# Welfare: Keeping the Poor in Their Place **URL:** **By** Joan Kennedy Taylor **Published:** April 2, 1980 --- “Welfare is the government program that everyone loves to hate.” Welfare is the government program that everyone loves to hate. Either you agree with Leslie Lenkowsky, who called it (in the March 1979 _Commentary_) “the domestic program which most Americans would place at the top of their lists of wasteful and ineffective public services,” or you agree with Richard Elman’s statement in his 1966 portrait of the New York City welfare system, _The Poorhouse State_: “One can’t help wondering what the poor ever did to deserve contemporary America.” Conservatives wonder too, but from a different point of view. An editorial in the _Wall Street Journal_ on August 14, 1979, worried in print about transfer programs, which take money from the rich to give to the poor, or “to put it another way, take money from the working to give to the non-working. And while the second way of putting it is not the conventional one, it seems a lot more pertinent if you review the recent explosion of such programs. Taking a calculator to the tables in the latest _Economic Report of the President_, you find that over the last decade government transfers to persons grew by 280 percent, while wages and salaries grew by 134 percent. How long, are we forced to wonder, can transfers grow twice as fast as the earnings that ultimately must support them?” The usual conservative attack on welfare is that taxpayers’ money is going to those who are not really poor and are receiving it through fraudulent deception. When, in late 1979, the House of Representatives passed a bill requiring states to support needy families at a level of welfare benefits equal to 65 percent of the official poverty line, California Republican Representative John H. Rousselot spoke for conservatives when he said: “This bill increases welfare rolls substantially without any substantial promise it will take out of the program those who don’t need it or who abuse it.” (Of course, those who abuse it are often not recipients, but government employees—a recent California welfare fraud scandal involved welfare workers who were collecting bogus welfare checks in addition to their salaries.) Liberals, on the other hand, look at welfare from the point of view of increasing government benefits for the poor, rather than the point of view of the overburdened taxpayer. Each position assumes that there must be a trade-off; either the poor must suffer or the taxpayer must suffer. Each position also assumes that the other one is unfairly selfish: the taxpayer criticizing the expansion of federal programs is accused of caring more about dollars than human lives; the welfare recipient is stereotyped as a lazy cheat. Both the taxpayer and the welfare recipient are being maligned. The taxpayer not only has a right to his money; he’s also given ample evidence of his good intentions. Even in the face of the heavy government drain on our purses (nondefense spending on all levels of government now totals “roughly one-third the national income” according to Milton Friedman), Americans still donate $40-billion a year to private charity. And the welfare recipient, far from being the beneficiary of this massive government spending, is more often its victim. Stigmatized, bullied, interrogated, and spied on, he or she must live a life totally dominated by bureaucrats. “Being on welfare is a full-time job,” says one New York City social worker. “If you do all the things the regulations require you to do, there’s no time left to look for work.” So has it ever been. Here’s how Ira Glasser, executive director of the New York Civil Liberties Union, has characterized our welfare tradition: > Welfare fed and clothed the poor, and public housing provided shelter. But individual rights became unthinkable. > > For people who needed shelter, the government provided public housing. But admission was denied for reasons such as poor housekeeping, irregular work history, frequent separations of husband and wife, single-parent families, common-law marriages, lack of furniture, apparent mental retardation, dishonorable discharge from the military, or the arrest of one’s child. These standards were not the result of ad hoc decisions by unfair individuals; they were actually written down as the legal regulations of public-housing authorities, and they gave housing officials unprecedented discretion—the early Americans would have called it dominion—over other people’s lives. Private troubles became a reason for public punishment. For people who needed money, the government provided wel- -fare. But eligibility standards depended on morality. Every detail of a recipient’s life was subject to scrutiny. Women were allowed different numbers of sanitary napkins each month, and men different numbers of razor blades, depending on whether they were employed or not. The same consideration governed the number of times one could have one’s coat cleaned. There were no allowances for newspapers, and telephones were considered a luxury, even for the blind. A single woman with preschool, dependent children could have her children’s benefits revoked if she were found to be sleeping with a man, and midnight raids by caseworkers became a common method of discovering such behavior. The abolition of privacy became a condition of survival. …We have traditionally been seduced into supposing that because they represented charity, service professionals could speak for the best interests of their clients. By now we should know better. Power is the natural antagonist of liberty, even if those who exercise power are filled with good intentions. (_Doing Good: The Limits of Benevolence_) From the libertarian point of view, both the liberal and the conservative approach to welfare represents a half-truth, and neither approach goes far enough. Each hopes to reform the system and make it equitable. But the inequities, to taxpayer and recipient alike, are a necessary result of wedding charity to the coercive power of government. It is the system itself that needs to be deglamorized; it is the very concept of government welfare that must be attacked. Yet this is a concept that has been part of our civilization since medieval times. Few nonlibertarians would disagree with Los Angeles columnist Phil Kerby, who