David R. Henderson  

Thoughts on Dickens

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Reply to Bill Dickens on Pover... DeLong vs. Feldstein on Romney...

Bill, that is, not Charles.

Both co-blogger Bryan (here) and many of his commenters (here and here) have done a nice job of handling Bill Dickens' major criticisms of Bryan's views on poverty and the poor. I have a few thoughts of my own to add.

First, some of the discussion by Dickens's critics of the issue of responsibility for decisions reminded me of one of my favorite scenes from the movie Jerry Maguire. I can't find it on YouTube, so I'll have to settle for this re-enactment. The first 30 seconds is what's relevant. The white guy on the left plays Cuba Gooding's character, Rod Tidwell.

Second, I don't think you can have a serious discussion of the poor without considering many of the incentives from government programs that blunt and stretch out the bad consequences of the bad decisions many of them make. I made this criticism in my review of Gertrude Himmelfarb's book, The De-Moralization of Society. My review is titled "Values Judgments." My main criticism was that she seemed to want the poor to behave better but wasn't willing to advocate ending government programs that give them an incentive to behave badly. I wrote:

But Himmelfarb believes that abandoning failed welfare policies and releasing the resources of the free market wouldn't be enough to achieve that aim either. Faith in free markets, writes Himmelfarb, "underestimates the moral and cultural dimensions of the problem." Traditional values, she argues, must be legitimated, and this is difficult when the state and the dominant culture are legitimating their opposite.

Those who want to resist the dominant culture, asserts Himmelfarb, "may be obliged, however reluctantly, to invoke the power of the law and the state, if only to protect those private institutions and associations that are the best repositories of traditional values." She does not say clearly which powers of the state she would invoke and for what, but her further discussion hints that she would have no trouble with anti-pornography laws, for example.

Himmelfarb is right that a cultural change is needed. But she is wrong to believe that "invoking the power of the state" is the way to get there. Though she seems to understand the strong connection between government welfare policies and the decline in culture, she doesn't take the obvious next step: calling for a radical downsizing of government.

But only a large cut in government welfare programs, with abolition of most, can set the cultural forces in motion that would lead to declines in illegitimacy, crime, and other social pathologies. Trying to change the culture without changing its underlying incentives is, well, silly.

David Frum said this well in his 1994 book, Dead Right. In discussing the major strands of 1990s American conservatism, Frum wrote: "Conservatives who throw in the towel on issues like Social Security and Medicare and welfare in order to direct their full attention to 'the culture' are attempting to preserve bourgeois values in a world arranged in such a way as to render those virtues at best unnecessary and at worst active nuisances. The project is not one that is very likely to succeed."


I would add that one of the government programs that does the opposite of bailing people out from bad decisions is the drug war. It penalizes people for (mainly) bad decisions and thus creates more poverty. I wonder where Bill Dickens stands on that.


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COMMENTS (15 to date)
Finch writes:

> It penalizes people for (mainly) bad decisions
> and thus creates more poverty.

I don't follow. If welfare penalizes good decisions and thereby increases poverty, doesn't a program that penalizes bad decisions do the opposite and reduce poverty?

Aren't you being inconsistent? If unemployment was punishable by monthly floggings, I bet we'd get less unemployment, though obviously such a system would be unacceptable.

David R. Henderson writes:

@Finch,
If welfare penalizes good decisions and thereby increases poverty, doesn't a program that penalizes bad decisions do the opposite and reduce poverty?
Good question. The particular program I have in mind is the drug war. When the government puts people in prison for 10 years, they are poor. When they come out they are poor. Because prison attenuates their job skills and is a black mark on their record, they tend to remain poor. Think of prison as a $100,000 to $200,000 tax (in present value terms). If you tax people that amount, you will make many of them poor.

Finch writes:

Sure, though they're fed, clothed, and given medical care. And you haven't identified the but-for world, in which they were a drug dealer or addict, which you'd need for comparison. So you've probably made them worse off, but not a lot worse off.

