Here’s my opening statement for yesterday’s poverty debate with David Balan. Enjoy!
The world is rich, but billions of people are still poor. What’s the morally right response?
The default view is that the government should dramatically expand redistribution programs, forcing the well-endowed – especially business and the rich – to provide a decent standard of living for everyone. I strongly reject this default view.
Why? Most glaringly, because the default view overlooks the fact that governments willfully cause an enormous amount of poverty. The most effective way for human beings to escape extreme poverty is to move from the Third World to the First World and get a job. Yet the governments of every First World country on Earth make it almost impossible for the global poor to come. Economically, immigration is a fantastic deal for both sides, because labor – especially low-skilled labor – is many times more productive in rich countries than it is in poor countries. A standard estimate says that if anyone could legally work anywhere, this would ultimately double the production of the world.
But First World governments don’t merely prevent the global poor from moving to opportunity. They covertly do the same to the domestic poor by strictly regulating construction in high-wage parts of the country. Right now, workers in places like New York and the Bay Area earn far more than identical workers in other parts of the U.S. However, governments in these areas also keep their housing prices astronomically high by blocking construction. As a result, most workers – especially low-income workers – can’t profitably move to high-paid areas because housing costs eat up all the gains. Standard estimates, again, say the harm is enormous; one influential paper estimates that housing regulation has cut total U.S. growth by at least half for decades.
Economists often fret about markets’ “equity-efficiency tradeoff,” but what the evidence really shows is that free markets are ready, willing, and able to give us far more equity and far more efficiency. Unfortunately, it’s against the law.
Given the situation, governments’ primary moral responsibility is to stop impoverishing people. If a man habitually attacks strangers, is the sensible response, “That guy should give his victims more money”? No; the sensible response is, “That guy should keep his hands to himself.” When people look at poverty and call for redistribution, I say they’re making the same mistake. If, in the absence of government interference, people are able to solve their own poverty problem, the best government policy is no government policy. Serious thinkers should loudly proclaim this fact before they breathe another word about poverty.
Since my opponent is a serious thinker, I know that he actually agrees with much of what I’ve just told you. So where does he go wrong? Emphasis. Yes, David favors allowing a lot more immigration and a lot more construction. He grants that these policies will enrich society in general, and the poor in particular. But none of this excites him. Why not? I’m no mind-reader, but my best guess is that David idolizes Big Government, and resents free markets. So when he thinks about a grave social problem like poverty, he doesn’t want government to get out of the way and let the free market work its magic. He wants government to heroically solve it with redistribution. Even when he knows that government viciously victimizes the poor, he wants to hastily concede the point, then talk about redistribution at length.
Aside: I will happily withdraw this criticism if David spends at least half of his allotted time on the evils of government.
Now David could reply: Sure, government does a lot of bad stuff to the poor. However, government also greatly helps the poor with massive redistribution programs – and these programs could easily be expanded. He could even flip my psychoanalysis around: “I’m no mind-reader, but my best guess is that Bryan idolizes free markets, and resents Big Government. So when he thinks about a grave social problem like poverty, he doesn’t want government to step in and ask the free market to pay its fair share. He wants free markets to heroically solve it with economic opportunity.”
How would I respond to this? I’d begin by pointing out that most government redistribution doesn’t even go to the poor. Most obviously, almost all extreme poverty exists outside the First World, but almost all redistribution happens within the First World. Less obviously, when you examine the budget, the welfare state focuses on helping the old – and most old people are not poor. The upshot: Governments could do vastly more for the truly poor without raising taxes by a penny. Just take the money they fritter away on elderly Americans, and give it to desperately poor foreigners.
To my mind, this would be a big improvement, but still a bad idea. I don’t just oppose the expansion of government poverty programs. I oppose the programs themselves.
Why? In my view, there’s a strong moral presumption against taking people’s stuff without their consent. This doesn’t mean that it’s wrong to steal a penny to save the Earth. But it does mean that no one should take people’s stuff without their consent unless they have a really good reason. And taking people’s stuff without their consent is the foundation of all government redistribution. Wishful thinking notwithstanding, there is no “social contract.” Real contracts require unanimous consent – and no government has that. What about “Love it or leave it”? It’s silly. Refusing to move to another country does not remotely indicate consent to anything.
So what counts as a “really good reason” to use redistribution to help fight poverty? Here are the main moral hurdles to clear.