criticized the Libertarian Party’s stand against taxation by writing: “The tax collector isn’t my friend either, but without taxes, who will take care of the widows and orphans?” How can libertarians counter the implications in such a question? First, we must make it clear that not only does our present system hurt, rather than benefit, the “widows and orphans,” but it is in the nature of any such system to do so. Valuable data may be found in attacks on welfare by liberals and social democrats, although their mistrust of government never goes far enough: books such as Elman’s _The Poorhouse State_; _Regulating the Poor_, by Frances Fox Piven and Richard A. Cloward; and _Doing Good: The Limits of Benevolence_, by Willard Gaylin, Ira Glasser, Steven Marcus and David J. Rothman all give innumerable examples of ways in which, in the welfare system, “power is the natural antagonist of liberty.” Precisely because responsiblity is so diffuse, the bureaucracy can be cruel, even inhumanly so. There is Karen Gibbs, who vainly stood in line for three days in the spring of 1977 when she was fourteen years old, trying to register for a CETA summer job—going back and forth between two job centers, each of whom, according to the _New York Times_, “told her she ‘was out of the district,’ but didn’t tell her what her district was.” There is Ed Taylor, who built a home for himself on a ledge above a railroad gulch in Detroit, from materials he gathered in vacant lots. He moved into his house in September, 1979, after refusing help from Detroit’s Department of Social Services, saying, “I don’t mess with the welfare. Welfare causes a lot of red tape ‘cause they got a lot of bums on welfare. I can make it on my own.” No one knows if he’s making it or not, because he disappeared after Detroit’s Sanitation Department tore down his house and carted away the materials on October 15. There is the unnamed young welfare mother in Chicago whose baby died in 1966 at the age of four days because her electricity had been turned off after the public aid department had failed to pay the bill—through a clerical error— which meant she had no refrigeration for milk. She couldn’t buy fresh milk because she had literally no money: she had been underbudgeted—through a clerical error—and her check had been misaddressed—through a clerical error—and returned to the welfare office. The agency refused to give her money to feed her other two children, even after the baby’s death. And there are the more than 28 black men who died in the Tuskegee Study, sponsored by, the United States Public Health Service (a division of HEW) from 1932 until well into the ’70s—men who were not told that they were in an experiment but were allowed to die of untreated syphilis so that scientists could study the effects of the disease and record its progress. ## Why was welfare started? Piven and Cloward’s pioneering book, _Regulating the Poor_, which was first published in 1971, sets forth the thesis that the purpose of welfare and relief has never been to help the poor, but rather to defuse discontent and potential rebellion and to enforce work norms. To do the latter in medieval times, it was necessary to prohibit private charity (with laws against begging and almsgiving) and to keep the poor from moving around in an attempt to better themselves (with laws against vagrancy). As early as 1349, the British Statute of Laborers was explicit in its intention to force the poor to work: > Because that many valiant beggars, as long as they may live of begging, do refuse to labor, giving themselves to idleness and vice, and sometimes to theft and other abominations; none upon the said pain of imprisonment, shall under the color of pity or alms, give anything to such, which may labor, or presume to favor them towards their desires, so that thereby they may be compelled to labor for their necessary living. But some sort of care had to be taken of those who couldn’t work, so finally, in 1531, another act of Parliament “decreed that local officials search out and register those of the destitute deemed to be impotent, and give them a document authorizing begging. Almsgiving to others was outlawed. As for those who sought alms without authoriza- “tion, the penalty was public whipping till the blood ran.” (_Regulating the Poor_.) Contributions for relief were also collected and administered by local officials. Then contributions were made compulsory. The monasteries were expropriated, “helping to assure secular control of charity.” Finally, the Elizabethan Poor Laws were passed, establishing a tax to care for paupers (the poor rate) and requiring justices of the peace to see that paupers were put to work. Then in 1723, an act of Parliament established workhouses in which the poor had to live and work in order to receive aid. These were indeed fearsome places—only 7 percent of the infants born or taken there as foundlings survived. The child labor in English factories that has been considered such a blight on the history of capitalism was not a matter of voluntary contract—it was pauper children that were put into the mills by government officials, in a form of “work relief,” as it would be called today. Manufacturers negotiated regular bargains with the parish authorities, ordering lots of fifty or more children from the poorhouses. (In at least one known instance, a Lancashire manufacturer agreed to the stipulation of a London parish that he take one idiot for every twenty sound children delivered.) To secure their acquiescence, the youngsters were told that once at the cotton mills or ironmongers they would live like ladies and gentlemen on roast beef and plum pudding. … Moreover, pauper children could be had for a bit of food and a bed, and they provided a very stable labor supply, for they were held fast at their labors by indentures, usually until they were twenty-one.... Many children did not survive the terms of their indentures. (_Regulating the Poor_.) Laws against begging and vagrancy, the discouragement of private charity, the enforcing of work for welfare recipients, even the poorhouse, all persist today. We still outlaw begging, and, as recently as 1937, when the state of New Jersey ran out of relief funds it issued licenses to beg, instead. “Vagrancy,” of course, is not only specifically against the law, but it was penalized further by the