However, an argument that Bruenig deploys is wrong-headed in a way that is interesting if only because it is so spectacularly so, and it's an argument which apparently some people think is pretty convincing, as I've Bruenig and also her husband, progressive writer Matt Bruenig, use it on a number of occasions. Here's the key passage:
But what about that small number of people who could work but, for whatever reason, don’t? Shouldn’t they have to? Well, before deciding whether it’s morally right for them to receive income without working, consider a far larger group that takes in far more money without toil: the idle rich. They soak up plenty of unearned money from the economy, in the form of rent, dividends and capital income. Salaries and wages — that is, money paid for work — only make up about 15 percent of the income of Americans making $10 million per year or more; the rest is capital income from simply owning assets.There's a surface level cleverness to this gambit. "Do you object to giving money to people who haven't earned it through working?" "Yes, I do." "Really? Great! Then you think it's wrong for people to make money via investing capital!" However, it should be fairly obvious to all concerned that the person owning the capital is not getting money for nothing. Think, for a moment, of a transaction that might go on within a friendly neighborhood street.
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In other words, the well-to-do already do what workfare advocates seem so nervous about: rake in money they haven’t earned through market labor....
I have broken leg and I need to make it to a doctor appointment across town because I can't drive with the cast on my leg. I ask my three neighbors Jack, Bob, and Rudolf if they would be willing to help. Jack says he'd be happy to help me but he doesn't have a car. Bob offers the use of his car but says he can't leave his house becsause he's watching his kids. Rudolf has a car and time but he's busy binge watching Stranger Things and says he doesn't want to help. So the result is that Jack drives me to my appointment using Bob's car. Because I'm grateful for my neighbors' help, I give Jack and Bob each a sixpack of good beer.
Now, would it not be odd if someone were to say to me, "Why did you give Bob beer? He didn't do any work to help you. You might as well give Rudolf beer as well."
It's true that Bob didn't do work. Indeed, Bob as "idle" while lending out his capital: a vehicle. However, Bob clearly provided me with value.
Ah, but wait. Perhaps you point out that Bob's car is actually kind of labor because he must have had to work to earn the money which he used to buy the car. Not necessarily, though. Perhaps he inherited the car from his father who died last year. Honestly, where he got the car doesn't really change its value to me. If he owns the car, and he provides access to it to me, then he's providing me with something of value to me whether he bought that car with wage labor or not. In this sense, if I return him something as an acknowledgement of the value which he gave me, I'm compensating him for a benefit that he gave me, I'm not giving him something "free".
Now of course, there's no moral stricture that we only give people money in compensation for something of value we get from them. There is a positive good to providing for the needs of people who cannot sufficiently provide for their own needs, and sometimes that's achieved by providing those people with money. That this money is not "earned" does not make it bad in some way.
However, it's disingenuous to argue that rent, dividends and capital income are money that is not earned. It's not earned by direct labor but it is earned in the sense that a return is earned for providing value to another. Labor is one thing that is valued. If Tom comes over and helps me tile my bathroom, I pay Tom for his labor because he's provided labor that's of value to me and so I owe him some compensation for the value he's given me. If I rent a week at a vacation lodge from Fred, he is giving me something of value (access to his vacation lodge for a week) and I compensate him in return. While in the one case the thing of value given me is labor and in the other case it's access to a capital asset, in both cases I pay the person who provided me value and the payment which I give is earned in that it's compensation for the value I received.
Darwin's economics lesson doesn't resolve the difficulty, which I understand Elizabeth Bruenig to be elucidating, of why we demand that the poor work in order to make themselves worthy of receiving money when we don't demand the same from the rich, who are capable of receiving money in exchange for value without actually performing labor. Why not provide each poor person with an apartment unit and institute a rent-collecting requirement for welfare instead? If that sounds absurd, it seems no less absurd than the make-work programs, which employed unskilled laborers who generally did crappy jobs while not working particularly tenaciously, that have existed in this country, unless we suppose that there is a moral value to work that does not exist in respect to collecting rent on an apartment. But if work is a more moral way of exchanging value for money than collecting rent, why do we permit the rich to merely collect rent? If we are serious about the moral value of work, we are doing the rich wrong by allowing them to earn money without doing labor. From this reductio, I believe, Elizabeth Bruenig concludes that American lawmakers' attitudes about the moral value of work are incoherent.
ReplyDeleteNotice that Elizabeth Bruenig wants to resist this work-based calculus of determining who deserves to have money and to what extent. As she writes in the last paragraph, "none of us live entirely on what we earn." As I understand her, she would sooner do away entirely with work requirements for welfare than to keep work requirements but impose them on capital income as well.