And then you have to consider the effects on everybody else from the incarceration, which are presumably positive and offsetting.

I'm not saying the drug war is not immoral, and it's sure invasive, but it's probably poverty reducing. Or at least, you'd need to look in a lot of detail to determine whether it was or wasn't. I think a lot would hinge on the question of just how bad a decision drug use is, and whether the drug war response is commensurate.

Ken B writes:
one of the government programs that does the opposite of bailing people out from bad decisions is the drug war. It penalizes people for (mainly) bad decisions and thus creates more poverty.
I agree but I also wonder how well that argument fits with a broader libertarian approach. After all I think you object to government programs that do ameliorate bad decisions. An example would be free needle exchange.
R Richard Schweitzer writes:

Is it not strange that in this land and "culture" of innovations we have not seen the creation and development of sufficient facilities to displace the political orientation of the use of government mechanisms to deal with obligations that seem to be so widely felt?

Why, after all, do we read The Government as the involved party in these discussions?

Is that the only, the best, the default, form of collective action (if, indeed, action need be in collective form)?

Is "Government" the connection that determines these relationships that give rise to these concerns?

Thomas DeMeo writes:

What about looking at any possible examples? Are there any? Hong Kong, perhaps?

JB7 writes:

I've always been a big Bryan Caplan fan, not necessarily because of his political views but because of his fearless iconoclasm and courageous bluntness. However, his response to Dickens was not up to par, and more or less resembled a harried attempt to rationalize and salvage his position.

None of Bryan's apologists have even remotely approached the two most potent points that Dickens made, namely:

A). Kids. As Dickens pointed out many of our social programs are specifically targeted at children. Conservatives and libertarians who stress the importance of meritocracy ought to think through and appreciate how meritocracy fails to effect children's outcomes. The child of a poor mother and the child of a middle-class or rich mother experiences a drastically rougher life sheerly through the coincidences of birth. Not being a social revolutionary, I'm inclined to accept that reality for the most part, but the relatively modest social programs we put in place to give a modicum of protection to children are what most decent people would recognize as justice. These programs are not, as Caplan asserts, a transfer of wealth from the meritorious to the lazy.

B). Caplan--and most diehard fiscal conservatives for that matter--subscribe to a certain myth. That myth is necessary to sustain their outrage at the welfare state. Fiscal conservatives imagine that the welfare state takes money from the productive to the unproductive. They imagine long welfare lines filled with the capable but lazy. They buy into the Welfare Queen myth. But, as Bill took pains to explain, most social programs only go towards people with specific conditions--poor with children, disabled, unemployed for a short period of time. Conservatives also blackout the 90's welfare reform and how drastically the system was reconstituted around work requirements and cutoffs. Caplan is constantly provocative, but he is often oblivious to nuance and specifics. He would rather argue with a hypothetical welfare state than the actual, messy batch of social programs that we have. Doing so would force him to confront the fact that many of the people who benefit from these programs--children, the disabled, the unemployed during recessions, veterans--really are in their position through no fault of their own. Until Bryan seriously engages with the specifics of our welfare state his critique will be fairly unserious.

Randy writes:

@JB7,

A) I don't trust those who use the phrases "our children" or "the children". Not that there's anything wrong with children, or helping children, just that the phrases reflect the politically oriented values of those who use them. The phrase "my children" is okay, as it reflects the pride and responsibility of family.

B) Outrage at the welfare state, for sure. But its because they are taking in $3.something trillion dollars every year in order to help "the children", but the problems keep getting worse while the houses, cars, and perks of the phrase users keep getting bigger and better.

Ken B writes:
Fiscal conservatives imagine that the welfare state takes money from the productive to the unproductive.

They also imagine that incentives matter, that there are real returns on investment, and that shifting resources affects productivity. What nutters huh? next they'll say something insane like 'trade benefits both parties' or 'when the slope is positive the line is going up.'

