The Inclusive Economy (Michael Tanner)

This book begins with a series of admissions that may shock some conservatives. Poverty is a real problem in this country, and for those affected it hurts. The trillions of dollars that have been plowed into the “War on Poverty” that was declared by LBJ in 1964 have alleviated poverty to some extent – even the federal government couldn’t spend that much money without getting something for it. And a good deal of history is cited to show that governments (as distinguished from churches and private charity) have been intervening to help the poor for many years, e.g., as by the English Parliament’s passage of the Poor Law in 1601.

What are the causes of poverty? Does this condition simply show that some people are less capable of competing in the economy than others, or are cultural factors at work that put certain segments of the population at a disadvantage. Again, Tanner seemingly comes down on the liberal side of the argument. Racial repression is real and the rules of society were long rigged against women (yes, there have been some big changes, but single women are still more at risk of being poor than men are). So don’t bother arguing that it’s time to abolish the welfare state, because such a course would be morally bankrupt (and political suicide for conservatives).

Tanner rejects the notion, however, that the government should seek to end poverty once and for all. Utopia is not an option, poverty reflects individual life choices as well as societal factors, poverty can never be fully eliminated. Also, economic growth has been the engine that permitted the United States and other developed nations to lift the majority of the population out of poverty, and we certainly don’t want to risk “killing the goose that lays the golden eggs.” It would be better to be unequally rich than equally poor.

Given skyrocketing deficits and debt, it’s hard to believe that the US should spend even more on welfare programs than the $1 trillion per year (federal + state) that it is spending already.. And while one could argue that welfare for the poor is more important than entitlement programs (Social Security, Medicare, etc.) for the general population, the idea of eliminating the entitlement programs (as opposed to hopefully making them more affordable) is a nonstarter. Also, there is some merit in arguments that existing welfare programs treat the symptoms of poverty without helping the people concerned to improve their fortunes (or at least the fortunes of their children) through their own efforts.

Some welfare program reforms are discussed, which hopefully will be pursued in an effort to get “more bang for the buck.” Combine the plethora of programs (some 100 or more) into a much smaller number - convert “in kind” benefits to cash benefits (giving the recipients more power to make optimal choices based on their specific circumstances) - make the welfare system more transparent and simpler to navigate. But at the end of the day, none of these ideas is likely to be a real game changer.

The book moves on to a series of libertarian ideas that would attack some root causes of poverty without attempting to address the problem by spending more and more money. Criminal justice reform (at all stages, starting by criminalizing fewer offenses) – educational reform (promote more choice and competition vs. pouring more money into a monolithic public school system) – rethink laws that are driving up housing costs (especially for the poor) – find ways to permit the poor to accumulate savings (notably private accounts for the payroll taxes they are compelled to pay into Social Security) - prune or eliminate taxes and regulations that are curbing economic growth.

Overall assessment: Excellent research, presents a lot of ideas that aren’t obviously related until Tanner points out the connections. Sensible, balanced conclusions. I plan to keep the book in my library for future reference.

Review posted on Amazon, 12/6/19.
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