Learn Liberty

Debate: What To Do About Poverty

This LearnLiberty debate presents arguments for and against more government assistance to help the poor in the United States. Prof. Steven Horwitz argues that the government has created too many problems and that lifting government-imposed barriers to the poor will go a long way toward solving the problems of inequality in the United States. Prof. Jeffrey Reiman takes the view that government, while not perfect, will have a key role to play in creating better programs to help the poor. What do you think?

 

http://www.washingtonpost.com/wp-dyn/content/article/2007/12/21/AR200712... [article]: Stephen Rose of the Washington Post presents a variety of evidence to show that the declining numbers of middle class Americans is mostly due to many of them getting richer


http://www.fee.org/the_freeman/detail/poverty-is-easy-to-explain#axzz2r3... [article]: Walter E. Williams of The Foundation for Economic Education explains what poverty is and why there is poverty in the first place


http://mises.org/daily/2526 [article]: Henry Hazlitt questions whether the government can truly reduce poverty


http://www.ted.com/playlists/67/the_quest_to_end_poverty.html : TED combines eight of their videos on different ideas of how to end poverty


http://www.economist.com/news/leaders/21578665-nearly-1-billion-people-h... [article]: Jon Berkeley of The Economist explains that we are towards the end of poverty and explains what factors played out in this reduction


What To Do About Poverty

[Movie clip, The Pursuit of Happyness, 2006, Columbia Pictures]

WILL SMITH: I remember that day, because that's the day that I found out there was only $21.33 left in my bank account. I was broke.

[Door rattles.]

[End clip]

BRANDON TURNER: So a fairly moving depiction of what poverty looks like in that clip. And so I'll start off with Professor Horwitz. Do we have an obligation to alleviate poverty, and how do we do that?

STEVEN HORWITZ: Yeah, and I want to make one quick point about that clip, two related points. One, we don't know, from that clip, why Will Smith's character's in that situation, which I think is an interesting question. I'd also note that, sort of, as we think about getting libertarian messages across, we need more clips with that kind of emotional power, right? That sort of depict the ways in which people can be wronged by forces outside their control sometimes.

So I think one of things that we want to say about that'lI want to say about that is, look, if the question is how do we alleviate, how do we fix inequality and really I think what we're really talking is how to alleviate poverty is the question how do we bring people up? I think one of things that we can do is to focus on the ways in which governments sets barriers in front of the opportunities for poor people to make themselves wealthier. So if I could wave my magic wand, I think I'd do four things, four changes I would want to see that would, I think, help address this.

One, we need to end the war on drugs, which is destroying poor neighborhoods, particularly urban neighborhoods as well as rural ones, as well as all the other terrible things that the war on drugs does. But certainly it has decimated neighborhoods and made them uninhabitable and discouraged businesses from operating there and providing work. Second, we need to get rid of the minimum wage, which has knocked off the lowest rungs of the economic ladder for millions of Americans, again, particularly the lowest-skilled and those who need entry into the job market the most. Relatedly, third, occupational licensure laws that make it more difficult often at the behest of incumbent, wealthier producers of products to set up barriers to entry to poor people who want to open, whether itís anything from a hair braiding shop to whatever, up to driving a cab, to whatever else it might be, that those opportunities are being closed off to them. And finally, something I mentioned earlier, I think one of the most important things we can do is we have to get more competition into the schooling system. Urban and ruraI live in the rural area, and I can tell you many of the public schools there are just as bad as the same ones we see in urban areas. Government has failed at providing effective schooling for poor people. We need alternatives. We need competition. We need choice to find ways to help poor folks get the human capital they need to try to avoid the kind of the situations we see in that clip.

JEFFREY REIMAN: I agree with most of that. I certainly think that the war on drugs is a disaster. I certainly think that it's good to get more competition into schooling. I think so far the results of that are mixed. I don't think it's an obvious panacea that's going to solve all these problems. There may yet be other things that have to be taken. About the licensure laws, I'm actually kind of libertarian. I don't even like the fact that I have to get a prescription from a doctor to get a medication. I'm a grown-up with a PhD. I know the difference between poison and.

TURNER: You're already a doctor.