Overall, the arguments are simply walking around the basic problems. The progressive approach is an attack on private property. That's simple.
ReplyDeleteHowever, the idea of work requirements is an inconvenient recognition that government 'welfare payments' are not charity. There is no love expressed when you force one party to support another party. That only happens when you take the burden on YOURSELF.
If government payments to the poor don't express love, then they are something else. Manipulation? Insurance? Whatever they are, it isn't as pretty as true charity - the veil behind which it hides.
Anonymous said,
ReplyDeleteWhy not provide each poor person with an apartment unit and institute a rent-collecting requirement for welfare instead? If that sounds absurd
Why would anyone think this sounds absurd? Actual charities have occasionally done similar things on a small scale, and to great success. Similarly with provision of investment money for a financial portfolio. The difficulty with it is feasibility, not absurdity; it is very difficult both to scale up and to keep (what people would usually regard as) fair across widely different circumstances, whereas a work requirement is not.
Why would anyone think this sounds absurd? Actual charities have occasionally done similar things on a small scale, and to great success. Similarly with provision of investment money for a financial portfolio.
ReplyDeleteDid these charities require clients to collect rent or make money on their investments before receiving aid? Do you know the names of any charities that have done this?
Also, what specific fairness concerns are talking about with regard to having a rent-collecting requirement for welfare?
This is a basic argument of the Communists against Capitalists and Capitalism in general that was drummed into us in primary school in the '80s in Eastern Europe. I'm astonished that anyone in the Western world who has a basic knowledge of economy can use it with a straight face.
ReplyDeleteI can't help but feel that it's so successful because it draws attention to people the average person envies because they are "filthy rich". That's why your counter-argument works so well: it's in a small scale.
Another point: it's different if someone has an income derived from their capital (their own private property) from the situation of welfare programs which give out money (earned by others and paid into a collective pool as taxes) to those in need who can't earn it from their own resources. It's not unfair if the recipients are required to give back from the resource they do own (their ability to work) in exchange.
Another point: it's different if someone has an income derived from their capital (their own private property) from the situation of welfare programs which give out money (earned by others and paid into a collective pool as taxes) to those in need who can't earn it from their own resources. It's not unfair if the recipients are required to give back from the resource they do own (their ability to work) in exchange.
ReplyDeleteIf the issue is "giving something back," then the fixation on work seems undermotivated. I take it for granted that all welfare recipients have some sort of personal property, even if it's just the clothes on their back; why not, in lieu of work requirements, have each welfare recipient lease a piece of personal property to the government for some nominal monthly rent? Perhaps under the terms of the lease an inspector would come by one day a year to use the property: if the property were a car, it might be driven around the corner, or if a piece of clothing, it might be tried on. But in any case a welfare recipient would have to enter into this arrangement with respect to something he or she owns in order to receive his or her entitlements.
If it's objected that nothing is actually being exchanged because the terms under which the property is being leased are all but worthless, recall that the government invests in all sorts of projects that would be considered worthless in the free market, such as the Interstate Highway System, but we don't begrudge the money that construction workers "earn" when working on worthless government projects. And the current system of work requirements for welfare is certainly paying welfare recipients more than they're worth insofar as the latter receive welfare benefits on top of their wages.
I think, however, the main reason this lease requirement for welfare is a non-starter is because most Americans think there is an unique moral quality to work that makes one worthy of wealth, but then we are doing the rich wrong by allowing them to make money without doing work.
Did these charities require clients to collect rent or make money on their investments before receiving aid?
ReplyDeleteThis is an incoherent question; your scenario was described as "Why not provide each poor person with an apartment unit and institute a rent-collecting requirement for welfare instead?" and thus the people in question have already received aid -- namely, (use of) an apartment unit for receiving rent. The poor do not usually have access to rental income; they have to be given it. The most you can mean is that their aid involves managing some means of generating their own income, and this is indeed quite common. The examples I am aware of are all small and tailored to those receiving it, for the reasons I already gave; local Baptist churches helping out members of their congregation, and the like.
Also, what specific fairness concerns are talking about with regard to having a rent-collecting requirement for welfare?
