Jack: Government's the Problem, Not the Solution

So here we go:

1.  "What's the better solution (to the problem of poverty)?"  also "I just hear them taking cheap shots at our nation's efforts (pitiful as they may be) to actually DO something about the issues people are facing."  which asks, Why not support these efforts, even if they are inefficient?

You've essentially conceded that government does almost anything less efficiently than private entrepreneurs in a free market.  But their intentions are good, even if relatively ineffectual, right?  However consider this:  What if, beyond being ineffectual, those government programs, in many or most cases, actually increase the difficulties faced by the poor?  If the programs not only fail, but make the problems worse, then we'd want to stop them even if we had nothing else in mind.  This is mostly in response to the second part of this question.  Good intentions don't guarantee good results.  

I'm referring partly to the destruction of incentives to learn how to produce.  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.  But also I'm referring to the waste of resources involved in most government relief programs.  Those resources had to be diverted (by force!) from uses that may have helped the poor more.  Such uses would include the creation of industries that would have employed these people in ways that rewarded their productivity and self-improvement.  And another use would be the donation of these resources to private relief agencies.  Finally, there is the unfair competition, faced by indigenous startup businesses, when our government shows up with free goods to distribute, stifling the fledgling businesses.

So back to the first part of the question:  What's the better solution to the problem of poverty?  A good general answer is to (1) teach people to produce things that other people want, so they have something to trade; and (2) establish Rule of Law and property rights, so that such entrepreneurs can keep what they produce, or what they trade it for; and also keep the property they create for productive purposes.  If these can be expropriated/taxed away/stolen, then they have no incentive to produce in the first place. People are very creative when they can keep what they make.

2.  "Can you point me to a conservative solution to poverty that provides an answer not only for individuals, but that also addresses larger systemic causes of poverty?"

Certainly, and at two levels.  First, humans tend to truck, barter, specialize, and serve each other's needs if they know they can keep what they make.  Because of this fact, the "conservative solution," which is freedom and property rights, tends "like an invisible hand" to guide and entice people into activities that relieve poverty.  Really, this is the only thing that has ever solved the problem.  But it does not necessarily make them aware that they are doing this.  They think they are helping themselves; but really they are helping each other.  (The two, of course, are not contradictory.) And this is large-scale, addressing what you called "systemic" poverty.  The Systemic poverty occurs where, try as they might, people cannot break out--because of crony capitalism, government brigandry, or the psychological imprisonment of a welfare system that keeps them just above subsistence without their doing anything.  (Consider what we've done to Native Americans--we couldn't have crippled them more if it had been our sole intention.)

But I know you want a conservative solution that involves actual intentions to help people, entirely aside from making a profit doing it, and focusing on people who currently are at the lowest level of productivity and can't yet bring much to the marketplace.  For that I could go back to many entrepreneurial efforts over the last several centuries in which business people intentionally located their businesses near poor people in order to hire them.  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."

In addition, let me refer you to povertycure.org, a newer organization founded by Christians for the purpose of conquering poverty in developing nations.  They engage in business education as well as small-scale equipping and funding, like the "micro-lending" agencies started by mission organizations and other not-for-profits.  I've seen them at work in the Philippines, and many people are prospering and flourishing.

3.  What do we/I/you mean by "we" or by "society"?

I'm fine with the idea that individuals can and should do things together.  They may identify as a community, or a village, or a church, or even a society.  But none of these necessarily imply the use of force, which Christ never authorized.  I'm fighting back against this common assumption that government is the best, or even the only way a group of people can combine their efforts to accomplish something.  In a free country (which is what a free market amounts to) people can combine and coalesce whenever it helps them do what they want to do.  One way they do it, of course, is simply to hire each other to allow specialization in tasks--this is why we have companies.  If the market is free, then these companies survive and thrive only so long as they are an optimal way to produce a product or service efficiently.  If they become slack and wasteful, competition overtakes them and they decompose.  Then their participants are free to combine in new ways.

4.  Whose job is it to alleviate povery--government or the church?

Well, it's the job of people.  When Christians get together they call themselves the church, which neither increases nor decreases their moral obligation to care for the poor.  The Church may find ways to do it that are more efficient than the aggregate efforts of individuals--such as the micro-lending mission organizations I mentioned.  As far as Coercion--which is what government is--this is none of the business, at least, of our national government, since as far as I know there's nothing in the US Constitution that charges them with doing it.  Some of the States may have such duties built into their constitutions, which just means they'll inevitably have to cope with the burden of an interfering, wasteful government entity getting in the way of the poor and of those who might otherwise help them.

