Yes Libertarians really do hate the Poor
Libertarians can get very sensitive about accusations that they don’t care about the poor and down-trodden. Many of them go out of their way to say that even though they oppose the welfare state, they don’t think poor people should starve or be given undue hardship, and that charity and the forces of the free market will be able to make up for decrease in welfare payments. But is that true? Would getting rid of the welfare state and having a “free” market actually help the poor? Or will it only make things worse for them? Let’s analyze.
What does the Welfare state do?
The welfare state provides payments and benefits to qualified individuals. Welfare states are found in countries all over the world. The most common forms of welfare are: healthcare payments and subsidies, pensions for retirees, workers compensation, food stamps and payments for the subsistence to households of lower income.
Libertarians try to argue that these programs are not needed, and that the individuals receiving benefits could be able to obtain sustenance on their own in a free market and that in fact the welfare state makes them dependent upon the state. But is that really true?
The average recipient of the so called “entitlements” are elderly and disabled individuals who are unable to be gainfully employed due to infirmity and old age. Medicare and Social Security, by far the 2 largest federal benefits programs, is entirely catered to either people who are over age 65 or individuals who have met the designation of disabled. These individuals are physically unable to work and even in a “super free” market their physical limitations would prevent them from obtaining income through employment. The bulk of the welfare state is in fact geared towards such individuals, and the increase in welfare spending which we commonly see on charts and graphs put forth by the right wing is actually more correlated with the overall rise in median age of the western world, rather than an expansion of government into our lives. The notion of the lazy poor “welfare queen” is largely a myth, the average recipient of public assistance is elderly or disabled.
The proportion of welfare state spending is correlated with median age. It appears that with many people growing older, and the financial crisis wrecking pensions and 401ks, we have many elderly and disabled individuals who simply do not have the capacity to independently provide for their means. Even with state level welfare programs, the majority of recipients remain elderly and disabled individuals who are unable to obtain employment in the private sector due to physical impossibility.
In other words, the bulk of the welfare state spending is not in fact “discretionary” gift giving done for fun, these are sunk costs reflecting conditions in the real economy. If the welfare state vanished overnight, these individuals would still need to provide for their food, shelter and medical care. The old adage “there’s no such thing as a free lunch” still holds true. Saying that cutting welfare spending erases those costs is but a fiscal illusion, the real costs of having an aging society and a large number of people who cannot physically provide for themselves will still be present. They instead will just be shifted elsewhere.
Can Charity and the Free Market really make up for it?
“Wait a second”, says the Libertarian, “even if the welfare state is mostly covering sunk costs, if those costs were shifted to the private sector it would be a good thing because charity and the free market are better equipped to provide for people.” This is the dominant rhetorical strategy that you hear about what could replace the welfare state. They claim that the power of “voluntary” behavior, via the capitalist markets and charity would be able to come up with better, more creative and more efficient ways of dealing with these sunk costs. This argument can be incredibly seductive to some. But is it just a bunch of bullshit?
For the vast majority of the recipients themselves, obtaining wage labor to cover the costs of living is simply not an option because they are physically unable to engage in productive labor. The idea of a regulation free economy being able to cure this is preposterous, their physical condition keep them from engaging in such activities. Thus they will always be dependent on others to obtain the means of survival.
Charity
One way that the non-working poor would be able to obtain the means of subsistence in the non-welfare state economy could be charity. The laissez faire advocates say that charities are not only more efficient in that individual “social entrepreneurs” can better calculate and plan a competent strategy for helping the poor. Because charities tend to be issue oriented (addressing singular problems like cancer research or running a soup kitchen) they can better target specific problems and eliminate them in a way which the top heavy government cannot. Thus through the same “voluntary” framework of the capitalist profit sector, charity allows for more innovation and creativity in addressing these needs, according to the laissez faire advocate. The libertarian also celebrates charity as it is “voluntary” while taxation is not, therefore the moral purpose behind it is more “legitimate” in their eyes.
