18 December, 2015

The bogus, self-serving notion that poverty is simple

In a recent article for The Week, Jeff Spross makes a fair claim against the standard "conservative" rhetoric that the real solution to the problem of poverty is for those in poverty to start working. He also addresses the position of some conservatives who say that we can never truly address the issue of poverty because it is such a complicated human problem. Mr. Spross points out fatal flaws with this claim, but fails to see the fatal flaw in what he presents as the solution.

To start with the flaws of the "conservative" solution he criticizes, Mr. Spross rightly points out that, in the so-called "advanced" countries, it is not as simple as going out and getting a good job. Thanks to the continued outsourcing of unskilled labor to "third world" countries, our own poor are deprived of the ability to simply go out and get a job which will provide enough pay for the basic needs of every day life; especially if they are trying to support a family. Instead, we have become a society where one already has to have ready access to money in order to get a job that pays well. You can't just graduate from high school and get a low skill job that will provide food and shelter for a family. It is increasingly the case that you have to go to college, or at least to a trade school, to get a good job, and that means that you have to already have access to money to get the education needed to get a job that pays even a subsistence wage.

Therefore, the typical conservative position fails to account for that large portion of the population that does not have the necessary access to money. These are the people they tell to go out and get better jobs, but don't seem to realize the true difficulties that exist in doing so. Ironically, they simultaneously want to cut funding for the education they need to do so on the basis that such government handouts inculcate government dependence. This failure to see the incompatibility of the solution they propose and their cutting off the means to achieve that solution is the fatal flaw in the conservative position. They don't see how their own economic beliefs and policies created the poverty that made social welfare programs necessary.

Mr. Spross finds it "incredibly galling when Brooks declares that 'surely the solution is to throw everything we think works at the problem simultaneously.' Because this is exactly what he and his Brookings-AEI colleagues are not willing to do." The "what" Mr. Spross says they are not willing to do is money. Mr. Spross is representing the so-called "liberal" side and advocating the idea that what needs to be done is for government to throw money at the problem. However, he is being unjust in claiming that Mr. Brooks and Brookings-AEI are not willing to thow everything they think works at the problem because that is precisely what they are willing to do. What they are not willing to do is what Mr. Spross and the "liberal" side thinks will work. Conservatives don't think that increased government spending on social programs will work, liberals do.

However, this solution by the liberal side is just as bogus and self-serving as that of the conservatives. It starts by setting up the false premises that modern society, defined as one where "land and infrastructure is governed by private property rights, where we trade money rather than goods, and where labor is highly divided and specialized," somehow prevents people from being able to learn the skills and obtain the capital and resources they need to provide for their own living. Mr. Spross seems to jump straight from "primitive" agrarian societies to modern industrialized capitalism without considering any of the economic history between the two. We are taken straight from the ability to stake out unclaimed land to needing to go to college or trade school.

This bogus premise becomes the self-serving basis of the so-called "liberal" position that the solution to poverty in a "modern" society is increased intervention and spending by the highest level of government. Looking at the level of national spending on social programs in other Western countries as an example to follow, Mr. Spross criticizes the US because its federal programs are too small, to diffuse, and too ill targeted. However this is a very simplistic view of how to address the problem of poverty. The economic situation in these other Western countries is rapidly approaching a more wide spread application of the so-called austerity measures, cutting back the programs Mr. Spross advocates because they are unsustainable. I maintain that the reason they are unsustainable is because they were too centralized, which made them too large to effectively target those in need. Mr. Spross claims that it was increased social spending at the national level that maintained full employment in the mid-20th Century, but it was actually a much more complicated formula of social programs, subsidies to large corporations, federal regulation favoring those same corporations, and easier access to personal debt. In other words, the perception of economic prosperity was false because it was actually based on people and corporations being economically supported by government and banks rather than being economically productive in a sustainable way. If they had been truly economically productive, and if this productivity had developed along the lines of supporting the wide-spread and independent ownership of production, then the need for government programs of assistance to the poor would have decreased.

The reality is that private property rights do not create a need for government programs to get the skills needed to earn a descent living. The earliest historical records reveal societies that already had land and infrastructure based on private claims to property. Even the "primitive agrarian" Mr. Spross uses as his example staked out unclaimed land, thereby claiming private ownership. Unless you discuss nomadic tribes or those striking out to form new cities, societies were based on private property rights and used some form of money to exchange goods for thousands of years before the rise of capitalism as understood by modern society. A look at different societies at different periods of time reveal that there is a way of providing the means to learn the skills and acquire the capital needed to be self sufficient. The establishment of wide spread private ownership of property and the guild structure during the High Middle Ages were key elements in nearly eliminating slavery, which was subsequently brought back by capitalism. The apprenticeship program of the guilds provided the means of support while learning the basic skills needed to do productive work. Once you became a journeyman, you could seek out further work and instruction to achieve the highest level of skill - that of master. When you were achieved the master level, you continued the process by having your own apprentices. It was these elements that allowed the slave to become first a serf and then a peasant - that is an economically and politically empowered citizen who was able to provide for himself and his family.

