The Poor are Not Getting Poorer

Steven Horwitz

That's the title of my op-ed in this morning's Philadelphia Inquirer.  I fully expect to make a third appearance on a certain economist-blogger's "Stupidest Human Alive" list.  And you should see the "fan mail" that's coming in.

UPDATE:  A slightly different version appears in today's Atlanta Journal-Constitution.

Comments

[Daniel Kuehn]

I wonder what would bother me more - being called "the stupidest man alive" or being accused of thinking war "is morally acceptable because it produces economic growth"... thankfully I don't have a big enough platform to get accused of either...

... I was recently reassured that I was not, in fact, a "crypto-fascist" - I was only a "conditional conscriptor". I thought that was a creative attempt at a compromise between "crypto-fascist" and "not a fascist of any variety".

[Mario Rizzo]

I would also argue that, by the standards of human history, there are *no* poor people in America. "Even the poor live better than the rich before."

[McKinney]

Income mobility is a very important point in the discussion of inequality.

[Troy Camplin]

We're having a fun discussion of this over on Facebook as we speak, on both Steve's posting of this and Aeon Skoble's reposting. :-)

Apparently one cannot say anything disparaging about some of the poor without being accused of saying all the poor are horrible people at all times throughout human history.

[Mario Rizzo]

Troy,

As Herbert Spencer said, among the poor there are the good-for-something and then there are the good-for-nothing. Some people are responsible for their own relative misery while others are not. Failure to even *think* of distinguishing is not beneficence or "charity." It is stupidity in a world a scare resources.

[Roger Koppl]

Steve: Great op ed and caliber research backing it up. Awesome.

Mario: Yeah, but what's it matter? Are we gonna make poor relief depend on some state-imposed measure of moral merit? Lest there be doubt, allow me to say that such a program would be impossible to do successfully and it would create terrible abuses. If you give poor relief, some people will exploit it. So what? I will not begrudge you a crust of bread even if your hunger is the product of your own wickedness. Your point that many poor Americans are rich by historical standards underlines just how great is the abundance of those we do not consider poor. It is therefore an argument *for* transfer programs.

[Richard Ebeling]

Yes, as Mario suggests, one of the central distinctions made in the 19th century among those concerned with helping the "poor" or the less well-off, or those who had fallen upon "hard times" not of their own making, was that between the "deserving" and the "undeserving" poor.

The deserving poor were those who not only appreciated that helping hand, but took advantage of it to improve themselves, get back on their feet, and become self-supporting over time.

The undeserving poor were those who were given helping hands but wasted it and took such generosity for granted. They would drink or gamble away any money given to them. They refused to use the helping hand to learn a skill or trade to become self-supporting. They acted as if they had a "right" to live off others, with no sense of obligation to others.

The undeserving poor, after various attempts to help them, well, just did not deserve the help any more.

And their vice-like behavior -- drunkenness, gambling, not working but accumulating debts and living off others, and sorting with "bad company" -- was considered to have one valuable social role to play. As examples to point to, to the young especially, as warning of what could become of them if they did not work hard, get an education, and plan ahead and save some of what they earned.

"Look, young Cuthbert, see that man in the gutter with that whiskey bottle in his hands? That could be you -- a wasted life, shunned by your family, and embarrassment to all polite society -- if you don't watch your ways! Take a lesson from that, Cuthbert."

It may seem comical to some, today, but to those those who attempted to foster "self-help" and "responsibility" among the young generations of that Victorian era, it was part of the moral teaching to assure a good and decent society.

Richard Ebeling

[David Hoopes]

I think Mario's point is quite important. What passes for poor in 21st century U.S. is nothing like being poor in 19th century Ireland or 21st century central China.

Wonderful editorial by Steven.

[Rafael Guthmann]

I guess that 21st century central China is also better than 19th century Ireland.

In Brazil, officially we have 15% of the population below the poverty line, now those poor are really poor: they have per capita family incomes below the cost of eating 2500 calories per day (in a balanced diet, they can eat 2500 calories if they spend all their money on rice).

In the US 80% of the poor households have cars. In Brazil only 40% of all households have cars. There isn't real poverty in the united states today.

[Alexandre Padilla]

When it comes to discussion about poverty and income inequality, Steve is right on point. People focus on a comparing two snapshots of income inequality. Income inequality in 1960 is less than income inequality in 2010. But they don't look at upward mobility. Because they see greater inequality, they think that poor are getting poorer and rich are getting richer when, actually, poor are getting richer and so are the rich. But one could also say that while rich are getting richer, they also give away more of their income via redistribution than the poor. That discussion on income inequality is no different than the discussion on trade saying that rich countries benefit from trade more than the poor countries that engage in trade with those rich countries. People completely ignore the trend upward. Poor countries that engage in trade move upward in terms of economic growth, wealth, GDP, Income per capita than countries that don't.
I am just amazed how people have such a static view of the world.

[Troy Camplin]

If charity were local and private, distinctions among the poor, among who gets help, could legitimately emerge. Of course, people also respond to incentives. If I can make more with welfare than at McDonalds, then why work? My wife tells me that when she was a social worker, she saw that most of the welfare recipients had turned ensuring they were getting welfare into a full time job. It's amazing how you can get around all the rules and regulations that require you to be "looking" for a job. She has enough stories to fill a book that would no doubt cause an outcry among the supporters of welfare. Most people have no idea how incredibly corrupt the welfare system is.

[phil m]

I have to disagree. With the expansion of the service sector, there is a widening income gap and wages and benefits stagnate and decline as the currency moves ever downward. In the 1960's, my grandmother could raise 5 children on waitress tips and send them all to private school. Now, my impoverished neighbor in the same position needs welfare to raise her son, and still has a lower standard of living than my grandmother did.

[Troy Camplin]

Might your neighbor be choosing some things other than private school for his/her children? Might the difference in values explain the difference?

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