Jack: Simply Put, Free Markets Solve Poverty

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?

Greg: My Failed Attempt to Answer Every Concern

Jack,

I think you're right.  I think that I need to respond very directly to the points that you made several posts ago and I can see that I've left you unsatisfied.  Perhaps we actually agree on more than we think we do since I actually do consider myself a capitalist and believe it to be the best way to generate wealth.  So this response will be divided into two sections.  First, I will pull some quotes or points from your most recent e-mail, offering a brief response and then, second, I will return to the post of your blog dated September 5 in order to respond directly to the seven answers you gave.

Part 1

First, you claim, "the level of poverty is stunningly low in our nation."

My response:  Of course American poverty is low if you compare it to underdeveloped or so-called "third-world" countries!  And I am sure you'd attribute the difference between the "first world" and the "third world" to the form of capitalism that has dominated in Europe and North America.  In part, I'd agree (although I'd also point out that our systematic exploitation of native peoples -- both in North America and in the subaltern world -- might have even more to do with our modern prosperity and their poverty).  

Yet in our own nation I'd hardly call poverty "stunningly low" in light of the facts.  According to the most recent census data, 16% of Americans currently live at the poverty level and 20% of children do.  These are our highest poverty levels since 1993.  In fact, 1 out of 6 children live in homes that cannot provide consistent access to adequate food.  And without government programs such as SNAP, WIC, subsidized school lunches, etc. these children might literally have nothing to eat.  Astonishingly, most Americans (58.5%) will spend at least one year in poverty between the ages of 25 and 75.  And currently there are an estimated 643,000 homeless people living in the U.S.  These are not "stunningly low" numbers; I'd call them "stunningly high."

You also said, "In order to find even the small amount of poverty we do, and to make it seem large enough that we would need government's forceful hand to correct it, we have to keep on redefining poverty upward.  Where once it meant widespread lack of food and shelter; today it means not feeling confident that these will continue, or receiving less material goods than others."  I am not knowledgable enough to know if the standards used to define poverty have shifted as you say.  But let me be clear:  I am not calling for more than a minimal safety net to meet the very basic needs of those in the most desperate of circumstances.    Yet I would ask, Jack, at what point exactly do you go from saying that there is a "stunningly low" level of poverty to an amount worth our collective attention?  When the number of homeless tops a million?  When the number of food insecure children rises from 15.9 million to 16 million?  Because to me, our poverty already seems quite noteworthy.  

Meanwhile, you praise the entrepreneur as the real hero of the story.  Yet if we are to witness the emergence of those meritorious entrepreneurs from among said 15.9 million, is it not fair that we as a society ensure that the 15.9 mil are provided with a stable learning environment, quality education, basic healthcare, and similar (dare I say "equal"?) opportunity to that of their middle and upper class peers?  Otherwise, the expectation that these unfortunate children (who simply, it would seem, lost the lottery at birth) will be able to participate in the free market at the same stratum and with the same wherewithal as their peers will be able is unrealistic.  The game is rigged.  The starting lines are uneven.  I can't beat you in a game of Monopoly with an inheritance of one house on Mediterranean and Baltic while you inherit hotels on Park Place and Boardwalk, no matter who ingenious I may be.  The proposition that seems so scandalous to so many laissez-faire libertarians is actually rather modest: Let's be proactive a making sure the game isn't rigged before it starts.

Second, you state, "The process of hiring the labor puts more income into the laborer's pocket than he could earn elsewhere, and so his wealth has increased.  That is how people escape poverty, and there is no other way."  I agree with that statement.  But why are there so many who are willing to work in the inner cities who have no businesses willing to hire them?  I'll answer that.  Because those who live in impoverished locations are oftentimes unreliable, difficult to work with, untrained in the etiquette and basic manners of the middle class, sometimes mentally ill, and even tend to be felons, etc.  So we have a quandry:  1) Poverty is alleviated when laborers are hired, but 2) those who can hire chose not to hire in the places of the greatest poverty.  The only solution that I can see is that profits must not be the primary goal of the businessman and businesswoman.  Of course, we do see some examples of this taking place, but they are precious few.  The truth is that, left to self-interest alone and the guidance of the invisible hand (and when we say "the invisible hand," do we not mean basic human nature?), the businesses go elsewhere.  What proposal then, based upon the free market, do you offer that will help people "escape poverty" since "there is no other way"? 

