TCS Daily


Bureaucrats Helping the Poor? Or Themselves?

By Tim Worstall - May 18, 2006 12:00 AM

Editor's Note: Part One of this series can be found here.

Why should liberals like Charles Murray's Plan? You know, the one to abolish the entire bureaucratic structure of the current welfare state?

To repeat: his idea is to take all of the current handouts, whether to individuals, farmers or corporations and, for roughly the same cost, simply hand a check for $10,000 a year to every adult American citizen (indexed by income, of course).

Well, it's easy to think of the people who won't actually like it. First and most importantly will be the Congresscritters themselves. The ability to order money around a system is power -- and that is, after all, the very reason they are in Washington. I can't think of any other reason people would spend years climbing a greasy pole. As The Plan will abolish much of this power, we might expect to see some resistance here.

The actual members of the bureaucracies who would be out of a job as a result one might take to be opponents as well. Why would we need a series of assistant under secretaries and deputy such at the Department of Housing and Urban Development if the poor are all to be given sufficient money to rent their own housing? I can understand that those who work there might beg to differ. These objections would not just be from the bureaucrats themselves, of course. There will also be a large network of activists and special interest groups who will object.

That may puzzle some, however. For surely if the poor are raised above the poverty line, there is no more need for anti-poverty campaigners? Well, that argument would betray a charming -- coff, coff - naivete about how the system works. Do you actually think that all those lobbying groups exist to actually achieve anything other than to perpetuate the existence of gravy jobs in lobbying groups? As with other interest groups, the very worst thing that can happen is that a problem actually gets solved: if it does, how can the membership be galvanized into donating so that another power lunch can be taken?

OK, OK, I'm being excessively cynical; they're not all like that (nor, somewhat to my amazement, are all Congresscritters). I'm sure that if you looked real hard you could find a few honest men and women in both professions. But what The Plan would do is reveal who they are. For at the heart of the thinking liberal's objection to the current economic set up is a belief (one that I share to an extent) that it simply isn't fair. (No, don't worry. I haven't gone all liberal on you, rather betraying my roots in Classical Liberalism, a very different thing.)

No, I don't mean the extreme of the case where any differences in outcome are to be abhorred - i.e. the wilder shores where complete egalitarianism resides. Rather, the obvious and true statement that equality of opportunity does not yet exist. Yes, to a large extent (and more so than in most countries of the world) it is indeed possible to start anywhere in America and make it to the top. As Steven Levitt puts it in Freakonomics:

"The black boy from Daytona Beach, abandoned by his mother, beaten by his father,...a full-fledged gangster in his teens...now twenty seven years old, Roland G. Fryer Jr., the Harvard economist studying black underachievement."

Yes, it's possible, goes the liberal case, but it's extraordinarily difficult and it can be made easier. The simplest way for it to be so is exactly The Plan.

It's a well-known postulate in economics that we can reach any efficient outcome (that is, one where we cannot make someone better off without making someone else worse off) through purely market mechanisms: as long as we can change the starting positions. There are indeed those born into, through no fault of their own, positions where climbing up out of poverty is almost impossible. There are many different possible ways of helping them but the most efficient is simply to make cash grants to all. Everyone, therefore, has the basics for survival and can turn their attentions and efforts to whatever it is that they wish. Those who seek education, an improvement in life can do so, those happy to laze on the porch can, as well. But what the Plan might do is to make it possible for all to unlock their potential, if they should so wish.

There is also a more Marxian (that is, using some of the insights of Marx without swallowing the entire pitcher of kool-aid) analysis possible. That economy, especially political economy, is about the analysis of power structures. In Marx's original analysis, still fervently believed by some today, capital will ever conspire against labor and attempt to engender a situation where there is a large reserve army of the unemployed. These unfortunates will have no option but to sell their labor at whatever miniscule price the oppressors are willing to offer, leading to ever fatter profits and the ever increasing immiseration of the proletariat.

If that is, indeed, the view of the world people really believe in, then The Plan is actually the answer. By providing an unconditional grant sufficient to survive upon, this "power structure" is subverted. The unemployed cannot be forced to accept lower wages for they can survive with none.

It won't come as any surprise to regular viewers of the political scene that there are those who play the game for what they can get out of it. Yes, it happens on all sides, in all parties. You might be slightly more surprised to find that there are those -- yes, again, on all sides and in all parties, however strange this might sound -- who are doing it all out of conviction. They really do want to change the world for the better.