Ken B writes:
Fiscal conservatives imagine that the welfare state takes money from the productive to the unproductive.

They also imagine that incentives matter, that there are real returns on investment, and that shifting resources affects productivity. What nutters huh? next they'll say something insane like 'trade benefits both parties' or 'when the slope is positive the line is going up.'

Floccina writes:

@JB7
On kids some arguments would be:

1. We already have laws that take children from parents for severe neglect. Also in this day of a shortage of adoptable kids, there is the option of voluntarily putting the kids up for adoption if things get to bad.
2. Charity I think that absent government charity churches would jump in and help the kids of the worst parents but unlike government would try to give them moral instruction.
3. Relatives will often help the kids.
4. Housing can get much cheaper than it is.
5. Even in much poorer countries with no safety net children do not often starve except in times of general famines. Illiteracy is higher in those countries but in a rich country so dedicated to the idea of education like the USA, I think the increase in Illiteracy would be very small to zero.

hopaulius writes:

@JB7 Arguments that government welfare programs must ever be sustained for the sake of the children view the situation in static terms and ignore the possibility that changing incentives might change parent behavior over time. They also ignore the exploitation of children by dysfunctional parents who want children in the home in order to increase the size of the government check. Finally, they view government as the sole savior of distressed children. How many aunts, uncles, and grandparents let their nieces, nephews, and grandchildren stay in dysfunctional parents' homes because government welfare is keeping them afloat?

JB7 writes:

@Ken B

I certainly don't dispute that "incentives matter, that there are real returns on investment, and that shifting resources affects productivity." But what does that have to do with my post? I didn't argue that incentives don't matter, but rather that our relatively modest social programs are defensible on the grounds that they benefits people who I, quite frankly, think are deserving of our sympathy and incapable of responding correctly to incentives through no fault of their own--children, the handicapped, the short-term unemployed, the mentally disabled?

@Floccina

You write, strangely, "in this day of a shortage of adoptable kids, there is the option of voluntarily putting the kids up for adoption if things get to bad." Im not even sure how to respond to this statement. Clearly no one who understands the foster-home system in this country can imagine that it is doing justice to the children in it. Also, the Third World is teeming with children who would benefit from adoption. More children on up for adoption would like crowd out Third World adoptions. Also, your point about the laws that take children away from negligent parents seems to betray your own (I presume) libertarianism. Those laws clearly represent a big exercise in state power. I'm not sure I disagree with the laws, but they certainly aren't very libertarian.

@hopaulius

You, like Caplan and others who have disagreed with Dickens's and my points, have really failed to engage with the concrete welfare state as we have it today. Yes, obviously incentives matter, and I fully accept that the welfare state can warp people's behavior in a negative manner. However, you really ought to brush up on the 1990s welfare reform and familiarize yourself with the specifics of the actual social programs that we have. For me, this was the most important part of Dickens's post. You seem to be stuck in an AFDC mindset, when what we really have is TANF--a relatively small ($17 billion a year, a pittance in the federal budget) program with a 60 month limit on benefits and work requirements. There's little reason to believe that this, or any other social program, is really incentivizing unemployment in the long term. Before anyone keeps hammering away about incentives and dependency, they really ought to read carefully what Dickens had to say about the actual functioning of the welfare state, rather than the hypothetical fiction that libertarians and conservatives love to argue with.

Ken B writes:

I am a little amused at the notion that government spending is 'for the poor'. Take the amount the federal government spends, deduct for the sake of argument all military and law enforcement spending. Look at what remains. If even half of that were really spent 'for the poor' we wouldn't have any poor.

sieben writes:

Why not just ask Caplan point blank if he'd support abolishing government welfare for children?
My gut is, he would. And it would have nothing to do with whether they are deserving.

But this is a red herring anyway. The only reason Bill Dickens brings up child welfare is to change the subject. Brian wants to talk about the undeserving poor, whether they are on government assistance, private charity, or receive nothing at all.


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