Kill the poor

"Kill kill kill kill kill the poor tonight," sang the Dead Kennedys as they imagined slashing the welfare rolls by dropping neutron bombs on crime-ridden urban ghettos. The late-70s, early 80s punk band saw themselves as giving voice to a right wing fantasy — ridding the world of worthless parasites who drained their wallets and had no respect for an honest tax avoider’s hard-earned property.

Now a new report by Prince’s Trust is claiming that a generation of chronically jobless young people is costing Britain billions of pounds in welfare handouts, lost productivity and crime. The problem group are known as known as NEETs — not in employment, education or training. And according to the Trust’s chief executive, Martina Milburn, "These young people lack confidence and faith in themselves. They are disenchanted in their core."

In a recent piece for the Guardian journalist Edward Pearce strikes a Dead Kennedyesque note when he writes that "by the criteria of proper global free-market Hobbesery, the thoughtful response of the Neets would be to die."

Pearce blames Friedrich Hayek for this callousness. Thoughtful conservatives might want to extend a helping hand to those who aren’t coping in the free market — after all, this is what the welfare state was designed to do. However…

That was the serfdom against which Friedrich von Hayek warned, and from which so many people have clearly escaped. He never used the language of Ayn Rand, outraged that the fit should bend an atom to temper life to the unfit, but this soft-spoken man, stressing the creative capacity of an unconfined economy, made such talk respectable. Along a subtly graded spectrum, we can make our way from Hayek to Ivan Boesky, greed is good and its corollary: being poor is a crime.

It’s not hard to see how Rand might have encouraged her followers to despise the poor. In an essay titled ‘What is Capitalism?’ she makes it clear that she thinks there is no thing as a right to welfare — even for the disabled. "misfortune is not a claim to slave labor" she insists; "there is no such thing as the right to consume, control, and destroy those without whom one would be unable to survive."

For Rand, self esteem flows from ability and achievement. And except for a small number of disabled unfortunates, lack of achievement is a personal choice — a failure of will. It’s easy to imagine that Rand would rather have died than live life as an incompetent loser who survives on the ability of others. Nobody could ever accuse her of compassion (or of economic literacy).

But did Hayek share this view? While he never showed much concern for welfare recipients or low paid workers he does not seem to have blamed them for their lack of economic success. Instead he had a far more realistic view, arguing that:

It ought to be freely admitted that the market order does not bring about any close correspondence between subjective merit or individual needs or rewards. It operates on the principle of a combined game of skill and chance in which the results for each individual may be as much determined by circumstances wholly beyond his control as by his skill or effort (p 172).

As for the idea that greed is good, this seems to be a corruption of Adam Smith’s insight that "By pursuing his own interest" an individual "frequently promotes that of the society more effectually than when he really intends to promote it." Hayek certainly agreed with that. In a large scale industrial society, the market enables people to take care of strangers by consciously taking care only of themselves and their families. But Hayek also understood that a free market needs to be combined with a government safety net — a minimum below which nobody should fall. Unlike Rand he did not believe that poverty was always the result of choice or lack of talent.

So if Hayek is right about markets then how could it be that being poor is a crime?

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14 Responses to Kill the poor

  1. AJ says:

    I think you could probably trace back the same split between the moralist strain and the utility strain of liberalism to the very beginning of the tradition. One just has to look at Locke and Smith.

    In his not very often cited submission to the poor law commissions, Locke, while accepting that assistance to the poor should exist, as part of the natural law of self preservation that any legitimate government was bound to protect, the limitations he wished to impose on those subject to the laws was decidedly illiberal. Among other things, he wanted all the poor receiving parish assistance to have their names noted down in the parish

  2. Paul Frijters says:

    Its strange to blame economists, even Hayek, for statements about the innate worth of the poor. Right at the start, economics was called the dismal science because its proponents believed in the innate equality of people, which implies an equal right to live and some minimum right to consumption. As fas as I know Hayek was a great sympathiser of those early economists and their ideals.

