September 7, 2015 by Liberty
If you’ve been linked to this page then you’ve probably asked about how the poor will survive without the government there to provide a safety net. It’s an interesting question and just about any libertarian would sympathize with your reasons behind it.
No one wants to live in a world where people are starving in the streets. Hell, I don’t give a damn about most of my principles when it comes to the preventable suffering of another human being. We live in a world with enough resources that no one should be suffering from a lack of food. I do not want to live in any society that doesn’t fight for a solution to this problem. That is exactly the reason that I don’t support government welfare.
There is a problem with the basic question most people ask about poverty. People regularly ask how we can help people in poverty but people rarely ask how how we can prevent poverty in the first place. Treating poverty with subsidies can help but wouldn’t it be much better to have a vaccine for it in the first place?
Poverty & Absolute Poverty
Before going too deep into the nitty gritty details of poverty. I feel the need to clarify a few things.
For the most part, when I refer to poverty in this article. I am referring to absolute poverty (or maybe slightly broader.) Absolute poverty is poverty where basic human needs aren’t being met. That means someone isn’t eating enough calories or they’re sleeping in the elements. Absolute poverty is someone struggling to literally survive.
Non-absolute poverty is a much more hazy and useless definition. It’s completely based on cultural factors. While there are some government definitions, those definitions mean very little without factoring in a ton of economic factors.
You cannot cure non-absolute poverty because it’s more cultural than physical. To try and solve non-absolute poverty is impossible because it’s just a pointless definition. In America, we consider people that can afford iPhone’s, excessive calories, and basic housing in poverty. Of course, a family in a poor African nation will look at these people like millionaires.
Some people have more than other people. That’s non-absolute poverty. Given a random set of people, some people are bound to have lower incomes, assets, and resources than other people. Even in a society with almost no disparity between rich and poor, some people would be defined as poor while others would be defined as rich. (If everyone made between 90k and 110k a year on a bell curve, the 90k income individuals would be in poverty by non-absolute definitions.)
Absolute poverty is where people are actually suffering. That is where we need to look for a solution. Non-absolute poverty is an impossible to solve problem because no matter how many times we “solve” it the problem will constantly redefine itself.
The Government Solution To Poverty
Let’s go back to something I said earlier. I would absolutely hate to live in a world that didn’t try to alleviate the suffering of the poor. That is exactly why I can’t support government welfare.
If you’re like most people, this probably doesn’t make much sense to you but please stick with this for a minute.
People tend to assume government actually solves the problems it claims to solve. That really isn’t so clear though. Looking at the statistics it could just as easily be argued that the government “solution” to poverty is just exacerbating the problem.
Lyndon Johnson said the following about the goals of his War On Poverty:
“…not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”
Quite frankly, it sounds just like what I believe in but here is where it takes a terrible turn. (Well… I could argue it takes a terrible turn much earlier but that’s not relevant to this subject.)
To understand why it’s so bad, we need to look at the history of poverty in America. In 1947 over 30% of people were in poverty in America. For around 20 years after that, poverty reduced consistently all the way down to around 12%. That was around that time that the War on Poverty started.
Immediately after the War on Poverty started, poverty reduction stalled. Yes, poverty stopped reducing as soon as the “war on poverty” started.
Welfare has not worked. Funding has been increasing every year and results haven’t gotten any better. Later on in this article I’ll go over how it’s actually hurting too.
More important than the failure is this though. The stated goal was to cure poverty. Since the evidence has overwhelmingly showed a dismal failure of that goal, why hasn’t the system been either completely overhauled or stopped. I’d argue that’s because government is more interested in politics than solving societal problems but one thing is clear: Government is sure as hell not trying to solve the problem of poverty.
“So… Wise Guy… What’s Your Solution?”
Yes. It is easy to knock the current system without offering any solutions. I’m sure you’ve heard plenty of people do that in your life. I’ll be offering a ton of options to help solve poverty without the use of government later in this article but there is a much more important point to hit.
If I thought it were possible for one person to offer a solution to a problem as complex as poverty, I would gladly offer that person my backing in the use of government force. That being said, I don’t believe it’s a simple enough problem for one person to solve. In fact, I don’t think hundreds or even thousands of people are currently smart enough to solve poverty. I believe it’s a problem that requires the participation of millions or even hundreds of millions of people to come to a solution. That means, anything I say about it might as well be pointless babble.
The free market encompasses hundreds of millions of people into solving the problem of poverty. In the absence of the price mechanism, communism led to the deaths of millions of people. In the time before welfare, the free market (or the free market available. It wasn’t a completely free market.) was reducing poverty year after year.
Honestly, I’ll offer some ideas, but I don’t know how to solve poverty. Government may claim that it has the solution but it’s record proves the exact opposite. Millions of people working without coercion have shown that they can reduce poverty before government got involved. I trust results significantly more than I trust anyone’s blind claims to know the solution to poverty.
A Land Before Welfare
What happened before welfare was introduced in America? How could poverty have been reducing so dramatically?
