Misdirected Compassion; D. Mataconis

Many of us are aware of the dangers of social ism, and the influence it has had on politicians at the national level. But I wonder how many people are taking notice of the assaults on our property rights and civilliberties that are taking place week by week as local authorities introduce new pro grams. We must educate ourselves and help others to learn the difference between voluntary and coercive action, and we must involve ourselves in the affairs of our communities. Perhaps it will be by concentrating on local issues such as these that we will be able to stem the tide of collectivism. 0 Misdirected Compassion by Douglas Mataconis N early everyday we are confronted with newspaper and television stories about society's less fortunate members-families living in squalid conditions, and homeless people sleeping on the streets of America's great est cities. Understandably, these stories are shock ing to most of us; no one in a country such as ours, we say to ourselves, should be reduced to living in conditions like these. Someone should "do some thing" about it.

Unfortunately, this urge to help the poor typi callyleads people to believe that only government sponsored programs can provide the needed aid. Whether the proposed remedy is a government mandated "living wage," rent control laws to en sure "affordable" housing, or other interventionist policies, the underlying premise is that compassion for the poor demands that we increase the size and scope of government. When we look at the results of these policies, however, we see that government Mr. Mataconis recently graduated from Rutgers Univer sity. He will be attending George Mason University School of Law in the fall. intervention doesn't improve the lot of the poor; in fact, it often worsens the situation. Supporters of the minimum wage, for example, assert that the poor should be helped by insuring that their jobs pay a wage that meets their basic needs. That sounds reasonable and compassion ate. However, what if a worker's productive output is less than the minimum wage? In this case, the very people who are supposed to be helped by the minimum wage-the low-skilled working poor -are hurt the most, since employers are less likely to hire them at this new, higher wage. As a result, a law that was passed out of compassion for the needy produces higher unemployment and more deprivation.

The results are similar with rent controls. In this case, a law is passed to make housing more afford able for those with low incomes. Again, this sounds reasonable and compassionate. The actual result of such a law, however, is to reduce the sup ply of affordable housing. By setting a ceiling above which rents cannot rise, such laws prevent landlords from earning returns comparable to other investments, such as stocks or bonds, that require less time and fixed capital. Thus, investors are discouraged from building new low-income housing or maintaining properties they already own. Once again, a law that was passed out of a sense of compassion for the poor does the greatest harm to precisely those it is supposed to help. One is led to ask: If we really care about the less fortunate members of society,whydo we pass laws and implement policies that make them worse off than they were before? It would be far better prac tically and morally to abandon this blind faith in the state's ability to help the poor, and search for a better way to assist those in need.

For example, instead of a government mandated minimum wage, we should allow employers to pay what they believe the labor in question is worth, in light of competitive market conditions. Admittedly, there will be people who will be earning less than what many would consid er "decent," but isn't it better that these people be employed at a job paying $3.00 or $3.25 an hour, and thus gain the experience needed to advance and earn more, rather than be unemployed under 307 a system where the government has decreed that wages cannot fall below $4.25? Similarly, we would find that a free market in housing is the best way to alleviate the crisisin low income housing. Whereas now in many cities the only area of housing attracting investment is high income housing, rent decontrol would restore the profit incentive to low-income housing. We would find that, at least initially,the costs of low-income housing in cities currently practicing rent control would probably rise but, as investors reenter the field, competition from new and refurbished hous ing would drive rents lower.

There is nothing wrong with feeling compassion for the poor. Human charity, so long as it isn't coerced, is admirable. Problems develop, however, when compassion is misdirected into policies that actually worsen the plight of the poor. If this compassion is genuine, then those who feel it must abandon these policies and recognize that the best remedy for poverty lies not in a larger and more powerful government bureaucracy, but in an expansion of the free market and the opportunities it provides for everyone. 0 FranklinPierceon PublicCharity I readily and, I trust, feelingly acknowledge the duty incumbent on us all, as men and citizens, and as among the highest and holiest of our duties, to provide for those who, in the mysterious order of Providence, are subject to want and to disease of body or mind; but I cannot find any authority in the Constitution for making the Federal Govern ment the great almoner of public charity throughout the United States .

. . . it would, in the end, be prejudicial rather than beneficial in the noble offices of charity_ ... -from a Veto Message, 1854 IDEAS ON LIBERTY 308 The Social Security TrustFund: "Savings" vs. Saving by Richard W. Fulmer F or every person receiving Social Security benefits in 1950, 17 others were employed. By 1970 the ratio had dropped to three workers per beneficiary, and as postwar baby boomers reach retirement age early in the 21st century, that ratio will drop to two-to-one. In the year 2030, workers will be paying an estimated one-third of their wages to support Social Security recipients. Originally the program was intended to be pay as-you-go, with receipts equaling disbursements. With insolvency looming, however, Congress in 1977 and 1983 decided to increase tax revenues beyond current expenditures and "save" the dif ference for future needs through the purchase of government securities. In practice, however, the purchase money is spent on current programs, and the "Trust Fund" is left with IOUs-thus Social Security tax receipts aren't "saved" in any mean ingful sense.