This of course could not be further from the truth. Empirical measurements of the efficiency of charities are not encouraging. The levels of fraud and waste in charities are often higher than those seen in government finances. While some charities are more efficient than others, the notion that they are somehow more efficient than government is a myth, many charities have a dollar inefficiency rate as high as 95%. This is even more damning when you take into account that many charities falsify or misrepresent their data. Unlike public expenditures, which are subject to review by the population via things like the freedom of information act, charities are privately run, and have the ability to distort all figures and hide them from objective evaluation. But those studies which have looked at charity as a whole paint a bleak picture with rampant inefficiency, fraud and abuse. Sending your dollars to charity is certainly no more efficient than having them work through the welfare state, and in fact the data suggests that charity is far less efficient than public welfare.
Of course this efficiency measure is only measuring a dollar effectiveness in terms of the money you give being used for the designated purpose of that charity. And the designated purposes of many, if not most charities, have nothing to do with alleviating or targeting the sunk costs which the welfare state addresses. Many charities like the Make A Wish Foundation, are not only posting dismal efficiency numbers, but the actual purpose (giving children with cancer “one last wish”) really has nothing to do with helping the poor. The same goes for those charities which fund cancer research or clean up the environment or help homeless pets. Even those charities which do seem to target the poor (like soup kitchens for the homeless or vaccines for impoverished African villagers) are not addressing the whole problem, the non-working poor suffer because of a lack of consistent income, giving them soup or medical care does not help that. Now one could try to argue that this is simply because the government is crowding out those charities which would provide income to the poor, but this too is an unqualified statement. Before the welfare state existed there were no charities which could provide fixed payments to the poor and elderly in such a dependable way as something like social security did, and indeed if such charities had existed we would have never had a need to create a welfare state in the first place! The focus of charities before the welfare state (and in countries which have much weaker welfare states) are no more altruistic than those in the countries which do have strong welfare states. There is no indication that the welfare state is crowding out charitable giving, and it seems that in all likelihood the welfare state is in fact performing a task which charity is unable to perform. Thus the welfare state is not crowding out charity, but complementing it.
Even if one were to ignore the significant statistical evidence which suggests that charity is less efficient than the welfare state, there is still great doubt that charities could replace the welfare state in the libertarian laissez faire economy due to lack of taxation subsidy. Truth be told, most of the private “voluntary” charities are quite heavily subsidized, sometimes from direct contributions from the state, but even more so because of the favorable tax policies put in place. Charities as non-profits, are not taxable in the United States. This stands in contrast to for profit entities and individuals who do have to pay taxes. In such an environment, those entities which are deemed un-taxable are in fact being subsidized by the state via the supply side. Say we have 5 people, I could choose to give one of those people $10, and I would be in effect subsidizing them, however instead of directly giving them money, I could also take $10 from all the other 4 and not take any from the last person. The real effects in either situation would result in my actions making that person $10 richer than he would’ve been had I not specifically targeted him for special treatment. Tax cuts, when done in a disproportionate way
such as that, do in fact act as subsidies, whose real effects differ little from direct subsidies. There is also the even bigger factor that taxable contributions by individuals and businesses are counted as tax deductions. That is to say, if you give a portion of your income to a charity, you can deduct that from your overall income taxes. This is a powerful tool that incentivizes charitable giving, and in fact many try to take advantage of this to lower their overall income, and perhaps if they’re lucky bump themselves into a more favorable tax bracket. Thus, when charitable deductions are taken into account, the charities are even more heavily subsidized by government action than they are from being tax exempt. Take my example of the 5 people and giving one $10, say that I make a rule which says that the other 4 people will only be taxed $5 if they give $3 to the tax exempt man, this lowers their overall tax burden and allows them to keep even more money. Thus, not only is the tax exempt man making $10 from the taxation subsidy, but he is also making $12 from the contributions of others. Now my rules alone have just enriched him by $22 (or perhaps $20 if one is to count $8 as the real loss rate of the others). Charities are extraordinarily subsidized by our income tax rules.
