In the early 1970s, I was a graduate teaching assistant at UCLA in an undergraduate course taught by Charles Baird, a free-market economist. After explaining to the class the problems with the current welfare system--its disincentive to work, the amount of life-arranging (his word) that social workers do, etc.--Baird proposed as an alternative Milton Friedman's idea of a negative income tax.

Under Friedman's plan, the panoply of different government aid programs would be replaced by a simple cash giveaway, administered through the tax system, with no money specifically earmarked for certain items, as with food stamps, and no pesky social workers trying to manage your life. Poor people would be able to spend their welfare payment on anything they wanted.

Shortly after the class, an undergrad--one of the more promising and apparently idealistic ones, I might add--came by to discuss the Friedman proposal further. I expected him to focus on the proposal's effect on the poor. Instead, he considered solely its effect on himself.

He had calculated that under the Friedman plan he could be independent of his middle-class family because he would qualify for the negative income tax himself. I was stunned. Where I grew up, in rural Canada, there was a stigma about taking welfare. I had simply trusted that this stigma would be strong enough that few young, healthy people would take advantage of a negative income tax. This student challenged my naivete, and unwittingly made me an opponent of the negative income tax.

I was reminded of that incident while reading Gertrude Himmelfarb's The Demoralization of Society. Himmelfarb, a history professor at the City University of New York, takes a fresh look at Victorian England--an era my 40-something generation was taught to ridicule--and finds much that was good. One of the good things was the way Victorians stigmatized those on "relief." We are told today that welfare should carry no stigma, because that is demeaning and dehumanizing to those dependent on it. The Victorians believed exactly the opposite.

Humanitarians in that era wanted to help only poor people who were unable to support themselves. Thus, they wanted able-bodied people on relief to feel stigmatized by those around them, as a way of motivating them to get off welfare as soon as possible. They wanted those who could be poor and independent not to turn into paupers, that is, people who were permanently dependent on others for their daily sustenance. They thought a lot about how to reduce this permanent dependence.

Their thinking led them to believe in "less-eligibility," which was the basis for the Poor Law reform of 1834. Before that welfare reform, people were entitled to relief. The 1834 law tightened eligibility. According to the principle of less-eligibility, the condition of the "able-bodied pauper" should be less "eligible," less desirable, than the condition of poor self-supporting laborers. Less-eligibility led to the workhouse principle, the idea that to get relief, the able-bodied pauper and his family (but not the sick, the aged, and widows with small children) would have to live in workhouses.

Weren't these workhouses the hellholes that Charles Dickens portrayed in Oliver Twist? Certainly not always. French writer Hippolyte Taine, who observed England in the 1860s, reported that the workhouse he visited was spacious and clean, the children were taught in classrooms, and the diet included meat once a week--a luxury in those days.

Though workhouses weren't the hellholes of popular myth, they did take away people's freedom and segregate them from the general community. And it worked. Taine reported that of the 350 "inmates," not one was a single able-bodied man.

"They prefer to be free and starve," he wrote. "The workhouse is looked upon as a prison and the poor make it a point of honor never to enter one."

The data on workhouse expenditures confirm that the reform worked in discouraging dependency. Annual expenditures averaged 6.7 million pounds in the five years before the reform and 4.5 million pounds after, in spite of a population increase of I million.

Illegitimacy has always been a decent predictor of future social pathologies. The Victorians, writes Himmelfarb, also condemned women who had children out of wedlock. While I still think condemnation was too harsh, contrast that to three years ago, when former Vice President Dan Quayle was the one condemned for even suggesting there might be problems associated with illegitimacy.

Himmelfarb quotes the recently departed surgeon general, Joycelyn Elders, who, asked whether having children out of wedlock should be condemned, answered: "No. Everyone has different moral standards....You can't impose your standards on someone else." This difference in moral outlook, argues Himmelfarb, is responsible for a huge difference in results. She notes that whereas in 1901 only 4 percent of births in England and Wales were out of wedlock, by 1992 the figure was 32 percent.

Himmelfarb's subtitle, from Victorian Virtues to Modern Values," highlights the importance of words. What the Victorians called "virtues," we call "values." And the change in words speaks volumes. Virtue connotes something that is rock solid and definitely not arbitrary. Value sounds squishier, more subjective.

Himmelfarb notes that modern "moral education" courses explicitly avoid educating people about morality. Instead, the values clarification technique has students "discover" their own values by "exploring their likes and dislikes, preferences and feelings"--as if likes and dislikes have anything to do with morality. The Victorians would have little tolerance for this ethical relativism that surrounds us today.

Instead, the Victorians believed in the bourgeois virtues--being honest, industrious, punctual, sober, and law-abiding, to name a few. Living by these virtues almost guarantees that dependency will not become a problem. Those virtues also resulted in a very civil, and very safe, society. Hippolyte Taine wrote: "I have seen whole families of the common people picnicking on the grass in Hyde Park; they neither pulled up nor damaged anything." And, notes Himmelfarb, Britain's crime rate during the Victorian era was very low. By 1901, near the end of the Victorian era, the crime rate bottomed out at 250 indictable offenses per 100,000 population. Compare that to Britain's 1991 rate of 10,000, a staggering 40 times that 1901 rate. Taine commented, "The aim of every society must be a state of affairs in which every man is his own constable, until at last none other is required." The modern emphasis on values over virtue has done little to help us achieve this noble aim.

But Himmelfarb believes that abandoning failed welfare policies and releasing the resources of the free market wouldn't be enough to achieve that aim either. Faith in free markets, writes Himmelfarb, "underestimates the moral and cultural dimensions of the problem." Traditional values, she argues, must be legitimated, and this is difficult when the state and the dominant culture are legitimating their opposite.

Those who want to resist the dominant culture, asserts Himmelfarb, "may be obliged, however reluctantly, to invoke the power of the law and the state, if only to protect those private institutions and associations that are the best repositories of traditional values." She does not say clearly which powers of the state she would invoke and for what, but her further discussion hints that she would have no trouble with anti-pornography laws, for example.

Himmelfarb is right that a cultural change is needed. But she is wrong to believe that "invoking the power of the state" is the way to get there. Though she seems to understand the strong connection between government welfare policies and the decline in culture, she doesn't take the obvious next step: calling for a radical downsizing of government.

But only a large cut in government welfare programs, with abolition of most, can set the cultural forces in motion that would lead to declines in illegitimacy, crime, and other social pathologies. Trying to change the culture without changing its underlying incentives is, well, silly.

David Frum said this well in his 1994 book, Dead Right. In discussing the major strands of 1990s American conservatism, Frum wrote: "Conservatives who throw in the towel on issues like Social Security and Medicare and welfare in order to direct their full attention to `the culture' are attempting to preserve bourgeois values in a world arranged in such a way as to render those virtues at best unnecessary and at worst active nuisances. The project is not one that is very likely to succeed."

Contributing Editor David R. Henderson is an associate professor of economics at the Naval Postgraduate School in Monterey, California, and the editor of The Fortune Encyclopedia of Economics.

COPYRIGHT 1995 Reason Foundation
COPYRIGHT 2004 Gale Group

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