Libertarianism and the Poor

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Two different friends in two different contexts recently asked me about Libertarian approaches to helping the poor.  Here’s what I had to say on that question in my  2012 collection of campaign essays, “Less We Can.”

Libertarianism and the Poor

We know free markets produce more prosperity, and we know government spending is often ineffective or worse.  But many are nonetheless reluctant to embrace libertarian ideas because of their commitment to social justice.  Without the welfare state, how would Libertarians take care of the poor?

The short answer is:  Voluntarily.  Libertarians know as well as anyone that many people in our society sometimes find themselves in difficult circumstances through no fault of their own.  We are as likely to believe that looking out for least fortunate among us is not only compassionate but essential to a healthy community.  And many of us, including this writer, come from religious traditions that leave no room for doubt about the obligation to help the poor.  For most of us, then, the question is not whether to help the poor, but how.  And our historical experience strongly suggests that government programs just don’t improve the welfare of the poor as well as voluntary assistance does.

The first problem with government aid is that it is easily misdirected.  Government anti-poverty programs may be intended as boons for the poor, but they tend to become boondoggles for the powerful.  This shouldn’t surprise us, because when we make charity part of a government budget we inevitably place it in competition with other budgetary priorities.  In a politically driven process, if it’s the nameless needy versus failed Wall Street banks, the needy don’t stand a chance.  The working poor would have a much better chance of getting ahead if they were simply permitted to keep more of what they produce.

In this country, at this very moment, there are working men and women who are too poor to afford their own homes, yet their taxes subsidize jumbo mortgages on beachfront mansions because of the mortgage-interest deduction Congress wrote into our tax code.  In this country, at this very moment, there are working men and women whose investment losses over the past two years have forced them to postpone retirement, yet their taxes go to fund salaries, bonuses, and pensions for high-paid executives whom the government has chosen to relieve from any responsibility for running their businesses into the ground.  These redistributions from the working poor to the networking rich don’t comport with too many people’s idea of social justice, but they are precisely the results we should by now expect from a system that countenances the redistribution of wealth according to the dictates of the politically powerful.

But can we rely on the voluntary alternative to fill the need?  Will we keep giving if we’re not forced to?  Experience says yes.  Experience teaches us that free people not only create abundance, they share it.

Aid works best when there are strong personal ties.  While government entitlements all too often have the effect of perpetuating poverty, anyone who has ever leaned on a friend or a family member during hard times knows first-hand of the powerful bonds created by such mutual aid.  It is altogether different from receiving an “entitlement” for which one has arguably “prepaid” with tax dollars.  And the effect is usually personally transforming for both giver and receiver, in a way that bureaucratic transactions never can be.  Strong families operate this way; they are strong not because the government requires it, but because family members spontaneously look out for each other and help each other thrive.  Healthy neighborhoods operate on the same principle.

But the flourishing of global organizations like Save the Children, the Red Cross, and Doctors Without Borders demonstrates how well voluntary charity can work even when personal connections are remote or non-existent and geographic distances are vast.  We give voluntarily to the victims of hurricanes, earthquakes, and tsunamis.  Humans empathize, and empathy works.

Then there is the layer between the neighborhood and the large non-profit—the space we refer to as “civil society.”  As David Boaz describes in his book, Libertarianism:  A Primer, the “ales” of medieval and early modern England brought communities together “for drinking, dancing, and games, paying above-market prices to help out a neighbor:  church-ales, to raise money for the parish; bride-ales, to get a marrying couple started; and help-ales, to assist those who had fallen on hard times.”  One sees in these customs the same instinct toward mutual aid that now survives in institutions from bake sales to church bingo to black-tie fundraising galas.  We find parallel traditions in many different African, Asian, and Latin American cultures, going by names like susu, hui, keh, or tanda.

Fraternal societies such as the Masons, Elks, Odd Fellows, and Knights of Pythias are also the descendants of a venerable tradition of mutual aid.  Historically, such fraternal and “friendly” societies distinguished themselves sharply from “charity,” as they were based on relationships among equals with the common desire to help each other through sickness, old age, and hard times.  This element of relationship bound the participants together more tightly in community, and encouraged responsible behavior by the recipients of aid—precisely what cannot happen under a system of legal entitlements.

Given all this history, the idea that people are insufficiently generous and that redistribution of wealth must therefore be required by law must be one of the most extensively falsified theories in all of political thought.  And on reflection, it’s quite odd to think that people acting on their own, with money they personally control, would be less willing to give generously than they are when they act through their legislative representatives.  People typically give more when they have more say in making sure their donation will not be wasted.

Unfortunately, big government is slowly “squeezing out” these older and better ways of voluntarily helping the poor.  That’s bad for the poor, because government programs don’t work as well.  But it’s also bad for the rest of us, because it impoverishes that important layer of civil society in which people of different races, religions, and political beliefs come together to celebrate their common humanity.  It’s good for Republicans and Democrats to work together at Habitat for Humanity.  It’s good for Jews and Muslims to serve together on the board of the local AIDS clinic.  These voluntary associations are ostensibly for limited charitable purposes, but they make us stronger in rich and subtle ways.  We need to reverse the tendency of big government to suffocate this layer of civil society.

Thus, the Libertarian approach to helping the poor is superior to the big-government approach on two counts.  It is superior because private organizations—both for-profit and not-for-profit—can take care of the poor more effectively than any government program.  And it is superior because a Libertarian approach to politics strengthens the layer of civil society that performs this and many other important social functions without the necessity of government involvement.

But don’t take my word for it.  Instead, consult your own common sense.  Imagine that you have entered and won an essay contest on the plight of the world’s poor.  You wrote an extremely compassionate and well-argued essay, citing holy scripture from several world religions as well as pagan philosophers throughout recorded history.  As the winner of the contest, you are now permitted to direct the spending of a $10 million fund for the alleviation of suffering among the poorest and most vulnerable among us.  As you begin to think in earnest about how to distribute the $10 million, you have many worthy charities to consider:  from the local soup kitchen in a neighborhood church basement all the way to the Gates Foundation or the Red Cross.  Go ahead and think of one or two before you continue reading.

Done?  Do you have your top choice or two?

Now, did it occur to you, for even a moment, to give that $10 million to the U.S. Department of Health and Human Services or the U.S. Department of Agriculture?

If not, then perhaps you should stop voting for people who think your tax dollars should be spent that way.