Month: September 2014

Why the State Can’t “Feed the Poor”

The other day, I went on my lunchtime walk, as I do pretty much every day. At the end of my lunchtime walk, I stopped at a gas station by my office to buy a bottle of water and a snack, as I do pretty much every day. While I was perusing the snacks, a large man flanked by two companions approached me. He asked me what I was buying.

“Peanuts,” I replied, suspicious of his curiosity.

I was already holding a water bottle and package of Starbursts I intended to purchase.

He explained that he had no cash, that he would buy me my peanuts, candy, and water using his state-issued food assistance card (a.k.a quest card, whatever you want to call it), if I would buy him a Black & Mild and a Swisher Sweet. Why the complex arrangement? Obviously, his quest card cannot directly purchase tobacco, while my credit card can.

Say what you will, but I agreed.

A relatively small, young female—there is nothing formidable about my physical presence—confronted by two burly men over 6’3” and a woman much, much larger than me, it would be easy for me to make the case that I felt threatened, that the cost of agreeing seemed preferable to the possible sinister cost of refusing.  However, to claim that I acted solely out of fear wouldn’t be entirely true. I was scared, I was confused, but I was also apathetic.

He bought my peanuts, and water for $3.19. I bought his tobacco for $1.98.  He effectively used taxpayer dollars to buy tobacco. I, unintentionally, made an enormous profit. The clerk didn’t bat an eyelid. Boom. What’s done is done.

Why am I telling you this? Well, I’m certainly not attempting to justify my actions. I still don’t know how I feel about the morality of the transaction.

Rather, I offer this anecdote as a demonstration of reality—economic reality. Specifically, the economic reality that we cannot “feed the poor.”

Let me explain.

In my experience, people tend to think of the economy as a system of exchange imposed upon a society—a set of legally approved goods and services bought and sold according to market rules with an official state currency—anything outside of which is considered the “black market.” Without a doubt, that economy exists, but it is not the economy, not in its totality. And to reduce the economy to such is, well, reductive.

At the macroeconomic level, yes, trade tends to occur in a uniform fashion: government-backed currency for goods and services. But at the micro level, the person-to-person economy is much more inclusive. Currency is not reduced to state-issued bills and notes, but to anything that has any value to any person. The economy is not reduced to official, recorded transactions, but to any exchange between persons. People trade, people barter, people do what they have to do.

Barter (1)

My point is that, ultimately, where there is value, there is currency. Where a buyer and seller are both willing and able, an exchange is possible.

As such, anything of value that we give to the poor (to anyone) has the potential to be used as currency to the extent that it is valuable.

It doesn’t matter what it is. As long as it has value to someone, it can be traded. Hand a man a tomato and he can now buy a tomato’s worth of something else from whoever is willing and able to purchase his tomato.  As a store of value, the lifespan of the tomato may be shorter than that of a traditional fiat currency, but it exists. And as long as the value of the object exists, it can be used as a medium of exchange. Some assistance programs may make the bartering process easier and more efficient than others, but as long as the program actually provides the poor with access to food, it also provides them with currency.

I present this not as an argument against welfare, per se, but as a plea for a better discussion about it, one that acknowledges its inherent limitations. Proponents of welfare systems often preface their views with clauses like, “as long as we make sure that aid is used on the important things likes groceries and school supplies rather than drugs or alcohol,….” That the state is capable of ensuring such a thing is taken for granted.

And yet, how welfare payouts are used is ultimately beyond the state’s control. Short of strapping people down and force-feeding them, we do not have a way to guarantee that the poor are fed. We can give to the poor, but we can’t control how they use what is given. We might be able to ensure that the poor have access to food, but we can’t guarantee that they eat it.

We can give food to the poor, but we cannot feed them.

welfare-1

Thus, to defend state-issued assistance to the poor is to accept the possibility that the poor will not utilize that assistance as we see fit.

You may say that it is worth the risk, and you may be right, but the risk must be acknowledged.

The distinction above may be subtle, but it is necessary for a proper debate about welfare. If we are going to have a productive conversation about welfare, we have to consider only those options that are actually at our disposal. If we are going to have a productive conversation about any legislation, we have to consider only those options that are actually at our disposal.

Even if you refuse to remove bad options from the table, you ought to remove from the table those options that don’t exist.

As mind-numbingly obvious as the above “rule of thumb” may appear, it is one rarely followed in the political realm. To dress up the options we do have as more impressive options that we don’t have is the “modus operandi of passing legislation in our current political system. Debates are quickly reduced to false dichotomies constructed of pipe dreams.

Stop global warming or don’t stop it.  Feed the poor or don’t feed the poor. Rehabilitate drug addicts or don’t rehabilitate drug addicts.

None of these accurately represent our real options, or the discussions we ought to be having. Contrary to popular thought, policy issues rarely boil down to the simple choice between solving a problem and not solving a problem. Good public policy questions whether or not a legislative “solution” a. exists, b. does more good than harm, and c. is better than non-legislative solutions.

Thus, as long as we keep treating the welfare discussion as the choice between feeding the poor and not feeding the poor, we will get nowhere. If we want to get anywhere, the political discourse must change.