No, the solution to the problem of poverty is not, as Mr. Spross suggests, "as easy as pie." I've talked to people who know how to bake, and pie isn't actually that easy either, especially making a good crust. I do not say that government spending, including at the federal level, is no part of the solution to the problem of the poor not having access to a good job. It seems that this may be necessary in our current economic environment. However, I do not agree that the solution is as simple as having the government borrow, print and spend money.

If conservatives believe that the problem of poverty is too complex to be solved, it is because they are unwilling to see how economic liberalism increases poverty. Their blind adherence to economic liberalism prevents them from seeing this. If liberals believe that the problem of poverty is simple, it is because they are unwilling to see how political liberalism fails to actually help those in need to get out from under the state. Their blind adherence to political liberalism prevents them from seeing how the big state with a powerful centralized authority is unable to exist without big business. They don't see that increasing levels of centralized government spending will only enable big businesses to consolidate more wealth, pay lower wages and outsource more jobs. Big government supports big business not only through direct subsidies and regulations that give them advantages over small independent businesses, but also through social welfare programs which allow big businesses to ignore an economic problem they actually created.

The problem of poverty is one that we will always need to address. "For the poor you have always with you: and whensoever you will, you may do them good." (Mark 14:7) If we truly want to minimize poverty by helping people get out of it, then we should look at what has actually worked. This may sound like a simple solution, but it isn't because it involves changing our perception of economics and government to include subsidiarity and solidarity. It involves unlearning the lie that economics is a science that can be separated from ethics in any practical way. It involves working out the complex issue of how to achieve the wider establishment of private ownership without committing acts of injustice. These are not simple things. However, it is not so complicated that we should give up trying, or simply try the same failed solutions over and over again as though they will somehow produce different results than they did in the past.

Maybe it's time to try distributism.

3 comments:

  1. How does economic liberalism increase poverty? Lets say we have an ideal system where in economic liberalism can function without interference by central planners: For example, currency competition, banking competition, the absence of regulatory law that allow larger corporations to keep competition out of the market...ect...

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    1. I apologize for the long delay in responding to your question, but here it is.

      Let's take the ideal system you started to outline above. I acknowledge that you ended your list with "etc.", but I think one item you made a point to include is very revealing. The absence of regulatory laws that allow large corporations to keep competition out of the market. Those who advocate economic liberalism seem to believe that the absence of such laws would prevent large corporations from keeping competition out of the market. Economic history shows this is not the case.

      Economic liberalism seems to always rest on an underlying, often unstated, assumption that without regulation the market will automatically be fair and balanced and, therefore, free. However, this is simply not the case. Once one competitor gains any significant economic advantage over the others, he can use many anti-competitive behaviors to get rid of his competition. Using economic power to manipulate the power of the state is merely one tool in the arsenal. Now, advocates of economic liberalism reject this particular tool, but don't include anything to effectively prevent it.

      Economic liberalism also rejects any form of regulation that would effectively protect the competition from the large corporation. With the notable exceptions of fraud and theft, the large corporation is left essentially free to engage in predatory anti-competitive behavior in the market. Those who advocate economic liberalism are always praising the forces of the free market, but then do not criticize when the large corporation charges below market prices, or pays below market wages, or outsources labor to countries where the workers are essentially slaves. Advocates of economic liberalism always insist on ethical behavior, but they also vigorously advocate against anything to enforce it on the grounds that the imposition of ethics interferes with the natural market forces. In other words, everyone should exercise scruples in their business activities, but with very limited exceptions we can't do anything about it if they don't.

      Take wage negotiations. The typical argument I hear from so-called conservatives is that wage agreements are freely negotiated so there is no need for government at any level to interfere. However, are they really freely negotiated? What conditions are required for those negotiations to be truly free?

      In order for negotiations to be truly free on both sides, both sides have to have the same negotiating power. A multi-billion dollar corporation offering a low-wage job on the one hand, and a low skilled person who might face eviction and hunger (for himself and his family) on the other is an all too common situation in wage negotiations. There is no level playing field and the wage negotiations in these cases cannot be truly considered fair or free. Yet, instead of calling out the corporations for exploiting these people, the "conservatives" attack the poor and praise the corporation. Remember that government assistance programs started because corporations were paying miserable wages - not the other way around. If conservatives want to end these government programs, they need to exert pressure - economic pressure - against the companies that pay wages so low that they make these programs necessary.

      Ethical behavior is praised, but not required. It is good business sense, but nothing is in place to prevent it unless it reaches the legal definitions of theft or fraud. Practically anything that brings higher profits is hailed as good business practice even if it ultimately is made possible through some social injustice. Economic liberals don't look at the social costs of such things because that is not part of their economic formula - even if it is important to them, it is a side issue from economics.

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  2. Thank you for your question. Circumstances prevent me from making a detailed response at this time. I will try to do so next week. In the mean time, I recommend the Distributism Basics articles on this site - particularly the one on the science of economics - that offer some explanation. Additionally, I answer this to some extent in the article titled "Utopia," published on this site in December 2013.

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