The debate over welfare often gets stuck in a dispute over moral principles, or worse, degenerates into ad hominem attacks on both sides. James L. Payne moves beyond ideology and rhetoric and examines the matter empirically: which ways of helping the needy really work and which do not? He investigates what the essential characteristics of effective and ineffective (or downright harmful) helping are respectively, and how can we promote the former over the latter. Payne points out that those who oppose welfare programs don’t do so because they are selfish and lack compassion, but because they see that such programs do not work. We could all agree that helping the needy is a good thing, the question remains how this can be done in a constructive manner.
Payne makes a distinction between sympathetic giving (giving “handouts”) and expectant giving (offering “a hand up”). Sympathetic giving is something-for-nothing-giving. This type of giving does not demand anything in response to the help and is “governed by the degree of sympathy or pity we feel for the recipient”. One example of this kind of helping is giving alms to a beggar. This kind of helping tends to be counterproductive and undermine the pride and self-confidence of recipients and reinforce dysfunctional behavior and attitudes. Sympathetic giving doesn’t lift the poor out of poverty but instead tends to lock the needy into a destructive state of permanent dependency. The aim of expectant giving, by contrast, is to help people get back on their feet, to “help people to help themselves”; it is “giving with a definite expectation that the needy person will do something constructive in exchange for the help rendered”. One example of that kind of helping is helping someone to get a job so that he can earn what he needs himself. This kind of helping bolsters the energy, self-esteem, and productiveness of people in unfortunate circumstances.
As Payne points out, most people agree that it is expectant giving that is the healthy type of giving. Yet we keep getting policies based on sympathetic giving. Payne offers an in-depth analysis of how this initially paradoxical situation has come about and why it persists over time. One central component of the analysis is that government welfare programs have an inherent tendency to lapse into something-for-nothing-giving: “… fiscal, bureaucratic, and institutional pressures inherent in government […] push even programs with the best of intentions into the handout mode.” Payne points toward a fundamental inconsistency in our thinking: “we insist on using government to help the poor, yet government’s way of helping is the much-deplored handout.”
Welfare is not like a machine, a simple toy that one can fix by tightening some screws here and there. The welfare programs we deplore are outgrowths of our own errors of reason and perception. Until we identify and transcend these fatal biases, welfare programs will never come right. We oversimplify by saying that welfare is something we need to reform; it is rooted in a flawed mindset that needs to be overcome.
As Payne points out, human beings are naturally compassionate. Giving to the needy is an extremely simple, primitive reaction to their plight. When we see a suffering person, our first impulse is to end his suffering by giving him what he lacks. But this is taking the easy way out: “Programs of sympathetic giving are always probable when people are acting impulsively – which, in politics, in not an uncommon situation.” The kind of helping that really works (expectant giving) makes considerable intellectual demands on donors. One reason for this is that it requires taking account of the special circumstances and abilities of each individual recipient, a task much better suited for small, local charities than for large and anonymous government organizations.
While governmental welfare programs are inherently structurally biased in favour of sympathetic giving, private charity organizations are naturally biased in favour of expectant giving.
When we directly give our own resources to those in need, we don’t want our aid to create an open-ended dependency because that would drain us financially. So we look for ways to help that will make the recipient independent and let us end our aid. […] In an institutional system of assistance, with workers being paid to help the needy, the incentives run in the opposite direction. Welfare officials are not dispensing their personal funds; they are giving away other people’s money. They do not suffer financially from open-ended giving. For them, the financial pinch comes when the money stops being given away, when the program is shrunk or closed down and their jobs disappear. Thus, the self-interest of workers and managers in institutional systems creates pressures to keep caseloads up, even if the program is ineffective, and even if it causes harmful dependency.
Payne rightly points out that this self-interested motivation of social workers need not be conscious. There are a number of psychological defense mechanisms that prevent employees from noticing what’s wrong – and from telling anyone when they do notice. One of these is task commitment: we have a tendency to believe that whatever we are doing is worth doing. It would be psychologically stressful for an employee to admit to himself (and to others) that what he or she does is wasteful and harmful. The well-established phenomenon of self-deception (humans are better at deceiving others if they first deceive themselves) can encompass the recipients of welfare as well. As pointed out by Paul H. Rubin, when “interest groups seek benefits, they typically use a public interest justification. That is, they do not simply assert that they have sufficient power to get benefits; rather, they allege that the benefits will also benefit the public. […] the theory of self-deception indicates that they may well believe these assertions themselves.” (See Rubin’s book Darwinian Politics for an interesting discussion of welfare from an evolutionary perspective).