Hurdle #1. Do we have strong evidence that the social benefits of redistribution far exceed the costs? It’s OK to steal a car to save your life, but not to steal a car because you’d enjoy it more than the current owner. The same moral principle holds for government – and due to the complex effects of economic policy, it is especially hard for government to comply. Redistribution plausibly has big effects on incentives and economic growth, so government has no business doing redistribution until it can credibly rule out major negative side effects.
Hurdle #2. Is government trying to solve absolute poverty – hunger, homelessness, and the like? Or merely relative poverty – lack of a smart phone or cable t.v? Using coercion to alleviate absolute poverty is morally plausible, but using coercion to alleviate relative poverty is not. If you’ve seen Les Miserables, you may remember the part where Jean Valjean sings, “He stole some bread to save his sister’s son.” It would laughable, though, if he sang, “He stole an iPad to play Halo.” Since there is little absolute poverty in First World countries, there is simply little moral room for domestic redistribution. International redistribution is another matter, of course.
Hurdle #3. Can voluntary charity take care of the problem? If you can handle morally objectionable poverty by asking for donations, there is no good reason to force anyone to help. And to repeat, you shouldn’t take people’s stuff without their consent unless you have a really good reason.
Hurdle #4. The last, and most controversial hurdle: Are the potential recipients of government help poor through no fault of their own? Or were they negligent? Yes, I know this is a touchy subject; morally, however, we must address it. If a friend asks to sleep on your couch for a few weeks, you normally want to know why he needs your helps – and his answer matters. “I’m fleeing a war zone” is more morally compelling than, “My wife kicked me out because I drink away all our money.”
Why raise this touchy subject? Because there is an enormous body of evidence showing that a major cause of severe poverty is irresponsible behavior of the poor themselves: unprotected impulsive sex, poor work ethic, substance abuse, violent crime, and much more. Just ask yourself: If you engaged in such behavior, how long would it take before you, too, lived in poverty?
When I make this point, people have two radically different objections.
The first is to deny the facts. I can’t do much to answer this objection during a debate; all I can do is give you a reading list later on.
The second objection, though, is to excuse irresponsible behavior – or even morally condemn anyone who calls behavior “irresponsible.” I say this second objection is absurd. If you had a spouse who cheated on you, or was drunk half the time, or kept losing jobs, you would run out of patience for his excuses. Why should you be more forgiving of total strangers? While irresponsible people often say, “I can’t help it,” this is just a misleading figure of speech. Think of all the times you said, “I can’t come to your party,” when what you really meant was, “I don’t feel like it.” That’s the real story of irresponsibility.
I am well-aware that blameless people do occasionally end up poor. My point is that the advocates of merit-blind redistribution are morally blind to the possibility that they are mistreating people who have compelling reasons not to help others. Suppose you have an alcoholic brother. He’s repeatedly made your life miserable for the sake of his favorite beverages. Your brother has lied to you and stolen from you. One night he shows up at your house, begging for help. You turn him away. Question: What would you think if a neighbor called you up and berated you for your “selfish attitude”? I say you should hang up on him, because your neighbor is way out of line.
To recap: I’ve offered no absolute objection to redistribution. Instead, I’ve pointed to four moral hurdles to clear before we even consider it. If we take these hurdles seriously, maybe you could salvage a tiny welfare state for indigent kids, the severely handicapped, refugees, and so on. Before you make even this small exception, though, consider this: When someone has made awful decisions in the past, ironclad rules are often best even though a judicious decision-maker would make minor exceptions. Given how badly all existing welfare states deviate from defensible moral principles, there’s a strong argument for keeping government out of poverty alleviation altogether.
Last point: If you summarize my position as, “We should do nothing about poverty,” you have totally misunderstand me. I earnestly favor a radical new War on Poverty. This War on Poverty, however, will target governments’ horrific policies that deprive the poor of vital opportunities. Instead of scapegoating people who understandably don’t like paying taxes to support strangers, this War on Poverty will deregulate labor and housing markets so the poor can solve their own problems with dignity. I am sadly aware that my War on Poverty lacks popular support. Few progressives want to solve poverty with deregulation – and most conservatives want to regulate immigration even more strictly than we already do. My War on Poverty, however, is the War on Poverty we ought to be fighting.
READER COMMENTS
Charles
Feb 27 2019 at 4:20pm
Hurdle #1.