However, the libertarians actually oppose income taxes, and most of them would like to see it disappear and replaced by sales or consumption taxes. This would actually destroy most of the government subsidy to charity. If sales taxes were to replace income taxes, the charities are paying them through purchasing commodities to achieve their purpose, rather than being subsidized through tax cuts they are now losing money by being at an equal level. And furthermore, with the abolishment of income taxation, the incentive for charitable tax deduction is destroyed, thus they lose even more money. Absent some kind of corrective system which allows government to reimburse charities for their expenses via a rebate of sorts, the charity is at a substantial disadvantage, and even if a reimbursement measure existed, the charity would still be at a substantial loss because of the charitable contributions would be lower. Thus under the libertarian tax system, charities will have a substantial deficiency of capital inflows and in all likelihood would not be able to have the same broad applications which they can under our current tax system. This when combined with the inefficiency, lack of targeting of the poor and fraud which naturally exists in charities makes for a substantial loss of aid to the poor. The idea that charity could replace the welfare state or even being to approach its effectiveness in a libertarian economy is thoroughly preposterous. However, these facts won’t stop the libertarian from arguing his next point, which is to play up the ability of the free market to help them.
The free market
The libertarian will say next that charity would not be needed as much in the laissez faire economy because the de-regulation will increase productivity and opportunity which allow poor families to achieve even more income. The poor disabled elderly person will be able to live off of the money which her family members gives her, and since the free market increases their job opportunities, the families of these people will be able to support them and they will be just fine.
This argument, like the charity one, is bullshit. First off, what if a disabled elderly person has no children? Are they to starve and be ignored? Are they to beg assistance from stranger? Are they to look for charity? Well, we already know the answer to the charity question, because chances are their sources of charity are dried up due to an unfavorable tax code. No, in all likelihood, the childless elderly would have no one to look after, and they would be forced into utter poverty and humiliation, begging for pennies on a street corner. There is no doubt that the quality of their lives is substantially reduced in the libertarian economy.
However those who do have children are creating an even more insidious problem. By having to support your parents, the children are forced to begin work at a young age. The sunk costs of living (shelter, food, medical care) are not going to go away, and they require immediate attention. This means that instead of going to school and investing in one’s self, the children of poor families must begin work at an early age, an often times this is in unskilled labor as they are the only jobs which untrained, unprofessional young people are qualified for. This traps them in diminished opportunities, because rather than making long term investments in themselves, they are forced to cover the costs of their elderly or disabled family members. Education requires large investments which do not yield a return until well into the future, but grandma’s medical bills can’t wait that long, they need to meet significant costs in the present. Thus, going to college and then medical school to become a successful doctor is simply not an option for the many of these children, even if they are smart and capable of doing so, the time it takes to see a return from these self-investments is simply too great, and the immediate expenses of paying for their disabled family members takes precedence over any goals and dreams they have. Instead of going to college they trim bushes or flip burgers to pay for the here and now costs of their disabled family members. Furthermore, by having all of his income go to pay for the fixed costs of supporting a disabled family member, the children of poor families are prevented from making savings of their own. Even after their disabled or elderly family members pass away, the child finds himself in the middle of life without an inadequate nest egg. And because he has no opportunities to climb the ladder to higher income (because he never had the chance to get an education), the child is himself at risk. Because he has saved less money, he must delay retirement to as late possible, this creates downward pressure on the job market, increasing unemployment among the youth and forcing them to bargain down their work hours, thus depressing wages and overall income to these families. After a long hard life of working for miniscule wages, the child retires with very little savings to show for it, the lack of investment and savings means that when the child reaches old age or becomes disabled, he too must rely on the assistance of his children. Thus a vicious cycle emerges which keeps families in poverty for generations. The laissez faire economy creates a permanent underclass, and indeed the observations of the real world confirm that the laissez faire free market policies create this.
