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Poverty is a political problem, not just an economic one

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Citing “the lowest rate of social mobility among rich countries,” Philip Alston, an NYU law professor and United Nations special rapporteur, argues that inequality in the U.S. has become a human rights issue. Alston, whose U.N. role focuses on the relationship between extreme poverty and civil rights, laments, “Poor people have no chance of having their voices heard. No chance of influencing public policy.”

Alston says that “[i]n a rich country like the U.S.A., the persistence of extreme poverty is a political choice made by those in power,” and of course he’s right, but not in the way he thinks. To progressives in the mainstream of American politics, government is a benevolent tool capable of eliminating poverty, if only our politicians would dedicate themselves to that noble project.

{mosads}This well-intentioned narrative bespeaks an acute historical illiteracy. Beyond that, its own kind of elitism, the mistaken notion that the politically powerful — politicians, bureaucrats, international bodies like the U.N. — are just innocent, virtuous protectors of the underprivileged.


Yes, Professor Alston, politics and public policy are responsible for widespread poverty, inequality, and economic exploitation. The appropriate response is not a call for yet more government intervention.

Libertarians contend that existing inequalities and exploitative relationships are not resultant merely of free and voluntary exchange. Force and coercion lie at their base; economic exploitation is — in a very concrete sense — linked to physical domination.

Students of history may find this insight to be a rather obvious one, yet it is surprisingly underappreciated in both popular and academic discourse about politics and economics.

So much of today is based on the concept of intersectionality. Which is the idea examining the interplay and intersection of various forms of power, privilege (or lack thereof) and discrimination. Very rarely does the punditry confront this other intersectional phenomenon: The historical intersection of political and economic power.

Our experts, of course, pay lip service to the idea; why yes, they say, surely everyone knows that the poor lack political power and agency, that they often have very little say when it comes to what happens in their own communities — how they are governed, policed, taxed, etc.

But the underlying question, that of how it is that the politically powerful rule the economy and, likewise, that the economically powerful dominate our politics, is largely ignored. And that question is one of class analysis, which, it would seem, makes Americans on both sides of the accepted political spectrum uncomfortable, uncomfortable because class analysis is the dirty, dangerous domain of Marxists and other marginal quarters of the radical left now in ill repute.

Indeed, so ignored are questions of class analysis that most on the political left believe the poor and politically powerless can and should rely on the state to protect them against economic exploitation. But what if it is government itself that is the source of exploitation, the force allowing the economic elite to monopolize resources and abuse working people?

This was the argument of the radical liberal inventors of class analysis, who took up and advanced the liberal free-trade philosophy of Adam Smith, David Ricardo, Jean-Baptiste Say, and others as an escape from the rigged, elitist economic system of mercantilism. In its incipient stages, this free market philosophy represented class revolution, not violent revolution, but the peaceful upheaval of an old order of systematic government intervention in the economy.

Free market thinkers very consciously thought and presented their arguments in terms of class consciousness, aware of class distinctions and contemplating a separation of politics and economics.

As political historian Annelien de Dijn observes, explaining the ideas of French radicals Charles Comte and Charles Dunoyer, early laissez-faire liberals sought “an industrial society, where all citizens worked, where no class existed that lived in idleness on the labour of others.” Free markets were to effect an economic levelling, not provide the philosophical tools for defending the existing rich.

It is probably becoming clear now that libertarian and classical liberal arguments about the effects of free markets are seldom taken on their own terms. But that’s our fault too, for too many libertarians, classical liberals, and other free-marketers aren’t clear about (or don’t know themselves) what they are advocating, duped by the free market enemies into defending any outcome that the current system of economic fascism happens to produce.

Interestingly, then, on this point the contemporary Right and Left very often agree: The free market order is, by and large, responsible for the set of outcomes we have today. The disagreement thus turns on whether these are predominantly praiseworthy or blameworthy.

The core factual and causal assumption — that free markets cause the kind of inequality Professor Alston cites — is actually a shared one; only the normative judgment that attaches to this premise is seriously debated in mainstream American politics, with both sides playing the roles they are expected to: Libertarians and conservatives say that free markets are fabulous and inequality is unproblematic, while progressive, left-liberals, and social democrats insist that inequality is among the most serious problems we face and free markets must be reined in by a proactive, socially-responsible government.

Conservatives are wrong. The levels of poverty and inequality we have today cannot be attributed to free markets — at least not the kind for which principled libertarians plead. And progressives and social democrats are wrong.

Given the special power to decide upon the rules of the economic game, people in government bodies will act no more selflessly than anyone else; and, indeed, they have every incentive to act much, much worse.

If we take seriously the idea that economics and incentives matter then we should find this fundamental progressive argument about the role of government worrisome. 

If people are inclined to regress to acting in their own self-interest, within any given framework of rules, then trying to create the right incentives within the system becomes very important.

Alston is right, poverty is a political problem, not just an economic one, but further concentrating political power over economic matters will only aggravate the problem, allowing a small corporate ruling class, both political and economic in character, to make the rules and concentrate wealth.

David S. D’Amato is an attorney, an expert policy advisor at both the Future of Freedom Foundation and the Heartland Institute, and a columnist at the Cato Institute’s

Tags Adam Smith Economic inequality Poverty

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