“Do we have strong evidence that the social benefits of redistribution farexceed the costs?”
We do: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/7596/2200485.pdf
Hurdle #2
“Since there is little absolute poverty in First World countries, there is simply little moral room for domestic redistribution.”
There are 50,000 homeless people in Los Angeles alone.
Hurdle #3
“Can voluntary charity take care of the problem?”
In hurdle #2 you claim we don’t have a problem…
Hurdle #4
“Are the potential recipients of government help poor through no fault of their own?”
I suggest you read “Scarcity: Why Having Too Little Means So Much”.
John Hare
Feb 28 2019 at 4:46pm
i read a few pages into your link and stopped. The cure for self inflicted wounds is not higher caliber ammunition. It is stop shooting yourselves. Bryan addressed these issues in many posts. Minimum wage laws and building codes are part of the problem. Renters rights are another part with it being near impossible to break even on inexpensive rental property under current law. Drug testing and other restrictions on employment are another facet of the problem. We can accept the blame as a society as long as the true problems are recognized and addressed. Throwing more money is neither
It is physically, but not legally possible to create a situation in which the homeless could self cure.
Charles
Feb 28 2019 at 7:45pm
“It is physically, but not legally possible to create a situation in which the homeless could self cure.”
Based on what evidence? The link I provided demonstrates a tangible solution which actually costs far LESS than existing ineffective programs. Try reading the entire article before posting a critique.
Do you want to be right or do you want to solve the problem?
john hare
Feb 28 2019 at 8:37pm
I went back and read the whole thing after getting home to my computer. Same opinion that it is an extended complaint about the costs imposed by homeless people without any solutions offered.
My evidence that the problems can be solved come from actual experience with the class of people we are discussing here, and having gone broke a few times myself.
It is physically possible to provide housing that could be rented for $100.00 a month. Getting it through permitting, zoning, impact fees and such is close enough to impossible as to not matter. I do concrete and my solution would use that, while at least three other methods exist of providing this class of housing and making a profit doing it. Physically, not legally. Every renter that doesn’t pay, steals, and commits vandalism increases the costs on the ones trying to get ahead. Protecting bad people as in current rent law is an assault on good people.
Bicycles are a nearly free way to commute. I’ve done it for a few months after one of my financial disasters. There need to be safe travel lanes, and a way to keep the bikes from being stolen or vandalized. Low/no income people are more likely dto do this to others that are handy.
Minimum wages, mandatory drug testing, background checks, insurance and a dozen other things make employing many of these people difficult to impossible for any legitimate business. I have lived on under $200.00 a week for about a year within the last decade. Someone making $5.00 an hour can make that.
Many of the costs in your article were police and courts and jails. Much of that could be mitigated if people had an honorable way out that didn’t include jumping through do-gooder hoops. Or having to answer to people that base their careers on keeping people needy.
I want to solve the problem. That article doesn’t address that at all.
Charles
Mar 1 2019 at 2:24pm
I appreciate you taking the time to finish the article. Thank you.
Bryan’s Hurdle #1 asks if the benefits of redistribution exceed the costs. So it makes sense to look at the costs of the system as it currently stands. As you can see, the current system is very expensive and ineffective. We can’t have a constructive discussion about any possible solution without understanding the current situation. The author ignores the failings of the current system, instead focusing on potential pitfalls of a broad solution.
Yes, part of the cost reduction noted in the article comes from police, courts and jails. Isn’t that the point though? We’re getting people off the streets and out of the legal system. Being poor shouldn’t be a crime.
I agree that housing laws have created a shortage of affordable housing but I don’t understand your jump to people not paying rent, stealing and committing vandalism. What do these bad actors have to do with the poor? They are not interchangeable.
john hare
Mar 1 2019 at 3:31pm
This is a reply to Charles at 2:24 pm in case the comment is out of sequence.
Not paying rent, stealing, and vandalism are very much connected with the poor, and the higher than should be costs of rent. It can take months in some jurisdictions to evict a tenant for non-payment. The other renters will pay higher rents to make up the difference. Lower class people often steal appliances and anything else of value on the way out knowing that prosecution is extremely difficult. Vandalism is considered a given by many landlords that have the expectation of fixing drywall and painting at a minimum between tenants, knowing that it is literally impossible to recoup these expenses from the culprit..
All of these problems drive some people out of the renting business which reduces competition. All of them cost the landlords money which must be recouped from the tenants that do pay. The only place the losses can come from is the paying tenants unless the landlord is to operate at a loss. Operating at a loss causes bankruptcy unless the owner is subsidizing the rentals.
Profitable owners prefer higher class properties that experience far less of these problems. Talk to some people in the business to get an idea of how it works.
Locally, government subsidized housing incentivizes people to stay down in reported income so as to not lose their privileges. So they tend to have much higher than average drug, unemployed, and gang populations with an unfortunate percentage of them having no intention of moving up.
Charles
Mar 1 2019 at 9:00pm
Reply to John from 3:31
There is a lot to unpack in that response.
I have actually spent time working with a landlord who rented to low-income tenants. Rental rates (at all price points) are determined by the maximum the market can bear. To make the claim that theft and property damage are the reason for high rental prices is simply not true. Rental demand drives the price higher.
If you don’t think renting to low income is profitable, you’re wrong. I’m sorry to be so blunt about it. I suggest you read “Evicted” by Matthew Desmond.
Are you familiar with the private equity money that is getting into the trailer park business?
https://www.washingtonpost.com/business/economy/a-billion-dollar-empire-made-of-mobile-homes/2019/02/14/ac687342-2b0b-11e9-b2fc-721718903bfc_story.html?utm_term=.a48462eeece2
https://www.reuters.com/article/us-usa-housing-mobile/hot-property-u-s-mobile-homes-affordability-slips-as-corporates-move-in-idUSKCN1Q80RJ
john hare
Mar 4 2019 at 1:57pm
Reply to Charles 1 March at 9;:00 pm
I am very familiar with the predatory nature of many trailer parks and could add to your list. A large part of the problem is that it is so difficult and expensive to set up new ones that the corporations are getting a lock on that market. Make it possible for individuals and smaller companies to set up new ones and the competition will force rates back to somewhere reasonable.
The landlord you worked with that had no problems with vandalism and such was an anomaly. Most landlords that I know have horror stories about that. To say that the problems of vandalism, theft, and non=payment don’t affect prices is not reality based. Those problems, and the barriers to entry conspire to keep prices much higher than they should be. The market will bear is true, but the market will only bear it because there is no Walmarts/Dollar Stores of residences to keep the prices of the rest in line.
I mostly shop at Winn-Dixie, but the prices reflect the fact that there is a Publix in one direction and an Aldis in another. Absent that, I am quite certain that my prices would be much higher, either at that store or because I had to spend serious time and fuel to reach another.
John Alcorn
Feb 28 2019 at 11:54am
Re: Hurdle #3:
Philanthropy, too, has issues. According to Vitalik Buterin, Zoë Hitzig, and E. Glen Weyl,
They propose institutional reforms (quadratic voting and a democratic mechanism for philanthropic matching funds) to limit the tyranny of the majority and to remedy pitfalls of philanthropy.
Philo
Feb 28 2019 at 12:21pm
You err by writing of “governments’ primary moral responsibility”: governments are not moral agents–only individual people have moral responsibilities. And the consequences of government policies can almost never be attributed to the actions of a particular individual. So talk about collective responsibility is a philosophical mistake which does little to illuminate the moral aspects of the situation. You should consider what actually is the moral responsibility of the individual politician or bureaucrat or citizen, given that only very rarely can he determine the government’s immigration or labor or other policies.
Philo
Feb 28 2019 at 12:28pm
You rightly focus on the harm done by the governments of rich countries, since the topic of the debate is, roughly, “What should rich-country governments do about poverty.” But you might have mentioned in passing that the governments of the poor countries are the most important factor in making those countries poor.
Nicola
Feb 28 2019 at 4:05pm
I agree with most of your arguments, but I don’t find your examples which include alcoholic beverages very strong. From what I know, alcoholism is a serious addiction (physically and psychologically), which is probably way more difficult to change than working although you don’t feel like it. But even in the latter case, I can imagine that mental illnesses like depression (diagnosed or not) can be perceived as laziness. Instead of judging those people, it might be better to redistribute by providing effective ways for those people to get the help they need.
Argo
Mar 1 2019 at 12:53am
Does anyone have a link to the study that was mentioned about how “housing regulation has cut total U.S. growth by at least half for decades”?
John Alcorn
Mar 2 2019 at 12:37pm
Chang-Tai Hsieh & Enrico Moretti, Housing Constraints and Spacial Misallocation (2018), MS link here.
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