As for point three, you point out to me that hospitals were originally created by Christians -- which is why so many bear the names of saints and biblical characters.  Yay!  We're finally on my turf.  I am a church historian.  And you are exactly right.  The irony in the context of our conversation is that these hospitals you point to were not created for the generation of profit.  In fact, the idea that someone might profit from the care of one who is ill would have been considered unthinkably immoral.  Hospitals were originally set up as agencies of Christian hospitality, a tradition dating back to Abraham which demanded care for the guest because the guest her/himself is an end in and of her/himself.  To treat the guest as a means to another end (i.e. profit) was inconcivable to early Christians yet it is the reason the modern medical-industrial complex exists.  If only we had some Christians today who were more committed to treating people ends in and of themselves as opposed to putting profits first (whether in the insurance industry, the medical field, or all those jobs in between). But the system has made us all guilty and made it impossible to treat individuals as ends in themselves.  In other words, I believe Capitalism has offered an alternative religion.

As for your forth point, which states, "There are two kinds of compassion:  one which speaks compassionately and likes to persuade or compel others to behave benevolently but gives little personally; and the other which actually gives, from their own means, to those who suffer.  The first we call "liberal Democrats"; the second "conservative Republicans."  Wait now, that sounded snarky, you're thinking.  It comes from a recent census study by economist Arthur Brooks of Syracuse University, currently president of the American Enterprise Institute; published in his recent book, 'Who Really Cares.'"   Yes, I do think it is snarky.  And, worse, I think it falls into the logical fallacy of a false dichotomy.  Nevertheless, I won't argue with you on this.  Republicans are generous.  I know many who are -- including most of my family.   I'll just points out that it is logically possible to hold the position that for the sake of the poor it is necessary to BOTH give generously from your own wallet AND also advocate for a progressive tax.  I, and many I know, fall into that category.  I think these dichotomies (and stereotypes) are unhelpful.

Fifthly, you state, "When I say government is inefficient I mean that government has wasted resources that could have done far more for these poor had they been left in the hands of those who created the resources.  The government action, in the big picture, has left the poor worse off than they would have been."  My response is quite simple.  Those resources that would have been saved would simply not be in the hands of the poor.  To claim that they would have been is a tremendous leap of faith.  Such resources would be in the hands of those who control the means of production.  Without "directed" distribution of resources, we know that the bottom 40% of the people control only 0.2% of the wealth while the top 5% of the population controls 61.9% of the population.   So when you talk about how the social safety net "wastes resources," you're right.  But it just wastes the resources of the top 5%.  (Link to the academic paper -- it is from 2007 so things may have shifted a bit:  http://www.levyinstitute.org/pubs/wp_589.pdf).  It is far more likely that dollar X would go for a yacht for someone making six figures than it would go for a childcare payment for the single mother trying to make ends meet on about $20,000 per year, and given the extreme wealth disparity in our nation, it seems disingenuous to me to suggest that the "waste" caused by reallocating funds for the poor actually damages the poor by, in essence, "wasting resources that could have done more for [them]."

On your last point you say, "[P]oor families, over spans of a decade or two, cease to be poor.  Only a few of those in the lowest quintile of family income--maybe 3-5% of them--remain there after a US census or two.  And that fact does, in fact, come from the US census."  Now that's odd.  First, because it doesn't line up with my experience at all (or the that of my many, many friends who work in the inner city), but, hey, if you have the data, then who am I to argue?  But secondly, it seems strange, in light of that data, for you to make the claim on Sept. 5 that when "poor people come to depend on government support, they sometimes set up multi-generational behavior patterns and forget what it might be to be a productive, self-supporting person."  After all, you can't have it both ways.  