residency requirements that many localities imposed on welfare recipients until recently. Modern welfare states discourage private charity mainly by competing with it. A spokesman for United Way was quoted in _The Nation_ (September 29, 1979) as saying that “in our society today the needs of the poor are largely met by tax responsibility.” And _Regulating the Poor_ points out: “Most private social agencies had been engaged with the poor until the Depression years; then, with the development of public relief programs under the Social Security Act, and with the rapid spread of mental-hygiene concepts, many private agencies turned away from giving relief and other concrete services to the poor and began providing psychotherapy to middle-class families.” As recently as 1931, according to Murray Rothbard in _America’s Great Depression_, charity organizations felt strongly that government relief would be counter-productive. “In fact,” he writes, > The voluntaryist (sic) tradition was still so strong in this field that the Red Cross opposed a bill, in early 1931, to grant it $25 million for relief. The Red Cross declared that its own funds were adequate, and its Chairman told a House Committee that such a Congressional appropriation would “to a large extent destroy voluntary giving.” Many local Red Cross leaders strongly opposed all federal aid, and even all public relief generally, and so the bill, after passing the Senate, was killed in the House. In European welfare states, charitable donations are also attacked by tax policies. Taxpayers in Sweden, who pay 87 percent on incomes over $35,000 a year (as well as paying deductions for charitable contributions, nor are individual donors in Great Britain. As for work relief, as recently as the 1960s, male welfare recipients in New York were sent to jail if they refused work offered by the Welfare Department. In April 1977, _U.S. News and World Report_ published a glowing account of work relief in Milwaukee County, Wisconsin, where able bodied relief applicants were offered instead “specially created” (read, make-work) subsidized jobs at below the minimum wage. The salaries were subsidized by the welfare budget, so “for the various government agencies involved and a few private employers, the work program means free labor.” The Pay for Work people, as they were called, were replacing union members in government agencies (who had been making over twice as much per hour, plus hospitalization and a retirement plan). The _New York Times News Service_ sent out a story at the end of 1976 about Willie Sykes, a man in Iowa who was born in 1900, orphaned at the age of nine, sent to a school for retarded children (although he was apparently not retarded) until he was 21, and then committed to the county poorhouse, where he still was in 1976. The administrator of the poorhouse is quoted as agreeing “that the state of Iowa, in effect, sentenced Sykes to a life in institutions, thereby ruining his life,” since it gave him no education or training. Poorhouses are now called “county care facilities” in Iowa, the news story reports, and “today, there are 3,900 residents of county care facilities in 72 of Iowa’s 99 counties.” Ohio, Illinois, Michigan, Wisconsin, Tennessee and New Hampshire are other states in which poorhouses, usually under other names, can still be found. Piven and Cloward report in _Regulating the Poor_ that, until 1934, the constitutions of Louisiana, Missouri, Oklahoma, and Pennsylvania denied inmates of “poorhouses or other charitable institutions” the right to vote or hold office. ## Welfare under the New Deal The relief system invented in seventeenth and eighteenth century England and brought from there to the American colonies persisted in general until the ’30s. In another book, _Poor People’s Movements_, Piven and Cloward write that “at the time of the Great Depression the main legal arrangement for the care of the destitute was incarceration in alms-houses or workhouses. In some places the care of paupers was still contracted to the lowest bidder, and destitute orphans were indentured to those who would feed them in exchange for whatever labor they could perform.” Harsh as this system might sound, it was at least administered totally by local authorities. The first relief authority that operated on a statewide level was not established until the winter of 1931–32—it was New York State’s Temporary Emergency Relief Administration, set up at the urging of Governor Franklin D. Roosevelt. The nation’s first Federal relief legislation followed shortly—the Emergency Relief and Construction Act of July, 1932. These measures, as well as the later New Deal programs of relief and public works, were instituted because of the havoc caused by the Depression. Perhaps the most generally persuasive argument for government welfare programs is what might be called the Argument from Depressions. Surely, it says, with unemployment affecting up to one-third of the work force, government help is needed for the massive numbers of people out of work through no fault of their own. According to this view, Hoover, and after him, Roose- Private relief agencies and many newly initiated government make-work programs tried to assist the growing numbers of people out of work, but despite (or perhaps because of) government intervention, the Depression grew worse. velt, saved us from even worse disaster. Yet this argument is a little like an old anecdote about a woman who took her cat to the vet to be sedated before a long train trip. The vet discovered that he had given the animal a stimulant rather than a sedative, and was surprised and relieved when she telephoned him to say, “Doctor, I can’t thank you enough for what you did. Why, even as it was, he ran through the train and bit three people.” Even as it was, the Depression grew steadily worse with each attempt at a government solution. As early as the spring of 1932, William A. Berridge, economist for the Metropolitan Life Insurance Company, warned that the proposed bills for massive public works projects “would encroach seriously, and perhaps dangerously upon the supply of capital funds that private enterprise will need in order to help the country climb out of depression again.” (This was before the Emergency Relief and Construction Act was passed.) In a detailed economic history of the period from 