To me the genius of The Plan is that we'll be able to see, on the liberal side, who is who. Those who really are in it to make the world better will support it, for it achieves two desired goals: increases equality of opportunity and inverts the perceived power imbalance between labor and capital.

Those who oppose it we must assume are in one of two other groups. Those in the political system simply for the joy of the power they get to exercise and those in that very same system simply so they can suck at the teat of the public money cash cow.

Ladies and Gentlemen, I suggest you prepare your scorecards now. This is going to be interesting, identifying and marking those in the game by their reactions.

Tim Worstall is a TCS contributing writer living in Europe.

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10 Comments

INTELLECTUAL, NOT ECONOMIC, POVERTY IS THE PROBLEM
INTELLECTUAL, NOT ECONOMIC, POVERTY IS THE PROBLEM
Giving $10,000 out to each would still leave the power structure n place. We would have the same failed public schools described in the Department of Education’s 1983 report A NATION AT RISK; the same tyrannical, tenured, self-selecting faculties and resulting politically correct, anti-intellectual, fraudulent universities; the same corporate controlled media, FDA, and congress; the same tyrannical judges and Supreme Court; and in general, the same control freaks and sociopaths in charge as before.

How will the money encourage universities and public schools to stop brainwashing and dumbing-down and truly educate? It would not. Nor will it affect the power structure to any great degree, merely managing to shift the area of bribery, extortion, and corruption.
Intellectual poverty: ignorance and lack of skills, is the problem; not financial poverty.

A 1997 OECD study found 46% of American adults 16 to 64 functionally illiterate, unable to understand the written word sufficiently to make sense of it, and therefore ignoring it. Math literacy was near the same. College grads were little different (mostly our teacher you can bet)! Five of 20 boys and 1 of 20 girls fail to learn to read using public school methods. So there will still be 137 female to every 100 male college graduates and a 60-40 female dominance in college. This is why drug companies and corporations in general reluctantly agree to labels and warnings. They are impenetrable to near half the population.

This is an intelligent voter: one who gets all his information from word of mouth, radio, and television, much of which he can barely understand? And many in Spanish? Newspaper readership is falling in part for lack of ability to comprehend what is written, as well as completion from online sources, etc. People shut off to what they do not understand. This is why trial attorneys work so hard to interest juries and make them understand the evidence. Ditto teachers, politicians, journalists and science popularizes.

Nice try, but back to the drawing boards, Professor Murray.

Immigration - American's poverty is intactable but immigration's is tactable
Charles Murray's Plan would make immigration far less palatable thus eliminating the path most like to allow people to escape poverty. There are America who are poor but there problems are very difficult if not impossible to solve (maybe some could be solved with psychopharmacology but only if they want to take the drugs). On the other hand many poor immigrants only need a green card to escape poverty. Charles Murray's Plan would make immigration even less palatable if it enable immigrants to qualify for the money. Also it is a disincentive to work (off course the current system is even a stronger disincentive to work). If it were not for those 2 concerns I would like the plan.

And… what about people who will not take it for moral reasons (pacifists and others who see it as receipt of stolen goods.)

The states could try
If you could get the federal government to return to its constitutional bound the states could try Charles Murray's Plan and other plans.

Rayostan, Government schools are wealfare - are they not eliminated in the plan? eom

Bureaucrats Helping the Poor? Or Themselves?
As a member of the bureaucracy I look forward to the day when we judge ourselves not by how many we "serve" but by how few.

Gbear
Welfare fraud Investigator

BTW schooling > education
schools are more about testing than teaching. Education is about learning most of that is done outside of school. My grand parent with 1 year if schooling where both very well educated and many college gads are not.

The bureaucracy exapanding is to meet the needs of the exapanding bureaucracy. eom

the last time
this was discussed, many here opposed the plan, even though they fall into neither of your rather simple categories.

If anyone here can show evidence that I support either the liberal advocates, or the govt buerocrats, I'll buy them lunch.

I oppose this program because it will result in a blanket assumption amongst the population, that the govt owes them a free lunch, and that the inevitable long term result will be that the people will vote year after year, to keep raising the amount of the stipend that they are entitled to.

Meh
My main problem with the plan is a) the cost and b) that it will cause many people to stop working at all.

hmmm
But the current welfare program already results in that assumption. So that's not any worse.

At least this one gives people more control and choices to get out of the poverty. Isn't that better?

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