Welfare Programs and the Great Society

0:00Today, I want to talk about welfare programs in the great society. And this seems like, oh, good grief, right? We all know these are bad and they cause problems and they're expensive and they haven't worked and, you know, so what? But I want to go beyond that level of analysis and try to explain why it is that there has been so little success in terms of reducing poverty by means of these various programs that have been instituted and enlarged since the 60s and when I say that they have not been successful what I mean is from about 1950 to 1968 the poverty rate was decreasing by about a percentage point per year and these so-called great society programs of Lyndon Johnson didn't really actually start getting major funding until around the late 60s so this is all this decrease in poverty is taking place basically before any of these programs either exist or were funded in any serious way.

1:01And then there's basically been stagnation and even a little retrogression over the years in spite of literally trillions of dollars spent on these various programs. So what I want to do then is begin by pointing out a book that is very influential. What I have here is the 10th anniversary edition from about 1995 and it's a book I make mention of in my own book, it's called Losing Ground by Charles Murray and the subtitle is American Social Policy 1950 to 1980. Now I am asking just out of curiosity not to put anybody on the spot or anything like that but I just am curious to know if there's anybody in the room who has first of all heard of this book.

1:49Is anybody familiar with Charles Murray's book or at least heard of it before? Have you heard of it? Has anybody read the thing? Okay, and I don't in any way mean that this counts as a demerit against you in any way, but that makes me feel better that I'll be imparting something that you don't know or have not heard before. That's actually useful. But it actually is a great book. It's really worth reading. It's really worth reading. You hear a summary of it and you think, okay, that's all I need to know about it. But I'm telling you, this is an enormously useful book, And it's very, very rare that a book on social policy would not only still be in print years later, but actually come out in a brand new 10th anniversary edition. It was cited all over the place in the 1990s when welfare reform was on the table.

2:35Everybody was pointing to Charles Murray and his thesis in this book as being simply obvious. But believe me, when it came out in the mid-80s, nobody said it was obvious. Everybody said Charles Murray is a big hater and he's evil and wicked and he hates the poor But then in the 90s, everybody pretended that they already knew all this, of course, so something happened, somehow, something happened over the course of those years to confirm the Murray thesis in people's minds. So what I'd like to do is refer to this book. As I say, it's enormously influential. I mean, you know, Reagan read it. He didn't apparently act on it, but he read it. A lot of influential people have read it. If you look at the blurbs on the back, they're all major people. So I want to talk about this book because Murray in here advances a couple of arguments that at first glance are shocking to hear.

3:28Now they don't seem so shocking to us in 2007 because we started to hear them. They started to become mainstream. But when they came out, these arguments were certainly shocking. The first of them is his argument that the stagnation that has become evident in the poverty level, or even the deterioration of the poverty level, so that it's gotten even worse, has taken place in large part because of some of the welfare programs that have been instituted and not in spite of those programs. Now that is a stunning claim and Murray is going to assemble an enormous amount of empirical evidence to try to support this conclusion. Now as I say, this became the conventional wisdom.

4:15By the 1990s people were saying that the programs are in some way themselves the problem. So that even Bill Clinton could say that these programs are themselves the problem. Now, it should be noted that when Bill Clinton ended welfare as we know it, which is how he touted this, he didn't include the 99 other programs that are included in welfare. He just got rid of aid to families with dependent children, and he replaced that with a program that would be administered more on the state level on a temporary five-year basis. But the safety net in terms of food stamps and unemployment insurance and medical care and all this, Medical Care and all this, all that was still in place, so it wasn't a complete abolition of welfare by any means. But the second claim that Murray makes is even more shocking.

5:03Murray argues that it is in effect impossible to design a wealth transfer program that is a government program by which some people are taxed and their money goes to other people. It's impossible to devise a program like that, that will not produce net harm. Now that was particularly shocking because social policy makers, of course, this is exactly what they want to do. They want to design programs like this, that take from some people, give to others and solve social problems that way. Murray is saying it is impossible to do that. Well again, a very stunning claim and he's going to have to have some serious analysis to justify it. Well, his analysis begins with a thought experiment that I find very useful.