1914 to 1946, _Economics and the Public Welfare_, the late Benjamin M. Anderson, Jr., shows that there were actually periods during the Depression when the economy was on the upswing, only to fall again with the initiation of some new government program. For instance, a strong business rally from March to July of 1933 turned downward with the establishment of the National Recovery Administration. The National Industrial Recovery Act was passed on June 17 of that year. “Businessmen suddenly realized that with the application of the NRA codes, and with the application of the processing taxes which the Agricultural Adjustment Act provided, there would come a great increase in the costs of production.... NRA and the processing taxes came in July and August, and the production curve turned sharply downward.” Furthermore, Anderson shows that there is a correlation between the level of unemployment and the attempts of the government to increase employment. Prior to 1924 we had not regarded it as a Federal Government function to make employment. Employment was a matter for the people themselves to work out. Beginning with the Federal Reserve purchases of Government securities in 1924, we have had Government policy directed increasingly toward making employment. The explanation of the good figures for employment prior to 1924, and of the desperately bad figures for employment which followed 1929, is to be found in precisely this fact. Under an old-fashioned Federal Government, which, in financial matters, was concerned primarily with its own solvency and with the protection of the sound gold dollar, the people themselves solved the problem of employment amazingly well. When the Federal Government took over and undertook to solve the problem for them, grave disasters followed. President Roosevelt inherited a terrific volume of unemployment. He did not cure it. The figures for 1933 are worse than the figures for 1932. The years 1933 to 1939, inclusive, show unemployment exceeding 9,000,000 for five years out of the seven. In only two years of the Democratic New Deal period prior to the outbreak of World War II did the annual average figure for unemployment get below 8,000,000. And in the best of these two years, namely 1937, the figure stood at 6,372,000, which is 12 percent of the labor force, as compared with 11.2 percent of the labor force in the year of extreme depression, 1921. The historical record is damning. The New Deal, viewed as an economic policy designed to promote employment, is condemned by the historical and statistical record. As Murray Rothbard put it in _America’s Great Depression_: “Whenever government intervenes in the market, it aggravates rather than settles the problems it has set out to solve. This is a general economic law of government intervention.” Not only, as both Anderson and Rothbard show in some detail, did the New Deal economic policies prolong the Depression, many of them also directly hurt the poor. Historian Barton J. Bernstein, in his essay “The New Deal: The Conservative Achievements of Liberal Reform,” says of the aftermath of the Agricultural Adjustment Act, “with benefits accruing chiefly to the larger owners, they frequently removed from production the lands of sharecroppers and tenant farmers, and ‘tractored’ them and hired hands off the land. In assisting agriculture, the AAA, like the NRA, sacrificed the interests of the marginal and the unrecognized to the welfare of those with greater political and economic power.” Later, in the same essay, Professor Bernstein points out that “most liberals agreed with Senator Robert Wagner of New York: ‘In order that the strong may not take advantage of the weak, every group must be equally strong.’ His advice then seemed appropriate for organizing labor, but it neglected the problems of unrepresentative leadership and of the many millions to be left beyond organization.” Some, but not all, of those millions were put on relief. In general, the New Deal favored the large farmer, the big businessman, the established labor union leader or member, at the expense of what Professor Bernstein calls “the marginal men.” Piven and Cloward see this as a recurring pattern in our society. The two major relief explosions in the United States, one in the Depression and another in the ’60s, were both initiated when there was not only widespread poverty but also widespread social turmoil. When there is no unrest among them, the poor can be safely ignored—thus the migration of southern blacks to northern cities in the ’40s increased urban poverty but not urban welfare rolls. In a 1974 book, _The Politics of Turmoil_, they sum up this point of view: > Ours is a “subsidy enterprise” economy, and the subsidies go to those who are enterprising in the use of their political influence. The low-paid alone seem not to realize this. Farmers receive wage supplements—we call them agricultural subsidies. The construction unions enjoy high incomes partly because of government subsidies to builders who are required to pay the “prevailing wage.” Large numbers of middle-income people enjoy the benefits of a host of housing and transportation and tax subsidies. And these are merely a few of the items on a very long list of government giveaways, both direct and indirect, which support the standard of living of the more affluent in America. In a subsidy economy, the singular faith of the working poor in advancement through wages alone is pathetic, to say the least. ## How government helps to create poverty The solution to this situation is not, as Piven and Cloward suggest, to decide that the poor should be more “enterprising” and demand their subsidy—in Piven and Cloward’s view, a guaranteed annual income. Rather, it is to expose and do away with the subsidies to other groups, and to recognize other interferences in the operation of the market that help to create poverty. Piven and Cloward recognize that urban renewal destroys the housing of the poor and benefits the middle class; they do not similarly speak out against rent control, which makes it impossible for landlords to earn enough return on their buildings to maintain them, especially in slum neighborhoods; and which, in conjunction with the high property taxes in many ghettos causes the abandonment of building after building to city ownership. They recognize that minimum wage laws