It is a bitter irony that vulgar libertarians like Hans Herman Hoppe claim that the poor are simply poor because they have “high time preference”, as if to infer some kind of moral defect. Because the conditions which the poor are placed create this high time preference in the first place. This cycle creates a Charles Dickens society, and indeed the Oliver Twist world had the economic policies which libertarians seek to enact. However, this is also a substantial loss for all of humanity, as humans are being under-utilized. It is a profound waste of human capital, one which causes a potential Einstein or Marie Curie to waste away in a factory or fast food joint, in such a situation not only is the intelligent poor person losing out, but society is losing out as well by not having the positive influence of her human capital being used in the most efficient fashion. Such an economic system is not only a crime against the poor, but a crime against all of humanity.
The libertarian may still try to argue that the lack of regulations give the poor more opportunity to be creative, someone like lil Wayne lifted his family from poverty by a capitalist system which allowed for free enterprise. This argument falls woefully on its face however, the increase in opportunity by deregulation would be slim, US markets are already quite liberal, there are very few productive opportunities which would be opened up if they changed. Furthermore, most start-ups require capital investment to get going, and capital for the poor is scarce in this environment, most of it is held by the rich and only used to invest in acitivities which enrich the financiers. So someone like lil Wayne may be able to make money by performing some trick if it helps out a rich record owner, but the overall availability of capital to the poor is quite scarce. And when coupled with the time preference increasing vicious cycle described earlier, there is no doubt that it actually decreases opportunities substantially for the poor.
Furthermore, the de-regulation includes curtailing of Civil Rights legislation which allows for people to work free of discrimination. The point of things like the Civil Rights Act and Americans with Disabilities Act is to make sure that the most qualified person gets the job, thus employers cannot refuse to hire solely on the basis of things like race, age, disability. If these laws were repealed there is no doubt that there would be an increase in these behaviors, making job opportunities even more scarce for these people. A poor, African American family with a disabled elderly family member to support would be at an extreme disadvantage. Thus, the idea that de-regulation and Charity can better provide than the welfare state is absurd. There is a reason why populations all over the world have chosen to have welfare states, welfare states simply work better than the alternatives.
Conclusion
In conclusion we can see that the Welfare state is not merely payments done for fancy out of emotive and naïve concerns. The Welfare state is mostly paying for sunk costs which would exist regardless, to say that cutting these programs saves money is but a fiscal illusion, the costs would merely be shifted onto the private sector. And once shifted onto the private sector they disproportionately hurt the poor, disabled and minorities in a way that is thoroughly unconscionable. There is a reason why rates of physical and mental illness are higher among the poor, and it is not because they are somehow morally defective, but because our economic system is morally defective. Although our system could be doing even more, the existence of a welfare state has greatly mitigated these effects and improved the lives of millions of poor people, giving them both relief and the opportunity to make investments in themselves to lift themselves out of poverty. It is the backbone which keeps the middle class alive, but unfortunately it is under attack.
There is one demographic which does share a heavier load of the burden for the welfare state, and that is the upper and upper middle class, affluent, mostly white members of society. There is no doubt that if the laissez faire economy was put in place, these people would see more opportunity, because the potential Einsteins and Marie Curies of the lower class are wasting away their lives in menial labor to support their family members, this actually creates a surplus of opportunity for the affluent and privileged. Simply put, because there are less poor people taking jobs in these higher paying careers which require substantial self-investment, there are more of these jobs available to the wealthy who can afford to make these investments. Also, the lower tax burden for the affluent means they get to keep more of their money, which means they get to control more of the capital in society. As the laissez faire economy is entirely private (meaning that all capital must come from private individuals) this means that this demographic will have even more social control by controlling most of the capital and controlling all production. Thus if the poor wish to advance themselves, it can only be done through investment of capital coming from this class of wealthy white men, and as only, they are only going to make those investments which benefit them. All production is being done to enrich this class of people, everyone works for them. Not only do white affluent males gain more economic strength in this model, they also gain more social power by being the sole source of capital for all production. This becomes even more curious when you consider that the majority of the advocates of laissez faire and the intellectual thinkers behind it, are in fact affluent white males, the very demographic which would benefit the most from the system they advocate. Perhaps they are simply well intentions but misguided thinkers, who legitimately think that their system helps the poor. But a more likely explanation is that they simply have lop-sided priorities, they value the benefits this system gives them more than they do the burdens it saddles on the poor. They know that there are substantial holes in their argument that laissez faire helps the poor and they simply choose to ignore them.