Since the poor are not typically rental property owners already, they would, as you said, have to be provided with relevant properties. The value of rentable units varies even within a single building. No matter what you do, you are going to be setting some people up with relatively valuable property and others with inferior property; and since rentable property is limited and not very flexible, they themselves will not have many options for improvement if they want them. This sort of thing is inevitably seen as unfair, and being widely seen as unfair, which is the death of any welfare proposal. (And note that it is being widely seen as unfair, and not being unfair in some particular way, that is the problem a welfare proposal has to deal with; a large-scale welfare proposal cannot eliminate unfairness, but it can eliminate things that will seem obviously unfair to large numbers of people.) Since the population of people who have to find work is massive in comparison with the population of people who rent properties, a work requirement is proportionally less likely to be seen as unfair -- it's a requirement most people see themselves as already having for other reasons, and therefore the broader public is not generally going to have a problem with it.
I take it for granted that all welfare recipients have some sort of personal property, even if it's just the clothes on their back; why not, in lieu of work requirements, have each welfare recipient lease a piece of personal property to the government for some nominal monthly rent?
And you're free to propose such a thing; it doesn't affect whether a work requirement is legitimate, only the question of whether we could come up with more imaginative alternatives -- which we always can.
Anon,
ReplyDeleteI think, however, the main reason this lease requirement for welfare is a non-starter is because most Americans think there is an unique moral quality to work that makes one worthy of wealth, but then we are doing the rich wrong by allowing them to make money without doing work.
I find this hard to credit, for the reason that in general the Americans who are most in favor of ideas such as "welfare to work" programs are also people who are very comfortable with the idea of investment and rental income.
As to why people who favor work requirements might be less than enchanted with your leasing idea...
I think it makes sense to try to think through why it is that people supporting work requirements actually do so.
One reason is the concern that if people are offered indefinite benefits without any nudge to start working to support themselves, they will end up worse off in the long run than if they are in fact pushed to work for a living. Why? Because you can make more and advance more if you are working than if you are collecting the (very scanty) "free" government benefits available instead. As I recall even the solidly lefty analyses of the Clinton era "welfare to work" bear this out: showing that the people who did in fact exit welfare to work for a living ended up better off than when on welfare. The problem was with the people who genuinely were not able to work, who ended up much worse off.
The other motive is some sort of general idea (sometimes punitive) that people should be made to contribute to society rather than just "freeloading". People who follow this view would, I think, generally see both working and providing capital as contributing to society. However, as you point out, people in extreme poverty don't generally have capital of a sort that the rest of society wants much. As such, they can't be told to contribute by providing capital. Your suggestion of leasing whatever they have would seem nonsensical to such a person, because your whole premise is that the thing being leased isn't actually valuable to society, it's just an excuse to give them money. Now, from your earlier comment I think you'd probably counter that the work that people on welfare are being asked to do isn't actually useful either, so they're not contributing to society either way and it's no more sensical to ask them to work than it is to rent their assets from them. I guess that's an argument one can have, but I think that in general people who support the welfare to work concept are people who think that people on welfare are in fact people who are capable of doing work that's valuable to society, so if it was pointed out that the work people are doing for a particular program is useless, they'd just reply that the solution is to find better work, not to jettison the idea of doing work at all.
Agnes,
ReplyDeleteIt's really helpful to hear your perspective on this as someone who actually grew up under a communist regime. It often strikes me that one of the reasons some of these ideas are becoming more popular here now is that the memory of what communist regimes were like is fading.
Bruenig attributes to proponents of work requirements the assumptions that:
ReplyDelete"...society (and the state) always require work to precede income; and that each person is due to receive simply what they earn."
That's really bizarre. I don't know of anyone who advocates work requirements for welfare and who also thinks those things. The first is obviously not descriptive of reality, and taken as a normative principle, it would lead to prohibitions on charitable giving, gift-giving among friends, and relatives helping each other out in tough times, just for starters.
Advocates of work requirements are not saying that the government has an imperative to stop people from receiving money that they did not earn, but rather that *public money should not be spent on direct transfers to people who could work, but choose not to. An extreme example to illustrate the distinction is as follows: while there is nothing wrong with Jack giving his brother Bob an expensive and unearned Christmas gift, it's a problem if Jack is a public official and he dips into the city treasury to do it.
Bruenig's maneuver is to conflate government spending with transfers of goods and services that come about through private exchange. That's a bad move, and an all-too-common one, although not so much among people who support work requirements. She treats the former kind of transaction, and the distribution of wealth that arises from such transactions, as though "society", represented by the state, were morally responsible for their fairness. But the only way for the state to live up to that moral responsibility--really, the only way for it to make any sense even to talk about that kind of moral responsibility--would be for the state to assume complete control of economic activity.