imaginary family values presents

yesh omrim

a blog that reclines to the left


The Gordian solution to poverty

2 September 2009

Every once in a while, some wide-eyed idealist—I believe that the most well-known such thinker was libertarian Milton Friedman—suggests that the real problem that poor people have is not enough money. Therefore, they say, the most effective way for the government to lift the poor out of their miserable condition is to give them money.

Of course, sober-minded folks are ready to click their tongues and say, how simplistic to believe that poverty is caused by having not enough money. Poverty is caused by a broken family, by insufficient education, by corrupt moral values, by paternalistic government programs that sap individual initiative, by… well, there is no shortage of disagreement about what the cause is, but all these wiser heads agree that if you give them money, poor people will just fritter away their largesse and be no better off in the long run. The proper way to help poor people, then, is to give them something other than money, or perhaps give them money with strings attached to ensure they spend it properly, and of course this requires a bureaucracy staffed by sober-minded folks to guide monitor the progress of their poor clients.

Despite all this accumulated wisdom, a few wide-eyed idealists have scraped together enough donations to find villagers in some desperately poor corner of Africa and give them money. It seems to be working out well so far.

(To be fair to the sober-minded side: around 1970, the US government tried a Friedmanesque negative income tax in what was called the “Graduated Work Incentive Experiment” or the “New Jersey Income Experiment” and, well, I guess the results of the experiment were not enough to convince Congress to give us all a negative income tax. To report further on this I will need to dig up one or two actual books.)

η The Earned Income Tax Credit functions as a negative income tax, sorta kinda.

via The Reality-Based Community