speeded the exodus of blacks from the agricultural south, as women and children were no longer hired to do field work; but the minimum wage, as economists particularly interested in the problems of the black poor (like Thomas Sowell and Walter Williams) are beginning to publicize, reduces employment opportunity generally for low-skilled workers. In an article on black unemployment in the _New York Times_ of March 11, 1979, Secretary of Labor Marshall is reported as blaming much of the problem on illegal aliens. Why? There are those who say black leaders, trying to instill pride in black youths, also instilled an unwillingness to labor at menial jobs. The accepted view has become that aliens take the undesirable jobs that blacks, who may be on welfare, do not want to perform. But Mr. Marshall said in an interview that it was not that simple. Employers from apple-growers to housewives prefer to hire foreigners because, whether they are here illegally or hold visas, they are in no position to complain about pay or working conditions. Most blacks are American citizens with the full protection of the law. In other words, there is work available, but apple-growers and housewives don’t want to pay the minimum wage, which went up on January 1 to $3.10 an hour. So “the full protection of the law” means that many blacks are unemployed. Another impediment that the law puts in the way of the poor who want to work are the multitude of state licensing laws that serve the same function as the old medieval guild system—they limit access to occupations. Walter E. Williams is one economist who is mounting a crusade against these laws. He is quoted in _Time_ magazine (January 21, 1980) as being appalled that “roughly 600 occupations are licensed in the U.S. . . . Our founding fathers thought that a man had a right to practice his trade without going to the feudal lord or the king to ask permission. But we have built the same system that our founding fathers sought to escape.” On top of all these barriers to employment, our welfare system teaches its recipients to be timid and fearful; in effect, as Thomas Sowell has said, rewarding them for failure. A recipient interviewed by Richard Elman said, When you want something from them you got to sit and wait all day, and if you complain they said, “You got nothing better now to do.” . . . When my husband was working, we had to worry all the time if he would lose his job, but those jobs there were always others. On the Welfare it is different. You never know if you will Government policy directed increasingly toward making employment. The explanation of the good figures for employment prior to 1924, and of the desperately bad figures for employment which followed 1929, is to be found in precisely this fact. Under an old-fashioned Federal Government, which, in financial matters, was concerned primarily with its own solvency and with the protection of the sound gold dollar, the people themselves solved the problem of employment amazingly well. When the Federal Government took over and undertook to solve the problem for them, grave disasters followed. President Roosevelt inherited a terrific volume of unemployment. He did not cure it. The figures for 1933 are worse than the figures for 1932. The years 1933 to 1939, inclusive, show unemployment exceeding 9,000,000 for five years out of the seven. In only two years of the Democratic New Deal period prior to the outbreak of World War II did the annual average figure for unemployment get below 8,000,000. And in the best of these two years, namely 1937, the figure stood at 6,372,000, which is 12 percent of the labor force, as compared with 11.2 percent of the labor force in the year of extreme depression, 1921. The historical record is damning. The New Deal, viewed as an economic policy designed to promote employment, is condemned by the historical and statistical record. As Murray Rothbard put it in _America’s Great Depression_: > “Whenever government intervenes in the market, it aggravates rather than settles the problems it has set out to solve. This is a general economic law of government intervention.” Not only, as both Anderson and Rothbard show in some detail, did the New Deal economic policies prolong the Depression, many of them also directly hurt the poor. Historian Barton J. Bernstein, in his essay “The New Deal: The Conservative Achievements of Liberal Reform,” says of the aftermath of the Agricultural Adjustment Act, “with benefits accruing chiefly to the larger owners, they frequently removed from production the lands of sharecroppers and tenant farmers, and ‘tractored’ them and hired hands off the land. In assisting agriculture, the AAA, like the NRA, sacrificed the interests of the marginal and the unrecognized to the welfare of those with greater political and economic power.” Later, in the same essay, Professor Bernstein points out that “most liberals agreed with Senator Robert Wagner of New York: ‘In order that the strong may not take advantage of the weak, every group must be equally strong.’ His advice then seemed appropriate for organizing labor, but it neglected the problems of unrepresentative leadership and of the many millions to be left beyond organization.” Some, but not all, of those millions were put on relief. In general, the New Deal favored the large farmer, the big businessman, the established labor union leader or member, at the expense of what Professor Bernstein calls “the marginal men.” Piven and Cloward see this as a recurring pattern in our society. The two major relief explosions in the United States, one in the Depression and another in the ‘60s, were both initiated when there was not only widespread poverty but also widespread social turmoil. When there is no unrest among them, the poor can be safely ignored—thus the migration of southern blacks to northern cities in the ‘40s increased urban poverty but not urban welfare rolls. In a 1974 book, _The Politics of Turmoil_, they sum up this point of view: Ours is a “subsidy enterprise” economy, and the subsidies go to those who are enterprising in the use of their political influence. The low-paid alone seem not to realize this. Farmers receive wage supplements —we call them agricultural subsidies. The construction unions enjoy high incomes partly because of government subsidies to builders who are required to pay