Now, at this point, Jack, I just want to say that this debate is not personal.  I may sound very passionate and that I because I am and it is because I care very deeply, but it is not because I am angry at you or at any other of my conservative family or friends who genuinely believe that the government should not have a role to play in poverty alleviation (beyond what you have suggested such as enforcing private property laws, etc.)  That said, I will move on to the second section and try to address, very briefly the points you made in the blog of September 5.

Part II

1.  The primary point here seems to be that 1) welfare programs de-incentivize people from working and 2) it wastes valuable resources.  As for the first, I believe that is entirely untrue when you consider who very low the standard of living is for the person who lives off of the system.  This is why I believe that welfare and unemployment benefits should remain low (as they are) so that there is still plenty of incentive for such people to find work.  (SSI and Disability is different and I think those should be higher since those are people who CANNOT work even if they wanted to).  It boils down to the question of how much incentive you think is appropriate.  Let's take two scenarios.  In the first, if you don't work, you starve and your kids starve.  End of story.  In the second, you don't starve, but you also don't enjoy the delicious foods you see others eating around you; you don't get to clothe your children in new, quality clothes for schools so that they avoid insults; you don't get to s occassionally plurge and celebrate a birthday or vacation; you don't get to buy that car you've always dreamed of.  Now, in my opinion, the first scenario is just plain cruel.  Does it provide incentive to work?  Of course it does!  It provides very strong incentive.  The second scenario also provides incentive though.  Does it provide as much as the first?  Perhaps not.  And yet I believe it provides plenty of incentive for any able-bodied man or woman to try to find work and become a productive member of society.  

As for the wastefulness of resources, I believe I've already discussed that earlier.  In my view, a somewhat wasteful program that cares for the vast needs of the poor is better than no program at all.  You counter that it is wasteful and that this actually hurts the poor because the resources that are wasted could actually end up back in the hands of the poor themselves.  I counter with that:  yeah, right.  When the top 5% of the population controls 61.9% of the wealth and the lower 40% of the population controls 0.2% of the wealth, I'm highly skeptical that much of that those "wasted resources" are going to "trickle down" to the lowest of the low.  Those facts, combined with the church's pitiful efforts at poverty alleviation in our own nation -- let alone around the world -- leave me gladly accepting the crumbs that fall from the government's table.  I believe it's the best option that the poor have right now.

2.  You write,  "It was good for both sides, since the business owner got low priced labor and the new workers got the best pay they'd ever had.  They're both exploiting each other; but for some reason only the employer is accused of 'exploitation.'"  First off, I think you misunderstand me terribly.  I never have and never will accuse a businessman or woman who deliberately enters the inner city to create jobs of being an exploiter.  Yet your answer baffles me since I was involved in many conversations for many years, trying (begging) businessmen to set up shop in the inner city, but to no avail.  The last sentence of this quote aside, this investment in the inner cities simply is not happening at all in our nation today. And where it IS happening, it is happening by Christians who are deliberately setting aside the pursuit of profit as their number one agenda (a violation, I might add, of capitalism's rulebook).  Either that, or the businesses are being built in areas of cities that are being gentrified, which is an entirely different endeavor.  

The first part of your answer though, I agree with.  I think you are right that the ability of people to set up their own businesses and begin to sell and trade is a wonderful solution to poverty.  One problem:  As you know, setting up a business requires capital.  Where does that come from for a typical inner city family?  Problem 2:  You must have consumers:  Where do they come from?  And where do they get the money to buy your product?  In other words, I really like your answer in theory, but what does it look like in practice on a large scale in modern urban America?

3. Perhaps we need to have a discussion about the word "free."  I think we use it in different ways.  The way that the word "free" and "freedom" is used by John Locke and the Post-Enlightenment thinkers such as those who drafted the American constitution (Jefferson, etc.) had a very different understanding of freedom than did the authors of Scripture.  When Jesus speaks of freedom, he means something very different than the economic freedom you speak of in your posts.  We should discuss this because we could easily start talking past one another and equivocating on our terms.  That's not a response; just a reflection.


