April 17, 2006

Charles Murray’s big idea

By: AFF Editors

Charles Murray has a new idea. In a Sunday editorial for the Wall Street Journal, the author best known for Losing Ground — the 1984 book that laid the intellectual groundwork for welfare reform — advocates replacing the bureaucratic welfare state with a simple redistribution scheme. Do away with the structure of the welfare state, he says, and just give straight cash money to the poor.

Okay, so it’s not really a new idea. Milton Friedman proposed the negative income tax as long ago as 1979 in “Free to Choose,” his classic statement on free markets for the layman. But the proposal has new meaning in an age where intellectuals of both the conservative and liberal stripe are finally coming to grips with impeding fiscal doom for the federal government.

Murray starts with a simple premise. “This country is awash in money,” he says. “America is so wealthy that enabling everyone to have a decent standard of living is easy.”

Murray’s simple declarative statement raises many questions. What is a decent standard of living? Everything depends upon the definition of “decent,” and more importantly, to what group or what time period one compares current standards. America’s poor enjoy a standard of living that would have been envied by royalty not very long ago in the grand scheme of human history. This is not to trivialize contemporary poverty, but only to put it in perspective. When the majority of relatively poor people in a country enjoy cable television, an automobile, indoor plumbing, air conditioning, and enough food that they struggle with obesity rather than malnutrition; you have a country that’s in good, not poor, shape.

Murray moves on, and gets more interesting. “We cannot [assure decent standards of living] by fiddling with the entitlement and welfare systems — they constitute a Gordian Knot that cannot be untied. But we can cut the knot.”

How? Murray explains:

Instead of sending taxes to Washington, straining them through bureaucracies and converting what remains into a muddle of services, subsidies, in-kind support and cash hedged with restrictions and exceptions, just collect the taxes, divide them up, and send the money back in cash grants to all American adults.

Murray’s plan, which he dubs simply as “The Plan” due to his apparent lack of marketing genius, provides for a $10,000 grant to all non-incarcerated American citizens, starting at age 21. It requires at least $3,000 per year to be spent on health care. By his calculations, “The Plan” would cost approximately $355 billion more than the current system if implemented immediately. By 2011, the costs will cross paths, with “The Plan” costing less money per year than the current system.

Murray’s plan raises many questions — most especially on the disincentives to work that it creates and in the ever-present conservative worry about the unintended consequences of any new proposal — and he admits as much. But he pushes the reader to his book for those answers. For Murray, however, those questions are side issues. His predominant concern is whether we should even want to eliminate the current inflexible paternalistic governmental bureaucratic structure of the welfare state. The answer is far more important than the Plan’s effects on poverty, retirement, and health care.

He concludes:

For decades, the welfare state has said to us, “We’ll take care of that.” As a result, we have watched some of our sources of life’s most important satisfactions lose vitality. At the same time, we have learned how incompetent — how helpless — government is when “taking care of that” means dealing with complex human needs. The solution is not to tinker with the welfare state. The solution is to put responsibility for our lives back in our hands — our as individuals, ours as families, and ours as communities.

Murray’s idea will no doubt bring controversy, but let’s hope it opens the debate further. Where has the welfare state moved American society? Are there alternatives?

Probably the biggest problem with his proposal is the possibility that his means, i.e. the large annual transfer payment, will be implemented without the end in mind, i.e. the elimination of the bureaucratic welfare state. Acceptance of both the means and ends of his solution hinges upon acceptance of free markets and the power of individuals to decide for themselves what is and is not good for them.

Unfortunately, modern liberals have abandoned liberalism. Liberals seem to believe — and I am reluctant but ultimately forced to paint with a rather large brush here — that the role of government is to provide the means and structures by which individuals can reach self-actualization or their highest potentialities. But they have largely abandoned their defense of classically liberal structures for self-actualization. They no longer believe in markets or individual decision-making. You can almost hear the liberal refrain, “But they’ll waste the money, and then we’ll have to spend more money to help them again.”

Indeed, even if the “Plan” were implemented, it would not be long before some new problem arose — a problem that just could not be resolved by Murray’s grant system. The government would have to step in. Experts would have to make decisions for people who were not smart enough to spend their money how the benighted classes thought they should.

This is the same problem Friedman saw with his own proposal for the negative income tax, which differed in details but not essence with Murray’s “Plan.” “The negative income tax,” Friedman admitted, “would be a satisfactory reform of our present welfare system only if it replaces the host of other specific programs that we now have. It would do more harm than good if it simply became another rag in the ragbag of welfare programs.”

And so it is with Murray’s proposal. The danger is that well-meaning liberals will adopt the idea’s evil twin — large income supplements without fundamental reform — and that weak-kneed conservatives will cow-tow, bargaining the liberals down on both ends, and eventually helping to create the worst of all alternatives — ever-increasing supplements and bureaucracy.

Jason Barnes is a freelance writer, and the editor of www.beltwayblitz.com in Arlington, Virginia.

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