the “prevailing wage.” Large numbers of middle-income people enjoy the benefits of a host of housing and transportation and tax subsidies. And these are merely a few of the items on a very long list of government giveaways, both direct and indirect, which support the standard of living of the more affluent in America. In a subsidy economy, the singular faith of the working poor in advancement through wages alone is pathetic, to say the least. ## How government helps to create poverty The solution to this situation is not, as Piven and Cloward suggest, to decide that the poor should be more “enterprising” and demand _their_ subsidy—in Piven and Cloward’s view, a guaranteed annual income. Rather, it is to expose and do away with the subsidies to other groups, and to recognize other interferences in the operation of the market that help to create poverty. Piven and Cloward recognize that urban renewal destroys the housing of the poor and benefits the middle class; they do not similarly speak out against rent control, which makes it impossible for landlords to earn enough return on their buildings to maintain them, especially in slum neighborhoods; and which, in conjunction with the high property taxes in many ghettos causes the abandonment of building after building to city ownership. They recognize that minimum wage laws speeded the exodus of blacks from the agricultural south, as women and children were no longer hired to do field work; but the minimum wage, as economists particularly interested in the problems of the black poor (like Thomas Sowell and Walter Williams) are beginning to publicize, reduces employment opportunity generally for low-skilled workers. In an article on black unemployment in the _New York Times_ of March 11,1979, Secretary of Labor Marshall is reported as blaming much of the problem on illegal aliens. Why? There are those who say black leaders, trying to instill pride in black youths, also instilled an unwillingness to labor at menial jobs. The accepted view has become that aliens take the undesirable jobs that blacks, who may be on welfare, do not want to perform. But Mr. Marshall said in an interview that it was not that simple. Employers from apple-growers to housewives prefer to hire foreigners because, whether they are here illegally or hold visas, they are in no position to complain about pay or working conditions. Most blacks are American citizens with the full protection of the law. In other words, there is work available, but apple-growers and housewives don’t want to pay the minimum wage, which went up on January 1 to $3.10 an hour. So “the full protection of the law” means that many blacks are unemployed. Another impediment that the law puts in the way of the poor who want to work are the multitude of state licensing laws that serve the same function as the old medieval guild system—they limit access to occupations. Walter E. Williams is one economist who is mounting a crusade against these laws. He is quoted in _Time_ magazine (January 21, 1980) as being appalled that “roughly 600 occupations are licensed in the U.S. . . . Our founding fathers thought that a man had a right to practice his trade without going to the feudal lord or the king to ask permission. But we have built the same system that our founding fathers sought to escape.” On top of all these barriers to employment, our welfare system teaches its recipients to be timid and fearful; in effect, as Thomas Sowell has said, rewarding them for failure. A recipient interviewed by Richard Elman said, > When you want something from them you got to sit and wait all day, and if you complain they said, “You got nothing better now to do.” . . . When my husband was working, we had to worry all the time if he would lose his job, but those jobs . . . there were always others. On the Welfare it is different. You never know if you will lose it, and if you lose it you lose everything. Evalynne, who worked as a therapist for a family service agency in New York City, agrees. “Once a family goes on welfare, it will probably never get off,” she says. “An inner city family, that is.” “Why is that?” she was asked. “Is it just the way the welfare department treats you, or is there also a change in your relationship with the outside society? Is it harder to get a job, or do you stop wanting one?” “Well, it’s interrelated,” Evalynne says. “The teachers know that your kids are on welfare, so they don’t expect anything from them. The kids may react by becoming trouble makers, and this reflects back on you. Everything you do is evaluated by a different standard—you may risk having your kids taken away from you if you send them to visit relatives, for instance. Also, it’s impossible for anyone to live on a welfare budget, so you’re always dealing with the workers, who treat you as if you’re not human. They don’t make distinctions between one client and another; they do everything mechanically. So you stop making distinctions. You become less human. I’ve seen clients just start to slip,” she scoops her hand downward expressively, “going from being willing to fight, to giving up. The system itself blames the poor—when the rolls go down, it’s not that the economy has gotten better or that people have gotten jobs; it’s just that the eligibility rules have gotten tougher. The five dollars that you made now makes you ineligible.” The rural poor often eat cornstarch or suck clay to ease the pangs of hunger when they don’t have enough to eat. In the same way, the welfare system is a stop-gap measure that makes the condition worse; it placates people temporarily, without giving them what they need. Conservatives, especially those with immigrant parents, often compare the struggle and hard work of pre-Depression immigrants with the lives of people on welfare today—to the disparagement of welfare recipients. What this comparison leaves out is all the ways in which government has made poverty harder to get out of, in the intervening years. Who ends up taking care of the poor? Other poor people. The government cynically recognizes this fact in its welfare regulations and eligibility requirements. It labels a woman with five small children “employable,” because she has a sister who has six children, who can take care of them all. It makes no arrangements for babysitting, ever, but the Aid to Dependent Children Office in