5.  Can "the free market alone address, or has it ever addressed, many of the the social and economic ills that our nation currently faces?"  Also, if "we" don't collectively take action, will a problem remain unaddressed that will eventually destroy not only the poor, but everyone."  [slight paraphrase of your words]

I hope I addressed the second part under #2 above.  But I would argue that in our nation's history, the "free market alone" is the ONLY thing that has addressed economic ills, starting in earlier centuries when those ills were far worse than they are today.  How else can we account for the reduction in suffering, the increase in opportunities, and the huge increase in life expectancy that have taken place here?

As far as social ills, the free market has, where allowed to function, addressed many of them.  If you look at the most current ones, you can trace them directly to government's efforts to use force to reshape society.  A partial list:  exploding illegitimacy, welfare dependency, urban crime, expanding prison populations, STDs, the near-sacred status of the crime of abortion, family dissolution.  So much of this has grown over the past 40 years, following the "War on Poverty" by the federal government.  I wonder sometimes, who has hurt our society more--LBJ or Hugh Hefner?

6.  What do I think about FDR's New Deal?  Don't "most historians" agree that it did help?

At the time of the Depression, FDR got credit for trying to "do something."  And many historians have continued to credit him with helping is to survive, and perhaps overcome, that event.  However, economists see it otherwise.  Much of the Depression was the result of government interference, making a normal recession into a deepening, recurring condition that really didn't heal until the late 1940s.  The Federal Reserve kept doing things with our money supply that pushed us backward every time we seemed to be making progress.  And Congress imposed tariffs and taxes that crippled whole industries.

And FDR pushed through the Minimum Wage, to please his Union supporters.  Unemployment immediately jumped among lower-skilled people, as it has done after every increase our Union-pleasing politicians have foisted on us.  Today the rate among Black teens who want jobs is over 40%.  Only a few brilliant companies, such as McDonald's and Wal-mart have devised systems that can use those with low skills to achieve a productivity level that is greater than the minimum wage.  This is why Unions provide all the energy to attack these companies.

7. What about God's mandate to care for the poor?

I think I addressed this above, and also in earlier letters.  I acknowledge this mandate, and I do lend my efforts and resources to obey it.  But I don't concede that we need to have a fumbling, wasteful, coercive government coercing people to contribute.  This always leads to filthy politics, as those wanting to protect their resources maneuver to avoid being taxed, while those who will benefit maneuver to get the largest share possible.

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.  The more disposable income we earn--and the more our government "allows" us to keep--the more we give.  To fail to see this is to overlook most of the successful charitable movements of the past century or two.

But in addition, people simply trying to trade with each other, focusing their generosity only on those closest to them, have done even more to help the poor to overcome their plight.  If you want to ask about Africa, Asia, Latin America, look at all their governments have done to prevent their peaceably producing and trading and accumulating.  As RR said, government's the problem, not the solution.  I suppose we could also point out that of all the murders perpetrated in the last century, the great majority of the victims were killed by their own governments!

Jack

Greg: The Uneven Starting Line

Jack,

The time has finally come for me to reply.  It's been a hectic few weeks.

For the sake of clarity, I'm going to try to summarize your main points.  You can correct me if I'm wrong.

1.  Humans CREATE wealth through their own work and effort and ingenuity.

2.  Since an individual creates his own wealth, he or she alone has the right to that wealth.  No one should be allowed to take that away.

3.  A proven method of attaining human happiness is through "earned success" (i.e. the rewards of hard work).  (By the way, I do not dispute that; I would dispute that it is the only or even the primary means to happiness).

4. All of the great captains of industry created wealth out of thin air; they did not steal it from others.  Their actions are morally praiseworthy.

5. A free market system delivers greater justice and greater happiness to people than any other system.

I realize that I've offered an oversimplification of your points, but I think that's the basic gist of what you're driving at.

So here are a few of my own thoughts.  First, are you willing to admit that there are some instances in history in which the rich gain their riches by oppressing others and using them as a means for their own end (i.e. increasing their wealth)?  An obvious example of this is slavery.  If you are willing to admit this, then the obvious follow up is "Is this still taking place today and what can be done about it?").  If you control the means of production and I do not have any capital of my own save the strength of my own muscles and the ability of my own mind, then you have me at a great disadvantage.  The starting line is not the same.  The scales are already balanced in your favor.  If I'm desperate enough, I will sell you my labor for a small amount of money in order to feed my family and, in the meantime, you profit greatly from my willingness to work for you for very little.  Thus, YOU have not CREATED the wealth; I have created the wealth and you have skimmed off all but a meager hourly wage that you must pay me -- just enough to keep me coming back.  This is, of course, what happens in Southeast Asia and throughout the world every day.  And, in order to increase your bottom line, you might skimp on maintaining the factory that I work in and after a few years -- boom -- a roof collapses and I die.  Without labor laws to protect me from you (the captain of industry), what power do I have?  Should not something be done in the name of justice and fairness to balance the scales?  

I stumbled across an interesting statistic the other day:  those who are born in the top 1% have a 99.87% chance of remaining right there in the top 1%.  How would you explain this fact?  Are those born in the top 1% that much more intelligent or beautiful or talented or strong than the rest?  I interpret it as a sign that our common notions of social mobility are a myth.

If we can agree that people do not all start with equal opportunity (do you agree with at least that?), then what do you propose ought to be a way that we even the scales?  Or is that even an effort worth undertaking?

Turning to a more theological argument, I would ask you, "How are you able to create?"  You are right that our human ability to create is a function of our being made in the image of God.  But you run the risk of sounding like Homer Simpson when he prayed before a family dinner, "Well, God, I worked hard to make the money to buy this food so thanks for nothing."  We are able to create because we have brain and brawn.  Those are God-given.  You are able to be a professor because God gave you a good mind.  Thus, in what sense is the wealth that you create by using that good mind in any way your own?  You mind is on loan from God.  Of course, the implication of this is something that I think you will agree with:  we own nothing.  We are merely stewards of what God has entrusted to us.  And this is not mere wordplay or semantics or holy-church-speak.  This has implications for our understanding of property and what we are to do with our property.  I find in the Bible a God who is particularly concerned with the poor and who demands that his people care for those poor.  In fact, God cared about them so much that he established laws to ensure that sinful human nature did not forget or neglect to care for his beloved poor. 

Out of curiosity, in your view, if a human is created mentally handicapped, then how should she or he be cared for?  How much money should they make?  Do they CREATE wealth?  If not, what is our societal obligation to them?

I think that the basic, foundational problem I have with your argument is how it assumes a rigid individualism.  In reality, we are all far more interconnected to one another than your model seems to assume.  The generation of wealth has many sources.  Yes, it can be hard work.  But other factors also come into play -- social structures, geography, inherited socio-economic status, laws, values, moral formation, social capital, etc.  

I also have a host of theological and biblical questions for you.  For example, why does Luke teach us that communal property and sharing was normative among early church members?  How compatible is the Lockean language of private property ownership with this?  What do you make of Leviticus 25 and the Jubilee laws?  There are many others but those seem most relevant to our current discussion.

For the record, I am not a socialist.  I believe in much of what you believe -- the right to work hard and earn your keep.  But I also believe that society can and ought to take certain measures to curb the excesses and abuses of the free market.  I find the current distribution of wealth in our country to be morally reprehensible.  This is because my sense of what is right and wrong are rooted in the biblical themes of love, compassion, equality, fraternity, community, the interconnectedness of human life, and a concern for the common good.  I know that you may not list the same virtues and themes from your own reading of Scripture, but then we enter into the world of biblical hermeneutics which is a world I most certainly welcome us to enter if you so desire.

Your turn.  (I actually don't like saying that because I don't believe we are having a competition here.  I'd prefer to think of us as cooperating with one another in seeking the truth.  But perhaps that emphasis on cooperation over and against competition makes me a liberal softie).

- Greg

Jack: Individuals CREATE Wealth

I'm going to try to offer only brief comments, but ones that may stimulate good further discussion.

I'm not into formalities with old friends.  If you find it comfortable to call me Jack, please do.

I think your definitions of wealth and happiness work pretty well; but would like to refine them further.  Individuals create wealth--they CREATE wealth--by combining resources and specializing in skills valued by others. I emphasize the creating, because God our Creator created us in his image and gave us the capacity to create.  Most of the wealth that exists today did not exist at all 1000 years ago, or even 100 years ago.  People created it.

They did this creating mostly as individuals, seeking profitable ways to meet the needs of others so they could trade for wealth that those others, with other specializations, had created to trade.  This will take us directly to a Justice argument, in which I would say that whatever you create, you have first claim to, prior to the claim of any human who did not create it.  This is both just and prudent--prudent because such a property right creates a natural incentive to create all you can, and the human race grows better off.

For a working definition, we could say that wealth is anything that can give benefit to people--either in itself or by enabling a greater productivity of other things that produce benefits to people.  We create it by producing more than we consume, and then using the surplus for the purposes above.  And your definitions of happiness seem nice; although they are hard to quantify.

When social scientists try to measure happiness (in order to correlate it to other things) I think they usually use self-reported questions:  How happy are you?  How bright does your future look? Things like that.  It's hard, though, to find other phenomena that consistently correlate.  One that has shown up in recent scholarship is a sense of "earned success."  Those who believe they have experienced success from their own purposes and efforts, also tend to rate themselves as happy. See Arthur Brooks of the American Enterprise Institute for scholarly studies on this.

About the film you asked me to look at:  Again, beautiful graphics.  BUT:  Look at it again and take note of the verbs he uses in reference to income and wealth.  He's arguing for injustice by talking about how much income different people "receive" or "get" or "take home."  He sees the great disparity as unjust.  Also, regarding wealth, he's concerned with who "has" it, or "controls" it.  (I think that's accurate; I didn't look at the film again before writing this.  But typically such arguments do use these verbs.)

The problem is that he ignores what caused the income, or the wealth, to exist in the first place.  An individual creates income by delivering a service to someone who places a higher value, on that service, than the money (wages or profit) he exchanges for it.  So both gain in wealth.  And we create or accumulate wealth by consuming less than we produce, using the surplus to form capital--items that multiply the productivity of labor and other resources.

My point is that people PRODUCE income; they don't just "receive" it.  They CREATE wealth; they don't just "have" it.  It's theirs.  Go through your film, or any text that makes the same point, and mentally substitute the words "produce" or "create" where the author uses "receive" or "have" or whatever.  It changes the whole tenor of the argument.  For example, if the top 1% PRODUCE 25% of the income (or whatever amount), you might tend to ask a different kind of question.  Instead of "why do we allow the injustice of those few "getting" so much," we might ask "Why do those few bear such a heavy productive burden, even though all of society benefits from what they've produced to earn that income?"  Or, "When will the other 99% get off their collective duffs to produce more?"  Or perhaps more compassionately, "What can we do to help those at the bottom to produce more, so they can relieve their poverty?"

The fallacy in the film author's argument, I think is common to such people as Jim Wallis et al:  They look at people primarily as Consumers, rather than as Producers/ Creators.  People are a liability rather than an asset; an appetite rather than a discovering, producing mind.

When Steve Jobs grew so rich, his high income and net worth took nothing from people in lower classes.  He gave more than he received; the reason he got so rich was that he managed to produce so richly of his gifts.  The same is true of the very richest of entrepreneurs--Bill Gates, Warren Buffett, John Rockefeller, the Vanderbilts, the Astors, Henry Ford, Thomas Edison, and so forth.  All of these people produced in order to trade, and all of them made everyone, at all social levels, better off economically.

I do want to respond to your answered objections: For #2: Economics is not amoral, any more than physics is.  Both are concerned with finding the truth, and we all should try to behave morally and rationally in reaction to what those disciplines reveal.  For #1:  you quote "some economists" suggesting that the poor are worse off than 30 years ago.  This is demonstrably false, both nation- and world-wide.  The pie is indeed getting bigger.  It is almost impossible to come up with even a strained measure that would suggest otherwise.  We all eat better, live longer, and have access to wider opportunities.  The only exceptions occur under regimes that seek to control people more tightly, ostensibly for "their own good."

But now here's Objection #3 for you, based on all the above:  A free market, more than any less free environment, delivers greater justice (to each his own) and greater human flourishing.  Individuals combine voluntarily in various companies, teams, and families, to produce as much as the earth will permit them to, motivated by the common and natural desire to improve their own lot and that of their families and neighbors.  All they need is Rule of Law and Property Rights, so that they can have confidence that whatever they create, they can keep and enjoy.

Your turn.

Jack