Acton Institute Powerblog

Freedom of choice is foundational to poverty relief

(Photo credit: Public domain.)

This essay won second place in the essay contest of the Acton Institute’s 2020 Poverty Cure Summit, which took place on Nov. 18-19, 2020. The author will receive a $3,000 prize. An expanded and lightly edited version of her essay is presented below. – Ed.

Defining and describing humanity has always been one of the trickiest questions facing philosophers, scholars, and authors – most specifically the question of “what makes us human?” Inherent to this discussion is the conversation about the nature of human dignity. What is encompassed within the term “human dignity”? Perhaps it helps to look at the inverse – what dehumanizes? The consistent element of dehumanizing policies and practices is a revoking of freedom. Freedom to make choices is one of the fundamentals of human dignity. Crimes such as slavery dehumanize, because they limit or eliminate the individual’s choice. In a similar way, poverty solutions that limit an individual’s choice by means of putting strict conditions on aid do not uphold the dignity of a human person. Essential to human dignity is choice; therefore, the solutions that best uphold the dignity of the human person must seek to increase the individual’s access to choice.

For the purpose of this discussion, a few assumptions will be made. First, making choices is important to dignity. Second, these decisions should be made within a moral framework that seeks to dignify other humans, as well. Third, individuals are better equipped to make these decisions for themselves than a central government. Humans are made in the image of the Creator and are designed to be creators themselves who have free choice and are capable of action. The poverty solutions that best uphold the dignity of the human person are those that allow and promote freedom through choice.

Many government attempts at solving poverty are well intentioned, but often these efforts come with a host of conditions that box an individual into certain choices. Food stamps and other “survival” policies have anti-fraud measures that are very limiting and become an ever-present reminder that the person receiving this aid is different. The poor must spend their money differently and can have choice again when they are rich. For example, one of the most widespread food aid programs in the United States is the WIC food program, which sets specific limits on which foods and which brands of food can be purchased with the benefits, as denoted by the small WIC label on a price stamp in a grocery store. Choice, and by extension dignity, seems to be reserved as a luxury. Policies like this, that seek to maximize efficiency by conditioning aid, as an unintended consequence may actually undermine the dignity of the poor.

Unfortunately, beyond failing to maintain the recipients’ dignity, these sorts of policies often also fail to be financially efficient. As a general rule, the more guidelines and requirements a program has, the more of its funding is lost to administrative costs. With recent pushes to simplify welfare programs in the United States, there has been a corresponding decrease in administrative costs. Beyond mere administrative inefficiencies, however, restricted aid does not confer the same value to the receiver that the government expends. This is not an intuitive concept. It may help to picture this example; if someone were to give you a $25 gift card to a boutique clothing store, it simply would not be worth the same to you as $25 in cash. Sentiments aside, the restrictions and limits inherent to a gift card (i.e., it can only be used in certain places, and you may prefer a different brand, or you may be able to buy more clothes for a lower price at another store) decrease its monetary value to the recipient. Thus, the inefficiency is twofold: There is a loss at the administrative level, as it costs more money to manage the issuing of aid, and the aid is worth even less than it is labeled to the receiver, as its inflexibility decreases its value. Restricted welfare programs not only fail to uphold human dignity but also fail to uphold economic efficiency.

As Russ Roberts points out in his lecture for the Acton Institute’s Poverty Cure Summit, we are all likely well-aware of the maxim, “If you give a man a fish, you feed him for a day, but if you teach him how to fish, you feed him for a lifetime.” But he explains that this sort of view is short-sighted. Knowing how to fish allows one to survive, to avoid death, but this basic skill alone does not essentially imply a decent standard of living and dignity. However, Roberts points out, “If you could then allow them to interact with others in a market economy, they can prosper.” The market is the mechanism for prosperity and independence from aid. This is the road to thriving. The point being, the open market is where prosperity occurs and the person flourishes. Well-intentioned policymakers undoubtedly desire citizens to thrive. In order to do so, they should promote work that is well-integrated with the market. If financial independence and freedom are the goal of aid, it should be administered in a way that promotes economic productivity. Historically, the best motivator for productivity is profit, and the free market – with low restrictions on work and trade – offers the clearest connection between the two. The most efficient, effective, and dignifying solutions to poverty promote access to work without too many conditions, rules, or requirements. This means that deregulation in certain areas of the workplace can be one of the best solutions to poverty.

While many regulations make sense and are the duty of the government to maintain, many more regulations claim this role than truly fulfill it. In many places throughout the market, both in the United States and abroad, there are restrictions that make it difficult to work and move out of poverty. Many of these regulations do not make sense. Braiding hair, arranging flowers, and auctioneering are all licensed professions in American states. Such barriers to entry uniquely harm the economically disadvantaged. They create an artificially high entrance fee to earning a living: You cannot begin to work until you have spent time and money getting licensed. Not only does the licensing process have costs associated with training, testing, and filing, but one of the often-overlooked costs is the time opportunity cost. For someone struggling to earn a subsistence level income, time spent in cosmetology school or flower-trimming school is hours and days that could have been spent earning an income somewhere else. This can be prohibitive and trap people into lower income jobs with lower entrance barriers. The economic losses here are profound. The Institute for Justice has conducted years of analysis and study on the economic impact of occupational licensing in the United States and found “losses in economic value ranging from about $30 million (Rhode Island) to more than $840 million (California). A broader measure finds losses ranging from $675 million (Rhode Island) to over $22 billion (California).” Certain professions have reasonable education and licensing barriers: There is a reason high school students don’t have summer jobs as neurosurgeons. Many of these barriers, however, are an unnecessary and harmful regulations.

One of the clearest examples of this was illustrated during the summit by Isis Brantley, who shared her 20-year legal battle over braiding hair without a license. Isis, now an internationally recognized authority in natural braiding, knew her passion for braiding since she was a teenager. She opened a small, private salon, which was later raided by police. Following her 1997 arrest for braiding without a license, Brantley spent money and years of her life fighting for her rights, which culminated in a federal court ruling in her favor.

One of the greatest solutions to poverty would be increasing access to these and other professions that act as gatekeepers by means of high entry requirements like unnecessary certification and licensing. The next step after removing barriers may be to subsidize access through interview training courses, résumé help sessions, and possibly public transport credit options. These programs promote an individual’s choice of profession, are in touch with the market, and level the playing field for people attempting to enter the market. These sorts of programs empower individuals to work where they choose and thus promote choice, a concept fundamental to human dignity. They also help people reenter the open market, which can put them on track to becoming economically independent and eventually negate the need for welfare.

Public and private approaches to alleviating poverty need to keep in mind the dignity of the individuals they are serving and prioritize choice. Central to human dignity is choice. The most fundamental freedom is freedom to choose where to live, where to work, how to spend money, what to wear, and more. The best solutions to poverty do not merely lift individuals out of poverty but allow them the agency to mobilize. Freedom of choice is central to dignified poverty relief.

Emma K. Randall

Emma K. Randall is a junior majoring in economics and business analytics at Patrick Henry College in Purcellville, Virginia. She enjoys researching and writing about public policy issues. In her free time, Emma enjoys playing piano, following the news, and serving as a volunteer high school debate coach and as a volunteer ambulance driver for the local fire department.