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Principled Ideas from the Centennial Institute Volume 4, Number 2 • February 2012
Publisher, William L. Armstrong Editor, John Andrews
HOW AND HOW NOT TO FIGHT POVERTY: LESSONS FROM THE PRESIDENTS
By Lawrence W. Reed
“The lessons of history show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. The federal government must and shall quit this business of relief.”
and yielded harmful cultural pathologies that may take generations to cure. The actual beneficiaries of the whole 20th century experiment in federal poverty-fighting were not those whom the programs ostensibly were intended to help. The beneficiaries were the politicians who got elected and re-elected as champions of the downtrodden, along with the bureaucratic armies of professional poverty-fighters whose jobs and empires always seemed secure regardless of the ill effects of the programs they administered. “A lot of people went to Washington to do good,” as the economist Walter Williams quipped, “and apparently have done very well.” Some of those were well-meaning, others were not. But all were misled into paths which no administration of the 19th century ever took—the use of the public treasury for widespread handouts. What the Welfare Statists Miss
A welfare statist would probably survey the men who held Surprisingly, these words of an American president do not the highest office in the land before 1900 and date from the early years of the Republic, but from the progressive days of the New Deal. The dole deadens dismiss them as hopelessly medieval. Even during the severe depressions of the 1830s Franklin Roosevelt spoke them in 1935. But the human spirit. and the 1890s, Presidents Martin Van Buren his pledge of quitting was empty. Indeed, 30 and Grover Cleveland never proposed that years later Lyndon Johnson would take “this Washington, D.C., extend its reach to the relief of private business of relief ” to new heights in an official “War on distress. Poverty.” Another 30 years and more than $5 trillion in federal welfare later, a Democratic president in 1996 would sign a bill into law that ended the federal entitlement to welfare. As Ronald Reagan, a far wiser man, observed long before it dawned on Bill Clinton, “We fought a war on poverty, and poverty won.” Poverty-stricken Policies What Reagan instinctively knew, what Clinton finally admitted, and what FDR preached but didn’t practice was that government poverty programs are themselves poverty-stricken. We have paid an awful price in lives and treasure to learn some things that the vast majority of Americans of the 19th century—and the chief executives they elected—could have plainly told us: Government welfare or “relief ” programs encouraged idleness, broke up families, produced intergenerational dependency and hopelessness, cost taxpayers a fortune, Yet welfare statists err when they imply that it was left to presidents of a more enlightened 20th century to finally care enough to help the poor. The fact is, our leaders in the 1800s did mount a war on poverty—the most comprehensive and effective ever mounted by any central government in world history. It just didn’t have a public relations office, nor elitist poverty conferences at expensive resorts, nor a gimmicky name like “Great Society.”
Lawrence W. Reed has been president of the Foundation for Economic Education since 2008. He was previously president of the Mackinac Center for Public Policy. He is a prolific author and lecturer, holding degrees in economics and history. This essay is adapted from his address at the CCU Symposium on Compassion for the Poor on October 12, 2011. Centennial Institute sponsors research, events, and publications to enhance public understanding of the most important issues facing our state and nation. By proclaiming Truth, we aim to foster faith, family, and freedom, teach citizenship, and renew the spirit of 1776.
