The War on Poverty

April 6, 1964

President Johnson’s call for “a national war on poverty,” with the objective of “total victory,” is going to be hard for the Republicans to combat. Who isn’t against poverty?

There is an air of moderation about the President’s proposals that adds to Republican difficulties. He asks for an added expenditure in the first fiscal year of less than $1 billion—only, as he points out, 1 percent of our national budget.

Then again, he assures us that “The war on poverty is not a struggle simply to support people, to make them dependent on the generosity of others. It is a struggle to give people a chance.” And he follows this with proposals for government job-training and employment programs.

But soon the thoughtful reader becomes aware that what the President is proposing is a set of more government interventions to try to cure evils brought about by previous government interventions. It is not a coincidence that so much of the unemployment that exists today in this country is among the unskilled. One of the chief reasons is the Federal minimum-wage law. Hundreds of thousands who could otherwise find work are kept out of the labor market altogether if their earning power is less than $1.25 an hour.

THE CAMEL’S HEAD

A generation or two ago a young beginner might work for nothing until he learned the business. His father might even pay an employer for his training. Today minimum-wage laws and union restrictions make such apprenticeship on an adequate scale practically impossible. So, under the poverty program, workers are to be trained at taxpayers’ expense. But we may be sure that each union will oppose this free job-training by government.

Another doubt likely to occur to the thoughtful observer is whether Mr. Johnson can achieve “total victory” over poverty with an expenditure of only $970 million a year. This comparatively tiny price tag for such a vaultingly ambitious goal, one suspects, is merely a way of getting the camel’s head in the tent. If the history of social security is any guide, we can expect the price tag to increase geometrically as the years go on.

In fact, we may not have to wait long. On the very day that the President’s program was announced, the head of the National Farmers’ Union declared that it represented “only an infinitesimal fraction of what needs to be done to wipe out poverty in America. . . . We should be talking about tens of billions of dollars.” This, of course, would lead to a wild inflation that in the long run would only multiply the poverty problem.

WAGE WITHOUT WORK

A few days after that, a 32-member group calling itself the Ad Hoc Committee on the Triple Revolution declared that every American should be guaranteed an adequate income as a matter of right whether he works or not. This fantastic proposal would destroy all incentive to work, not only on the part of those who expected to be supported, but on the part of those who would be asked to support them out of their own earnings. There could be no faster way to impoverish the nation.

The only real cure for poverty is capitalism—the system of private property, free markets, and free enterprise. This system has made us the most productive and richest nation in the world. It has continued to achieve its miracles even in the last generation. It has raised the average weekly factory wage from less than $17 in 1933 to $102 today. Even after the rise in prices is allowed for, it has more than doubled our real per capita disposable income—from $923 in 1933 to $2,127 in 1963.

As some commentators have already pointed out, the state known as poverty is relative, not absolute. What we call poverty in the U.S. would be regarded as affluence in Africa, Asia, or Latin America. And in any system that allots its rewards in proportion to skill and output there will always be a bottom fifth, no matter how high average income goes. But impatient efforts to wipe out poverty by severing the connection between effort and reward can only lead to the growth of the Leviathan state and destroy the progress this country has so dearly bought.