantity demanded, and in that way prices help us to cope with scarcity. Not only that, the free market, via a system of profit and loss, gives entrepreneurs an incentive both to supply more of scarce resources and to discover alternatives to them. (But not all “trade” is conducted this way. See No. 4 below.)

2) The free market means the government gives businesses special privileges. This is a very common belief based on the idea that pro-market means pro-business. But the free market is free precisely because it denies special legal privileges to any person or group. People sometimes define “privilege” as any advantage a person or group may have over others. Certainly such advantages exist today and would exist in a free market—you may be born into a wealthy family or have superior drive and resourcefulness—but these advantages are consistent with the absence of privilege in the libertarian sense, as long as you acquired such advantages without fraud or the initiation of physical violence against the person or property of others.

3) The pre-Obamacare healthcare industry was a free market. Actually, it was a highly interventionist market, as John C. Goodman explains. Similarly, the failures of the housing and financial markets were hardly the result of “free-market policies,” and the same could be said for practically every other sector of the American economy. The free market is free of legal privileges and discrimination; it is whatever happens in the absence of aggression and within certain “rules of the game”—for example, private property, freedom of association, and the rule of law. Again, it’s not pro-business, pro-consumer, or pro-anything if that means using political power to intentionally help some and hurt others.

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