Lower Manhattan had hand-lettered signs posted that read “Please Do Not Bring Children To This Office,” in 1966. And when urban renewal destroys four housing units for every one that it builds, where do the people who lived in those former slums go? They make some other slum more crowded. ## Deregulating the poor When people can’t buy, they make other arrangements. They barter. They trade services. They form groups to do things that otherwise they couldn’t do. (That is, unless they are welfare mothers who are afraid that the social worker will think them unfit if they aren’t always at home with the children, cleaning house.) In an article in the March 1979 _Commentary_, “Welfare Reform and the Liberals,” Leslie Lenkowsky wrote that “finally, perhaps more than the middle class and the wealthy, the poor depend upon stable communities in order to have a chance of prospering and advancing.” Today we have the growing phenomenon of the voluntary poor—people who prefer the cameraderie and community feeling and lack of regulation of a life that emphasizes interaction with a community rather than making money. There was a time when such people primarily took religious vows—in our society they also become performers, artists, students, even back-to-nature enthusiasts. They trade services; they borrow each other’s clothes and books, to say nothing of borrowing each other’s money. Since their emphasis is on the quality of their life and relationships rather than on money-making activities—money is not the way they “keep score” to see how well they are doing competitively—they aren’t really that concerned with the nature of their entitlement to the money they need. They may beg for it; they may apply for food stamps; they may apply for a grant from a private foundation or for a student loan. If the money is there for the asking, the question is, how onerous is the qualifying process? Not, do I have a right to it? The involuntary poor, as we have seen, are another matter. They believe in the work ethic. It’s interesting that the short-lived National Welfare Rights Organization got very little support from black organizations like the Urban League and the NAACP, most of whom wanted to get blacks off welfare, not on to it. Indeed, although federal welfare programs are so many and complex that no one knows how many people are receiving what at any given time, it is generally considered by welfare experts of varying political persuasions (Michael Harrington and Martin Anderson, to pull two names out of a hat) that half the people eligible for welfare benefits never apply for them. Piven and Cloward see such a reaction as proof that welfare is fulfilling its function of keeping the poor quiet: > “That the working poor are ready to forfeit such substantial sums,” they write, “is powerful testimony to the force with which the ideology of work and success, together with abhorrence of the dole, has been driven home to those who gain the least from their labor.” What can be done to reverse this disastrous system? The present trend toward libertarianism is the trend toward what F.A. Hayek has identified as spontaneous orders, self-regulatory sytems, like the market, that operate as if they were planned, but which no one individual or group of individuals could have the knowledge to plan. The first thing that has to be done therefore, is the reestablishment of community ties. It is not poverty that is the worst problem for people on welfare; it is the bureaucratically induced alienation, as we can see from the much better functioning of the voluntary poor. The first thing, then, is to encourage the rebuilding of ghetto areas by the people that live in them. And “encourage” does not mean to pour government money into slum areas—the government has done enough damage in that way already. It means allowing the homesteading of abandoned buildings. It means “sweat equities.” It means drastic cutting of property taxes. And it also means abolishing the minimum wage and the occupational licensing laws, particularly those prohibiting pushcarts and peddlers, so that there will be more jobs and people will be able to start small businesses. Jane Jacobs, author of _The Death and Life of Great American Cities_, has identified principles of city safety that can be learned from in thinking about improving the ghettos—she discovered that safe streets are streets that are bordered with a wide diversity of usages (which means that they are bordered by buildings of different sizes and ages) with a high density of population and a high ratio of ground coverage. These are, to use her phrase, streets that have “eyes” on them all the time, because the different usages take place at different hours. She has also pointed out that the usual housing project is a miniature city standing on its side, whose “streets” are corridors and elevators which are unobserved and therefore not safe. Jacobs’s account of the rehabilitation of Boston’s North End, after it had been “redlined” by banks as a slum, points the way to the possible reclaiming of real slums. The largest mortgage loans that had been fed into this district of some 15,000 people in the quarter-century since the Great Depression were for $3,000, the banker told me, “and very, very few of those.” There had been some others for $1,000 and for $2,000. The rehabilitation work had been almost entirely financed by business and housing earnings within the district, plowed back in, and by skilled work bartered among residents and relatives of residents. There are already businesses which have found it to their advantage to experiment with innovative training programs and work schedules, which in turn provide expanded opportunities to the low-skilled worker. A 1978 book by David Robison, _Training and Jobs Programs in Action_, published by the committee for Economic Development in cooperation with Work in America Institute lists, among others, some interesting programs that accept no government subsidies (subsidized training is generally inefficient, because it is not aimed at profit). The Continental Illinois National Bank and Trust Company, for instance, has a program of work-study jobs, in which local highschool seniors are allowed by the school system to reschedule their classes so that they can work part-time at the bank. They have a better attendance record than other employees