Greg:
I like my responses to have some planning and structure to them; but I want to get something to you that you can chew on. So'll I'll just offer a numbered list of comments on your last memo.
1. You objected to my characterization of our poverty level as "stunningly low" and suggested it was actually "stunningly high." The context of my original remark involved the great success story of free markets and the fact that poverty in America is a small exception to the rule rather than the overwhelming rule, as it has been almost everywhere else for all of recorded history. Your 643,000 homeless people (BTW, I don't think there's been anything close to a consistent way of discovering their numbers) sound like a lot; but as a percentage of our population it's "stunningly low."
Lest I get tagged as heartless, let me hasten to one of my most basic points. When you point out a social problem such as hunger or homelessness, you're talking about the fate of all of us absent some kind of productivity that has delivered most of us from it. Your complaint arises from the fact that our great productivity has only rescued most of us and not all of us. But systems other than free markets have failed, over and over, to rescue more than just a few within a population.
And...an important "and"...people living in a free market are not without compassion. Conservatives, as I've pointed out, are famously big-hearted in a free country. Their compassion is expressed through private agencies that are much more efficient, with the resources given them, than are government agencies pursuing the same need. But the taxation extracted by the government, to fund the public agencies, reduces the money remaining for taxpayers to contribute to these more-effective private agencies. This is why I have argued that it's not good enough to say that the government programs have at least tried to do something. In their attempts, they have squandered good resources on very sub-optimal achievements. Good intentions don't guarantee good results; and it's the results that the poor need to eat!
2. You spoke of free markets as a "rigged game," favoring those born with resources and talents and opportunities. OK; but that's not injustice unless you want to blame God. The important thing is this: if it's a game, "rigged" or not, it's a win-win game. In a free exchange, both parties gain--unlike those exchanges dictated by government.
3. You show intense and genuine concern about people in the inner city who would apply for jobs if any capital owners would build workplaces there. You recognize that owners don't do it because the labor resources there are not very capable of the high productivity any new enterprise would need; and you express frustration because it leaves unemployed, people you know personally and care about.
But consider the viewpoint of someone who owns financial capital. She wants to invest that capital in places where it will initiate a large volume of profitable exchanges so more wealth can be created for all involved, including both herself and the new employees hired. If she tries to go to the inner city, where businesses have failed or fled, she'll probably turn out to have wasted her resources--producing goods whose value falls short of the value of the resources consumed. She'll face loss and possible bankruptcy, instead of the profit that would demonstrate that she has created wealth in the world. Inner cities have already killed most of their businesses; how can she hope to survive in that kind of bleak environment? Would you place a garden on ground where all the plants have died?
Now, does that mean that the people still living there have no hope? NO. But they have to go where the jobs are. Example: In the early 1900s Henry Ford needed reliable workers to make cars. He needed to stay in Michigan because that's where the iron processing could be transported in on cargo ships from Minnesota. So he advertised jobs for unusually high wages, to people all over the country, as did other nearby manufacturers who supplied his plants. In the Deep South, where conditions were as bad as inner cities, thousands of men (of any color) hitched north to apply and to prosper. These poor people entered the middle class thanks to the partnerships that made Ford so rich. But they did have to move. That's what happens in a dynamic free market.
Now, would it be good to help inner-city dwellers to train and relocate? Yes, that's a fine appeal to people who'd like to give to a productive cause. But in Ford's case it also appealed to an entrepreneur who wanted to build a prosperous business. Is that unfair, offering only an opportunity that requires them to leave their home environment? No, because building the auto plant in Jackson MS would just have meant that it couldn't compete profitably and therefore wouldn't happen at all. In this description, "escaping poverty" involves a real movement, geographically and not just economically.
Building a plant in the inner city means a business that can't support itself and would require continuing infusion from the more prosperous parts of the company. That means that the employees continue in a dependency only slightly different from handing out food packages to them each week. But if as individuals they go to where their work actually creates product worth more than their wages, then they are in a self-sustaining enterprise. Poverty is not just relieved; it's replace by prosperity.
3. You saw "irony" in my reference to hospitals and the fact that so many were established by Christian organizations, apparently because they were not started to generate profit for their owners. I don't see that. Free markets are what makes it possible for people to to have the needed prosperity, to generate enough wealth for them to donate it to causes like that, and like other causes you pursue. Imagine trying to raise donations of that size in a country without free markets, where the people would be much poorer. Not every successful organization needs to be set up for profit; and those set up to keep their surpluses (so-called "non-profits) are more efficient with their resources than are those finances with forcibly-extracted tax money.
Regarding profit-making hospital organizations, I disagree with the idea that they are immoral. To conclude thus, we'd also have to say that foodstores and housing contractors are immoral; since what they produce is also necessary for life. We require medical care; but we also require food and shelter. Why shouldn't those who provide all of these exchange them to us and make a profit?
4. You raised a point about where resources would go if the government did not tax them away for public purposes. You argue that the saved resources would "simply not be in the hands of the poor," but "in the hands of those who control the means of production." Yes, of course they would; we want them to be there! First, these people have the resources because they created them out of their own entrepreneurial efforts, so it's just that they should have first claim over them. But more important, they are the ones who know how to make these resources productive. That's what creates jobs to make poor people into prosperous people. You can kill that golden goose to give a meal to a poor family; but you'll get no more golden eggs.
5. You pointed out an apparent contradiction in my statistics about what happens to poor families over the years. I probably should have offered more detail. In a University of Michigan study of hundreds of thousands of families, surveying their income levels from 1975-1991, we find that the bottom quintile mostly escaped poverty--all but 3 to 5% of that 20% of all households. Those people--the 3%--represent the persistent poor with the multi-generational behavior patterns that I referred to. This 3-5% of a quintile--less than 1% of all families--are a small but real group, with a problem they need help with. But pause to note that the rest of their quintile--the 15-18%--are indeed escaping. This is the miracle, so different from countries and eras of permanent stagnation. On the other hand, the ones remaining permanently in poverty produce so many of our prison occupants and illegitimate babies.
6. I ask you now to concede that there are not two, but three fates for the poor: you've spoken of two: they have no help and either starve or find some bootstraps on their own; or a government program somehow gives them help that doesn't create incentive-killing dependency. But I advocate for a third way: private individuals exercising compassion, who interact with the poor one-on-one in private help programs, funded voluntarily by donors convinced of the programs' efficacy. These donors can cut off funding the moment they suspect that the program is growing wasteful or ineffective, and choose alternate programs to help people. (Try that with government programs!)
7. You brought up the very interesting topic of what "freedom" means. I suppose some philosopher may have at some time written a sentence or two about that, right? But you've a right to ask me to express if I can, what I mean. I think I'd say that Freedom is a condition of being unconstrained, of having a genuine capacity to select among options without restriction by another. And in answer to the fine point you raise, I think that Jesus might have tolerated my poor attempt at definition, so long as it recognizes that it's not just other people or organizations that put bonds on us, but Sin, which comes from within us. He sets us free from that. And it's for us to set each other free from the bonds we keep placing on each other. Government limits our freedom, as it must, in cases where we use it to interfere with the freedom of others. "...and governments are instituted among men to secure these rights, deriving their JUST powers from the consent of the governed."
How are we doing?