Just as the advocates of slavery and segregation claimed that their system helped blacks by upholding “the natural order of things”, the advocates of laissez faire claim that their policies will help the poor by doing the same. However, in reality, just like slavery and segregation, laissez faire is nothing more than a system which benefits affluent white males at the expense of everyone else. These individuals seek to reverse the great progress we have made, they seek to misinform the populace and make false claims. We must arm ourselves with the truth, for if we lose these laws and programs, it may be years before we ever get the chance to regain our progress. America it seems, cannot afford to repeal the welfare state.
16 responses to “Yes Libertarians really do hate the Poor”
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- - June 21, 2013
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The Hobbesian 
Good post, particularly liked the bit on charity.
Libertarians would obviously not be convinced as in the free market, everyone would be rich, or something. I’ve noticed that highly specific, difficult political questions – such as children supporting their grandmother, or this or that contractual dispute – are something libertarians shy away from, instead preferring more sweeping statements about how everything would be efficient and grand.
Who knows – Murray Rothbard would probably argue that Grandmother could sell the children (or vice versa).
“Good post, particularly liked the bit on charity.”
Thanks, I felt like I had to hit charity especially thoroughly because it is one of the most commonly invoked arguments and usually it is just done in passing: “charity’ll help em out!” However upon closer examination its clear to any reasonable person that there is no way that charity could possibly provide the poor with the same amount of resources as the welfare state does. It may keep them from falling off the edge into starvation, but it certainly isn’t going to help them in the way the welfare state does. And when you combine that with the regressive tax measures of laissez faire and the inability of the free market to provide them with more opportunity it is quite clear that overall they get a raw deal out of this whole thing.
“Libertarians would obviously not be convinced as in the free market, everyone would be rich, or something. I’ve noticed that highly specific, difficult political questions – such as children supporting their grandmother, or this or that contractual dispute – are something libertarians shy away from, instead preferring more sweeping statements about how everything would be efficient and grand.”
That is very true, most of the arguments I hear from libertarians of why the free market helps the poor is usually centered around broad concepts like GDP/GNP growth and technological innovations making things like cell phones and healthcare cheaper. It is basically done with the assumption that it is making the poor have better lives. However when you look at things like Gini coefficient and poverty levels when compared with welfare state expenditures and free market policies it is quite obvious that the poor are actually becoming even more entrenched in their social position. The “pie” is getting bigger but the vast majority of that growth is occuring in the slices belonging to the wealthiest percentile, the pieces belonging to the poor more or less stay the same over time. Which brings up the question of healthy growth which strengthens social and economic infrastructure and unhealthy growth which doesn’t. There is also the fact that most of these innovations which have made things cheaper occurred in countries with welfare states! The idea that welfare states and taxation are going to squeeze out incentives simply doesn’t add up, of course gross over taxation can cause that, but if done in a reasonable way all the incentives of the free market can exist in a society with a welfare state and in fact innovation may be even more common as the more efficient use of human capital (by allowing children of poor families to afford things like education and self investment) means that the smarter minds are able to find a niche more easily from where they can benefit humanity by using their strenghths. And of course there is the equally bankrupt argument that most of the reduction in poverty in countries which adopted the welfare state (which is around 20%) came from the market itself, this argument may have been believable when Mises claimed it in 1946 when the welfare state was in its infancy and we simply didn’t have the gross data, but in 2013 to say that all the reduction in poverty is 100% due to endogenous growth in the private sector is to ignore all the data we have seen which shows the strong correlation between poverty reduction and welfare state expenditures and the strong inverse correlation between Gini-coefficient and welfare state expenditures. And even if one goes out of their way to try to prove that welfare isn’t directly causing this growth and reduction in poverty one can easily return to the idea that by increasing the utility of human capital and lowering unemployment and so it really is creating a positive externality which allows for markets to function more efficiently. I will probably attack the libertarian arguments against the welfare state on another day, but for now this blog/essay focused more on the libertarian arguments of why laissez faire would help the poor.
