Why do we have more poor people after decades of socialism?
In 1959, the U.S. poverty rate was 22.4% according to the Census Bureau. It fell to 10.5% in 2019. Democrats will attribute that decline to government redistribution of income, but keep in mind that the rate fell to 12.1% in 1969, the year after President Johnson’s Great Society welfare legislation was passed and before it was implemented. It’s more likely that the reduction in poverty came from economic growth and not government policies. Poverty rose to 15% in the years 2010 – 2012 without any change in policies.
Johnson intended his legislation to end poverty in a generation. The primary government programs for reducing poverty today include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Nutrition Assistance Programs (SNAP or "food stamps"), Supplemental Security Income (SSI), Earned Income Tax Credit (EITC), housing assistance, Medicaid, and Medicare.
We spend more on the poor today than anyone at any time in the history of mankind, yet poverty remains resilient, hardly budging since 1969. Daily news stories and advertisements for charities proclaim the exploding problem of hunger in the richest country the world has ever seen. Why?
Of course, Democrats will blame the wild west capitalism that President Reagan forced on us, but that’s fake history. President Carter launched the roll back of price controls in a desperate attempt to unstick the failed economy from the stagflation of the 1970s. Reagan removed more price controls, but neither president ended U.S. regulation of the economy. Since then, the Federal Register of new regulations has increased by 70,000 pages per year. Reagan, Bush, then Clinton, in turn, passed the largest tax increases in U.S. history. The U.S. is more socialist now than it was under Carter in many ways.
Marvin Olasky answered the poverty puzzle in The Tragedy of American Compassion, a history of poor relief in the U.S. since our founding. In colonial times, community members would take the destitute into their homes with the church helping to pay for their care. By 1830, New York City was still a small town but had 30 relief agencies.
Socialists have always complained that charity could never be sufficient to meet the needs of the poor, but the poverty warriors of the past disagreed. They feared that people gave too much through the 18th and 19th centuries, not too little. The umbrella organization for New York’s relief agencies vowed, “to aid those whom it can physically and morally elevate and no others[.] [...] If the Institution fails in this discrimination, and has no higher aim than the Almshouse, why should it exist at all?”
In the 19th century, the philosophy dominating charity said that the givers must get to know the poor well enough to understand their problems. Churches and charities would divide towns into sections and assign volunteers to get to know all the poor in their area. If the poor were unable to work, as were the very old, the sick and women with children, they needed direct aid. But they usually gave it in kind, such as food, cloth for making clothes, and wood or coal for heating. They required men of working age and in good health who had fallen on hard times to work for handouts. A common practice was to keep wood nearby and pay the men for the wood they chopped, the demand for which was high before coal and natural gas became popular.
The charities’ goal was to place men in jobs through which they could support themselves and their families. After a period of chopping wood or other manual labor, they could refer men to employers with a good conscience that the men would be steady workers.
The Christian understanding of human nature guided their charitable efforts. They knew that people are born with a tendency to laziness and some will refuse to work if they can live from the labor of others. This wasn’t a new idea. A century earlier in the Dutch Republic, towns set up tubs large enough for a man to drown in. They would put men who refused to work in them and add water slowly. The tub had a pump in it that would keep the man from drowning if he pumped fast enough.
Then, Horace Greeley, who became famous for his advice, “Go west young man!” became infected with the socialism simmering in France in the early part of the 19th century and imported it to the U.S. through his newspaper. Socialism taught that people are born good and are poor only because of oppression. Taking from the rich and giving to the poor would abolish poverty and return humans to their natural state of innocence. Greeley and other socialists began promoting the policy that the state should provide for all the needs of the poor. Then poverty would disappear.
Greeley believed that human desires are “good in themselves. Evil flows only from their repression or subversion. Give them full scope, free play, a perfect and complete development, and universal happiness must be the result… then you will have a perfect Society; then will you have ‘the Kingdom of Heaven…’”
Greeley’s former assistant editor and founder of the New York Times, Henry Raymond, disagreed and the two debated human nature and poor relief in newspaper columns through the last half of the 1840s. Raymond wrote that an emphasis on the external causes of poverty “is in the most direct and unmistakable hostility to the uniform inculcations of the Gospel…”
“Before a cure can be applied or devised, the cause of the evil must be ascertained: and here at the very outset, the theory of Association [the early name for socialism] comes in direct collision with the teachings of Christianity….The law of Man’s nature must cease to be the supreme law of his life. He must learn to subject that law to the higher law of righteousness, revealed in his conscience and the Word of God…”
Greeley’s philosophy of poor relief would become known as the “social gospel” and later as “social justice.” Socialism gained in popularity as Christianity declined, with two results for the poor. The first was a reduction in private giving.
“When personal contact was lost, social schemes became unrealistic and even destructive: the charitable equivalent of Gresham’s Law [that bad money drives out good] rolled into motion, for bad charity was capable of driving out good. Once some groups succumbed to the pressure to give indiscriminately, other groups faced pressure to go and do likewise, or risk being castigated as Scrooges and ignored by those it hoped to help.”
The second consequence was an increase in the numbers of poor. Time magazine wrote in 1967, “The world’s wealthiest nation seems caught in a paradoxical trap: the more the U.S. spends on the poor the greater the need seems to be to spend more still.” Olasky added, “This new ‘paradox,’ of course, was exactly what Josephine Lowell and others in the late nineteenth century had predicted.”
While the poverty rate is stuck between 10% and 15% depending on the economy, the number of people in poverty has grown with the increase in population. We have proven that if you pay people not to work, they won’t. If you pay poor, uneducated, unmarried teen girls to have babies, they will.
The debate between Greeley and Raymond continues today. Conservatives continue to hold to the Christian doctrine that says at least some poverty is due to moral failures. Socialists insist that all poverty comes from oppression by society; it is a policy choice.
It seems that giving away money doesn’t end poverty; it merely lures more people into it. The demand for free money rises to meet the supply; it’s basic economics. There will always be a segment of the population in whose calculations it’s better to be poor and not work than be poor and work.