Asked if we need to spend more money on anti-poverty initiatives, Eberstadt answers:
Let me suggest this is not the right way of framing the question. Quite the contrary: if we presume that government entitlement transfers are the answer to the poverty problem, we are pretty much doomed to failure before we even start.
For a healthy national community of prosperous and independent citizens, we need a nation with strong families, solid education, a serious work ethic, and a good jobs market. Anti-poverty programs can only substitute for these fundamentals—and unfortunately such programs are necessarily rather limited and imperfect substitutes. Of course there is a role for public resources in addressing public need—but such government resources can be targeted more efficiently and intelligently than we are doing today.
This year marks the 50th anniversary of Lyndon B. Johnson’s “War on Poverty.” Nicholas Eberstadt, an economist at the American Enterprise Institute, has published a monograph entitled, The Great Society: The Triumph and The Tragedy at Fifty. Eberstadt calls Johnson’s vision for the war on poverty “the most ambitious call to date” in American political history. At the time of Johnson’s speech unveiling this “Great Society,” the United States had only one nation-wide social program, Social Security. Johnson wanted more:
The Great Society proposed to reach even further: to bring about wholesale renewal of our cities, beautification of our natural surroundings, vitalization of our educational system. All this, and much more—and the solutions to the many questions encountered in this great endeavor, we were told, would assuredly be found, since this undertaking would “assemble the best thought and the broadest knowledge from all over the world to find those answers for America.
Philosopher and theologian, Michael Novak recently delivered a speech at the Catholic University of America on the vocation of business and Forbes published the transcript. Novak argues that “capitalism is lifting the world out of poverty.” As many Asian and African economies shift from socialist to capitalist, they are seeing enormous economic growth, and small businesses are the force behind these economic gains:
Even in developed nations, most jobs are found in small business. In Italy, over 80 percent of the working population works in small businesses. In the U.S., the proportion is just about 50 percent, but some 65 percent of new employment is in small businesses.
During the great economic expansion of 1981-1989, the U.S. added to its economy the equivalent of the whole economic activity of West Germany at that time. Sixteen million new jobs were created in the U.S., the vast number of them in small businesses. Startups peaked as new businesses came into being at a rate of 13 percent (as a portion of all businesses) – an all-time high. Much the same happened under Clinton in 1993-2001, but even better – 23 million new jobs were created.
In the creation of small businesses, four factors are necessary. First, ease and low cost of incorporation; second, access to inexpensive credit; third, institutions of instruction and technical help (such as the system of local credit unions in the U.S.), and the steady assistance of the extension services of the A&M universities; and, fourth, throughout the population habits of creativity, enterprise, and skills such as bookkeeping and the organization of work. Economic development is propelled, as John Paul II said, by know-how, technology, and skill (Centesimus Annus 32). Therein, perhaps, lie the greatest entry-points for Americans and others who wish to help poor nations by proffering assistance in economic development from the bottom up. (more…)
The House Budget Committee has issued its report on The War on Poverty, 50 Years Later. It’s 204 pages long, so feel free to dig in. However, I’ll just hit some of the highlights.
Lyndon B. Johnson’s War on Poverty has created 92 government programs, currently costing us about $800 billion. The committee’s take on this is summed up as:
But rather than provide a roadmap out of poverty, Washington has created a complex web of programs that are often difficult to navigate. Some programs provide critical aid to families in need. Others discourage families from getting ahead. And for many of these programs, we just don’t know. There’s little evidence either way.
In the latest episode of Uncommon Knowledge, Peter Robinson interviews Amity Shlaes, author of the new biography, Coolidge. Read Ray Nothstine’s review here.
In the book, Shlaes makes an explicit connection between Coolidge’s rough-and-humble upbringing in Plymouth Notch, VA, and his bootstraps optimism about commerce and markets. The Coolidges believed that responsibility, hard work, and a virtuous life were bound to pay off, in large part because they experienced it in their own lives.
