Reclaiming the American Dreamer

Welfare: The Political Economy of Welfare Reform in the United States, by Martin Anderson. Hoover Institution Press, 251 pp., $10.00.

Martin Anderson is a remarkable political figure. An economist and long-time Republican with libertarian leanings, he has mounted attacks on policies that significantly erode our freedom, and has been surprisingly effective in these attacks. At the same time, he has moved back and forth between academia and positions of influence and power with both Richard Nixon and Ronald Reagan, somehow seeming to manage to maintain both the influence to accomplish a surprising amount of what he wants, and the mobility to disassociate himself from the power lusts and “dirty tricks” that invariably seem to be part of the entourage of major political party candidates today.

Thus, he joined the Nixon campaign in its successful bid for the presidency in order to work for the establishment of the volunteer army. He became an aide in the Nixon White House for the same reason and was the White House liaison with the Gates Commission, which reported on the feasibility of the All-Volunteer Armed Force. He also worked as Deputy to Arthur Burns when the latter was made Nixon’s domestic policy advisor, and is the only member of the working group that developed Nixon’s Family Assistance Plan who opposed its submission to Congress.

What should be of special interest to Libertarians is that he left the Nixon White House at what seemed to be the height of his influence, to accept a position as Senior Fellow at the Hoover Institution on War, Revolution and Peace. Whether coincidentally or not, by leaving the White House well before the summer of 1972 (in fact, in the spring of 1971, even before the break-in at the office of Daniel Ellsberg’s psychiatrist), he was able to leave with his reputation intact, clearly unassociated with the Watergate cover up and Nixon’s downfall.

In 1976, Anderson was an advisor to Ronald Reagan during the latter’s unsuccessful bid for the Republican presidential nomination, and was Reagan’s Deputy Campaign Director for Policy Development during his unofficial campaign for the presidential nomination in 1979. Shortly after Reagan announced his official candidacy, however, Anderson announced that he was returning to his position at Hoover, and would work with the Reagan campaign only on a consulting basis. No one knew why, and Anderson wasn’t telling, but, as Evans and Novak wrote in their newsletter, it seemed to be a sign “that all is not well within the campaign.”

But important as Anderson’s forays into the political arena have been, it may be his books that will turn out to have most influenced the politics of his time.

His first book, The Federal Bulldozer (1964) is still considered to be the definitive attack on urban renewal, and has been credited with providing many anti-urban renewal groups with the ammunition they needed to be successful.

His second book, Conscription: A Select and Annotated Bibliography (1976) is the first volume of a three-volume work which will include a book of selected readings (due later this year) and an essay on how to raise an armed force in a free society. Perhaps the most complete bibliography on the draft ever compiled, it covers books, unpublished manuscripts, articles, pamphlets, reprints, speeches, government publications and congressional hearings.

Anderson’s latest target is Welfare (1978). More specifically, it is any variation on the idea of the guaranteed income (including its conservative variation, the “negative income tax”), an idea which is trotted out by welfare bureaucrats periodically, whenever administrations or power blocs change.

The book has received some impressive endorsements. Columnist William Safire called it “the most penetrating study ever written on the knottiest problem in U.S. politics.” Arthur Burns said it was “impressive and important.” A former Commissioner of Welfare, Robert Carleson, added that the book was “an extremely important and valuable contribution to the impending debate over welfare reform.” And the free market’s own Henry Hazlitt called Welfare, in a review in The Freeman, “the definitive refutation” of the idea of a guaranteed income. Even Milton Friedman, the originator of the concept of the negative income tax, has quoted Anderson and says his analysis of the impossibility of radical welfare reform is right, in his own just-published book Free to Choose.

Its critics have to admit the validity of its argument;

even the negative or partially negative reviews which I have seen of Welfare seem for the most part to contain only niggling technical criticisms, essentially wishes that Anderson had written a different book. Thus John Bishop, writing in the Fall, 1978, issue of The Public Interest, quar-reled with Anderson’s handling of the biases inherent in some field studies he analysed, felt that the book implied that the planners did not foresee some problems to which they had in fact postulated false solutions, and held that some unacceptable figures were made more so by Anderson’s reporting the upper estimate of a range of estimates. But Bishop himself admits that none of these points in any way alter the validity of Anderson’s basic theses or his findings. In fact, his quarrel with the book is that it is, in his words, “a masterfully written brief,” whereas Bishop sees “a need for an up-to-date, popularly written book that provides a balanced and thoughtful summary of the findings and policy implications of this research.”

Robert Lekachman in The New York Times Book Review (July 9, 1978) also wanted Anderson to write another book, possibly the Piven and Cloward classic, Regulating the Poor. His basic complaint was that Anderson “argues this classic conservative case,” and “gives no sign of having ever visited a welfare center or of comprehending the hassles and humiliations of life on welfare.” But even he had to admit that the book “is a sharp demonstration that three essential objectives of a tolerable welfare approach are in sharp opposition to one another.”

