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Thursday, February 24, 2011

A Libertarian Antipoverty Agenda

Restoring the sawed-off bottom rungs.

About a month ago I published an op-ed in the Philadelphia Inquirer arguing that poor Americans today are better off than poor Americans were back in the early 1970s (and certainly before that).  Not surprisingly, it has generated quite a stream of “fan mail” from those who either cannot or will not believe it.  I’m used to getting strong reactions like that, although one of the responses was among the nastiest pieces of fan mail I’ve ever received.  But what really bothers me about several of these responses is the accusation that I “hate” poor people and don’t care about their well-being.

What’s surprising about those reactions is that they seem at odds with the facts and tone of the article.  My point in demonstrating the changes in the economic condition of poor Americans is not to suggest all is well, but instead to celebrate how much progress we’ve made in reducing absolute poverty and to counter the claim that poor Americans are worse off than they used to be.  Nothing in the data I presented indicates that every single poor person is better off now.  Rather I was arguing that on average poor people today live better than a generation ago. (They live longer than they did in 1980 as well).  I was also arguing that this is a good thing.  How this qualifies as “hating” poor people is beyond me.

It’s also not clear how this means that I don’t care about getting rid of the poverty that does exist in the United States.  Celebrating the gains also does not mean I am blaming the remaining victims.  In a recent column I argued that libertarians can certainly accept that there are structural reasons for poverty.

What’s to Be Done

Okay, so what can we, as libertarians, do to reduce the poverty that remains?   My own libertarian antipoverty agenda, which is mostly focused on urban poverty, would have three major planks, all of which involve getting government out of the way so that it stops being the structural cause of poverty.

First, eliminate all minimum-wage and occupational-licensure laws.  Almost all these laws have their origins in racism and xenophobia: One need only look to the racist authors of South African apartheid, who used minimum-wage laws to help carry out their malign objectives, and the U.S unions that pushed for such laws to explicitly keep blacks and foreigners from competing for jobs.  Racial or ethnic majorities with political power have consistently harmed their poorer, minority fellow citizens this way. These laws cut off the bottom rungs of the economic ladder for those lacking the skills to earn higher wages or the capital to pay for the licensing requirements.

Second, open up the public schools to competition, if not outright abolishing them.  Urban public schools are not just ineffective, they are also positively destructive of human capital.  Throwing more money at them hasn’t worked, and it’s time to give poor Americans, especially poor folks of color, the opportunity to get the education they deserve by making schools actually compete for students.  The combination of awful public schools and minimum-wage and licensure laws has kept more Americans poor than any other set of policies of the twentieth century, and they have damaged African-Americans more than anything the Klan ever did.

War on Drugs

Third, end the War on Drugs.  The culture of violence created by the drug war, along with the way that it has driven legitimate businesses out of poor areas, has done a great deal to impoverish Americans — especially Americans of color.  In addition, it has destroyed families by arresting people, disproportionately poor and nonwhite, for victimless crimes.  (The police enforcing these laws also routinely destroy families by arresting the wrong people, often killing innocents in the process.)  Legalization would take the profit and violence out of the drug trade and make poor urban areas increasingly hospitable for businesses and thus jobs.

My list could have been longer, but this is where I would start. Too many poor Americans are stuck in poverty because government puts structural barriers  in their way.

My critics might disagree with my diagnosis of the problem, but that’s different from claiming I don’t care about the poor.  I care about them very much, which is why I chose to highlight how much progress we’ve made in the last generation.  Now if we can get the State out of the way, we’ll do even better in the next and spread those gains even more widely.

You can read a Portuguese version of this article here

  • Steven Horwitz was the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he was also Director of the Institute for the Study of Political Economy. He is the author of Austrian Economics: An Introduction.