“Who knows – Murray Rothbard would probably argue that Grandmother could sell the children (or vice versa).”
lol, actually I’m pretty sure Murray Rothbard made that exact argument on more than one occasion. And this actually reminds me of the latest blog/essay I am working on which tries to explore the role of morality in the economy and hopefully make the argument that economic and moral theories of value should be merged and that in many ways it is impossible to separate moral from economic decisions. And as things like price signals are ultimately showing us real conditions of the scarcity of a commodity and how it should be distributed, human morality is actually signaling us as to actions of social cohesion and which kinds of behaviors cause dysfunction and can be just as harmful on society as the shortages and inefficiencies caused by ignoring price signals. Libertarians have implicit in their arguments that people can simply shift their moral values (like selling off their kids) and everything will be a-ok, when in reality forcing people into such situations is actually harmful for society and creates more economic stagnation than anything else. Anyways, I will probably finish and post that one soon whenever I get the time/motivation to do so.
One more thing I wanted to say but didn’t, is that libertarians tend to view poverty purely as a numbers thing, that is to say that it is simply lower levels of income and wealth and that is all. Whereas I tend to view poverty as a complex social phenomenon which includes cultural differences. That is to say, poverty is more than just how much is in your bank account, it is something which creates class division and caste systems which end up harming both markets and culture by creating psychological and social barriers which can end up inhibiting capital flow in a way similar to that observed in the Lucas paradox. The libertarians try to argue that capital flows downhill like water in a free market, and they are correct, however just like how man builds dams on their waterways, social barriers end up being formed which dam up capital and keep it so that there is always more “water upstream” than what there is downstream. Libertarians try to get around this by denying that these dams exist or if they do trying to minimize them and make it seem as if any attempt at curbing these things will be futile. An of course I disagree with this and believe that people can in fact address these problems and any argument that it is impossible is silly and not really based in any observable data.
Sounds like an interesting post, look forward to it! 🙂
I am not a libertarian and I am not against the welfare state. But…
1) “the average recipient of public assistance is elderly or disabled.”
You apparently have no idea how one “gets” disabled in the US today:
http://thelastpsychiatrist.com/2010/11/the_terrible_awful_truth_about_1.html
2) Saying that libertarians “hate the poor,” rather than “libertarians are mistaken on this point,” is kind of a jerk move.
1) The link you posted does bring up an important point, obviously one simply needs to be labeled “disabled” by a doctor in order to be considered so and get welfare benefits. I have seen this process first hand and it can be kind of hazy. However, it reminds me of a conversation I had with one of my psychology professors back when I was in college. My professor made the statement in class that some opiate addicts need to be on Methadone for the rest of their lives as their addiction is so severe that they are simply unable to live opiate free. I was perplexed, as from what we had learned about the brain it appeared to be extremely resilient, people can bounce back from terrible injuries, brains can heal themselves, people like Gabby Giffords can heal over time from extreme injuries. Surely the brain of an opiate addict, no matter how severe, should be able to heal, your endorphin receptors can heal as they do in most people. I approached my professor after class and asked him that, why they are considered beyond help when there is no physical basis for saying brains can be permanently damaged from drugs. His response, was that I was probably right, the brains of these people should heal, there is no neurological reason for their permanent addiction. However, behaviorally, these people are unable to get off of opiates, which means that they simply have not responded to treatment to get off of it. While physically they “could” in theory get off drugs, in actuality, they are for all functional purposes permanently addicted. That is a simple fact of medicine that there are people who are permanent addicts, even if they don’t “have” t be permanently addicted. So how should a system function on those facts? Well, a therapist has to accommodate certain realities, if someone always gets back on opiates, and never gets off, they are for all functional purposes permanently addicted, and if methadone therapy improves their lives and the lives of their families then it is the most humane and logical course of action.
