Ed,
I'm not sure that the term ideological applies only to those who oppose
welfare. It is just as ideological to support widespread welfare. My
"ideology" supports the entire removal of government welfare by making it
unnecessary.
Those really hurting can be handled by various charities.
Except that now the really hurting are overwhelmed by positively hordes of
people demanding welfare. The immediate reason for increasing welfare rolls
(apart from a small number of states who have pushed 'workfare' with some
success) can be linked to a threshold.
Let's say you get a smidgen above the national minimum wage - say $6 an
hour. For a 40 hour week, you get $240. The Feds say that accommodation
takes half the wage of the poor. (Also, it was reported recently that to
afford a two bedroom apartment required an income of $15.80 an hour.)
There are costs to working - perhaps overalls and tools, bus fares, and so
on. However, the major costs to the worker are taxes, legislated expenses,
and social security payments.
So, how much is left after rent is paid - along with work costs, taxes and
the rest? Perhaps a $100 or less, from which to pay everything else. Choose
your figure.
Compared to small welfare payments, this is OK. But, what if welfare
increases to a more reasonable sum - as it should to give people some
semblance o dignity. When it rises, it also raises the threshold)?
Direct money welfare, plus an "affordable" apartment, plus food stamps,
medical care and the other goodies, approaches or exceeds the return from
actually working.
So, they would be foolish to work - even if their take-home pay is greater
than welfare.
If (say) the extra they get from working is $40 a week, they are actually
working for a $1 an hour.
This kind of calculation is what makes a threshold. As welfare increases,
more people find they are better off taking it than working - so they stop
work and start welfare.
I would in such circumstances - wouldn't you? It makes sense.
Henry George suggested that you should look at your behavior, then check
other people to see if you can observe similar behavior in them.
This is what led to Classical Political Economy's "least exertion principle".
("People seek to satisfy their desires with the least exertion.")
So, as welfare payments and benefits rise, so do more people find it
sensible to stop work and start welfare. The rising threshold produces more
welfare recipients. Who may then take another part-time job, or jobs. Of
course they are not supposed to - but let's be sensible about this.
In the fifties, the Toronto Council was appalled because some of the
people getting subsidized housing were found to be working at extra jobs.
The Council nannies demanded a crackdown.
Then I found that an a number of tenants had left the housing to buy houses
of their own. Their low rents had enabled them - with extra hard work - to
build up enough to make a down payment.
At the time, I said 'bully for them'. They had worked their way out of the
system. Had they not been in cheaper public housing, they would not have
been able to save enough to make the jump.
Most of the tenants didn't jump - they were satisfied with their perks. So,
we get yet another 'problem' for earnest sociologists to prattle about -
the confirmed welfare recipients who cross generations.
In Classical Political Economy we have a name for those people at the
bottom. They are General Level and receive the General Level of Wages - the
lowest wage. Their wages are the practical consequence of Ricardo's Theory
which came to be known as the "Iron Law of Wages". It suggested that no
matter the technology, the techniques, the increases in knowledge, wages
would be continually pressed down to subsistence - that is barely enough to
live and reproduce.
However, Ricardo missed something as did Malthus, Marx, and Henry George.
All of them assumed a free market would apportion production fairly to the
three Factors of Production, so that each Factor would receive back its
contribution to total production.
However, as I've mentioned in my posts to Keith, Wages and Interest suffer
the discipline of the free market price mechanism - yet, Rent doesn't.
The market for Land in the modern economy is more a collectible market than
a price mechanism controlled free market. I should say to Keith that this
isn't "Georgist" theory. It's Pollard's interpretation of the theory, but
one with consequences that are easy to see. This is why up to 70% of the
cost of housing is land cost. Actual houses fall in cost year by year, as
they get old. Yet, the cost "housing" goes up and up.
Why?
Have people forgotten how to think?
In engineering terms, the free market is an example of negative feedback
(like a thermostat). The collectible market is an example of positive
feedback. That doesn't bother us much, but when positive feedback applies
to one of the three basic Factors of Production "Land" we have trouble my
friends, trouble in River City - and everywhere else.
So, what are we discussing, Ed?
We are discussing government welfare, how much we should have, whether we
should have it at all, with the sources of the arguments found in different
ideologies.
We happily take issue with the "solution" even as the causes sink ever
deeper into oblivion. Most of the people on this list - writers and lurkers
- I would think are reformers of some kind. But, I would argue that they
are enmeshed in consequences and nowhere near a cause.
They often remind me of the young communist in one of the high school
classes taking my senior economics course. "We don't want ideas, we want
action," said the young man. (He thought Henry George was a fool for
thinking reform will come from the democrat process. It will come "only
from the barrel of a gun" he declared. Delicious!)
You know my favorite quote. Einstein said:
"Solutions are easy. The real difficulty lies in discovering the problem."
I think I'll have to make that part of my E-Mail signature!
Perhaps we should start thinking about problems for a change.
Have a Great New Year.
Harry
______________________________________
Ed wrote:
>Keith Hudson:
>
> > In much the same way as joining freindly societies, 95% of the workers of
> > those times also sent their children to fee-paying schools, and paid fees
> > to their local doctors' and hospitals' panels.
> >
> > The fees were moderate, and the workers could afford them because, during
> > the course of the Industrial Revolution -- never mind the highly selective
> > views of Dickens, Engels or Marx at that time -- their standard of living
> > was rising four or five-fold.
>
>Just a very gentle reminder, Keith. Dickens, Engels and Marx were living in
>those times, you were not.
>
> >
> > But, since the State takeover of charity, the 5% "unworthy" element (my
> > inference) of the population has now grown to something like 25% (my
> > present-day estimate) making unjustified claims in one way or another.
>
>I wonder how judgemental we should be here? I'm old enough to remember the
>Great Depression, and the enormous day by day struggle of the "unworthies"
>of those days, my father among them, to keep their families badly housed and
>barely fed. "Relief" was a last resort, but ever so many people had to use
>it, even though they hated to do so.
>
>I've done some work at a local food bank and encountered some of the
>"unworthies" of the present. Some are young immigrant mothers, perhaps the
>wives of guys like the Slovak immigrant who gets up at four in the morning
>to make sure I have my newspaper by five thirty. Some are middle-aged men
>from the Ottawa Valley whose local economy had changed radically, giving
>them, with their limited skills, no place to fit in. They had come to the
>city to look for work, but there was nothing here for them either. A few
>were students, trying to improve themselves, and looking for something to
>supplement their usual diet of Kraft Dinner. There were a few Native
>Indians trying to make sense of a world whose culture was alien to them.
>There may have been some people in that crowd that were in some sense
>"unworthy", but I would hesitate to try to identify them.
>
> > Fact: there is no longer enough money to pay for the continuation of the
> > Welfare State. Claims will always rise above tax income.
>
>I have no problem with the state being in the welfare business, the
>education business, the health business, etc., etc. In fact, I believe
>these things are its business, and should be paid for by a fair, progressive
>tax system. I personally deplore the current ideologically based campaign
>to weaken, erode and destroy many of the good services that the modern state
>has come to operate over the past two centuries. It's almost as though
>educating children has been placed in the same category as selling junk at
>Walmart.
>
>Ed Weick
******************************
Harry Pollard
Henry George School of LA
Box 655
Tujunga CA 91042
Tel: (818) 352-4141
Fax: (818) 353-2242
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