Comments (16)

• RogerM

  Thanks for this excerpt! We need far more articles on poverty like this because poverty is the only economic subject that socialists are interested in.

  Published: May 1, 2007 9:04 AM

• David St. Hubbins

  The state can reduce the portion of poverty that is caused by the state to begin with.

  Published: May 1, 2007 9:42 AM

• TLWP Sam

  Why not just call a spade A Spade? If someone is poor it is because they are poorly paid and if they are poorly paid in a free market then they are simply not productive enough to warrant any serious payment. In other words poor people are unproductive people, period. You could lay claim to blaming society, government, taxes, history, your parents, etc., but plenty of people come from hard done by backgrounds and create a better life for themselves. The West has had it share of poor people who complain that it's too hard to become successful. Yet, every now and again, migrants come along with nothing but a hard-working ethic and they make something of themselves. They don't complain, just work, and before long, they rise up the ladder of society whilst the same poor people stay where they are.

  Ultimately, in a total laissez-faire world without any redistribution (voluntary or otherwise) there would be only two options available to a poor person (which are mentioned in New Testament by Saint Paul): work or starve.

  Published: May 1, 2007 10:37 AM

• Brad

  This is why we have the system we have. A purported Capitalist system in which the mice THINK they are working for themselves, so they stay productive, but have their labor taken in so many varied ways, and their future production liened to the hilt, that they are actually working for the State. Whatever equity one has is actually a loan. Statist education has dumbed down the average citizen to the point that they don't notice and mostly don't care.

  So the pie is kept as big as it possibly can, but the time is going to come when those who think they're getting a slice actually won't, or not anywhere near a big a piece as they expect.

  So our politico-economic system is perhaps the most evil. At least with an up-front Statist system you know what you're getting and you can fight it. With this "capitalist" system, it's a semantical game. It is held out as capitalistic, the "bad things" are blamed on it, but it truly is socialistic. But the bad things stick, justifying even more intervention, yet it is still call it capitalism. The truly socialistic construct will inevitably fail, and then blame the failure on capitalism!

  As far as reducing poverty, no it can't, because poverty is subjective. And soon, as medical research continues outside market forces, costs will continue to skyrocket, we will all be "in poverty" in some manner as there will be sliding scale of which medical procedures we can't afford that someone else can. This will then justify socialized medicine, which will be rationed, and real poverty will beset all.

  Published: May 1, 2007 11:47 AM

• Evans

  I deal with this problem as well in POVERTY:A Treatise On Its Principal Cause

  Published: May 1, 2007 1:23 PM

• billwald

  These days most of the people in poverty class are unemployable because of mental condition and/or addictions. These people should be institutionalized and only the state can do that. But this is a "free" country and the courts have determined that "mental" people have a right to beg, to eat out of dumpsters, and sleep in alleys.

  Published: May 1, 2007 5:57 PM

• Ted

  billwald:
  perhaps you could expand your comment?

  Published: May 1, 2007 6:22 PM

• Brainpolice

  "These days most of the people in poverty class are unemployable because of mental condition and/or addictions. These people should be institutionalized and only the state can do that."

  Then you support compulsory commitment for the mentally ill? As for mental illness itself, I'm more or less a Szasian on that.

  "But this is a "free" country and the courts have determined that "mental" people have a right to beg, to eat out of dumpsters, and sleep in alleys."

  If the bum is on private property, then of course the owner has every right to throw them out (however, this does not mean that they have to, for there is such thing as voluntary charity afterall). If the bum is on public property, I may as well consider it in a state of non-ownership and the bum to be a homesteader. The public property itself has no legitimate ownership; the bum is sleeping on stolen property without any discernable just owner. It would unwise to concede to the false idea that public property is owned by all of us collectively.

  The bum in the alley problem has been addressed by Walter Block in his case for free immigration (:

  Take the case of the bum in the library. What, if anything,should be done about him? If this is a private library, then theplumb-line or pure libertarian would agree fully with his paleo: throw the bum out! More specifically, the law should al-low the owner of the library to forcibly evict such a person, ifneed be, at his own discretion. Cognizance would be taken of the fact that if the proprietor allowed this smelly person to occupyhis premises, he would soon be forced into bankruptcy, as normalpaying customers would avoid his establishment like the plague.

