Tuesday, May 20, 2014

The Forgotten Man: Poverty is the Best Policy


Mark Hendrickson of Forbes wrote in November 2013 that William Graham Sumner was a Forgotten Man that reminds us of the "Forgotten Man," the responsible and productive workers and taxpayers. Perhaps, one of the reasons for this forgetfulness was the distortion of the application of the phrase. William C. Mullendore wrote in 1951 that the phrase was wrongly applied to the exact opposite class of people. Progressives corrupted the phrase to divert people's attention to collectivist ideas (pp. 5-6). And it was Franklin Delano Roosevelt himself who popularized this perversion in his 1932 speech when he applied the phrase to the "poor" rather than to the industrious and responsible taxpayers. 


William Graham Sumner wrote a book, "What Social Classes Owe to Each Other". It was first published in 1883 and was printed for the seventh time by Caxton Printers Ltd. in 1974. Understanding its content will give light to the idea of "class struggle," which has been popularly promoted especially in times of widening economic inequality. In the Introduction we read that the problem of economic inequality must be solved or else, violent revolution will be the inevitable result. As naively believed, this is a threat to the wealthy. They must solve this problem to prevent ""bloodshed and destruction" (p. 9). It is their duty to make everybody "equally well off" (ibid.). If not, they will be "brought down to the same misery as others" (ibid.). 


Individual responsibility on the part of less fortunate is almost ignored in current discussion. It is fashionable today to sentimentalize poverty to solicit support for public welfare. The first topic in Sumner's book best describes the existing trend, "On a New Philosophy: That Poverty is the Best Policy."

Sumner describes the above policy as "a new maxim for judicious living" (p. 22). And the substance of the policy is this: "If you get wealth, you will have to support other people; if you do not get wealth, it will be the duty of other people to support you" (ibid.). 


Almost everyone is willing to support this policy. "Pro-poor" sermons, essays, and orations are widespread. Churches are expected "to collect capital from the rich and spend it for the poor" (p. 16). "Clergymen, economists, and social philosophers have a technical and professional duty to devise schemes for 'helping the poor' " (ibid.).


In an era that "pro-poor policy" is sensationalized, to be rich is shameful. It is almost synonymous to a thief. This is at least true as far as the mindset of "humanitarians, philanthropists, and reformers" (p. 20) is concerned. We can see this the way they exaggerate their observation. "They find enough which is sad and unpromising in the condition of many members of society," "they see wealth and poverty side by side," and "they note great inequality of social position and social chances" (ibid.). They exaggerate the miseries and the qualities of the less fortunate, and invent new concepts to advance their perceived remedies. Their inventions include "new theories of property, distorting rights and perpetuating injustice" (p. 21). This is the inescapable outcome in a society that only emphasizes the interest of one group at the expense of "the interests of all other groups" (ibid.). In this kind of society, Sumner has concluded "that it must be quite disreputable to be respectable, quite dishonest to own property, quite unjust to go one's own way and earn one's own living, and that the only really admirable person was the good-for-nothing" (ibid.). 


Confusion is the primary cause for the popularity of the foregoing perception, confusion as to the identity of the poor and the nature of the proposed solution. As Sumner indicated in the Forgotten Man, the way politicians and social planners use the term "poor" is difficult to determine. They do not mean those who cannot earn for a living. Instead, it "is an elastic term, under which any number of social fallacies may be hidden" (p. 19). One therefore must be wary whenever you encounter the word "poor" in the speeches and publications of those who promote public welfare.

The second confusion is the failure to distinguish the difference between voluntary charity and legislative charity. The first one is valid and legitimate. The second one involves force and coercion, and leads to economic loss. 


Ending this topic, Sumner identifies two kind of societies - a society based on status and a society based on contract. A society based on status, which is an attempt to revive the feudalist system promotes the poverty policy in a subtle way. Freedom and social progress are only possible under a society based on contract (Gary North in his essay "The Rule of Law and the Free Market" identifies that "the concept of biblical covenant between God and man undergirds the right of private contract," Authority and Dominion: Economic Commentary on Exodus Volume 5, 2012, p. 1347). Notice how Sumner describes a society based on contract: 
"A society based on contract is a society of free and independent men, who form ties without favor or obligation, and co-operate without cringing or intrigue. A society based on contract, therefore, gives the utmost room and chance for individual development, and for all the self-reliance and dignity of a free man. That a society of free men, co-operating under contract, is by far the strongest society which has ever yet existed; that no such society has ever yet developed the full measure of strength of which it is capable; and that the only social improvements which are now conceivable lie in the direction of more complete realization of a society of free men united by contract, are points which cannot be controverted" (p. 24). 

Source: Sumner, W. G. 1974. What Social Classes Owe to Each Other. Idaho: Caxton Printers Ltd.