Welfare and Poverty

GOVERNMENTAL PUBLIC support programs are as old as the Babylonian Empire—when Hammurabi made protection of widows and orphans part of his celebrated code. In 1601, Queen Elizabeth I attempted to identify and assist England's needy. However, the first government-supported welfare program in modern times came in Germany in 1883 with legislation that introduced accident insurance for workers. The idea spread to surrounding countries, and soon laws required health insurance as well as retirement pensions. By the 1930s, state-supported welfare programs in some form existed in most of the world, spurred by socialist theory and the increasing power of labor unions.

Simultaneously with the advent of the Industrial Revolution, influential capitalists had opposed such concepts, saying government assistance violates the concepts of laissez-faire economics—or state nonintervention—and that social programs financed by tax revenues are counterproductive. The debate continues. At one extreme is the left's Marx-Engels utopia, never quite accomplished, in which private ownership of property is abolished and all citizens are provided for according to their need, with everyone working diligently and energetically to the best of their ability for the good of a democratic and egalitarian society. At the other end of the spectrum is the right's philosophy that human nature precludes such a socialist ideal and that the resulting “nanny state” eliminates incentives for achievement. Without discomfort, says this argument, there is no need for innovation or even effort: “Necessity is the mother of invention.”

In America, President Franklin D. Roosevelt's Social Security Act of 1935 extended federally funded pensions to the elderly as well as payments to help the blind and children without working parents. In 1965 during President Lyndon Johnson's ambitious War on Poverty, Medicare medical insurance was given to the aged. Medicaid was created for low-income families.

But not everyone believed the programs were effective or a good idea. “Here in California,” then-Governor Ronald Reagan said in 1971, “nearly a million children are growing up in the stultifying atmosphere of programs that reward people for not working, programs that separate families and doom these children to repeat the cycle in their own adulthood.” Reagan voiced disdain for bureaucrats whose job performance, he said, was gauged by how many new clients they had enrolled for the public dole: “They go out and actually recruit people to be on welfare.”

“The irony is that misguided welfare programs instituted in the name of compassion have actually helped turn a shrinking problem into a national tragedy,” Reagan said in a radio address to the nation on February 15, 1986, and continued: