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Poverty Relief: Civil versus Political Society

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t seems that just about everyone in Washington now believes in welfare reform. Even President Clinton, who vetoed legislation passed by the Republican Congress. But that was then. With an election fast approaching, the president is now solidly behind welfare reform.

Unfortunately, he doesn’t go nearly far enough. Nor do the Republicans. We need to begin debating welfare repeal, not reform.

At both the national and state levels today, government is the central institution in the business of caring for the poor. Richard Rector and William Lauber of the Heritage Foundation estimate total welfare spending between 1965 and 1994 to be $5.4 trillion (in 1993 dollars) — 70 percent more than the cost of World War II. Government has become the provider of first resort and has created a bureaucracy to match, surrounded by the usual Washington parasites: policy analysts, interest groups, journalists, and lobbies.

Lyndon Johnson initiated his “Great Society,” presumably with the best of intentions. And for a number of years there were ample defenders of mammoth social initiatives despite the paucity of positive results. But today, the general consensus, from moderate-liberal to conservative, is that public programs specifically directed at the poor, and especially Aid to Families with Dependent Children (AFDC), have failed. The official poverty rate has remained essentially unchanged since the advent of the “Great Society” and concomitant expansion of the welfare state.

Indeed, few now doubt that these programs have had the unintended effect of actually worsening poverty — both encouraging more people to end up poor and creating a class of people permanently dependent on the government. It is also widely recognized that welfare has contributed to ancillary social problems, particularly illegitimacy, which, in turn, spawns a host of ills like crime, delinquency, drug use, family instability, and poor school achievement.

The recognition that government aid may result in perverse incentives has pushed legislative reform efforts at national and state levels alike to focus on changing the behavior of welfare recipients — mandating job training and work, encouraging school attendance, discouraging additional pregnancies, and so on. Republican governors like Tommy Thompson of Wisconsin and John Engler of Michigan have made their reputations with such programs; GOP presidential nominee Robert Dole naturally climbed aboard the bandwagon. Even President Clinton appears to be supporting this general approach.

But while there is no doubt that government can better manage its programs, that is but a short-term palliative. The only real solution to poverty in all its facets is to shift responsibility for relief to the private sector. And debate over this option has only just begun.

Senator Dan Coats of Indiana and Empower America’s Bill Bennett have proposed a policy package to funnel federal money through private charitable groups and create tax credits (in contrast to deductions) for charitable contributions and provision of home care for the needy. This essentially constitutes conservative central planning, however — better than that practiced by the left, perhaps, but not the real solution. Some analysts have suggested going even further, cutting public welfare expenditures by the amount of tax credits, essentially empowering taxpayers to defund government welfare programs. This is better, since it takes money out of the hands of government entirely, but it would undoubtedly leave much of the welfare establishment intact. The only principled alternative, which remains largely ignored in the debate, is to end government welfare altogether.

Shifting responsibility from political to civil society is important for several reasons. First, traditional charity was always a complex community exercise involving mutual responsibilities. Givers fulfilled their obligations — to God and the community — by simultaneously helping the poor and ensuring that the latter lived up to their responsibilities, while the recipients were expected to do what they could to avoid or escape poverty and had to give in return for their benefits. This model helped create a tightly knit community centered around real compassion — a willingness to “suffer with” those in need — in which both parties benefited.

Moreover, poverty is far more than material want. Counting government benefits, material deprivation today in America is primarily relative, that is, most “poor” people are able to meet their basic needs, though often with some difficulty, but seem seriously impoverished when compared to their better-off neighbors. At the same time, government programs have created another form of poverty — dependency. Many people are no longer in desperate financial need, but they are dependent on the government.

Equally important, material poverty is generally a symptom, not a cause. Today many people are behaviorally poor, that is, poor because of they’ve made poor decisions. Having a child out of wedlock, committing crimes, failing to finish school, not working, and using drugs all contribute to poverty. Perhaps the most important factor in rising poverty is the increased number of female-headed households, with illegitimacy running as much as 80 percent in the inner city. In particular, teen mothers are likely to spend many years in poverty.

Alas, government programs, by focusing only on material deprivation, have actually exacerbated the other forms of poverty. In contrast, private and especially religious charities have tended to address all three forms of poverty. While seeking to meet immediate financial needs, they have sought to discover the cause of an individual’s or family’s distress and to move them towards material independence.

Private charities tend to be more flexible, and therefore more able to judge recipient behavior and make decisions accordingly. Since benefits are not a legal entitlement, donors may refuse or cut off assistance. They may also set behavioral requirements for eligibility. Such demands may be modest — residents of Washington, D.C.’s Christ House, a medical facility for homeless men not ill enough to warrant hospitalization, must help serve dinner, clean up after themselves, and behave responsibly. Participants in the Salvation Army’s rehabilitation program have even more duties. Finally, private programs are more likely to emphasize the creation of personal relationships between givers and recipients.

The private programs that vary most dramatically from today’s secular initiatives are those built around more theologically conservative religious doctrines. These programs not only seek behavioral change but spiritual transformation. And they work. The alcohol and drug rehabilitation programs operated by Teen Challenge, a Christian organization, have a success rate of between 70 and 86 percent, compared to single-digit rates for many government programs. Teen Challenge centers also operate at a fraction of the cost of public systems. Washington, D.C.’s Gospel Mission treats homeless men for drug addiction much more successfully than nearby government shelters. Executive Director John Woods states that “rehabilitation is temporary unless the heart is transformed.” The International Union of Gospel Missions reports that its drug-treatment programs have a success rate of about 70 percent. Chicago’s St. Martin de Porres House of Hope, a homeless shelter for women, is known for its tough regimen. It has a recidivism rate of between four and five percent, compared to roughly 40 percent for the city’s system as a whole.