per-capita income at the start of the 20th century. The poverty that remained stood out because it was now the exception, no longer the rule. In the absence of stultifying government welfare programs, our free and self-reliant citizenry spawned so many private, distress-relieving initiatives that American generosity became one of the marvels of the world. This essentially spontaneous, non-centrally-planned “war on poverty” had one decisive advantage over FDR’s New Deal and LBJ’s Great Society: It actually worked. President Thomas Jefferson, taking office in 1801, set the tone for America’s first full century as a nation. His inaugural address gave us a splendid summation of what government should do. It described not welfare programs, but “a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”
If pressed to name it, those early chief executives might well have said their anti-poverty program was simply called liberty. This word meant things like self-reliance, hard work, entrepreneurship, the institutions of “This is the sum of good government,” civil society, a strong and free economy, and Liberty works concluded Jefferson. A similar view was held government confined to its constitutional role by James Madison, his successor, who had wonders. as protector of liberty by keeping the peace. been a key figure in the construction of the Constitution and a prime defender of it in The Federalist. Remarkably, the last great 19th-century president, Grover It would have been inconceivable to Madison that it was Cleveland, was just about as faithful to that legacy of constitutional to use the power of government to take liberty as the first one, Thomas Jefferson. When Cleveland from some people and give to others because the others left office in 1897, the federal government was still many were poor and needed it. years away from any sort of national program for public payments to the indigent. Anything Doesn’t Go An Astounding Century Regardless of political party, the presidents of that period did not read into the Constitution any of the modernday welfare-state assumptions. They understood that government has nothing to give anybody except what it first takes from somebody. They also had a humbling faith in Divine Providence, leading to a healthy confidence in what a free and compassionate people could do without federal help. And what a poverty program liberty proved to be! In spite of a horrendous civil war, half a dozen economic downturns and wave after wave of impoverished immigrants, America progressed from near-universal poverty at the start of the 19th century to within reach of the world’s highest
Madison even vetoed money bills for so-called “internal improvements,” such as roads. “The government of the United States is a definite government, confined to specified objects,” he declared. “It is not like state governments, whose powers are more general. Charity is no part of the legislative duty of the government.” Why didn’t Jefferson, Madison, and other American presidents of the 19th century simply stretch the Constitution until it included poverty assistance to individuals? One reason was paramount: Such power was not to be found in the rule book. Imagine playing a game—baseball, bridge, chess, or whatever—in which there is only one rule: Anything goes. It would be chaotic and unpredictable, eventually
CENTENNIAL REVIEW is published monthly by the Centennial Institute at Colorado Christian University. The authors’ views are not necessarily those of CCU. Designer, Danielle Hull. Illustrator, Benjamin Hummel. Subscriptions free upon request. Write to: Centennial Institute, 8787 W. Alameda Ave., Lakewood, CO 80226. Call 800.44.FAITH. Or visit us online at www.CentennialCCU.org. Please join the Centennial Institute today. As a Centennial donor, you can help us restore America’s moral core and prepare tomorrow’s leaders. Your gift is tax-deductible. Please use the envelope provided. Thank you for your support. - John Andrews, Director
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degenerating into a free-for-all. And while simple games would be intolerable if played this way, the consequences for the many deadly-serious things humans engage in— from driving on the highways to waging war—would be too frightful to imagine. The trend of our time is an erosion of any consensus about what government is supposed to do. This was not so in Jefferson and Madison’s day. The rule books at that time were America’s founding documents, namely the Declaration of Independence and the Constitution, including the Bill of Rights. In the spirit of those great works, most Americans shared a common view of “the sum of good government”—the protection of life and property. Why rob
Voices of CCU
‘NEWS21’ PROJECT SEEKS INTEGRITY IN JOURNALISM
Are integrity and independence still possible in journalism today? News21, the Project on News in the 21st Century, aims to prove they are. It launched in August 2011 with an academic course required for Colorado Christian University sophomores and an outreach component through Centennial Institute. Brent Bozell of the Media Research Center headlined an all-day conference on Dec. 2, on the topic “Have the Media Failed America?” Prof. Chris Leland teaches the academic course, with help from adjunct faculty members Stephen Keating, formerly of the Denver Post, and Jay Ambrose, formerly of the Rocky Mountain News. Stephen Keating comments: “‘Be seekers of truth’ is one of the CCU strategic objectives. Yet today we see the news media losing their way, fractured by technology and awash in red ink. Students preparing to enter any field— including business, ministry, or the media itself—will become better citizens by understanding how news is produced, disseminated, and consumed.” Jay Ambrose adds: “News is an allencompassing force no one can escape, and that no citizen should try to escape. Without it, there would be a darkness that could endanger self-governance. “Yet news can be inaccurate, factually correct but misleading, sensational, cheapening, and negligent. Citizens need to become skeptical, discerning readers and viewers—alert to detect bias when they see it, careful to offset hidden opinion by seeking out counter-opinions.” Cal Thomas, syndicated columnist and Fox News contributor, will keynote the next News21 conference. The date is March 2. The topic is “Media Fairness in the 2012 Campaign.”
Peter to pay Paul?