and are rated “somewhat superior in job performance,” and those that later join the bank as full-time employees cost the company less per hire than other methods of recruiting. Sears, Roebuck has a company-wide policy of employing handicapped workers, in a program run by a rehabilitation specialist who is himself blind. From 3 to 11 percent of the employees in any Sears facility “have some disability that would qualify them for state rehabilitation services.” And Control Data has opened several innovative plants, all of which stress profitability. They located one in an inner-city, high-unemployment, low-income area of Minneapolis, where they selected employees on a “first-come first-hired” basis, many of whom were female heads of households that lacked a twelfth grade education. Although it began as a training center, the plant is now operating profitably. Another plant, “in the economically distressed Selby-Dale area of Saint Paul, Minnesota,” is the first entirely part-time facility in the country, designed “to supply part-time employment primarily for female heads of households and mothers with school-age children and secondarily to neighborhood students.” Most of the employees live close by, and absenteeism is very low. The plant is a bindery, and the manager points out that “using part-time workers is efficient. No one can collate well for more than five hours at a time, which is all we schedule. Most people are less productive in their sixth to eighth hours of a workday.” Because the bindery is so efficient, it is saving Control Data money: “Before the Selby facility was established, it cost Control Data nearly twice as much to have similar services performed by outside businesses.” A third successful Control Data plant is in a rural strip-mining area in Kentucky. It found an excellent pool of workers, some of whom travel twelve to eighteen miles to work, and is described by its manager as “a superb operation in terms of productivity, low-absenteeism, and a strong work ethic.” Any lowering of capital gains taxation will free investment capital and make experimental plants such as these more attractive to other businesses. A _Wall Street Journal_ editorial on June 9, 1978, said that “the major obstacle to black capitalism is no longer racial discrimination but the tax and regulatory structure.” Citing black support for the Steiger amendment to cut capital gains taxes, it went on to say that “those black leaders who still believe black enterprise can only be built via government subsidies or contract favoritism have a pleasant surprise coming. There is a vast population of talented, educated and adventurous blacks bottled up in corporate America for want of venture capital. They will be freed if only we can change the rules to get the train moving again.” Since ethnic groups historically have prospered by starting businesses and hiring their own members, we can expect expanding black enterprise to have a beneficial effect on black unemployment. The poor are being offered only the false alternatives of public welfare or public jobs, both of which have been used throughout the history of industrial societies to regulate the poor and keep them from bettering their lot. The very need for welfare as we now know it was created by government. Government laws and regulations such as minimum wage laws, the licensing of occupations and businesses, and labor laws all discriminate against the disadvantaged by reducing their opportunities for employment. Indeed, in 1948, before much of this legislation proliferated, black male teenagers experienced less unemployment than their white counterparts. Today, after more than a generation of government programs to supposedly benefit the disadvantaged, black teenage unemployment has risen to a shocking 40 percent. Yet why is anyone surprised? In the words of Walter E. Williams, “Many analysts believe that market-entry regulations are political acts that have made it increasingly difficult for the black underclass to enter the mainstream of American society.” Although more than half the people on welfare rolls are white, it is the “black underclass” that stays on welfare for generations, that is herded into neglected ghetto areas in deteriorating inner cities, and that is the impetus for schemes to expand the welfare octopus. The statement issued by Clark R. Watson, chairman of the American Association of Blacks in Energy, which was issued in February of 1978 is perhaps even more relevant today. Federal schemes to assist minorities such as the War on Poverty, Model Cities and the like failed dismally. They failed because they perceived minorities as necessarily and perpetually poor. Secondly, they failed because beyond lip-service the government has not really been dedicated to eradicating poverty.... AABE does not look to platitudes, promises and traditional ties. Rather, the organization looks solely at the bottom line, at the marketplace and what it has done and can do for black folks. Neither Republicans nor Democrats buy groceries, only dollars do. If it so happens that the private sector operating in a free market (which in this case accurately implies deregulation) offers greater visible, measurable salvation for blacks than we have experienced and are experiencing with government, that is what we support. ... The fact that certain national organizations purporting to represent blacks in service or elected capacities cannot appreciate these rather simple dynamics and continue to rely on advice from outside the black community is tragic. Advice, I might add, which usually comes from persons whose careers are dependent on welfare/socialism type of programs and who feel threatened at what they see as an eroding source of power—their “poor minorities.” The bureaucrats want us to believe that they are absolutely necessary to the functioning of the political system, and nowhere are they more entrenched than in welfare. The truth is that if it were politically feasible we would do better for both the poor and the taxpayer if we deregulated the poor in the ways I have outlined and then closed down the entire system, giving everyone involved, employees and recipients alike, two months pay in lieu of notice. But it’s not likely to happen tomorrow. Welfare is the bureaucrats’ last ditch stand. Joan Kennedy Taylor is the Senior Editor of LR.