Some people have this strange view that people were dying on the streets before welfare came in and saved people’s lives. This is actually pretty far from the truth. The vast majority of the poor and sick got well taken care of.
The first solution people had to these problems was one you’ve obviously heard of before but you may not completely understand the history. Private charities to help the poor were significantly more influential before the government stepped in and pushed them out of the way.
Just like any government program, welfare is just a less efficient form of the free market solution. A private charity is required to please it’s supporters. Government has no requirement to do the same (just look at congress’s sub 10% approval rating with huge incumbent reelection rate; over 90% regularly.) Most importantly, you can’t stop sending your money to the US government if they fail to meet your standards.
Historically, people could give money to charities that showed results and stop giving money to charities that were poorly run bureaucratic messes.
The second solution is one that you’ve probably never been taught.
Do you know how organizations like the Freemasons started?
They started as a mutual aid organizations. Before welfare, there were organizations that offered insurance for absolute poverty, health care, unemployment, and a multitude of other problems. All of these organizations were voluntarily joined. These private organizations existed with no government intervention. The cost for a year’s membership was sometimes as cheap as a few days work for it’s members (sometimes less.)
These organizations ran significantly more efficiently than any government organization could because their members could leave (and stop paying) if they were dissatisfied with the helpfulness of the organization. Of course, I can’t opt out of government welfare. I’m forced to pay no matter what.
The free market developed these superior solutions long before government intervened. That’s why poverty was reducing year after year.
Why did these organizations go away? Of course, what’s the point of paying a mutual aid organization when you’re forced to pay for the same service from government? It’s just like government taking over any business. When the government has a monopoly over the service, the competition dies out.
What if I told you welfare systems designed by government tend to favor the rich over the poor?
The Poor Scare The Rich
Capitalism is the least friendly form of societal organization for the rich.
People with a lot of money benefit least from capitalism.
That probably sounds a little hard to believe based on everything you’ve ever heard but it’s true. The fear of people in poverty has been the fundamental motivation for guilds, minimum wage, unions, and hundreds of other government led actions.
Poor people have the ability to beat absolutely any price offered by someone with more resources. Imagine you’re a middle-ages helmet maker. You have a pretty good career. You certainly don’t have it that bad in comparison to some people. That being said, you’re constantly haunted by poor people developing the helmet making skill and driving your prices down. That’s where guilds came in. A bunch of helmet makers got together and used the power of government (not capitalism,) to force the poor out of their business.
Capitalism was driving craftsmen into competition but government pulled them above it.
Without government, these craftsmen would have been forced to compete. Of course, this problem of poverty is even more dangerous for the rich.
Let’s say there are two similar businesses. One business is owned by it’s employees. Another business is owned by a wealthy businessman. Both businesses will have similar expenses. If it was a laundromat, then both businesses would need employees. Both businesses would need machines. Both would need repairs. Both would need water. All the expenses would be similar but look at the profits.
An employee owned business could split the profits among the employees. The other business would need to split the profits between the employees (through wages) AND the owner. Suddenly there is a discrepancy. The employee owned business can actually lower their costs more than the wealthy businessman because the wealthy businessman is a completely useless expense.
The wealthy businessman can only compete so much because he will always be a useless expense on the business. He could only lower his profits so much to compete before he’d make nothing and his competition could still make their regular wages. Odds are he’d leave the business before competing.
(Sure, there are ways the wealthy businessman could try and nullify that disadvantage but they cost more money and again, reduce his profits.)
When government stays out of businesses, business owners need to compete with each other. While today, banks can throw out as many bad loans as they like while staying in business, there was a time (be it a small time when it comes to banks) when they were forced to compete with security. Banks that were driven out of business would lead to many very rich people needing to start from the bottom.
Throughout history, government has always been (and likely will always be) a tool to be used by the rich. While historically, the rich individual’s money went straight to the king. People have realized how dangerous that really is. That means they take a bit more of a complex route through election contributions, backroom deals and hefty job offers. Fundamentally though, it’s the same old power structure.
(Just think about this. How could the same congress that passes company bailouts still pass welfare? Because both help the people with the money.)
There is no reason to add more layers of complexity to the same old system. It’s time to start looking for a new way.
The Poor Aren’t Stupid
I feel like it’s one of the most common mistakes of people trying to “protect” the poor. They completely insult the poor by acting like the poor are just plain stupid. This is a mistake in so many different ways.
First of all, poor people aren’t all poor involuntarily. I spent a large percentage of my life in poverty. I had the means to get out of it but I was consciously using my time for things I preferred to earning more money.
Then when I considered leaving poverty, instead of getting a job and living comfortably, I stayed in poverty and used my resources to develop more income for my long term prospects. (College students are poor too but they’re going to end up better off than many people that go right to work.)
I can remember talking to a former co-worker while I was in fast food. He left the fast food job for a couple months but then came back. He had a good job training opportunity to become a plumber. I asked why he came back instead of sticking with the job training. He told me, “I couldn’t get food stamps if I kept that job. I make more working here for fewer hours than I do at that job working 60 hours a week at that job.”
Don’t think for a second that a good portion of poor people are incapable of making intelligent calculations. Many studies have shown people can make more off welfare than minimum wage. (That being said, most people don’t qualify for all that welfare. It’s an odd thought though.) Considering you don’t need to work any hours a week for that income, that’s a pretty obvious advantage.
Working in fast food to pay my way through college, I heard tons of similar stories from people I was working with. Do not insult these people by pretending they’re not making rational calculations with their time.
The Government Officials Aren’t Stupid Either
People subtly insult the intelligence of poor people but people downright attack the intelligence of most government officials. People have this strange belief that government officials really think they’re doing good things but just happen to screw up. People think, “sure, they may have screwed up welfare but they tried really hard. They’re still trying hard.” This is a major miscalculation.
Think about it this way. Most politicians run their campaign scientifically. They use empirical evidence to try and get themselves the edge in votes. They have experts managing every factor that they can get their head around. Sure, they may have a few key issues that they choose on principle but those issues aren’t core in their decision making process. They have experts telling them, support this, and don’t support this.
One look at the welfare program in America shows clear evidence that welfare doesn’t reduce poverty. It didn’t even have a fraction of the improvement promised. The experiment has obviously failed. So, what’s the logical thing to do if results are your goal and your experiment failed? Start over.
Now consider this: Assuming people are as well-informed as they are today (not at all well-informed), what is the logical thing to do if your goal is to get more votes? Increase funding to welfare.
After Welfare Ends
I hate to be so blunt but welfare is going to end. This is not a political statement. This is a mathematical one. Welfare (for rich and poor) has been increasing at such a ridiculous rate that it would be absolutely insane to predict its survival. There isn’t a rational economist in the world that believes the system can survive without some complete overhaul.
There is no reason to believe the end of welfare would be a positive in the short term. In fact, just like any unnatural high, stopping it comes with a crash. Fortunately, the world has never been in a better place than now to recover from decades of poor financial management. While no one can predict the ultimate outcome. There are a few factors that seem inevitable.
In the last two decades the efficiency of the free market has increased at a rate more dramatic than any time in history. The common use of computers and networking has made the exact possibilities endless when it comes to solving poverty.
You can see a bit of this progress already. Microloans are making it possible to safely invest money with people that would traditionally be impractical to reach with loans. Notably, they’re being used for people stuck in absolute poverty that are trying to build businesses to help their communities. While 100 years ago, it would have been impossible for a person to invest a few thousand dollars safely and relatively efficiently, today it’s day to day business.
These microloans are making investing capital in poor areas significantly more profitable than it ever could have been in the past. That combination of profit and positive impact make the growth of these programs inevitable (with or without a government. More so without.)
Helping people in poverty is becoming a more profitable pursuit. That means, even if we completely ignored the charities that have been pushed out of the market by government, poverty would still be getting more money pushed into solving it. So, ideally, the answer to who will feed the poor, would be, themselves.
So… Who Will Feed The Poor?
I don’t know. That’s fundamental to understanding the situation. No one knows exactly how hundreds of millions of people will work to solve the problem of poverty. If they did, they’d have solved the problem by now.
What I do know is that people care about feeding the poor. Just the fact that you’re asking about who will feed the poor without government, tells me that you care about feeding the poor. It makes me feel confident that you wouldn’t let people die of starvation (I sure as hell wouldn’t.) The truth is virtually everyone feels this way. We all want to solve poverty.
We will all be working to solve it. That is, assuming we are culturally allowed to see the problem of poverty by our government. Government does not solve poverty. It has hidden poverty. It’s reduced the amount of money people give to charity. It’s encouraged dependence instead of independence. It’s taken more and more money from citizens all while watching the problem get worse and worse.
Millions of people in America are dependent on government charity for basic subsistence. Many of this people have never even learned that iPhone’s are a bad place to spend their money when they’re in poverty. At this point, sadly, they are now dependent because they never got to learn how to lift themselves out of poverty because government has offered it so long.
Generations are being raised to depend on government welfare. Imagine if a private charity had results as bad as government, do you think they’d still be getting donations?
There are millions of ways to solve poverty. You can increase employment through jobs, less regulation, better training, and so on. You can increase investments in bad neighborhoods to drive up competition, decrease prices, and again, increase employment. (Microloans are one way to do that.) You can invest in quality charities that have good records of helping people OUT of poverty instead of getting them dependent. You can privately help people in need. You can create mutual aid organizations. And I’m willing to bet you can think of even more, better ways to reduce poverty than I mentioned that don’t require using government. That’s the point.
All of these methods will be used (and some are being used) independent of government welfare. In fact, there will be more money for citizens to invest in these enterprises when government gets out of the dependent welfare system.
Who will feed the poor? Well… Who will grow the food without government? People that don’t want to die of starvation. People that want to make a profit. People that enjoy growing food. People that like to help their neighbors eat.
So, who will feed the poor? Everyone.
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