On this, Robinson offers a wonderful follow-up (around the 31-minute mark), observing that some have connected Lyndon B. Johnson’s similar “hardscrabble upbringing” with an entirely different perspective, namely his “championing of the federal government as an instrument for lifting the poor of the nation.” Why, Robinson asks, did the early struggles of each of these men lead them to entirely different conclusions about economic empowerment and poverty alleviation? (more…)
Because it is right, because it is wise, and because, for the first time in our history, it is possible to conquer poverty … Lyndon B. Johnson’s Special Message to Congress, March 16, 1964
Anthony Bradley, commenting on the preference black voters showed for President Obama, points out that Lyndon Baines Johnson’s War on Poverty policies “introduced perverse incentives against saving money, starting businesses, getting married, and they discouraged fathers from being physically and emotionally present for their children — resulting in generational welfare dependence — black voters are lured to choose dependence over liberation.” The full text of his essay follows. The full text of his essay follows. Subscribe to the free, weekly Acton News & Commentary and other publications here.
Another election has come and gone, and once again the balance of power has significantly shifted in Washington, D.C. and statehouses across America. Tuesday’s results are, I suppose, a win for fans of limited government, in that a Republican House of Representatives will make it more difficult for President Obama and his Democrat colleagues in the Congress to enact more of what has been a very statist agenda. But even with the prospect of divided government on the horizon, we who believe in individual liberty and the principles of classical liberalism still have much to be concerned with. Perhaps the primary concern is whether or not those Republicans who were swept into office—not due to any real love of the electorate for the Republican Party, but rather due to anxiety over the direction the Democrats have taken the country—will be able to hold to the principles of limited government and individual liberty that so many of them claimed to espouse during the campaign, or whether those principles will be abandoned in a mad pursuit of power. Forefront in the mind of every lover of liberty should be Lord Acton’s famous maxim: “Power tends to corrupt, and absolute power corrupts absolutely.”
My sincere hope is that with Americans deeply dissatisfied with both major political parties and finding that the government is either unable or unwilling to solve the major fiscal and social problems that we face, people will begin to re-think their basic assumptions about the role of government in American life. For decades, the default assumption has been that the government is a force for good and can be a driver of positive social change. Witness Social Security, Medicare, the Great Society, the War on Poverty, etc. All of these programs were designed by experts to alleviate some pressing social need, and were assumed to be the right thing to do. After all, who wouldn’t want to help the poor and elderly to live a fuller, better life? And yet, as the years went by, all of these programs—though well-intentioned by their creators—have failed to achieve their lofty goals. The Social Security “trust fund” is devoid of funds and packed with IOUs left by politicians who, over the years, have spent the money promised to seniors on other programs. Medicare, Medicaid, and other government health care programs have warped the economics of health care, paying doctors less and less and therefore driving up the cost of private insurance in order to make up the difference. Obamacare is little more than an attempt by the government to solve a cost crisis—created in large part by government intervention—with even more extensive government intervention into the market. We already know how that story ends. And as for the Great Society and the War on Poverty, trillions of dollars over the years simply failed to alleviate poverty in America, and in many cases only created deeper, more entrenched social problems.
It is clear by now to anyone who cares to look that massive government intervention into society tends to do more harm than good, no matter how well intentioned the interventionists are. Government has its place—no arguments for anarchy are to be found here—but the government must be limited to its proper place. The genius of the American founding came in the limitation of the national government to certain enumerated functions, leaving the people at liberty to take care of the rest of life as they saw fit. The respect for individual liberty and the acknowledgement that the rights of citizens were not granted by the state but were granted to individuals by God himself provided a firm foundation for the vibrant growth and strength of the United States in the coming centuries. As a people, we need to realize that the further we move away from those founding principles and the more we cede our liberty to governmental agents in return for a promise of security, the less likely it is that we will remain strong, vibrant, and free.
At the Acton Institute 20th Anniversary Celebration, Acton President Rev. Robert A. Sirico reminded us of the roots of human dignity and the importance of individual liberty during his keynote address: