Economy & Business

What Noah Smith Gets Wrong about Poverty

Sign in the Skid Row district of Los Angeles, Calif., in 2015. (Lucy Nicholson/Reuters)
Almost none of his key claims are exactly true.

Noah Smith has offered a stale slab of conventional wisdom under the hectoring headline: “Stop Blaming America’s Poor for Their Poverty.” The essay compounds sloppy thinking with tedious writing, but it reflects a common line of thinking, the defects of which are worth taking the time to understand.

Smith argues that conservatives err in taking a moralistic view of poverty (he cites my writing on the subject) and offers as a point of comparison the Japanese: “In Japan,” he writes, “people work hard, few abuse drugs, crime is minimal and single mothers are rare. The country still has lots of poverty.”

Almost none of that is exactly true, or true without qualification.

To start at the end and work backward, a technical matter: It is not obvious that Japan “has lots of poverty.” Real data about poverty in Japan are notoriously difficult to find (it is almost as if the government does not want to talk about it!), and Smith here relies on a useless measure of “relative” poverty, the share of the population earning less than half of the median income. You can see the limitations of that approach: A uniformly poor society in which 99 percent of the people live on 50 cents a day and 1 percent live on 49 cents a day would have a poverty rate of 0.00; a rich society with incomes that are rising across-the-board but are rising much more quickly for the top two-thirds would have a rising poverty rate, and some people who are not classified as being in poverty this year might be in poverty next year even though their incomes are higher, etc. It would be far better to consider poverty in absolute terms, but our progressive friends are strangely resistant to that.

Secondly, it is not entirely clear that the Japanese are as free from the pathologies that attend poverty in many other places as Smith suggests. It is true that Japan as a whole has low rates of chronic unemployment, drug use, single motherhood, etc., but the relevant question here would be how Japanese who are poor compare on these metrics with Japanese at large. To assume that the situation with the poor can be approximately deduced from national averages is pretty sloppy analysis, if it counts as analysis at all.

Third, it emphatically is not the case that Japan is a society that is largely free from substance abuse. In Japan, as in the United States, the most socially significant and destructive mode of substance abuse is legal: alcohol abuse. Japan has a big problem with alcohol, and alcohol abuse is related to joblessness and poverty, although the question of causality (Are they unemployed because they drink, or do they drink because they are unemployed?) gets complicated, and some studies suggest that in Japan some kinds of destructive drinking increase with income.

Smith is correct that Japan has high work-force participation, and that it has a universal(ish) national health-insurance scheme. To which he adds: “Too many people fall through the cracks in the capitalist system because of unemployment, sickness, injury or other forms of bad luck.” This is an odd thing to write immediately after noting that Japan has 1. low unemployment and 2. a national health-care system that helps people through sickness and injury.

Perhaps those things are not sufficient?

“Capitalism” is a very broad term. The United States is a capitalist country, and a rich capitalist country at that. So is Japan. So is Singapore. So is Sweden. So is Switzerland. These countries have radically different health-care systems, tax codes, family lives, cultural norms, etc. Unsurprisingly, these produce different outcomes on a great many social fronts — but all of them are comprehended by “capitalism.”

So, not obviously correct about Japan, and not obviously correct about capitalism. Smith is batting about his average here, the usual mishmash of tendentious platitudes and misunderstood truisms.

But what about conservatives and our judgmental, “moral” approach to the question of poverty? I do not think Smith really quite understands this either. And, since he uses my work as his example, I will do my best to make it more clear.

The thing about moral truths is that they are truths. Take the example of a problem drinker. We can be reasonably sure that his life will improve if he stops drinking two liters of bourbon a day, or at least that it is much less likely to improve if he does not stop drinking two liters of bourbon a day. Some people see drunkenness and understand it as a character defect; others see alcoholism and understand it as a disease — in either case, the diagnosis is the same: Stop drinking two liters of bourbon a day. Perhaps it is the case that the world has been cruel and unfair to him. What now? Stop drinking. Maybe his parents abused him, he was discriminated against because of his race or sexual orientation, and wrongly convicted of a crime. What now? Stop drinking. It is not that those other factors do not matter — of course they do, especially if they can help us to understand the source of the problem. But the remedy is going to be the same.

To argue that the problem is “the capitalist system” is to retreat into generality and to refuse to consider the facts of the case, each on its own merits. To insist that the problem is capitalism also is to assert that phenomena such as homelessness are fundamentally economic problems, which does not seem to be the case. In New York, Los Angeles, and other big cities, it is common for people to sleep on the streets even as beds in shelters go unoccupied. There are many reasons for that, but the main one almost certainly is mental illness (and substance abuse as a subset of that). That is the nearly universal opinion of the professionals who work with the urban homeless.

There are better and worse ways to deal with mental illness in a wealthy, complex society, and we in the United States have settled on one of the worst: After the “deinstitutionalization” of the 1960s and 1970s, in which left-wing liberationist thinking combined with right-wing penny-pinching to gut the public mental hospitals, we punted the problem to the police and to the jailers, who are ill-equipped to handle it. The United States is not alone in this. Many (perhaps most) Western European countries have more effective social-welfare systems than we do, but even in Sweden, with its fairly comprehensive welfare state, mental illness is the leading cause of “work force exclusion,” as they call it.

Smith insists that poverty is “related to the economy’s structure.” I suppose that must be true in some trivial sense. “Structural” is a favorite word in these kinds of arguments, but I am not convinced it actually means anything other than, “This problem is complicated and has lots of variables that I intend to replace with a single adjective.” But the big changes that progressives generally propose for the United States — a national health-care system like Japan’s, an enlarged welfare state more like Sweden’s — do not seem to have been entirely effective in the places where they have been tried. And there is good reason to believe that Swedish or Swiss practice cannot simply be imported into Eastern Kentucky or Baltimore and replicated locally. That does not mean that there is nothing to learn from Japanese or European practice — perfection is not our criterion — but it does complicate the conversation. We have, in fact, spent a tremendous amount of money on anti-poverty and economic-development programs, and much of that has not delivered anything like the promised return.

And that is where this “moral” stuff that bothers Smith comes in, again.

The United States is a very, very rich country, one that can well afford to be less than scrupulous about distinguishing between the so-called deserving poor and the undeserving. (Whatever that means. A related thought: Christians citizens, who believe themselves to be the recipients of the greatest unmerited gift in the history of all things, could probably stand to be a little less persnickety about who is deserving and who is undeserving of considerably less precious benefices. We should act like we believe our own dogma.) Given that, we should be less worried about some “undeserving” person getting over on us than we are about doing active harm to individuals and communities through well-intentioned programs. And, indeed, thoughtful conservatives (and, once upon a time, thoughtful progressives) are very much attuned to that. Social spending of all kinds creates incentives and disincentives. Some of these can have big, unintended social consequences. There is a moral question there, to be sure, but there also is a question of program design. Economic treatments of fundamentally non-economic social problems are not likely to produce good results.

In my own reporting on poverty in the United States, I have tried to present the facts as unsparingly as I can. Perhaps Noah Smith thinks that I do this in order to savor the exquisite delights of moral condemnation. But the intended purpose is to scour away the crust of sentimentality that poverty has acquired in order that we may deal with the actual facts of the case in a way that is productive and that does not end up deepening the very problems we hope to mitigate. There are people who are poor because they have terrible disabilities and no family support; there are people who are poor because they drink two liters of bourbon a day; there are people who are poor because they simply will not work; there are people who are poor who are willing to work but cannot or will not relocate to places where there are opportunities; there are people who are poor because the education system has failed them; there are people who are poor for all sorts of other reasons. We have to sort those out, not because we want to elevate the “deserving” and abandon the “undeserving” but because those are fundamentally different problems that demand fundamentally different solutions.

We could try to do that. Or we could blame “the capitalist system.”


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