5:50He says, let us suppose that we identify some social problem. He said, let's take smoking. Okay, now smoking is the most politically correct social problem there is. Smokers are despised and hated by everybody. But let's take smoking because it's a useful example. Let's suppose the government wants to reduce smoking. They want to cut down on the number of smokers and or they want to cut down on the amount of smoking that smokers are doing. One way or the other they want to discourage smoking. Well, how are they going to do this? Let's suppose they establish a program, the anti-smoking program. Obviously people aren't going to quit smoking if you offer them, say, two dollars. Here's two dollars, go ahead and quit smoking. That would not be a sufficient inducement for most people.

6:38However, I think there's hardly anybody on earth who wouldn't consider quitting smoking if you said I'll give you two trillion dollars to quit smoking. Certainly everybody would quit there. So Murray's point is that if you're going to establish an anti-smoking program, and later on we'll see how this applies to welfare, you have to offer a sufficient inducement to people to get them to stop doing the undesirable behavior, namely smoking. So you have to give them obviously more than two dollars, but at the same time there are limits in this world. You can't offer $2 trillion to everybody. You've got to come up with some reasonable figure that will be a sufficient inducement to discourage people from engaging in the undesirable behavior. So Murray suggests, let's suppose we use the figure $10,000. We'll give you $10,000 if you quit smoking.

7:26Now this is back in, his book came out in 1985, so this is in 1985, so maybe it's $20,000 now, but let's just use the $10,000 figure. So we'll pay you $10,000 for quitting, but you have to stick with it for a year. You can't quit for an hour, get the $10,000 and then go back. You have to quit for a full year and then you get the $10,000. Now, he wants to leave aside, just for the sake of simplicity, the possibility that people will quit for the year and then have relapses and maybe even go back to smoking. He says, for the sake of argument, let's just eliminate that possibility. Now, when we are designing our program, once we pinpoint the dollar figure that we're willing to reward people with for ceasing the undesirable behavior, we then have to consider the class of people to which this reward will apply.

8:20For instance, we can't give $10,000 to somebody who started smoking yesterday and then quit for a year so he could get the $10,000. 10,000. Obviously that would not be useful. So we can't apply it if you just started yesterday. So let's say we just arbitrarily say, if you've been smoking for five years, and if you've been smoking not just once a week for five years, but let's say you've been smoking a pack a day for five years, then you're part of a core of smokers that we really want to gear this to. So if you've been smoking at least a pack a day for at least five years and you quit for a full year, we'll give you ten thousand dollars. Well Murray then proceeds to lay out for us several, I think plausible scenarios regarding what is likely to happen and all of these scenarios would be occurring simultaneously.

9:12He says let's consider people who are in their fourth year and eleventh month of smoking when this program is instituted. Well what incentive do they have to not just continue for another month? Obviously they would. Just smoke for one more month, quit for a year, you get $10,000. Who wouldn't do that? So anybody who's already been smoking four years and 11 months is just going to carry on doing it for another month. Or let's imagine somebody who has been smoking for four years and 10 months. For just two more months you smoke, you can get $10,000. Or imagine somebody's been smoking just four years. So the four-year, 11-month people, four-year, 11-month and 29-day people, They're likely to just carry on just for the sole purpose of getting the reward. Now that's less true when you get down to people who have been smoking for four or three or two years.

10:00But that incentive is still there, albeit somewhat diminished. So imagine, again, you've been smoking for four years, if you smoke for one more year you get $10,000. Now this is before we had the kind of high cigarette taxes we have now, where smoking for another year might cost you $10,000. So let's just eliminate that. Well, let's remember, first of all, that it's much more difficult to kick the habit once you've been smoking for five years. So in a way, it's like welfare dependency. You think, well, I'll just start in on this program and surely I'll be able to wean myself off it years from now. But you find that it's actually much more difficult to do so. So that, let's say, let's say you were a teenager and you started smoking partially thinking, I think I'll start this destructive behavior just to collect $10,000 five years from now.

10:54They get five years from now and they realize that $10,000 is no longer a sufficient inducement to get them to quit. It's got too much of a hold on them. But meanwhile, you've enticed them into smoking and you've enticed the most vulnerable people who were at the point of their lives when they were really going to make fundamental life decisions And you've enticed the most vulnerable people who were at the point of their lives when they were really going to make fundamental life decisions, now they've begun smoking. Now, what about people who are smoking a half a pack a day? Well, what incentive do they not have to just begin smoking a pack a day so that they qualify for the reward? Or imagine somebody smoking 19 cigarettes a day. Obviously that person will start smoking 20, so as to qualify.

11:40So this reward of $10,000 would be the factor that would make the marginal nonsmoker become a smoker, and when I say marginal nonsmoker, the word marginal in this sense means somebody who is only this close to being a nonsmoker, this person is this close to being a smoker. So, if I say, if I'm talking about marginal farmers, I mean somebody who is just barely making it, and if anything unexpected happens, he's just ruined. Okay, he's just on the margin there. Well, likewise for smokers, somebody who is marginal could go either way, doesn't really care. You suddenly offer $10,000, these marginal folks are likely to do it.

12:28Well, if you suddenly start saying $10,000 five years down the road, well, the marginal people may go for that. So the difficulty facing a policy analyst is that you need to come up with sufficient inducement to get people to stop doing what you want them to stop doing. But the inducement cannot be so great that it will encourage other people to either begin this activity or increase this activity. Now let me quote a bit from Charles Murray's book here. He says, now, if 90% of the population had been smoking for five years when the program began, we might still argue that the program would show a net reduction in smoking. But only about 15% of the adult population smokes a pack a day or more.

13:16Let us estimate that a third of this number have been smoking at that rate for more than five years. If so, our plan has the potential for reducing smoking among 5% of the adult population and the potential for increasing smoking among 95% of the adult population. It is exceedingly difficult to attach numbers to the considerations we have just reviewed without coming to the conclusion that the program as specified would have the net effect of increasing both the number of cigarettes consumed and the number of smokers. At this point Murray challenges his readers to think up an alternative to his program. If you think that maybe the reason my program on net probably increases smoking is that I've just designed it badly, then you recommend something that would be better.

14:03And he said every recommendation you can come up with is going to contain the same kind of moral hazard, the same kind of inadvertent enticement to begin this conduct that his own program has. So it disproportionately attracts people to this behavior rather than to discontinue it. Murray then lays out for us several what he calls laws of designing social welfare programs. And these are laws that are based not on, they're not laws like axioms and geometry that simply recommend themselves on the basis of their clear and obvious nature, but these are laws I think that are based on empirical generalization over time.

14:51And his first such law is what he calls the law of imperfect selection and he says any objective rule that defines eligibility for a social transfer program will irrationally exclude some persons. Well what does that mean? Well I think we all can think of examples of people who were really in terrible, terrible circumstances but somehow didn't qualify for any assistance at all, right? at all, right, because they, for some reason, either just the wording of the legislation didn't quite apply to them, or they weren't clever enough to figure out how to become eligible for something, but we all know cases of people, I think, where they just didn't apply for anything, they weren't able to get anything, whereas we also know people who clearly didn't deserve anything, who have spent years and years living on the public dole, so there is going to be this imperfect selection.

15:42How do we cope with this imperfect selection? Any program we institute is going to inadvertently exclude some people who should be covered by it. So how do we deal with that? Well in the old days, the way you would deal with it is you would rather than say, let's broaden the eligibility requirements so as to make sure that every single person who could possibly need help will definitely be covered. That would be one way of dealing with it. But in the old days I think the attitude would have been more likely to say it would be better actually to have a few worthy people not actually get it than to increase the eligibility requirements so much as to be sure to cover everybody because when you begin to do that you undermine community values about work and about the necessity not to live off your fellow man.

16:36So it would be better to just keep the eligibility requirements perhaps irrationally restricted Then to just make them more broad, whereas beginning in the 60s the opposite conclusion began to hold. Because you began to hear much more often the argument that poverty is a problem with the system. It's a systemic problem. It's a problem inherent in the market economy. Nobody is to blame for it. And I don't mean to say that everybody who's poor has only himself to blame because he's just a bum. I don't mean to suggest that at all. But certainly I think it's reasonable to say that some people are poor because they're very bad money managers or they're buying $300 sunglasses the day before their rent is due, that sort of thing. These people do exist, there are people like this in the world.

17:23But the argument began to be in the 60s that people are poor because it's inherent in the system, it's in no way, they have no personal responsibility whatsoever. So there's no shame, in that view, there's no shame in taking welfare because it's in no way your fault, you bear no responsibility for the condition you're in. So if that's your working assumption, then you're going to be more likely to deal with this problem by saying, well, let's make the eligibility requirements even broader. The second law that Murray identifies for us, he calls the law of unintended rewards. I think this is the key. He says any social transfer, that is expropriation of one person to benefit another, increases the net value of being in the condition that prompted the transfer.

18:12So that is to say, if there's going to be a transfer to me of $10,000 for quitting smoking, this increases the net value for me of becoming a smoker, of being in the condition that prompts the transfer. Secondly, in this law of unintended rewards, the program that seeks to change behavior must offer an inducement that unavoidably either adds to the attraction of or reduces the penalties of engaging in the behavior in question. Then finally, number three, the law of net harm. Now this one is not immediately obvious. I'm actually going to read a brief paragraph of Murray's book to you on this. But he says, the less likely it is that the unwanted behavior will change voluntarily, the more likely it is that a program to induce change will cause net harm.

19:08Now let me refer to Murray himself here. As inducements become large, as they must if the program is dealing with the most intractable problems, and here he's talking about problems that are the least likely to change voluntarily. So we're talking about when you're dealing with the most intractable problems, as inducements to overcome these problems become larger and larger, the more attractive they become to people who were not in need of help in the first place. We do not yet know how large they must finally become. We do know from experience, however, that quite generous experimental programs have provided extensive counseling, training, guaranteed jobs and other supports, and failed.

19:56We can only guess at what would be enough, perhaps a matter of years of full-time residential training, followed by guaranteed jobs at double or triple the minimum wage, we do not know. Whatever they are, however, consider their effects on the people not in the program. At this point, it appears that any program that would succeed in helping large numbers The authors of the Hardcore Unemployed will make Hardcore Unemployment a highly desirable state to be in. That's what he means by that. Now, again, these are not the sorts of things you read in the New York Times, but nevertheless, they're interesting points, and there is, in fact, a substantial body of empirical data that I think makes them all the more plausible.

20:44Let's suggest this one criterion, for example, will now go from smoking to welfare programs. We know that in the 1960s, the eligibility requirements for aid to families with dependent children were loosened, and the program came to cover more and more people. When Franklin Roosevelt established the program in the 30s, he envisioned this as something to help widows who were with eight children, what in the world are they going to do? That was the thinking. But now it became much more broad and in effect it became, as some people have said, it became a negative inducement to marriage. Because if you had a full-time working head of household in the house, you don't get the payments anymore. So the inducement is not to marry or to stay married.

21:35Now some people have said, that's far too simplistic, nobody makes marriage decisions on the basis of welfare policy. Well, they've actually been able to study this to the point that you can almost make an absolute statement that it is true that these programs do have that definite effect. It's not simply that they exist side by side. The program seems to have this outcome with regard to marriage. And from about the late 60s to the late 70s, for about 10 years, there was a series of experimental programs carried out in various cities across the country to see what kind of effect there would be if people were offered a guaranteed minimum income. Would it decrease the amount of hours they worked and would it make them less likely to get or stay married?

22:23And what they found was that family breakup was much higher in the families that were getting the guaranteed income because in effect the state became the father, so the family structure was dispensable. What was interesting was that in Gary, Indiana, however, there was no effect observed on marriages. So what was going on in Gary? Were they having a religious revival of some kind? Why is it that in Gary there were no observed effects? Well, it's because the people in Gary misunderstood the program. They thought that if they got divorced or something, they would lose the money. But no, you don't lose the money. It's a guaranteed income. Oh, that's the only reason that there's no effect. So they stayed married in Gary.

23:08Okay, so I mean, there it is. I mean, there's plenty of evidence of this. And there's also, there's overwhelming evidence that the number of hours worked declined. Because there are people who say, well, welfare doesn't discourage work. Well, if you're getting a guaranteed minimum income, which is what this program was all about, you know, it seems like you could at least get by. You could get by at a standard of living that's higher than three quarters of the world. you know three-quarters of the world are living worse than that so a lot of people did but particularly young men just beginning their lives on the job market began got trapped in this and and and work the least of anybody so now people who should be learning work ethic and all this are diverted into socially destructive behavior because they realize well if I get rewarded for not not doing anything, so it's more desirable to be in this situation.

24:00So they actually have been able to do studies that have, they've had a control group that's not getting this guaranteed income and a group that is, and there's just no comparison in terms of family breakdown and disincentive to work and so on. It's quite widespread. Okay, well, this is obviously the analysis that we started here in the 1990s about aid to families with dependent children, that it was discouraging family life and obviously family life with a mother and father present is a good, I mean the reason that we want this is that it's a good staple environment for children. You find that without that father figure the children have a lot more difficulty and in particular they wind up joining gangs half the time, I remember poor Dan Quayle who was not exactly one of my favorite people in the world, but I remember that trouble he got into in the late 80s when he made some comment about Murphy Brown, or was it early 90s, because Candace Bergen's character on television was having a child out of wedlock and they were treating this as just a wonderful thing to do and Dan Quayle said, you know, you're very much papering over all the difficulties that people who are in that situation have, you're making a lot of money, you're making a lot of money.

25:16I think it seemed like, oh, this is just a breeze. Everybody should just do this. That's hard work. It's very difficult to do. And it's very hard on the kids half the time, particularly when it's a mother, because it's very hard for her oftentimes to find work, and you've got to get child care. It's very, very hard. And everybody, of course, ridiculed stupid Dan Quayle because he can't spell potato. So we don't care what he has to say about anything. And as typical in these situations, Quayle totally backed down and sent a stuffed animal The Great Society programs of the 60s were not just confined to making AFDC payments more easily available to people.

26:13It was also additional funding to education for people coming from the least advantaged households. It was massive programs for job training. For example, the Job Corps that I mentioned in the book. Medical care, for example, was established, like the Medicaid and Medicare programs. All these things are also part of the Great Society. But as I'm suggesting in the book, they have not had the outcomes that people might hope. I hope that money is not necessarily the reason that, for example, some schools are not doing well. If you were to walk into some of the schools in New York City, some of the high schools in New York City, I guarantee you, you would not walk, just walk through the hall. Don't even go in the classroom and see what's going on.

26:58Just walk down the hall and observe the behavior and then say to yourself, is the thing holding this school back the fact that we don't have 1.7 computers per student? It seems to me that with chalk and a chalkboard, you could really accomplish a lot in some of these places. It's not that, well, my goodness, we need to be spending $25,000 per student. We've had a dramatic increase in per-pupil expenditure, and we still have all this dysfunction. Half of it has to do with the family background of the students who are coming there. Obviously, if you've got all kinds of problems at home, that's going to be reflected in your academic performance. and Performance. Whereas if you have a supportive household that's interested in what you're doing and demands standards of you, you're going to have much more success. But in a lot of places you don't have that. So billions of dollars were poured into these programs, but they had very, very little to show for them.

27:50The one program that people do point to as being successful along these lines is the Head Start Preschool Program. It turns out that this program had billions and billions of dollars spent on it. It turns out that any gains that a student gets from the Head Start program, as soon as they start the next year of school, all those benefits are gone. They've disappeared. They're not there. They don't persist. So, again, the thinking is that if we just spend money, everything will be fine. It will show how generous we are, but not necessarily so. I mentioned the example of the Job Corps program. The reason people are unemployed is they just don't have enough opportunity. So the job corps was going to take hardcore unemployed young people, 100,000 of them, and go and give them job training and this and that.

28:35And what was found was that, well, first of all, violence keeps breaking out in these job training programs. You wind up with the situation where you're paying about as much to send every one of these students to Harvard as to actually participate in the program. You find that people who complete the program, By the way, two-thirds of the people didn't even bother to complete a free job training program, so hello. But if you do complete it, it turns out that you didn't do any better on the job market in terms of wages than people who were accepted to the job corps but never showed up for it. So again, you've now spent the equivalent of a Harvard tuition and you have exactly zero results, zero, nothing. The job corps has consistently been like this, isn't it?

29:21I think they've had years where they've said, hey, this year the Job Corps did really well. But yeah, this is the one program that gets funded more and more every year. Every senator wants to say, look what I brought home, it's the Job Corps for my constituents. My colleague Mark Thornton, who's another senior fellow here, was telling me, I don't remember all the details, but he was telling me about in Alabama there was some job training program and for one year they wanted to study how many people went through the job training program, and then entered a field for which they had been trained and the answer was 1. That was the answer. So anyway, that's another matter we can get Mark back in here, some of you know him. Alright, so I already told you about all the different manifestations of welfare.

30:07It's also the case that in order to stay out of poverty, there are relatively simple things people can do. Even if you keep a minimum wage job for a year, which typically, on average, you're not earning minimum wage after a year, you're almost always bumped up from that. But even if you had a minimum wage job for a year and you stay married for a year and you've completed high school, then you have almost no chance of being poor. But again, the incentives that are produced by some of these programs are such that they make it much easier for people not to take that very first important step. The key point to remember, I think, is that human beings are not naturally inclined toward hard work. They have a disinclination to do hard work. Economists speak of the disutility of labor.

30:56Albert J. Nock and others have pointed out the obvious fact about human nature, that human beings are anxious to seek after wealth with the least possible exertion. And Nock then goes on to, I just might note incidentally, make the point that this is why government can be such a dangerous institution because given that people prefer to work and get remuneration with the least effort possible, well, people would much rather get their loot and get their money through no exertion at all or through using political means to get the government to take some people's money and give it to them. I mean, that's much easier than going out and working. We all have this inclination to do that, and I don't just mean poor people.

31:41A lot easier than competing on the market is filing an antitrust suit with the Justice Department, or getting some special subsidy, or crippling your competitors through the government. So the government is always there to make it possible for you to get stuff without really working for it. And so the danger here, and this is what Murray is pointing out, is that any time you say, well we need to give free this and free that, free this and free that to everybody, and then after that we have to give 17 more free things, every time you do that, you take people who are only marginally in the workforce, who are this close to just dropping out and just saying, heck with it, I'll get the free payments. Every time you expand that, a whole other class of people drops out of the labor force.

32:30I was only barely willing to do this in the first place, now I'm not doing it. The more generous it becomes, the less work gets done, the fewer people want to do it. Now I tried to make mention in the book, I tried to at least quote a couple of passages from the Murray book because I think these are really, really valuable passages. Murray points out that in the 1960s a lot of the incentives changed. and he says that all the changes in the incentives pointed in the same direction. It was easier to get along without a job. It was easier for a man to have a baby without being responsible for it. For a woman to have a baby without having a husband. It was easier to get away with crime. Because it was easier for others to get away with crime, it was easier to obtain drugs.

33:17Because it was easier to get away with crime, it was easier to support a drug habit. Because it was easier to get along without a job, it was easier to ignore education. Because it was easier to get along without a job, it was easier to walk away from a job and thereby accumulate a record as an unreliable employee. Well, there is also the fact that the 60's saw the promotion of what became known as the welfare rights approach, that people should not only not be ashamed, but they should positively, they should consider it a positive good to receive welfare because they are entitled to it. It's not something that society grudgingly accords them, but they are entitled to it as a right. So Murray says that this idea is incredibly destructive because it undermines what he called status rewards.

34:03So he says that at least the working poor family used to, if they had nothing else, they had the dignity of knowing that they were not being a burden to their neighbors and they were supporting themselves. Now, under this new philosophy that they're entitled to get welfare payments, now they just seem stupid for not doing it. So, again, Murray says, once these highly functional sources of status are removed, the vaunted work ethic becomes highly vulnerable. The notion that there is an intrinsic good in working, even if one does not have to, may have impressive philosophical credentials, but on its face it is not very plausible, at least not to a young person whose values are still being formed. To someone who is not yet persuaded of the satisfactions of making one's own way, There is something laughable about a person who doggedly keeps working at a lousy job for no tangible reason at all.

34:55And when working no longer provides either income or status, the last reason for working has truly vanished. The man who keeps working is, in fact, a chump. Now, it has been alleged that people are on welfare because there just aren't enough jobs for them. But black unemployment really began taking off in the 1960s. A number of people on welfare began exploding in the 1960s. And so people always say, oh, yeah, yeah, yeah, it's because there just aren't enough jobs. Well, actually, there was a jobs boom in the 1960s. And New York was particularly prosperous. And yet New York has got tremendous increase in the welfare rules at that time. So what exactly is going on?

35:41Well, some of the incentives that I've described, I think, are plainly in effect. It's also the fact that, by the way, if you ask people who are jobless at that time, are you jobless because you can't find work? Three-quarters of them said no. Three-quarters of them said no. And what's also interesting, by the way, is that I don't know if you've ever seen any of these studies where they ask people, do you recycle? Of course, everybody says, yes, I recycle because they don't want to go to jail. But when you ask them, do you think your neighbor recycles? The answer is overwhelmingly no. Well, everybody is somebody's neighbor, so somebody's lying here. Okay, well, similarly, there have been studies where people have asked the poor or unemployed or there have been studies just in the black community where they will ask people, you know, are you, you know, what, how would you describe yourself?

36:34And they say, well, you know, industrious, whatever, responsible. Now, can you describe your neighbor? Oh, he's a bum, you know, whatever, doesn't do anything, he just sits back and collects money. Well, again, everybody is somebody's neighbor, so somebody's lying here. So it's interesting that even the poor will say, you know, I'm surrounded by people who just refuse to do legitimate work. But New York City is a classic example. I mean, I came from Massachusetts. I lived in New York for quite some time. And between 1945 and 1960, the number of people on welfare increased by 47,000. But from 1960 to 1965, just a five-year period, it grew by more than 200,000. By 1971, after a decade of extraordinary prosperity, great prosperity ever since World War II, there were nearly 1.2 million people on welfare in New York City alone, which means that there were more people on welfare in New York City Then the entire populations of 15 states of the Union.

37:40And one can go on about the various jobs that were available. Jobs that were going unfilled in the 1980s were jobs that simply required you to be able to understand how to divide 100 by 4 or understand what 75% means. These were going unfilled. So, again, why not? What could possibly be the reason that a self-respecting human being Couldn't take these jobs or if you didn't know those things why couldn't you teach yourself simple things like that? Well, I'll just finally end up with the note, just to elaborate a bit on something else in the Great Society, Lyndon Johnson and Kennedy chapter, is that there was in fact in the 60s founded an organization called the National Welfare Rights Organization and they actually ended up getting some federal money to promote their ideas And one of the things they did was that if people were turned down for various welfare programs they would just counsel them on how to break the bureaucracy down until they finally are just so tired of you that they cave in and give it to you.

38:43And so they would stage sit-ins and whatever and just overload the bureaucracy with more paperwork than they could possibly deal with and so they just finally broke down and gave in. Well, I'm just going to conclude again with the ideas that Murray gives us. He says that people are not naturally hardworking and moral, and that only a nexus of economic incentives, moral exhortation and social stigma encourages responsible, upright behavior. When those things are undermined, it is only natural to expect that people's natural inclinations to choose leisure over work and immediate gratification over responsibility and good sense come to the surface and it is much easier to lure people into this kind of behavior since our natural inclination is to want to exert the least possible effort than it is to teach them responsibility and self-sufficiency once they have become acclimated to the values and lifestyle that the welfare system encourages.

39:42One absolutely final note is that a gentleman I've had some correspondence with David Beto, University of Alabama, has written a book on... Gosh, the title of it is escaping me now, but it will come to me. But B-E-I-T-O wrote a book on... It's called From Something to Welfare State. I can't remember what it is. But he did a study of fraternal organizations in American history. American History. And these voluntary associations in the old days provided a lot of the services that now the welfare bureaucracy provides. They provided to their members assistance during emergencies or help with burial expenses or things of that nature. These organizations provided them. They were able to get, by pooling their resources together, they were able to get group discounts on medical care, get very inexpensive medical care. But Beto and others have pointed out, and Murray in another one of his books called In Pursuit of Happiness and Good Government have both pointed out that one of the results of these massive welfare

40:51bureaucracies is that they, sometimes we use this term, they crowd out private initiatives to help the poor because, you know, well, if I'm already paying my taxes and I'm getting these things from the government, what's the point of having the elks or the moose lodge or something help me? There's no point in having that now that the government's doing it. So a lot of what had been done in the past was simply not done anymore as a result. So these private approaches were crowded out because the government then kind of takes over. There's less and less for these other groups to do and they wind up not exercising these functions anymore and society becomes more dependent on government, less independent than it used to be.