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.

4 thoughts on “How to Handle the Poor – Part 3

  1. I’ll read it! Hayek is awesome.

    And yes, free market competition with currency would be a key part of the system I describe above. So you would have A) a government that prints a little money sometimes, but not a lot and B) any bank, company, organization, or individual can also print their own free market currency and let the free market decide if they like it or not (like Bitcoin).

  2. I challenge and digress from some of the aspects of section 3:
    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.

    Lets take a case in point: wal mart. it has been statistically PROVEN that if walmart were to take action on its own and increase its own minimum wage within its own company to 15/hr, and the ACTUAL cost of said wage increase was passed directly on to the customer, distributed evenly across all of its products, you would see less than 2% inflation of their own prices. this is fact. however when you mention wage increase to them(and this includes benefits) they start crying that the sky will be falling and prices will skyrocket. yet any skyrocketing of prices would be artificial and NOT based upon any market in reality. it would simply be a punitive measure designed to make sure the poor stay poor. so if we imposed a no minimum wage law, companies would just become even more predatory than they already are. they only look at short term returns (and in this case, the 2% price increase ensures they wont take the loss of the raise they give their employess) and dont even consider the possibility that more workers might enjoy their jobs, and this will reflect in their customer service, which will help make the experience in their stores positive for the customer, and customers will be motivated to shop there MORE. so in a perfect world, YES what you say is correct. but in the real world, it is flawed because the rich arent playing by any rules. if they could open a store with no employees and a single machine there that says “insert money here”, no product or service for sale, the name of the store is just “Give me money” they would. I would also like to point out you do not mention corporate welfare in any of your posting, are you unaware of it, or purposely choosing to omit THOSE facts?

  3. it has been statistically PROVEN that if walmart were to take action on its own and increase its own minimum wage within its own company to 15/hr, and the ACTUAL cost of said wage increase was passed directly on to the customer, distributed evenly across all of its products, you would see less than 2% inflation of their own prices.

    Yeah, I remember reading that too. I think Wal-Mart should increase what they pay to their employees, for many of the reasons you mentioned.

    It’s probably accurate. Doesn’t change anything I said though. The government shouldn’t be putting guns to business owner’s heads and forcing them to pay their employees some arbitrary number.

    Wal-Mart should pay their employees whatever the hell they want to pay them, regardless or your and my opinions on the matter. If the job sucks, those employees should quit. If the business sucks for the customers, the customers shouldn’t shop there. Very simple.

    I would also like to point out you do not mention corporate welfare in any of your posting, are you unaware of it, or purposely choosing to omit THOSE facts?

    Then you need to read this blog some more. Like this post here:

    http://calebjonesblog.com/how-to-fix-every-political-problem-in-the-united-states/

    and here:

    http://calebjonesblog.com/if-i-was-president/

    Where I say this:

    11. I would turn the Department of Justice towards the Federal Reserve, and start investigating the crap in them. I would constantly be harassing them, and fill their offices with subpoenas. I would, of course, eliminate, veto, and/ or override 100% of all corporate welfare or bank bailouts of any kind.

    I am 100% opposed to corporate welfare and bank bailouts and have said so many times. Not one fucking dime of my tax dollars should to go any corporate welfare or bailouts for any reason whatsoever.

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