Dr. Mary Ruwart is a leading expert in libertarian communication. In this column she offers short answers to real questions about libertarianism. To submit questions to Dr. Ruwart, see end of column.
QUESTION: Recently in the Liberator Online you answered a question with the following supporting argument:
“For example, about 75% of the tax dollars that are targeted to welfare programs actually go to the middle-class administrators rather than the needy. In contrast, private programs give about 75% of donated dollars to the poor. Thus, the poor get more when charitable giving is private.”
I am interested in where you got your statistics. I want to share this argument with friends, but I like to provide references. Could you do so?
MY SHORT ANSWER: Gladly! These are the references that I’m currently citing in the latest version of my book
Short Answers To The Tough Questions:
“
Welfare and Poverty,” NCPA Policy Report #107 (Dallas, TX.: National Center for Policy Analysis, 1983), p. 1.
“Breaking the Poverty Cycle: Private Sector Alternatives to the Welfare State,” a book by Robert L. Woodson. (Harrisburg, PA.: The Commonwealth Foundation for Public Policy Alternatives, 1988), p. 63.
“
The Costs of Public Income Redistribution and Private Charity” by JR Edwards, Journal of Libertarian Studies 21: 3-20, 2007.
The last reference is the most comprehensive. On pages one and two, Edwards cites two studies, over a seven year period. He writes:
“[Government] income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.
“In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator,
www.charitynavigator.org the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.”
Later on Edwards adds: “In fact, the average cost of private charity generally is almost certainly lower than the one-quarter to one-third estimated by Charity Navigator and other private sector charity rating services…” and tells why.
The bottom line: Government spends about 70% of tax dollars to get 30% of tax dollars to the poor. The private sector does the opposite, spending about 30% or less to get 70% of aid to the poor.
Note: I used “about 75%” from memory, which is getting a little less accurate these days. 🙂 In the future, using the “about 70%” figure would probably be better.
Edwards also makes this key observation:
“[R]aising only half as much money through voluntary donations, the private agencies (and families) could deliver the same amount as the government, saving, in the process, all the costs the government imposes on the public through the compulsory taxation. Given that aiding the poor must have large support among the public for coercive government redistribution to be policy, couldn’t the supporters raise, through voluntary donations from among themselves, half the amount that would have to be raised through taxation, and avoid coercing the rest of the nonpoor public?”
That’s the hope the libertarian vision offers: more effective aid for the poor and needy than ever before, delivered voluntarily by the private sector at a far smaller cost than today’s welfare state.
LEARN MORE: Suggestions by Liberator Online editor James W. Harris for further reading and viewing on this topic:
Free ebook: The End of Welfare: Fighting Poverty in the Civil Society by Michael D. Tanner.
In this 1996 Cato Institute book — now available as a free download — Cato’s Michael Tanner traces the growth of the welfare state in America. He argues that government welfare programs have failed to accomplish their ostensible goal of alleviating poverty. Moreover, they have undermined the traditional American principle of voluntarism. The interventionist welfare state has replaced civil society with political society — and the results have been disastrous for taxpayers, community, liberty and, most especially, the poor themselves.
Tanner argues persuasively that government welfare has failed by every measure, and that private charity can and should replace coercive bureaucratic government welfare. This will not only be more cost-effective, it will provide the poor with more effective and humane care.
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Short Answers to the Tough Questions, Expanded Edition is available from the Advocates, as is her acclaimed classic
Healing Our World.
Most often, you will hear a prominent national name mentioned like Donald Trump, Hillary Clinton, Bernie Sanders, Mitch McConnell, Paul Ryan, Harry Reid, or Nancy Pelosi. These are easy targets, and most people keep their minds on the national political news.
Regardless of who they name and the issues they champion, your response should remain the same.
Once you know their top issues, you can begin to ask questions about those issues being manipulated by the person they trust least. Questions like “How would you feel about giving authority over you to [insert their untrustworthy person’s name here] on the Second Amendment?” or “If [insert their untrustworthy person’s name here] were in charge of who receives welfare and who doesn’t, how would you feel about that program?”
They will be taken aback by this, because they’ve not considered this before.
Then, you can begin a discussion about how when you empower the “good guy” to enact a policy that you also empower the “bad guy” to use that authority. We’re seeing this unfold right now as Congress decides on gender equality when it comes to the draft. As it stands today, the federal government requires young men aged 18-25 to register with the Selective Service. Last week, the Senate voted for equal treatment to force young women to also register for the draft precursor. There were two outcomes that would lead to equal treatment under the law here:
We’ve all seen a politician or two try to score political points by talking about outsourcing and how outsourcing destroys the fabric of America… Or it takes jobs from Americans… Or it is bad for the economy…
What if I told you that none of those politicians sees that they serve as the mechanism by which EVERY American outsources the worst thing we possibly could.
We outsource responsibility.
Within (and hopefully outside) the libertarian movement, we discuss individual liberty and all that flourishes with that liberty, while recognizing that the price of individual liberty is responsibility, both personal and social.
Today, Americans outsource responsibility to government.
Rather than seeking knowledge about what is in the food we eat and how safe it is, we outsource that responsibility to the FDA and USDA. They do such a great job of preventing outbreaks of foodborne illness and ensuring that we have nutritious meals every time we eat, don’t they?
Rather than caring for others through mutual aid societies and private charity, we outsource that responsibility to the alphabet soup that is SNAP, AFDC, and TANF. Those programs keep people from going hungry and from living on the street so well, don’t they?
Rather than choosing the type and quality of education our children receive, we outsource that responsibility to a school system that chooses for our children the type and quality based on our ZIP code. Government schools continue to provide the highest-quality, individualized education that each of our children will need to succeed in the world they will face as adults, don’t they?
What if we chose to take back the responsibility of all that we’ve outsourced to government and focus on how we can flourish with the liberty that comes along with it?
Will you be more responsible with me and end this outsourcing?