Know what? I think I'm going to stop here.  First of all, because I'm tired and I think I've addressed a lot of material already, but also because as I look ahead I see some topics coming up that will take some posts in and of themselves.  So I've tried to response more directly to your ideas.  If I still am too indirect, I apologize.  I'm not an economist and so you'll have to give me some grace for writing outside of my academic discipline.   But, beyond that, I'm not a logical positivist not even a foundationalist.  So perhaps were are dealing with some differences in our epistemological assumptions.  I suppose any discussions of this nature must begin with defining the philosophical and epistemological methods, mustn't they?  And perhaps that is part of our problem.  I read history different than you.  I imagine I have a very different theology than you.  And I likely have arrived at a different idea of "the good" than you.  And perhaps that is precisely what makes our conversations so interesting.  Till next time...

- Greg

(And I really MUST stop neglecting my Ph D studies for this.  Paul Ricour, Hamid Dabashi, and Achille Mbembe are calling my name and they won't stop until I appease them).

Greg: Another Try

Jack,

I'm going to give this another try.  I think you're right that I didn't address the points you were making as directly as I could have.  In my defense, it was very late and my brain was throwing fits that I was trying to make it write to you that evening.  Nevertheless, I do think much of what I had to say is relevant, if perhaps tangential.  For example, the statistics that I shared with you about how only 7% of those on welfare have stayed there chronically speaks to how "efficient" and "effective" welfare actually is -- presumably it is doing what it is supposed to do (i.e. provide people with a temporary safety net until they can get back on their feet).  It also presents evidence against your claim, "When poor people come to depend on government support, they sometimes set up multi-generational behavior patterns and forget what it might be to be a productive, self-supporting person."  If my professor's data is correct, that is a far smaller problem than you make it out to be.  But, you say, that is not the heart of your argument.  Fair enough.  Let's address your argument.

The core of what you are saying seems to be:  welfare is inefficient.  It would be more efficient for the poor to be cared for by the private sector.  To quote you again, you say, "I think history shows that the private means would address poverty more efficiently and effectively. (and permanently!)"  Now that's a fascinating statement to me.  If that statement were true, then why do we in America have such an obscene level of poverty in our nation?  This is the most unregulated and least taxed free market in the developed world. I've included a cart below that illustrates how low our taxes really are in the U.S. when compared to the GDP.

Corporate tax rates are also comparatively low in the U.S. (especially once you consider all the loopholes that are available.  See examples here:  <http://money.usnews.com/money/retirement/slideshows/top-10-corporate-tax-breaks>).  And yet in this nation that so values the unregulated market, what do we find?  Massive unemployment, severe poverty, homelessness, sick children left without insurance, and the like.  One would also expect, according to libertarian theory (and I believe what you are arguing for), that an unregulated economy like ours would witness wealthy philanthropists, profitable corporations, and the private sector freely utilizing their funds to eliminate poverty, but that is very far from the reality on the ground.  (I do not mean to dismiss the incredible generosity of some wealthy philanthropists.  My point is that what is given does not meet the level of need.)

And this is a nice segue into another of your points.  You mention how the work of my former church in the inner city illustrates the effectiveness of voluntary poverty alleviation efforts, even without lots of funding.  Well, you're certainly right about that -- we had almost no funding!  Know why?  Because the wealthier Christian businesswomen and men that I pleaded with to help save our little preschool -- the one that we had to close -- simply couldn't allocate the resources for it.  Their cash was tied up in capital used to grow their businesses.  Because, as you know, to compete in today's marketplace you gotta keep spending money to make money.  (I've never been quite sure about this: when does a business have enough?  When do corporations get to a place where they are content with their current level of profit?)

Were we effective in what we did with little to no money?  Yes, we were.  We were extraordinarily efficient with the money that we had -- and I know that you love efficiency.  However, we simply lacked the resources to make a large-scale difference.  We couldn't provide housing, clothes, jobs, food, health care, legal advice, psychological services, low-interest loans, utility assistance, transportation, education… we were, after all, a church of 70 people.  The only way to provide those vital services would be to tap into a massive source of income.  

