"Public Provisions" Pitfalls by Christina Martin

May 2010 #10-14 “Public Provisions” Pitfalls
Summary:
By Christina Martin
Government entitlements
too often work against
Nobody likes physical pain, but often it gives us a signal that we need to change our
natural and healthy
behavior before we incur serious injury. In the sphere of social policy, government
incentives that help
entitlements designed to avoid short-term pain too often work against natural and
individuals to avoid long-
healthy incentives that help individuals to avoid longer-term pain. Many people will
term poverty. In contrast,
endure smaller temporary pains, work harder, save more, eat healthier and build a
private charity not only is
social network in order to avoid larger future pains like hunger or homelessness.
better suited to meeting
This is not a new observation and has been commented on for thousands of years.
individuals’ needs, but it
also administers
Our nation’s founders were well aware of the importance of incentives. In 1766
compassionate aid while
Benjamin Franklin declared in a letter to the London Chronicle that England’s poor
respecting individual
were the most miserable in the world because England’s welfare programs had
rights.
destroyed essential incentives, making people dependent on the government. He
concluded after his world travels that “the more public provisions were made for
Word Count 764
the poor, the less they provided for themselves, and of course became poorer,” but
“In 1766 Benjamin “the less [that] was done for them, the more they did for themselves, and became
richer.”
Franklin declared in a
letter to the London Franklin observed that there was “no country in the world where so many
Chronicle that provisions are established for them” as in England, including hospitals for the poor,
England’s poor were almshouses for the elderly, and generous government support. Of England’s
the most miserable in government welfare he said:
the world because
The day you passed that act, you took away from before their eyes the
England’s welfare greatest of all inducements to industry, frugality, and sobriety, by giving
programs had them a dependence on somewhat else than a careful accumulation during
destroyed essential youth and health, for support in age or sickness.
incentives, making
people dependent on In short, you offered a premium for the encouragement of idleness, and you
the government.” should not now wonder, that it has had its effect in the increase of poverty.
Repeal that law, and you will soon see a change in their manners.
While these words may seem harsh, Franklin was a well-known philanthropist who
exhorted his peers to help the needy personally and voluntarily. He appreciated the
difference between supporting and enabling.
In early America, most poverty relief was delivered voluntarily through

relationships. This not only encouraged gratitude, strong relationships and a strong
community; but it also allowed those who gave aid to require recipients to take
genuine steps toward employment and responsible behavior, when appropriate.
Givers could tailor their aid to the needs and best interest of the individuals they
sought to help, giving more to the neediest, and less to others.
Private charities still thrive today. However, their efforts are often undermined by “Since the 1960s,
government programs that create perverse incentives to work less, spend more and government
not plan for the future.
spending on
Government-sponsored attempts to alleviate poverty are funded by taxes and poverty relief has
dictated by regulations. Regulations, by their nature, draw arbitrary lines and apply risen precipitously
equally to all citizens. Accordingly, when government creates social safety nets, it even after
creates entitlements, something to which citizens have a right if they fit certain legal adjusting for
criteria. Regulations, not relationships, determine how these programs are inflation, yet it has
administered. If people have a legal right to something, they rarely will feel gratitude
for it. If it is denied, they will feel cheated, regardless of whether or not they had little or no
deserved it in the first place. impact on the
poverty rate .”
Nowhere is the failure of government entitlements more evident than in the failed
War on Poverty. Since the 1960s, government spending on poverty relief has risen
precipitously even after adjusting for inflation, yet it has had little or no impact on
the poverty rate.1 The only significant progress in reducing poverty, especially child
poverty, came from the welfare reforms of the mid-1990s, which required more
welfare recipients to work or to train for work. Commenting on these reforms, Ron
Haskins, a scholar for the Brookings Institute, agrees that using “carrots and sticks”
is the most effective way to get individuals out of poverty. 1 Yet, even if the
government would build further upon such reforms, it could not substitute for
charity, nor could it escape trampling on individual liberty.
Government programs always involve coercion, because that is the only tool in the
government’s toolbox. When your neighbor gets welfare, you are forced to work on
his behalf. There is no compassion involved in robbing Peter to pay Paul. In
contrast, private charity violates no one’s rights and allows people to express their
compassion in the manner and the amount they wish. A shift to a system that relies
more on private charity and philanthropy not only would restore liberty and property
rights, it also would restore the important natural incentives that motivate people to
work hard and to live responsibly. Attention editors
and producers:
1
Ron Haskins, What Works is Work: Welfare Reform and Poverty Relief, 4 Northwestern Journal
Cascade Commentaries are
of Law and Social Policy (Winter 2009), citing U.S. Census Bureau, Historical Poverty Tables (1959-
provided for reprint in
2005) and Congressional Research Service, Cash and Noncash Benefits for Persons with Limited
newspapers and other
Income (1968-2004).
publications, with credit
1 given to author(s) and
Id. at page 51. (“Social policy should emphasize – and where necessary and possible demand –
Cascade. Contact Cascade
responsible personal behavior and then reward that behavior. Second, one of the major arguments
to arrange print or broadcast
against welfare reform was that there were not enough jobs available in the American economy to
interviews on this
support a major movement of mothers into the job market. That concern was misplaced as something
commentary topic.
on the order of 1.5 million additional mothers found jobs. Third, the prediction that low-wage jobs
would doom mothers and their children to a life of poverty turned out to be questionable. There is no
doubt that a full-time job, even at minimum wage, when combined with income from the EITC,
Please contact:
provides more income than welfare alone….”)
Cascade Policy Institute
4850 SW Scholls Ferry Rd.
Christina Martin is Director of the Asset Ownership Project at Cascade Policy Suite 103
Institute, Oregon’s free market public policy research organization. Portland, Oregon 97225
Phone: (503) 242-0900

Fax: (503) 242-3822
Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501 (c)(3). Nothing
www.cascadepolicy.org
appearing in this Cascade Commentary is to be construed as necessarily representing the views of Cascade or its
info@cascadepolicy.org
donors. The views expressed herein are the author’s own.

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May 2010 #10-14 “Public Provisions” Pitfalls

In early America, most poverty relief was delivered voluntarily through

Phone: (503) 242-0900

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