Prolific and provocative, Charles Murray has gone many rounds in the war of ideas on social policy. His 1984 book Losing Ground changed the debate about welfare policy by focusing on family breakdown and welfare dependency. His new book, In Our Hands: A Plan to Replace the Welfare State (AEI Press, 2006), recasts the discussion on entitlement policy with its plan to eliminate government and corporate subsidies and give everyone--beginning at age twenty-one--an annual cash grant of $10,000 for life. Below is an excerpt from the introduction.
During the second half of the twentieth century, the welfare state confronted accelerating increases in the number of people who were not just poor, but who behaved in destructive ways that ensured they would remain poor, sometimes living off their fellow citizens, sometimes preying on them. As their numbers grew, they acquired a new name: the underclass. The underclass grew first in the nation that was the largest and ethnically most heterogeneous: the United States. As the years passed, poor young men increasingly reached adulthood unprepared to work even when jobs were available. They were more disposed to commit crimes. Poor young women more often bore children without a husband. Poor children more often were born to parents who were incompetent to nurture them. When it came to solving these problems, it was obvious by the 1980s that government had failed. Then the evidence grew that government had exacerbated the problems it was trying to solve. As the Americans were making these discoveries, an underclass also began to emerge in the European welfare states.
That the easy tasks of the welfare state became hard and that underclasses are growing throughout the Western world are neither coincidences nor inevitable byproducts of modernity. The welfare state produces its own destruction. The process takes decades to play out, but it is inexorable. First, the welfare state degrades the traditions of work, thrift, and neighborliness that enabled a society to work at the outset; then it spawns social and economic problems that it is powerless to solve. The welfare state as we have come to know it is everywhere within decades of financial and social bankruptcy.
The libertarian solution is to prevent the government from redistributing money in the first place. Imagine for a moment that the trillion-plus dollars that the United States government spends on transfer payments were left instead in the hands of the people who started with them. If I could wave a magic wand, that would be my solution. It is a case I have made elsewhere. Leave the wealth where it originates, and watch how its many uses, individual and collaborative, enable civil society to meet the needs that government cannot.
But that is a solution that upwards of 90 percent of the population will dismiss. Some will dismiss it because they do not accept that people will behave in the cooperative and compassionate ways that I believe they would. But there is another sticking point for many people with which I am sympathetic: People are unequal in the abilities that lead to economic success in life.
To the extent that inequality of wealth is grounded in the way people freely choose to conduct their lives, I do not find it troubling. People are complicated bundles of skills and motivations, strengths and weaknesses, and so are their roads to happiness. Some people pursue happiness in ways that tend to be accompanied by large incomes, others in ways that tend to be accompanied by lower incomes. In a free society, these choices are made voluntarily, with psychic rewards balanced against monetary rewards. Income inequality is accordingly large. So what?
Inequality of wealth grounded in unequal abilities is different. For most of us, the luck of the draw cuts several ways--one person is not handsome, but is smart; another is not as smart, but is industrious; still another is not as industrious, but is charming. This kind of inequality of human capital is enriching, making life more interesting for everyone. But some portion of the population gets the short end of the stick on several dimensions. . . . When a society tries to redistribute the goods of life to compensate the most unlucky, its heart is in the right place, however badly the thing has worked out in practice.
Hence this book. The argument starts by accepting that the American government will continue to spend a huge amount of money on income transfers. It then contends that we should take all of that money and give it back to the American people in cash grants. The chapters that follow explain how it might be done, why it is economically feasible, and the good that would follow.