    Indeed, if I have to make a judgment call about the average sympathies of economists it would be to say that economists are on the side of the nation state and its bureaucracy. We by and large elevate policy advice and the decisions a social planner should make as the desired outcome of their scientific enquiries. And we still explicitly model everyone as of equal worth; we almost never model any innate importance of property or even liberty; but we nearly always model the notion that an extra dollar to a poor man taken from a rich man will improve societal welfare. Its closer to the truth to call economists practical socialists rather than innate market adepts. Property rights and markets are means to an end, not an end in itself. In mainstream economic thinking, there’s no such thing as an innate right to the spoils of ones’ market interactions. There is just utility of consumption and (dis)incentives.

    AJ’s story of Locke is fascinating. I never knew. I have known and know many people though who think that the poor should know their place in society and should acknowledge that anything they get, be it from the state or from decentralised sources, is a form of charity for which they should be visibly grateful and humbled by. To put it crudely: they want the losers to acknowledge their standing and to acknowledge their low status publicly and constantly, just like Locke seems to have wanted. On that point I dont know where the average economist stands.

  3. Don Arthur says:

    AJ – Thanks for the reference to Locke’s ‘An Essay on the Poor Law’. I hadn’t read about Locke’s views until you mentioned them.

    Paul – You say that many people:

    …want the losers to acknowledge their standing and to acknowledge their low status publicly and constantly, just like Locke seems to have wanted

    I think you’re right. The sight of welfare recipients who are unapologetic and insistent on their right to the dole makes many people angry. After all, haven’t taxpayers earned their incomes?

    And what’s the point of slaving away in a mindless, unsatisfying job if you end up getting no more respect than a dole bludger?

    It seems to me that small government activists at places like the CIS encourage these sentiments. Writers like Lucy Sullivan have made a point of emphasising the ways poverty can flow from bad behaviour.

  4. Jason Soon says:

    Shock! Horror!
    The Mises Institute exposes Friedman and Stigler’s socialist past!

    http://mises.org/story/2530

  5. Amused says:

    Being ‘poor’ does not equal indigent and unemployed, although it may well include that category. What of the poor who are gainfully employed and work hard, long hours? To what do we ascribe their position? Lack of personal capital? Failure to choose parents wisely? Are the labouring poor that constitute the Chinese working class, and around a quarter of the world’s working class, indigent failures, or heroes of the new dispensation?

    What of the world’s peasantry. No slouches they. Work day and night they do, and live if not on the smell of an oily rag, then at least on around 40% of the calories that anyone blogging here do. An inspiration, even to CIS types I would have thought. Positively stakhanovite in their devotion to humble, ceaseless toil. But ‘respect’ ah well, that results from a number of factors, not the least of which is fear, I fear. There is nothing like the franchise, and failing that, a whiff of grapeshot, to keep the insouciant in line. When that happens. the number of indigent and absolutely miserable toilers, tends to fall.

    It’s a kind of ‘strucutral adjustment’ from below as it were, and from time to time, it appears that we just have to apply it again, just to remind a few irresponsibles, that just throwing ‘hard work’ at a problem, is simply inadequate as a means for dealing with the indigent, the inadequate and the frankly scary.

  6. Don Arthur says:

    What of the poor who are gainfully employed and work hard, long hours?

    Amused – Ayn Rand gave this issue careful consideration and decided that, in a free market, the working poor are bludgers:

    If some men do not choose to think, they can survive only by imitating and repeating a routine of work discovered by others

  7. Rafe Champion says:

    Don, there’s not a lot of point in arguing about Rand’s ideas at all because they are not represented by anyone in Australian politics that I know of.

    What if you try arguing with Mises on liberalism and socialism?

    The peasants of the world need to be offered an alternative, along the lines of the so-called sweat shops which give them a chance to do better and accumulate some capital beyond subsistence. Even Bono is onto that!

    http://catallaxyfiles.com/?p=2732

  8. Patrick says:

    I will second that three cheers for ‘sweatshops’, actually. I can’t stand sanctimonious union preaching about ‘human rights’ and ‘minimum labour conditions’ given that the subjects of their faux concern, whilst perhaps those most in need of our help, are actually their victims.

  9. Bill Posters says:

    I will second that three cheers for

  10. Angharad says:

    I think the point of the Princes Trust research isn’t about providing more welfare, it’s about investment in changing the environment of NEETs. It’s more about the benefits of investment than the burden of NEETs in the first place.

    And you are disingenous quoting the Dead Kennedys as “giving voice to a right wing fantasy” – they were exposing the lie and arguing the opposite.

  11. Don Arthur says:

    Angharad – I agree with you about the point of the Prince’s Trust report.

    Do you think that Edward Pearce is right about the way some right wing Americans respond to poverty? He writes:

    Rightwing Americans, moralistic about being rich, find something particularly disgraceful about not being rich. It is failure, and a failure that, in an off-Christian way, positively deserves punishment.

    Anti-poverty campaigns usually begin with a shocking discovery — that poverty and disadvantage are serious problems and are getting worse. The statistics come first and then the policy proposals. But if Pearce is right then some of the public don’t respond in the way the campaigners expect. Instead of supporting the kind of constructive suggestions groups like the Prince’s Trust propose they become angry at the poor.

    And yes, the Dead Kennedys were satirising right wing fantasies not endorsing them. Maybe I should have made that clear.

  12. Angharad says:

    I don’t know enough Rightwing Americans (or indeed Americans) to be in a position to know how they respond to poverty, so can’t answer that.

    And I don’t know that the Prince’s Trust report is necessarily coming from an anti-poverty perspective. Although there’s that aspect of it.

    I’ve got a fair bit to do with early intervention programs mostly based in areas of high disadvantage. Nearly all of them, and nearly all the UK ones have a public face as community development – a soft feel to them. But most of them come from a crime prevention model that starts from an assumption that if you engage with families when the kids are little you can make a difference. There are robust studies here and in the UK that show the hard economic and educational outcomes, along with a reductions in crime over time. And you achieve this by assisting families to keep their kids engaged with school, by helping parents to be better parents etc.

    The sort of stuff the Prince’s Trust report is saying is the cost of not doing that stuff. All the benefit cost analyses I have seen have shown that an investment in crime prevention through what looks like soft engagement, actually has hard, positive outcomes over time.

    And that’s a message that governments, and increasingly philanthropy, like and are prepared to invest in – certainly in the UK, less sure about this in the US. Kind of hand-up, not hand-out. Perhaps it’s how the message is packaged.

  13. Don Arthur says:

    Angharad – For me the most disturbing thing about US welfare reform over the past 15 years is the focus on pushing single mothers into work while neglecting the needs of their children.

    There’s been a harshness to the debate, where out of wedlock child-bearing and welfare reliance is portrayed as a deliberate lifestyle choice. Think tanks like the Heritage Foundation argue that helping parents with welfare harms their children. For them, the obvious response is to discourage out of wedlock child bearing and joblessness by cutting the government assistance that supposedly encourages these behaviours. And whenever the issue of children’s needs comes up they want to talk about adoption.

    Children have become collateral damage in the free market movement’s war against big government. It suits them to argue that disadvantage is voluntary because it discourages public support for government interventions.

    I agree that the promising policies for dealing with disadvantage are early intervention programs. I’d like to see Australian think tanks like the Centre for Independent Studies engage with the research on child development and early intervention programs. It’d be refreshing to have policy debate guided by evaluation findings.

  14. Angharad says:

    Don, here’s an Australian example of a collaboration between Griffith University and an NGO that does exactly what you are suggesting the CIS should do. This program wasn’t funded by government however, it was and continues to be, funded by philanthropy.

    It has already been highly influential in developing a couple of federal and State government programs using the same approach – even before this evaluation came out.

    I do think the US treatment of single parents isn’t a useful approach. It’s good to help sole parents re-engage with work, but I think US style approaches aren’t in anyone’s best interests, kids or parents. And are probably not in the best interests of the economy – unless the sole goal is to provide a workforce of low-paid, casual workers who are motivated by absolute necessity to turn up at work, regardless of the needs of their kids.

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