It seems important, in the light of such reactions, to realize what this book is and is not. It is a devastating attack on the guaranteed income and the negative income tax. It is a well-writ-ten, careful, systematic, documented, and above all practical overview of the costs and consequences of the welfare “reforms” that have been endorsed by the administrations of Nixon, Ford, and later, Carter. One

could call it Everything That Today’s Policy-maker Needs to Know About the Guaranteed Income, But Was Afraid (or not knowledgeable enough) to Ask.

To many libertarians, it will not seem to contain everything that the policy-maker needs to know, since one of the things the book is not is a theoretical attack on the idea of welfare from a libertarian point of view. Neither is it an attack on welfare institutions from the viewpoint of how they harm those whom they purport to serve—the poor.

The case that Anderson is interested in making is presented in eight chapters, each of which is summarized in a beginning thesis. These (summarized even further) are as follows:

1. The war on poverty has been won, when we look at the benefits and services available to the poor, as well as the cash given through welfare.
2. These programs, however, have created a dependent caste, barred from getting off welfare by the “poverty wall” of what would be lost by working.
3. Overwhelmingly, Americans oppose a guaranteed income and favor welfare only for those who can’t take care of themselves.
4. “The clamor for radical welfare reform comes essentially from a small group of committed ideologues who want to institute a guaranteed income under the guise of welfare reform.”
5. If we had a guaranteed income, low income workers would withdraw from the work force in massive numbers.
6. No radical welfare reform plan can simultaneously provide politically acceptable levels of benefits, incentives to get off welfare, and an acceptable cost to the taxpayer, as these factors are inversely related. (It is the “elegant demonstration that when any two of these three basic elements of radical welfare reform are set at politically acceptable levels, the remaining element becomes unacceptable” which Henry Hazlitt considers to be the most original contribution of the book.)
7. We should return to a philosophy of welfare reform that eliminates fraud, minimizes cost, and gives help only to those who are unable to support themselves.
8. President Carter’s Program for Better Jobs and Income (which was presented in May ’77 and died in Congress in the summer of ’78) would be even more difficult to administer than the present system, adding millions to the welfare rolls and billions to the cost:

Each of these theses is fleshed out with charts, tables, examples, and citations, and the result is, in the words of Henry Hazlitt, “such a thorough job of theoretical and factual analysis that it would seem hereafter impossible for anyone with a candid and open mind to read it and still take the guaranteed income seriously.”

Still, libertarians may well be disappointed that Anderson has deliberately restricted the book’s purpose to three aims: “to examine the essentials of [the welfare reform] debate, to try to explain the reasons behind the current unrest about our welfare system, and to discuss the major reasons why all attempts to radically change our welfare system have resulted in dismal failure.” His conclusion is that either President Carter’s plan will fail and be supplanted by a similar new plan or that “on the other hand, Congress may be so weary of denying the welfare professionals that it might finally decide to try radical welfare reform to see if it works. It could be a costly experiment.”

Contrast this quotation with an earlier one from the introduction to the paperback edition of The Federal Bulldozer, written on December 25, 1966, before Anderson had access to the seats of power. After summarizing the ways in which urban renewal programs violate rights, he wrote:

“This kind of a program is not logical, it is not practical, and it is not moral. For no government program should exist that threatens the life, the liberty or the property of any person.”

Should we conclude, from the striking difference in tone between these two quotations that Anderson has changed his mind? I strongly doubt it. He states clearly in Welfare that “any proposal that includes a right to an income necessarily implies that someone is to provide that income, and the rights of the person who is to supply that income are almost always quietly ignored.”

But this recognition of rights is embedded in an approach that is narrowly practical, and at least implicitly endorses existing programs, even though they too ignore the rights of the person who is to provide the income. Because Anderson has thrown in his lot with the two-party system, he accepts the thesis that in order to make our society nearer to the libertarian ideal, he must set himself just such limited, practical goals—to implement this program, to stop the worst excesses of that, to support the best he sees available within the present major parties.

There is, of course, an alternative. Now that the Libertarian Party is growing faster than anyone expected, it could very well directly influence our society and change social institutions, just by articulating the issues in principle and challenging the other parties by threatening to take away a crucial margin of votes. With men like Martin Anderson advising Libertarians, rather than Republicans, the Libertarian Party influence could be impressive indeed.

Perhaps, instead of preserving his mobility in order to maintain his integrity with respect to Republican politics, as he seems to have been doing, Martin Anderson will decide to break once and for all with the politics of expediency and go back to the politics of principle, where his statement in The Federal Bulldozer shows he belongs.

This man was meant to be not only libertarian but a Libertarian.

Joan Kennedy Taylor is Senior Editor of LR.