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The Plan

2006-04-14 01:53:20.980155+00 by Dan Lyke 7 comments

Charles Murray has a suggestion: Replace welfare and other domestic aid programs with $10,000 cash grants for every person in the country. Max Borders interview with Charles Murray on the topic. I see a number of issues with his assumptions, but his proposal puts some of the issues with welfare and bureacracy and self-determination in some pretty plain light, and I think it's worth giving the idea a little bit of thought because it showed me some of the assumptions I've made about the situations of poverty, and how the current systems aren't really addressing what's probably the real problem.

[ related topics: Books Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2006-04-14 02:39:04.753335+00 by: aiworks

This is an old concept. LBJ commissioned a study on providing a guaranteed minimium wage to everyone in the country. The math says it makes sense.

#Comment Re: made: 2006-04-14 03:12:33.324906+00 by: Dan Lyke

I can believe that the math works out. I think that where it becomes an interesting mind experiment, or perhaps real world experiment, is looking at what happens when this approach raises the number of poor because without a rationing framework... well... I expect that we'll end up with the same problems of poverty, we'll just have less excuses as to why it occurs.

#Comment Re: made: 2006-04-14 03:31:15.025266+00 by: aiworks

If you buy into the whole Jeremy Rifkin "End of Work"/post-capitalist society argument, you have to do something like this since their wont be enough work to go around. In fact, some research suggests we may already be in a situation where unemployment is really 20%-30% but people wont avail themselves of entitlements because they don't want to.

I keep thinking back to Star Trek where there was a credits system alluded to, but no one really seemed to care that much about it.

#Comment Re: made: 2006-04-14 17:40:22.193854+00 by: radix

The problem I see with this solution is that it doesn't solve the key problem. Poverty is caused by legal adult citizens making bad decisions (broadly, there are exceptions). Granting them this $10k is not going to help. In fact, if it is sent in one lump sum payment it will probably lead to higher crime and death. Which in a barbaric Darwinian sense may in the long run alleviate poverty. Even if you measured out the amount of money needed for housing, basic utilities and food needed and sent it out every month, you're still going to have a lot of people who will not use the money for those purposes. What would be worst would be to grant the money and then eliminate the other programs.. Then when the money is misused you have a very ugly situation as there would be nobody to go to (other than private charity, which is already overwhelmed).

In theory it sounds great and I have to admit it has some appeal, but IMHO, it's fatally flawed by an economist's assumption of a rational actor.

#Comment Re: made: 2006-04-14 17:49:54.396177+00 by: Dan Lyke

radix, that's exactly what I see. But asking people to consider this takes away the "less fortunate" excuse, and turns welfare into a question of where the tradeoffs between self-determination and decisions which lead to consequences that we as a society find untenable lie.

Unfortunately, as soon as I start looking towards actual solutions I start to dance in that minefield that is the unholy alliance between psychology and the "recovery" industry, and realize that any steps towards real solutions would be so overridden with self-serving graft that... well... what we really need is a culture that's more willing to acknowledge that bad decisions have bad consequences.

#Comment Re: made: 2006-04-14 20:35:13.485793+00 by: aiworks

Just to mention, when I say that the research says the math makes sense; this is taking into account the idea that many people will spend the money unwisely. The current problem is that government (or any entity, probably) is incapable at trying to force people into making good decisions and meeting goals set by society. The thinking goes that the money saved from eliminating administration will put more money in the pockets of people who need it and so there's a greater chance that there's enough money to meet basic needs. It's also likely that a "managed life" industry would spring up to manage basic needs and then turn over the excess to the "managed." There are miserable people now and there would be miserable people with this solution, but the solution would (hopefully) reduce the number of miserable and offer more options for people who want to better themselves.

And, I still maintain that there's just not enough work to go around. While in the past the notion that anyone could work hard and better themselves was true, I believe that very recently we've turned a corner where that is no longer true. Freeing up cash so that people can pour their energy into something that they have a passion for could go a long way towards reducing unhappiness in the world.

#Comment Re: made: 2006-04-15 15:20:22.191641+00 by: Dan Lyke

I may have to get the book now. The issue with the "managed life" industry is that unless it's mandatory (at which point it becomes yet another government program), it's not going to apply to the people who'll spend their money unwisely and then wonder why they can't afford food. I think (at least in the short term, a decade or so) it'd result in more "homeless", more people standing on exit ramps, and definitely a lot more hungry children, and in the long term society would have to own up to the issues behind those problems.