Although public welfare obviously does not prevent the existence of private charity, Gresham’s Law seems to apply to philanthropy: bad charity drives out good. Tax support for public programs reduces the amount of money average people have to give; it also reduces their sense of obligation, since they have “given at the office,” so to speak. Moreover, when able to do so, recipients are likely to choose a public entitlement free of obligation over a private program that requires something in return.

Nevertheless, the conventional wisdom in Washington is that there is no alternative to a government-run, taxpayer-financed system. Thus, the welfare-reform debate has typically focused on what kind of government-run, taxpayer-financed system is most desirable: universal or targeted, with an insurance element or not, and so on.

Some policymakers have also come to advocate cutting public welfare spending and placing greater reliance on the philanthropic sector, but many charitable organizations have reacted rather as a vampire responds to a cross. This reflects the fact that many theoretically private organizations have become heavily dependent on government money — 25 percent overall. More than 80 percent of funding for the United Cerebral Palsy Association comes from the government. Catholic Charities, Jewish Federations, and Lutheran Social Ministries all receive more than half of their revenue from government. Such groups ask how they can be expected to make up funding cuts. Julian Wolpert of Princeton warns that even if the present level of giving, roughly two percent of personal income, “could be raised to five percent — an implausibly high figure, that would still fall far short of matching” proposed cuts.

Yet the point is not to replicate public programs, but to shift responsibility for private relief to the private sector. The purpose is both philosophical-compulsory compassion is an oxymoron — and practical. Only by rolling back the state are we likely to simultaneously recreate a sense of neighborly responsibility for the needy and enable a wide variety of private alternatives to develop. People do respond to needs around them. Reports The New York Times :

“Across New York City and the country, neighborhood groups are growing in number and in strength, taking on responsibilities that were once the province of government agencies and getting more attention from government officials.”

More organizations are practicing a modern variant of gleaning — providing leftover food (some gathered from restaurants rather than fields) to the needy. And so on.

Moreover, the private alternative is not nearly as limited as is commonly conceived. A number of religious communities, especially the Amish and Mormons, but also many individual churches, provide comprehensive ministries to meet the multifaceted needs of a family in crisis. Nor are religious organizations the only ones capable of providing social assistance. Observes historian David Beito, “Only churches rivaled fraternal societies as providers of social welfare before the advent of the welfare state.” Beito estimates that nearly 30 percent of the adult population once belonged to fraternal societies, like the Masons, which created an extensive private social-service network. Such groups offered accident, health, and life insurance; they built orphanages and homes for the elderly. Moreover, fraternal societies were not alone. Community associations, labor unions, institutions like hospitals, and other groups, such as temperance societies, constituted an extensive yet voluntary social network. These organizations had varying memberships and purposes, and offered varying levels of benefits. But taken together they provided a significant social safety net.

Other institutions also contribute to a private safety net. For example, the number of grant-making foundations has been growing steadily — up from 21,877 in 1975 to 37,571 in 1993. Even some profit-making firms succeed by focusing on needy people who are willing to work — the Industrial Labor Service Corporation (which has branches in 20 cities), Dallas Youth Services Corps, and New York’s Airborne Express, among others.

Assuming that civil society’s past successes offer a model to which we should return, the question is how? We must simultaneously accomplish two things: as a political society, we must eliminate government welfare, while as a civil society, we must expand private assistance. Simply fulfilling the first task — which itself means overcoming strong interest-group opposition — does not guarantee success, or at least immediate success, in achieving the second. But is that a reason not to end welfare? To the contrary, it makes it more important that we shift responsibility for the poor from the state. After all, most people have grown comfortable with political society having taken over the difficult job of managing social problems. It is, in fact, much easier to write a check to the IRS than to suffer with someone who is poor and in need.

The mere fact that government has bungled the job of poverty relief may not alone impel people to reclaim obligations their ancestors considered to be natural. Something more, a mixture of individual responsibility, civic duty, and moral or religious obligation, is also necessary — along with the recognition that people can no longer rely on someone in some bureaucracy to do the job for them.

Virtually everyone admits that a good and just society must care for the needy. And an increasing number of people acknowledge that civil society does a better job at poverty relief than does political society. It is time for Americans to start dismantling, not reforming, the welfare state and recreating the voluntary social institutions that once served America so well.

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    Doug Bandow is vice president of policy at Citizen Outreach, the Cobden Fellow in International Economics at the Institute for Policy Innovation, a senior fellow at the Cato Institute, and serves as adjunct scholar for The Future of Freedom Foundation. He is a former special assistant to President Reagan; he is also a graduate of Stanford Law School and a member of the California and D.C. bars. BOOKS BY DOUG BANDOW: Leviathan Unchained: Washington’s Bipartisan Big Government Consensus (forthcoming) Tripwire : Korea and U.S. Foreign Policy in a Changed World (1996) Perpetuating Poverty : The World Bank, the Imf, and the Developing World (1994) The Politics of Envy : Statism As Theology (1994) The U.S.-South Korean Alliance : Time for a Change (1992) The Politics of Plunder : Misgovernment in Washington (1990) Beyond Good Intentions : A Biblical View of Politics (1988)