In part 1 of this post, I discussed the different types of poor (the Can’t poor and the Won’t poor), and how the Western world’s “solutions” for poverty haven’t worked. In part 2 of this post, I discussed how the reason it’s hard for the poor to earn a “living wage” is because of government monetary and tax policies.
Today, in the final part of this post, I’ll wrap all of this together on how to best handle the poor within a free society.
Here then is exactly what a free society would to assist the poor, listed in no particular order.
1. Drastically slash all types of taxes, at least on the poor and middle classes. Tax people at very low rates and in a non-coercive way. The less taxes poor people (and middle class people) have to pay, the less poor there will be.
2. Avoid printing large amounts of money. Having the government on a gold standard might not be viable, but neither is printing trillions of dollars whenever big government needs/wants more money. This harms the poor (as well as the middle class). The sweet spot is in-between these two extremes.
3. Remove all wage controls. A country with no wage controls (and remember that minimum wage is a wage control) always has zero unintentional unemployment. The only unemployed people in society with no minimum wage will be the Won’t poor. Also remember that a minimum wage won’t even be necessary if you do steps one and two above; stuff will be so cheap, poor people would be easily able to afford the basics on very little income.
The above three steps would take care of most poor. For the poor left over, you would utilize some other systems as well…
4. Culturally and strongly encourage charity and social service. In welfare state societies, which includes the United States and Europe, charity and social service is not championed, because everyone assumes “the government will take care of that” and “that’s what the government is for” and “that’s what my taxes are for.”
In a free society, this would be the opposite. People would know the government wouldn’t be involved in helping the poor, so citizens would have to step up. People would be encouraged to donate a percentage of their income to charity and/or volunteer at charitable organization on a regular basis.
When hearing that, most modern-day people say, “People won’t do that!” The correct version of that statement is that people don’t do that now, because again, they think government (which is another word for “the taxpayer”) will handle it. But if you study history you find that people do in fact step up when government does not. There was no welfare of any kind in the United States prior to the 1940s. Prior to that, one third of all working men regularly contributed to social organizations. One-third! So history has shown that this does work. If it sounds weird to you, that’s only because you’ve never seen it work with your own eyes before.
5. Allow individual city governments to help the Can’t poor if the local voters so desire. The federal government would have no power to give government money to the poor, nor would state or county governments if they existed (and hopefully they would not). Individual cities are another matter. If the voters within each individual city so voted, the city government could give welfare services to the Can’t poor from local tax revenues collected. The Won’t poor would be ignored, and studies have shown that when you cut off a Won’t poor’s source of cash, most of these people magically get a job and become productive citizens again (sort of).
In these cities, the Can’t poor can apply for government assistance, and would only be granted such assistance if a panel decided they were indeed Can’t poor and not Won’t poor, based on a number of parameters. In addition, there will be strict time limits on how long an “accepted” Can’t poor would receive taxpayer largesse. These limits would be somewhere between 6 months and two years. After that, no more cash, ever, for the rest of your life. The only exception would be those Can’t poor who where physically prohibited from earning a living (like the extreme mentally retarded or severely disabled).
Would such a system have problems and imperfections? Yep, many. Such is the nature of government programs. But again, the local voters in that city could modify or terminate the program at any time through local democracy. At least the Can’t poor would have some sort of safety net within that city if the first four steps above didn’t assist them enough.
You’d have more libertarian or right-wing cities that didn’t have any poor assistance at all, and more left-wing cities that had a much larger amount. All good, since everyone could move to whichever city that most reflected their politics and value systems (which, by the way, was exactly how the United States was originally designed to work!).
If you did the above five steps, the problem of poverty / the poor would be a tiny fraction of what it is today in most countries. Would “cure” poverty completely? No. No system would make the number of poor go to zero and stay there. But it would be a lot better than the system we have now.