Now this fits in with welfare because there are some people who simply refuse to work, they can get diagnosed with “depression” by a doctor and get on welfare even if there really is no physical basis for that fact. The fact is that some people are unable to work, and there is very little we can do to make them work. The average person should actually prefer employment, you get more money and you are psychologically more satisfied, most people do prefer to work. So when you have someone who does refuse to work, they are outside of the norm, and keep in mind that the definition of psychological disorder is if your condition negatively affects your life. Now the conservative theory is that these people could work if they just had a good kick in the ass, but this logic is just as faulty as thinking that just because some opiate addicts could get off methadone that they will. For functional purposes these individuals cannot work, and they will live in poverty if we take away welfare, and their families are hit with those costs. You are really just forcing families and younger generations into poverty traps by falling for this fallacy. So we need to be careful in trying to undermine welfare on such logic, is welfare enabling these people like methadone can enable addicts? Or is welfare merely ameliorating a condition which would occur regardless of its existence. And I would suggest that much of these individuals fall into the latter category. Also keep in mind that many of the people on these programs do in fact have actual physical ailments and that those with “depression” only constitute one small part.
2) Yes it is a jerk move, but there are already plenty of articles out there that put it in softer terms that get ignored. I like to make it eye-catching. And the point is that after laying out the reality of how repealing the welfare state affects the poor, those who still support its demise should be inferred as some kind of hostility or lack of empathy for the poor. Trying to repeal the welfare state and claiming it helps the poor(despite the evidence to the contrary) is a bigger jerk move in my opinion.
Calling something what it is over using euphemisms is a jerk move?
Sounds like you need a sabbatical from your bubble. Try an empirical odyssey being without any of your comprehensively privileged support/credentials/resources/connections in a town you are not identified in for a substantial run with no cheating. That would mean beginning at a homeless shelter. A substantial run would be a minimum of six months. But it wouldn’t be incredibly authentic because you would have all you have to go back to and would want to recoup with a book deal or something that would end up exploiting the ‘profit’ you’d gained. Not to be confused with the profit that drives you currently. If you could or want to have the courage to do something like this. Then I would believe you have a sincerely informed opinion.
I’d meant my comment for you that appeared on the comment by thehobbesian 6-25-13 below yours.
It is hard to argue about what charity would do to make up for government programs when government confiscates upwards of 50% of income from citizens in the US. This is the real wealth of the people. Most have limited assets except for their ability to work and produce revenue. Excessive taxes confiscate half or more of out work, measured in our time and effort. Before judging the willingness of people to contribute to various charities, take a hard look at the theft of our property taken under force by our government on local, state and national levels. Libertarians are the only realists.
Libertarians are so greedy they won’t let me decide how their money is spent
So, I’m poor. Poorer than you. I’m also disabled and you’re not. Do I have the right to take money from you by force because of our relative conditions?
Private charities would weed out the large number of people who choose welfare as a way of life. Overhead would be cut in half. The high cost of collecting taxes (two-thirds of a dollar for every dollar collected) would be avoided. With these savings, contributions could be a tenth of current welfare funding-and the poor would still come out ahead!
Providing help more efficiently to those who can’t help themselves is only the beginning, however. Studies show that free markets, on average, create about ten times as much wealth as unfree ones. Not surprisingly, the needy in a wealthy society (e.g., the United States) are always better off than the needy in a poor country (e.g., India). Thus, deregulation, which stimulates wealth creation, helps the poor even more! A more libertarian approach would minimize the regulations which strangle the economy, thereby raising the standard of living for those on the bottom rungs of the ladder.
Ironically, free societies have a more even distribution of wealth than those which try to redistribute wealth forcibly! The reason is simple: free societies provide the best opportunities for the poor to work and grow rich. Conversely, a highly-regulated society creates poverty by destroying jobs, especially those of the disadvantaged.