REIMAN: That's right. I'm already a doctor. You would think, you know, I can marry people, you would think I can as a philosopher. Anyway, so I'm opposed to that. The minimum wage, I think, is a more complicated question. The economic studies that I have looked at or heard of suggest that the reduction in unemployment because of that is very small and eventually made up for by the fact that there is more money in the economy and therefore more demand. I don't think it's obvious that this is a negative thing, but maybe it is; I'm open on the empirical question. The thing I just want to insist on is, when you look at this picture, don't think about Will Smith; think about that kid, okay? Why Will Smith got poor is maybe his problem. Maybe he deserves it. Maybe he's a crook. Maybe he's stupid. Maybe he was lazy. The kid doesn't deserve it. That's where our real obligation comes.

TURNER: So let me put a question to you, Professor Horwitz. Is there a role for government to play in the alleviation of poverty, ideally? So, in other words, sort of, for writing up a treatise on political philosophy, what role does government play in alleviating the plight of the least well off? And then, attached to that, is there a role for the government to play in 2012 America? So this particular government is there a role that it can play a positive role it can play?

HORWITZ: A couple of things. I mean, I think that we can imagine a world, perhaps, where the role of government is minimal. And this is a point that of course libertarians have disagreed on. We have from more anarchist ones at one end who think that all of those services can be provided through the market or through civil society organizations synagogues, and churches, and mutual aid societies, and all that to classical liberal types who would argue that government perhaps has a role to provide something like a minimum income floor or the like. I think those are all within bounds as a kind of libertarian position on what the role of government should be.

So, again, if we're going to write up that treatise on political economy, I think it depends upon'differences among libertarians will play themselves out in how they see that. We can have Rothbard kind of on one end and Hayek on another, and those are all in play. So, do we need government to solve those problems? Iíd like to think we can do with the least government possible to solve those problems. For me, the most interesting question is, let's see what happens when we get government out of the way, and see how well people do, and see what weíre left with as a real problem of poverty. And then think about what kind of ways there are to deal with it.

In the world we exist in today, I think we are in a more complicated situation. We can see the ways in which opportunities for poor people are restricted by the kinds of things that I talked about before. And at some level one could argue, if government's going to restrict those opportunities, then perhaps it has an obligation to sort of fix what itís destroying on the other half. I certainly think itís really important when we think about these questions from a libertarian perspective to not take away the safety nets before we create the additional opportunities. The right way to go about this is: create the additional opportunities by getting government out of the way in the ways I talked about. Then, once we give folks the opportunity to pull themselves up, then let's start to talk about how much of that so-called safety net or whether it's a safety net or straight jacket's not clear how much of that that we can live without. And I think that's the right way to go at it from a libertarian perspective. That might not be a direct answer to your question, but as libertarians think about these issues of inequality and poverty, that's one way to go at it.

TURNER: So let me twist the screws a bit with you Professor Reiman. So, on the one hand, right, weíve got some very large, sort of government-led, causes of poverty, right? The rich have a tendency once they have climbed the ladder to pull the ladder up behind them, right? It's this image that we have. And so we have got government programs like the war on drugs, like the we have a series of wars that we're engaged in, right, all of which tend to disproportionately affect the least well off. So in other words, libertarians have done a lot of work in terms of trying to describe the ways in which the rich to tend to seize the mechanisms involved with government through the things like professional licensure and these sort of things. Do you see the power of those arguments? Do you see the weight of those arguments?

REIMAN: Sure.

TURNER: In other words, is there a way to say, maybe to rephrase something Dr. Horwitz said in the last session, where, government is the problem, government is the solution?

REIMAN: Well, I don't believe government is the only problem, because I think other things, like discrimination, are problems too. And the government doesn't make that happen. But I am certainly sympathetic to the idea that there are restrictive licensing rules, that people with power try to cut off access to competition from other people, and that we should eliminate those things. Where that can be demonstrated, they will have my vote.

I am very dubious about the idea that we can eliminate government here. I mean hereís one thing: Steve talks about charitable organizations, mutual aid, and so on. This is something that's always surprised me about libertarians, because after all, if you say that this is charity, then you make the recipient in a certain sense is diminished. That person receives the free charity of other people who are better off. If I'm right and inequality or some degree of inequality is a matter of justice, then it shouldn't be rectified by charity.

Charity means I give freely what I have out of my generosity. Justice means I give what I owe, what people have a right to, and that I believe treats people with greater dignity than charity. Now that's not to say that welfare programs treat people with greater dignity. It's to say that the idea that you do it by law, that you say these people have a right, treats them with dignity. And of course you should follow through on that.