Let me illustrate with one story from my time as pastor.  And this is just one story among hundreds.  One Monday morning in food pantry, a middle aged woman came to me to ask if we provided financial assistance with paying for medication.  I told her sadly that we could not afford to do that.  I told her that our little church channelled its limited funds into the food pantry that had brought her there that morning.  She was understanding and did not make me feel guilty in the least, but she did start to cry.  I asked her what was going on and she told me a bit of her story.  She had been a working woman up until the recession that hit in the fall of 2008 (thanks to the greed of unregulated banks -- but that's for another email, isn't it?).  When she lost her job, she also lost her health insurance (because, you see, in this country we have this funny system where your health insurance is tied to your job.  Weird, isn't it?).  And yet she had recently been diagnosed with a terminal illness.  My memory is foggy here and I cannot recall exactly what she had, but I think it was cancer.  The illness was treatable, but she could not afford the treatments and medication.  She did not quality for medicaid because her income had been too high on the year (since she had until recently had a decent job).  And so she was stuck.  Here was a medicine that she could take that would literally save her life, but she didn't have the money to buy it.  She had spent weeks on end going from one charitable organization to another -- even to some based in hospitals -- begging for the funds to purchase the treatment she needed, but to no avail.  When I asked her, out of curiosity, how much money we were talking about, she gave me a figure that was larger than our annual church budget -- and that amount was what she needed monthly!  What could I do?  I prayed for her and told her I would continue to pray that she would find the help she needed.  But after she left I became angry.  Here I live in the richest nation that has ever existed in the history of the world and yet we had in our midst a woman in her late forties who was dying from a treatable illness for lack of funds.  No one was there for her, but my little church.  And our little church simply could not meet that need.  It was far too big, and we were far too small.  If that woman is to live, there has to be funding from somewhere.  And that somewhere wasn't coming from the private sector (or from the public sector, for that matter, but that's because we don't have universal healthcare here).  I share that story simply to illustrate the constant struggle that workers in the inner city face:  vast human need and a paucity of resources to meet that need.  

Just imagine what we could do if we did have resources!  Imagine what a First Church could do if, instead of having an annual budget of $65,000, it had the annual budget of, say, a Greenville Free Methodist Church (I often dreamed of this).  The sad thing is, there isn't that much interest out there in finding out what would happen (and, believe me, it isn't for lack of trying to drum up interest).  So if even Christians -- Christians! -- are unwilling to make radical financial sacrifices to alleviate the poverty that exists right in their own backyard (and within their own little denomination), then how can we expect that the general populace will voluntarily pony up the cash to eliminate poverty in the world as we know it?  No, my doctrine of original sin teaches me that we as humans are not prone to generosity, but to selfishness.  And while some wait around for people to open their wallets voluntarily and out of free will, others starve.  The free market has simply not met the demand.

And so I judge a progressive tax which coerces money from the hands of those who benefit greatly from this system to be worth it if it feeds those starving people and pays for their life-saving medication.  Call it the lesser of two evils.  Prying taxes away from people is less evil than watching people starve.  Of course, I wish we didn't live in a world where that was necessary.  I wish we lived in a world where the rich really did live by the principle "live simply so that others may simply live," but we don't.  Heck, I wish even Free Methodists lived by Wesley's dictum to "gain all you can, save all you can, and give all you can," but we don't.  Today Christians (to say nothing of non-believers) build for themselves huge mansions with swimming pools and three-car garages while others on earth sleep on the streets.  It shouldn't be this way, but it is.

I'm being too verbose.  So let me sum up for the sake of clarity lest you conclude that I've not addressed your points.

Your claim:  The private sector is more efficient than the public at eliminating poverty.  Or, in your words, "People operating voluntarily, alone or in company with others, Christians as well as others, have demonstrated both great generosity and efficiency in helping the poor."

My claim:  Yes, but those of us in the private sector who commit our lives to doing just that do not have the resources necessary to carry out the task.  If we wait for "voluntary" giving, it doesn't come -- at least not in the amount needed to meet the demand.  Therefore, even if the government is less efficient, at least the job gets done, or partly done.  It's better as a poor person to have some inefficient help than to have no help.

Your claim:  The free market, by creating incentives to work and by rewarding innovation, will lift people out of poverty.

My claim:  But that isn't happening in America's inner cities.  Sure there are the occasional rags-to-riches stories but, it simply isn't happening on a grand scale.  In this nation -- the freest market in the developed world -- we still see masses of the poor who try to climb out of poverty and cannot.  There needs to be a modified free market, a "free market plus" so to speak, since the free market alone isn't doing the job.

I realize I have not addressed everything, but I hope I have at least addressed some of what you write.  I appreciate your patience and willingness to carry on this dialog because, as you can see, I care about these things a lot.

Blessings,

Greg

Greg: "The Poor are Just Lazy" and Other Devilish Lies

“So wickedly, devilishly false is that common objection, ‘They are poor, only because they are idle’.” - John Wesley, 1753

Jack,

There is so much to address here.  I feel like we are juggling a dozen topics all at once. Part of the reason I take so long in replying is because it always seems like such a daunting task to write on this wide set of issues.  So, for the sake of clarity and to keep this exercise more enjoyable for myself, I will respond to only one or two of your points right now.  Perhaps we can cycle back around to some of the other ones at a later time.

In this post, I want to state why I disagree with your contention that government programs aimed at poverty alleviation actually make matters worse.  First of all, conservatives just love to point to the worst abuses of the welfare system, medicare, etc. in order to justify their opposition to providing a just and robust safety net for those in need.  To be sure, you can find examples of those who abuse the system -- plenty of them.  But is this as widespread as you and many others claim?  I do not believe that it is.  Not long ago one of my research professors investigated the welfare system and found that, at the time of his study, of those currently on welfare, 70% had been on it for less than two years.  Another 20% or so had been on it less than five years.  And only 7% of those on welfare could be considered "chronic abusers" of the system.  To hear some conservatives talk, you'd think the inverse of these figures would be true.

The fact is that the majority of those Americans who are caught in poverty genuinely desire to work and would prefer to have a job as opposed to receiving a handout.  My own experience as a pastor and community organizer in the inner city for four years confirmed this fact for me.  Far from the picture that many paint of the poor as lazy couch potatoes who would prefer to draw a free paycheck instead of doing an honest day's work (and there ARE those people, but they are a very small minority -- 7% is about right according to my own encounters with hundreds of people), most are eager to work and are even willing to do menial tasks or hard labor -- tasks that I would personally hate to do -- for a minimum wage paycheck if it were available to them.  In fact, whenever I announced a job opening at our weekly food pantry, I would have people lining up to ask me about how they could apply.  One time one of my co-workers announced a free class would be offered to help people acquire basic employment skills such as learning how to dress for an interview, what businesses look for and expect from their employees, etc. and we literally had to keep going back to make more copies of the flyer we had created because the demand was so great.  And when I managed to acquire a database of business in the area that hired felons, I ran out of copies of the list on a weekly basis.  No matter what the talking heads may say about the poor, no one will convince me that they are a mass of leeches on society unwilling to lift a finger to help themselves.  Instead, a whole host of factors contribute to chronic unemployment in the inner city.  Allow me to offer just a few scenarios/factors from real life:

- Teens (and adults) who want to get a job but literally have nothing presentable to wear to an interview.  I knew a teenage girl whose mother would sell her daughter's clothes for drugs.  The girl kept wanting to apply for a job, but every time we'd buy her a set of clothes for the interview, they would be gone by the next morning.

- Being geographically located in an economic desert in which jobs are simply unavailable.  And being unable to find transportation every day to the suburbs or downtown where businesses are actually hiring.  Public transit is the best option for most of in this situation, but even coming up with bus fare on a daily basis can be very difficult for the unemployed.  And it doesn't help when local politicians keep cutting funding for public transit.