During the 1980s, I gained first-hand experience of how government destroys opportunities for the poor to earn while they learn. For example, while rehabilitating a dilapidated apartment building, a young man who wanted to better himself came by hoping for employment. He had some disabilities that made him less than an ideal worker, but suggested that I hire him for about half of the current minimum wage. With experience, he hoped that I would pay him more or recommend him to others.
Fearful that our arrangement would come to the attention of the ever-present building inspectors, I declined. I only lost a potentially good worker, but the young man lost a chance to earn while he learned–thanks to the aggression of minimum wage laws.
The very laws that were supposed to protect this young man from exploitation actually impaired his ability to get ahead. While well-to-do youths simply pay educators to train them, the disadvantaged are shut out of the work force, sometimes permanently.
Some of my low-income tenants made their living by providing child care in their apartments or taking in mending. One ambitious woman was able to get work sewing curtains for stores and offices. The city regulators started calling me to complain that these women hadn’t paid expensive fees to register their business. The regulators threatened to serve me with zoning violations if I didn’t evict these unfortunates and destroy their livelihood. This time I refused to be intimidated and assured my tenants that they had my support. Unfortunately, most of them buckled under the pressure. They couldn’t afford the hassle and the registration fees, so most went on welfare instead.
Licensing laws destroy jobs-especially jobs for the disadvantaged and the minorities. Recently, Afro-American women in several states have started boutiques that braid hair exclusively. Cosmetology licensing boards have forced many out of work by demanding that these ladies attend a year-long program, costing an average of $5000, that doesn’t even teach braiding! In many cities, would-be taxi and van drivers can’t conduct business without paying exorbitant fees (over $200,000 in New York City) for the medallions (licenses). In some cases, the city or county won’t grant new licenses at any price.
Such government intervention creates a great deal of poverty by putting people out of work! Thankfully, the Institute of Justice, a libertarian law foundation, is fighting City Hall-and winning–on behalf of the braid brigade and the would-be drivers. The Institute’s pro bono service helps the poor help themselves. While big government caters to the special interests who benefit from high hurdles to self-employment, libertarians are defending the rights of the working poor. Such cases demonstrate that liberty, not government, is the true friend of the disadvantaged.
Government regulations not only put the poor out of work; they create homelessness as well!
William Tucker, using statistical analysis, found that 42% of homelessness could be explained by the high median price of homes in the 50 cities studied. The median housing price, the best single predictor of homelessness, increased as zoning regulations and stringent building or housing codes did. As a result, rents skyrocketed, pricing the poor out of the market.
When cities tried to protect the poor with rent control, the plight of the poor worsened. Rent controls drive landlords out of business. The few remaining landlords can pick and choose among applicants, so naturally they rent to people who are middle-class and most likely to pay. As a result, the poor have no place to go and often end up on the streets.
Government regulations, meant to help the disadvantaged, create poverty for them instead. On the other hand, liberty promotes prosperity, especially for the needy. Liberty empowers the poor with the opportunity to work and grow rich, just as penniless immigrants did in the early days of our nation.
Of course, a few people will still be unable to create enough wealth to support themselves. A libertarian nation, with its prosperity and better employment opportunities, will be much better equipped than today’s society to care for such individuals.
Government licencing, minimum wages, and welfare harm, not help, the disadvantaged. If we truly want to help the unfortunate, we must give them the gift of liberty. Nothing else will do.
Way too biased.You don’t even make an effort to be objective and then you make up stats like ” many charities have a dollar inefficiency rate as high as 95%.” You could make half a decent argument if you supported it with credible studies, but you prefer to just make up numbers to support your claim. Unless you were talking about the Clinton foundation? Then yes, I guess you are right, but for having been involved in many charities, and being libertarian, I know for a fact that their efficiency rate is around 70% with 30% administrative costs. I also know for having worked in government for 15 years and now working in the private sector that everything in government costs about double what it does in the private sector. The only conclusion is that you are either very biased or just plain out lying.