Private charity organizations are also, though to a lesser degree, vulnerable to institutional problems, especially when they grow larger. However, “in any kind of organization based on voluntary donations, no matter how large, there is one ultimate check”
If programs become too unattractive – if they are clearly seen to create dependency or to assist recipients who are not trying to help themselves – donors are free to stop contributing. In the end, notoriously bad programs will be cut back or terminated. Programs based on the tax system – whether operated by government agencies or nonprofits using tax money – lack this safeguard. If donors are forced to give through the tax system, they cannot decline to support programs, no matter how much they disapprove of them.
Payne points out that in theory democracy should provide a way for the public to terminate failing programs, but in practice, it is almost never possible. As Rubin also pointed out, because of the phenomena of loss aversion and status quo bias, once a program is established it is extremely difficult to terminate it. Rubin writes that
Any program creates beneficiaries, and these beneficiaries will strongly resist any change that reduces their incomes. This resistance will be stronger than might be expected based on the amount of potential loss. Moreover, even if the program has potential gains for the losers (e.g. offers to pay compensation), the losers may still resist because the sure losses are overvalued relative to potential gains.
Rubin’s advice to policy makers is to “be very careful in imposing new programs because the political cost of later eliminating the programs […] will be higher than might appear.”
Another factor that pushes welfare programs towards sympathetic giving is ideology. Payne writes:
For generations, many philosophers and reformers have embraced the doctrine of income redistribution, believing that government should take from the rich and give to the poor. A handout policy follows almost automatically from this approach. If the poor are morally “entitled” to government payments, it is wrong to demand that they do anything in return for them. Thus, the policy of income redistribution has seriously harmed the cause of sound assistance policy.
This ideology is strong among contemporary government-employed social workers who are supposed to be the “experts” on the matter (in sharp contrast with the nineteenth-century social workers who worked in local, private charity groups and from whom Payne gathers much inspiration). Payne also points to a “naive idealism about human nature” in certain circles that has led people to believe that state redistribution of income by taxing the wealthy and giving it to the less well-off does not have negative effects on their motivation.
Another ideological aspect is the preoccupation with equality. Payne thinks that equality is “a noble social goal” when pursued through voluntary means. When force is used to implement equality, however, “the ideal turns sour”.
Relying on the coercion of the state to promote equality mocks generosity and poisons the wellsprings of genuine community. In the end, the welfare state produces donors who resent recipients, and resentful recipients who clamor for their “rights”.
And because of the obvious risks of fraud and shirking, both taxpayers and welfare recipients need to be monitored. This results in us all being “ensnared in a Big Brother apparatus of surveillance and control operated on the assumption that everyone is trying to cheat everyone else.”
How then can we possibly get out of this situation? Payne is rightly sceptical about political means:
Opponents of [governmental welfare] programs make the mistake of assuming that the way to rein in welfare spending is to gain political control of the purse strings. Their theory is that to cut welfare, all you have to do is cut welfare. Several decades of failure on this front should have revealed the flaw in this approach. Welfare handout programs exist because there is a powerful, if shallow, sentiment in favor of them. The public’s natural sympathy for the needy is mobilized by administrators and special interest leaders who present these programs as compassionate and who suppress their unfair and dysfunctional aspects. When attempts are made to limit welfare spending, these forces swing into action, accusing budget-cutters of trying to starve Grandma. The press and much of the public accept this interpretation […] Cutting programs does nothing to correct this imbalance in information and perception. Hence, welfare programs start growing back even before one has finished trying to cut them.
Payne stresses that the only effective way to limit programs is to expose their flaws and faulty premises. In parts three and four of the book, he also describes various voluntary alternatives for help and uplift. Overcoming Welfare is an inspiring book for those who really care about helping the needy (rather than about promoting their own view of the "good society").