  But what if it is a public library? Here, the paleos and theirlibertarian colleagues part company. The latter would argue that the public libraries are per se illegitimate. As such, they are akin to an unowned good. Any occupant has as much right to them as any other. If we are in a revolutionary state of war, then the first homesteader may seize control. But if not, as at present, then, given “just war” considerations, any reasonable interference with public property would be legitimate. The paleos or postponement libertarians take a sharply di-vergent view: one should treat these libraries in as close an ap-proximation as possible to how they would be used in the fully free society. Since, on that happy day, the overwhelmingly likely scenario is that they will be owned by a profit maximizer who will have a “no bums” policy, this is exactly how the public library should be treated right now. Namely, what we shoulddo to the bum in the public library today is exactly what wouldbe done to him by the private owner: kick him out.

  There are difficulties with this stance."

  "One could “stink up” the library with unwashed body odor, or leave litter aroundin it, or “liberate” some books, but one could not plant land mines on the premisesto blow up innocent library users."

  Published: May 1, 2007 6:51 PM

• Clayton

  I'm not in support of redistribution (quite the opposite); however, we should argue the facts and this statement is not accurate:
  
  

  "All schemes for redistributing or equalizing incomes or wealth must undermine or destroy incentives at both ends of the economic scale. They must reduce or abolish the incentives of the unskilled or shiftless to improve their condition by their own efforts; and even the able and industrious will see little point in earning anything beyond what they are allowed to keep. These redistribution schemes must inevitably reduce the size of the pie to be redistributed. They can only level down. Their long-run effect must be to reduce production and lead toward national impoverishment."
  
  

  As there appears to be no way to construct a practical lump-sum tax, the substitution effect must hurt the top end of the spectrum (as stated in the article). However, distributions could be structured as a subsidy on wages, causing a substitution effect TOWARDS work for the poor. We would trade highly productive time (of the wealthy) for unproductive time (of the poor) - reducing the average - but not strictly by lowering both ends as suggested.
  
  

  There are also potentially rational reasons to spend money certain ways, i.e. it may be cheaper to reduce the incentive to crime - with a wage subsidy - than fight the crime and spend resources jailing people after the fact.
  
  

  I'm a fan of solving the problems rather than aleviating the systems... but I believe the argument is strongese when there aren't weak (inaccurate) points so that the other side must argue the facts.

  Published: May 1, 2007 10:15 PM

• Renato Drumond

  "Can the State Reduce Poverty?"

  Well, the Hazlitt's book which his essay was extracted has a chapter called "The Role of Government". It's very interesting, and I think this chapter should appear on the form of essay too.

  Published: May 2, 2007 12:14 AM

• Todd Whitesel

  My response to the "poor people are lazy" argument is that our society is full of incentives to live in squanderville, because businesses profit more from wasteful consumer spending than from prudent spending. We tell each other to make good choices while swimming through a barrage of advertisements that nearly all try to get us to make bad choices.

  With artificially low interest rates, and no tax break on interest income, it is as if we are being punished for keeping our money in banks instead of Investing For Real and enriching brokerages. The tax deductability of retirement accounts is effectively regressive, giving rich people more usable money back than poor people. It is as if we have a silent barrier of disincentives trying to keep poor people poor.

  I support the FairTax because taxing consumption instead of wages is a far better incentive. It would take a lot of pressure off the trade deficit, reduce inflation as the net debt is reduced, eliminate the need for the ecology of industries that have grown up around the income tax, and encourage people at all levels of society to build up the national pool of available capital.

  What we have now perversely encourages people to live paycheck-to-paycheck, railing against The Man for screwing them out of raises and inflating prices to take what little they have left. It takes a lot of personal discipline to swim against that tide. Calling poor people lazy is like blaming the sinner for yielding after constant pressure to sin.