- Inadequate access to computers and the internet for the purposes of finding job listings and submitting applications.  Some have called this the "technology gap."  Middle and upper class families take for granted the tools they have in their own homes for research and communication.  Job hunting is immensely more difficult when you have no internet, no computer, no phone, and sometimes no electricity at home.  (This is one reason I fought so hard to keep our local public library branch open in our neighborhood.  Our Republican mayor wanted to shut it down -- along with five other branches in inner city neighborhoods -- but together we raised such a fuss that he had to back down.  Interesting that he didn't propose shutting any libraries down in the wealthy suburbs.  If you're interested in this, here's a link for you: NUVO article )

- Lack of basic social skills make employers less likely to hire people who speak with improper grammar, who are unfamiliar with protocols of etiquette that middle class folks learn by osmosis, who struggle with issues of literacy, etc.  Not to mention racial discrimination which is still a very serious issue even in 2013.

- If the only job you qualify for is manual or physical labor (and it usually is if you're a high school drop-out), then what do you do if you deal with chronic pain?  Or if you've been restricted from lifting anything over 10 lbs by your doctor?  This automatically eliminates you from a huge percentage of the jobs available in your area.

- Young adult males who can make ten to twenty times as much money selling drugs on the corner than competing for that one position that just opened up at the Dollar General down the street.  Capitalists are right about this:  human beings are rational and will do what they need to do to survive.

- Felons who are immediately disqualified from 95% of employment opportunities before the interview even begins.

- The woman whose husband has abandoned her with three children that she alone must care for and who somehow must find a way to job hunt and hold down a full-time position that will actually be profitable after deducting the costs of childcare.

- Middle aged workers whose parents require constant medical care and attention and who cannot afford the expense of a nursing home or elderly living facility.

These are only a few examples of the obstacles that the poor face when seeking employment (and I'm sorry they are so roughly written -- I'm typing this all very quickly because otherwise it won't get done).  Of course, the government is not the answer to all of these problems.  No one is saying that.  But some of these issues can either be exacerbated or alleviated according to how as a society we choose to address them.  

I submit to you that the "invisible hand" does very little to rectify much of what I've listed above.  Guided purely by self-interest and the pursuit of profit, a business owner will simply not choose to locate her business where the threat of break-ins is constant, where the workforce is uneducated, where the base of consumers have little to no disposable income, where real estate prices are in free fall, where the broken down infrastructure makes "importing" and "exporting" supplies through the economic desert a hassle, and so on.  If businesses are to be located in the inner city in order to provide jobs for the urban poor, the business owner must be motivated by more than the bottom line.  They must see it as their mission.  (There are examples of this being done in our country -- often by Christians -- and I applaud those efforts.  But they are far too few.)  The invisible hand does not provide that sense of mission.

Meanwhile the government can actually address some of the issues in productive ways.  We can provide cheap (or free!) public transportation.  We can maintain a robust and well-funded system of public libraries in order to lessen the technology gap.  We can ensure that the poor have basic healthcare so that a freak accident like a broken arm doesn't cause a family to go bankrupt.  We can fund our schools and pay our teachers adequately so that every child in our nation can learn to read and excel academically.  We can provide funds for counselors, psychiatrists, and social workers who want to address the complexities of poverty on an individual level and bring healing to damaged minds.  We can fund summer lunch programs in the park so that children don't have to go hungry three months each year.  We can provide re-entry programs for rehabilitated felons seeking to enter the workforce.  We can provide programs like Jobs for Life that equip unskilled workers with basic tools to make themselves more employable.  I could go on and on and on.  But here's the thing:  doing these things costs money.  Money isn't the ultimate solution, but it is an important part of the equation.  And the question I am asking is this:  As the richest nation that has ever existed in the history of the world, can we find enough money to make sure that our poor are given ample opportunity to work themselves up and out of poverty?  Will we collective address on a system-wide level the systemic causes of poverty in our nation?  And when people do hit hard times due to loss of a job or major medical issues, will we provide a safety net to catch them when they fall and see them through until they can get back up on their feet?  I believe we can.  And as a Christian I believe that we have a moral obligation to see that it gets done.  

Next time I write, I want to address this frequent claim by libertarians and conservatives that taxes are theft.  But I think I should wrap up this post for now.  I'm enjoying this dialog so let's keep it up. My replies may be somewhat infrequent in coming months due to how busy my Ph D work is keeping me, but I will reply eventually.

Be Well,

Greg