Charles Murray’s book Losing Ground: Social Policy, 1950-1980 was the explosive expose scholarly work that showed how “the war on poverty” and social welfare programs destroyed people by increasing the problems they were supposed to solve. It was a very empirical work that depended on looking at results. From the data he analyzed, Murray proposed a law:
The Law of Unintended Rewards: Any social transfer increases the net value of being in the condition that prompted the transfer.
Any time you provide money for people in a certain situation you make being in that situation less unattractive or more attractive.
Leftists and liberals have derided and scoffed at Charles Murray’s work (since there was no other way for them to deal with it).
Except when they admit that it is all true.
Here is socialist Vermont Senator Bernie Sanders preaching against Wal-Mart and other stores for not paying enough.
Here’s a summary from Sonya Sondoge on BenSwann.com:
During a Congressional panel discussion on Thursday, Indpendent Senator Bernie Sanders of Vermont blasted the Walton family for what he sees as their tax-subsidized fortune. He contends that they maintain their status as some of the wealthiest people in the world by paying poverty wages to their 1.4 Million US employees. He states the taxpayers are left paying for the rest for the workers and their families with taxpayer subsidized Medicaid, food stamps, housing, and other government benefits.
Sanders was calling into question whether its morally or ethically right for a massively wealthy and profitable company to have such high rates of full times employees on government assistance. He says the discussion about income inequality inside the Beltway are divorced from reality, and that the lobbyists and representatives for these large corporations are getting rich off fighting for corporations that hoard the earnings of the labor for just the executives and board of directors, as well as shareholders. Sanders said in the 1950’s the average working class wage was (today’s equivalent of) $37/hour.
He said today the average wage is $8.80, with the net result of exploding rates of poverty and workers needing help just to pay their bills and raise their children.
It is pretty convenient that Sanders forgets about Warren Buffet and other members of the one percent who make millions off Obama’s trickle down Federal Reserve policies which rob the rest of us of our buying power and keep the economy stagnant. Instead he attacks the one family that has actually offered people jobs and affordable products.
But he’s not completely wrong. In fact, he is confirming Charles Murray’s theory: by helping out low-income workers the government makes it more attractive or less unattractive to be a low-income worker. Sanders’ ideological allies Huffington Post even extol food stamps and other transfers as “stimulus” for retailers like Family Dollar. Wal-Mart lobbies for increases in the food stamp budget, not to get more for employees, but because they make more money when people get more money in food stamps.
What would happen if the government suddenly stopped all these social welfare bribes? All of a sudden, all these retailers would lose business. The price of food would sink and other necessities would sink. This would probably cause a crisis because minimum wage laws would interfere in the reset. But if we had a free economy, then wages and prices would settle at a natural balancing point. Wages would be nominally lower but they would be capable of buying more at the other lower prices.
Instead of allowing people to trade with one another freely, we’ve jammed up peaceful society with our envy-based rules and spread harm and hostility throughout the American economy.