  Published: May 2, 2007 2:24 AM

• Prakash

  "All schemes for redistributing or equalizing incomes or wealth must undermine or destroy incentives at both ends of the economic scale"

  Can anyone prove to me via economics or praxeology how a georgist rent redistribution via a uniform citizens dividend will reduce the incentive to produce?

  The scheme i am postulating is a simple one. self-assesment of land,(with the ability for others to compel you to sell if they offer around 120% of your assesed value) taxation of land rent at a high rate and redistribution to all adults.
  

  Published: May 2, 2007 8:12 AM

• TLWP Sam

  Interestingly I s'pose in the inversion of 'what the State can do' to 'what would a laissez-faire economy do' is that a laissez-faire economy would simply remove all artificial barriers to making a living but it's going to be ultimately up to the individual to pull themselves up by their bootstraps (or become a professional beggar too I guess). And in a laissez-faire economy if poor people STILL can't make it then you can definitely blame the individual for their ho-hum plight and not government, business, men, women, panda bears, etc.

  Published: May 2, 2007 10:56 AM

• Jehu

  To discuss the current length of the work week and not mention the impact of the dacades long military buildup of the Cold War period (continuing even now untouched since the collapse of the Soviet Union) is probably the most egregious mistake of this rather flawed analysis.

  It is possible to confine oneself to theoretical arguments about this issue, but it really would have been more enlightening if the author had spent sometime explaining the decisions taken by the Truman administration with NSC-68, and its impact on the current length of the work week.

  The authors of that document directly stated the effort required both longer hours of work, and a larger proportion of individuals working.

  Expansionist Keynesian economic policy was then used, allowing, in the words of the architects, successive administrations to "siphon" off a portion of of this economic expansion to support a permanent global military infrastructure.

  Further, the author should know that only recently has the issue of a shorter work week been confined to discussions about poverty reduction, and 'share the work' schemes. The principle arguments have, instead, focussed on translating increases in productivity into greater free time for employees - a goal which needs no justification, since the primary goal of human work is to get things done, not making money.

  While it is unlikely that any scheme to 'create jobs' by reducing the work week will ever work, reducing the work week to enhance human enjoyment, and promote a more cultured society, always has.

  Published: May 23, 2007 10:40 AM

• billwald

  In the late 60's (?) 90% of the facilities for mentally ill people were closed under the theory that community help would be superior and cheaper. Didn't work because the community programs were not funded and because people don't take meds when they are feeling OK and mental patients don't voluntarially take meds when they are off their meds.

  Everybody gots to be someplace. There is no point to telling people where they can't go without telling them where they can go. This includes poor people, bums, dopers . . . mentally ill people. This country is sufficiently rich to provide minimum facilities for any mentally/socially incapacitated people. I suggest a return to the old "Grapes of Wrath" county work farms.

  But it irritates me no end when facilities for people who will never hold down a job are built in the middle of cities - on the most expensive real estate. I would love to live in Manhattan or San Francisco but the only people who can afford to live in such places are the rich and the poor. The middle class has been forced out.

  I suggest that subsidized housing be only built in areas with decreasing populations - the small farm belt towns. Places where welfare payments could contribute to the local economy. (You say poor people don't want to live in North Dakota? Breaks my heart.) This will never happen. Why? Because the rich local business owners would have to pay a living wage if hamburger flippers and hotel maids couldn't live in subsidized housing.

  I suggest another reason for welfare housing in large cities is that the Republicans have ceded the large cities to the Dems in exchange for voting welfare money to the cities. This keeps the bums out of Republican neighborhoods. For example, western Washington State. The Dems own Seattle, Tacoma, and Everett, where the working poor and welfare cases are concentrated. Don't the poor people want to live in Mercer Island and Mill Creek? Doesn't the Post Office deliver welfare checks to those towns? People on welfare seldom vote Republican.

  Published: May 23, 2007 12:10 PM

• billwald

  Second, if "time is money," then the result of every form of government is to transfer assets. If all govermental functions were done voluntarially then the result would be to transfer assets (one's life energy) from the volunteers to free loaders.

  Published: May 23, 2007 12:15 PM