Today, far too many people think that government exists to do anything for anybody at any time they ask for it, from children’s day care to handouts for artists. In the 19th century, Americans appreciated the concept of individual rights and entertained little of this nonsense. But there is no consensus in the 21st century even on what a right is, let alone which ones free citizens have. The truth that individuals possess certain rights—definable, inalienable, and sacred—has been distorted beyond anything our early presidents would recognize. Rights and Wrongs
When the Founders asserted rights to freedom of speech, freedom of the press, or freedom of assembly, they did not mean that one may demand a microphone, a printer, or an auditorium at someone else’s expense. Their concept of rights called for no initiation of force against others, no elevation of any “want” to a lawful lien on the life or property of others. Each individual was deemed a unique and sovereign being, who required only that other citizens deal with him honestly and voluntarily. This is the only notion of rights that does not produce an unruly mob in which each person has his hands in someone else’s pocket. Vigilance against such abuses is what prompted early Americans to add a Bill of Rights to a Constitution that already contained a separation of government powers, checks and balances, and numerous “thou-shalt-nots” directed at government itself. They knew—unlike tens of millions of Americans today—that a government that lacks narrow rules and strict boundaries, that robs Peter to pay Paul, that confuses rights with wants, will yield financial ruin at best and political tyranny at worst. Nearly all of our presidents prior to the 20th century were faithfully constrained by this view of the federal
For details see www.news21ccu.com. ■
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How and How Not to Fight Poverty: Lessons from the Presidents By Lawrence W. Reed Government welfare programs cost us dearly in lives and treasure in the 20th century. Returning to the constitutional rigor of presidents in the 19th century may be America’s wisest way forward.
government. In this, they were true poverty fighters, because they knew that if liberty were not preserved, poverty would be the least of our troubles. They knew the importance of following the rule book. As Andrew Jackson, our seventh president, reminded Congress in 1832: “Limited to a general superintending power to maintain peace at home and abroad, and to prescribe laws on a few subjects of general interest not calculated to restrict human liberty, but to enforce human rights, this government will find its strength and its glory.” Meanwhile, the poor of virtually every other nation on the planet were poor because of what governments were doing to them, often in the name of doing something for them: taxing and regulating them into penury, seizing their property, persecuting them for their faith, killing them because they held incorrect views, and squandering their resources on official luxury and mindless warfare.
In vetoing a bill in 1887 that would have appropriated $10,000 in aid for Texas farmers struggling through a drought, Cleveland wrote: “I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering. Though the people support the government, the government should not support the people.”
Cleveland went on to point out, “The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune.” Americans proved him right. Those Texas farmers Foster self-reliance, eventually received in private aid more than 10 times what the vetoed bill would not dependency have provided. Wisdom of Bastiat To summarize, then: For the first 150 years of American history, government at all levels played little role in social welfare. As late as 1929, before the onset of the Great Depression, federal, state, and local welfare expenditures were only $90 million. By 1939, welfare spending was almost 50 times that amount, but at least the politicians of the day thought of it as a temporary bridge for its recipients. Welfare spending then fell and wouldn’t return to the 1939 levels until the mid-1960s. Not until the final years of the 20th century, after $5.4 trillion and a series of catastrophic fiscal and social consequences, did policymakers begin to realize that those old-fashioned principles embraced by America’s 19thcentury presidents were right after all. Even now in 2012, the lesson is far from learned. For the benefit of 21st-century welfare statists, I think the presidents I’ve cited here would echo the sentiments of the 19th-century French economist and statesman Frederic Bastiat: “Now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally… reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.” ■
America was about government not doing such things to people—and that one fact was, all by itself, a powerfully effective anti-poverty program. Americans of all colors pulled themselves out of poverty in the 19th century by creating wealth through invention and enterprise. As they did so, they generously gave much of their income—along with their time and personal attention—to the aid of their neighbors and communities. Such private, voluntary efforts are far more effective in promoting selfreliance instead of dependency. Who Supports Whom? Another 19th-century president who happens to be among my personal favorites, Grover Cleveland—our 22nd and 24th president, the only one to serve two nonconsecutive terms—understood this well. Cleveland thought it was an act of fundamental dishonesty for some to use government for their own benefit at everyone else’s expense. Accordingly, he took a firm stand against some early stirrings of an American welfare state.
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