So, you know, I'm skeptical of the idea that we can do this without that. And if you asked me what we should do now. Well, I would love to see Obama's proposal for encouraging preschool education. The French have a terrific preschool system. It's government funded, okay? It's everybody, even the richest people, try to get their want their kids to be in it. And it has a kind of equalizing thing, equalizing the starting points of people. It's beautiful. I mean, there's a required amount of budget that has to be spent on beautification, on introducing the students to culture and art and so on. Everybody goes through this. Well maybe you can figure out a way to do this privately, without government. I doubt it. I donít think you can do it for the poorest. But I would say I would like to see a system like that in America. Something like it. I think thatís something that government could at least help get started, even if we thought of a better way to do it than have government fund it, but I think that will be unavoidable as well.

TURNER: Steve . . .

HORWITZ: Just two quick comments here. I think, one, itís doubtful to me that it actually does respect the dignity more of poor people to turn them dependent on government. But the other question is whether charitableówhat about the dignity of the giver? Right? At least within charitable and other kinds of organizations givers are giving because they think itís important. They think itís valuable. They want to help. I think that respects their dignity more than taking money from them when.

REIMAN: But I think the dignity that is challenged here is of the poor. I don't think that the rich charity givers have a problem about dignity that I have to worry about. I'm worried about the poor.

HORWITZ: And I am too. But again, it's is not clear to me especially when at least the studies that I know indicate that folks who benefited, historically, who benefited from charity and mutual aid, got off of those and got on their feet more quickly that seemed to respect their dignity in a much more important way. One other point real quick I wanted to make about the comparison to Western Europe: I think it's important to point out that a lot of those countries have systems different from ours and do have larger welfare states and often more targeted in certain sorts of ways. But those countries also have higher unemployment rates and lower labor-force participation rates. If we want to talk about dignity of people, we want to talk about the opportunity to carve out one's life and to earn a living for oneself and to do the things that one loves regardless of what one earns at it, I think it's important to make sure that we maximize and employment opportunities for people. I think thatís a shortcoming in many of those societies that have chosen to trade off that kind of supposed security against more dynamic growing economies.

TURNER: Okay let me, so let's move to the final segment, then, which is the second round of questions. So I think last time we started'so weíll go back this way: Steve do you have a question that you want to ask for Jeff?

HORWITZ: I'm curious, Jeff: So how, in your idealized world what would that role of the market be? And, how do you see those limits of inequality? Where, what would you want to do about it? And how would you know that inequality was too great? I mean, where, I mean, you've talked about how, you have this kind of libertarianism in that it's not inequality per se. So I'm just curious, where are the problems you see in markets? And where are those limits?

REIMAN: Well, first of all let me say, I am a believer in capitalism. I am a believer in the free market. I have recently written a book, which is, I'm sure you'll love this, A Marxian Defense of Capitalism. You think that's logically impossible, right?

So, you know, I believe in, I believe that the main contribution that comes from the market, and this is a moral thing, is dramatically increasing the standard, the material standard of living of people. I think this has been going on now for a long time. I think it's going on globally now because of the spread of capitalist reforms. It's going on constantly in America, even in the face of inequality. I agree that the poor are better off now materially than they were 20 years ago, then 40 years ago.

Here's one statistic which I just really love. In 2009, 82 percent of Americans below the poverty line had air conditioning. Think about that. Imagine what they had 20 years ago or 40 years ago. So that's a way in which capitalism is working, but I mean that's very general. That is across the board. It doesn't quite get to individuals like the kid in that movie.

There I think that there are questions about discrimination, about poor education, and related ideas like that, which, I donít think you can just exclude the role of government there somehow because dogmatically. Maybe government can be replaced; maybe not.

I think that we've had a welfare system which treats people as the objects of charity, has treated them in a very condescending way and that contributes to dependence. I'm all for changing that. But Iím not worried about the dignity of charitable givers. Iím worried about the recipients who think, only because of the kindness of these more successful people do I get it. Itís not because I deserve it, that the society owes me some kind of fair share.

TURNER: Jeff, I want to give Steve a chance to respond real quick and then wrap up.

HORWITZ: Real quick, I think the only comment I'd make there is the assertion that government isn't the solution to these problems or perhaps isn't necessary, for me, is not a dogmatic assertion, it's an empirical question. Has government worked at these things? Can it work at these things? That's the question.

REIMAN: And I think it's got a more mixed answer: it's worked some and failed some. So let's make it work more.

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