“Capitalism and Freedom” Summary, Chapter 12: The Alleviation of Poverty

by Danny Fenster

This chapter is a free excerpt from Quicklet on Capitalism and Freedom.

Capitalism has widely reduced the extent of poverty, but poverty is relative. Even in the West some live in what we label poverty. A desirable solution is private charity, which has been diminished by expanding government welfare programs.

It is easier to agree on what to give in smaller communities; we are increasingly dominated by large and impersonal communities. If we all agree a certain floor must be set below which our community members may not fall, the questions of where and how to set the floor remain.

One defect of the programs mentioned in the last chapter is that groups of poor are treated by occupation or age or location, rather than as poor people in general. The best option is a negative income tax, providing an income floor poor people could not fall below. This floor would be based on the community's ability to support it, reducing administrative burdens and welfare costs.


Complete 10-second survey to read full article!

Capitalism has widely reduced the extent of poverty, but poverty is relative. Even in the West some live in what we label poverty. A desirable solution is private charity, which has been diminished by expanding government welfare programs.

It is easier to agree on what to give in smaller communities; we are increasingly dominated by large and impersonal communities. If we all agree a certain floor must be set below which our community members may not fall, the questions of where and how to set the floor remain.

One defect of the programs mentioned in the last chapter is that groups of poor are treated by occupation or age or location, rather than as poor people in general. The best option is a negative income tax, providing an income floor poor people could not fall below. This floor would be based on the community's ability to support it, reducing administrative burdens and welfare costs.

The problem with a negative income tax is political; taxes are imposed on some to give subsidies to others. "I see no solution to this problem except to rely on the self-restraint and good will of the electorate."

The liberal distinguishes between equality of rights and opportunity, on one hand, and material or outcome equality on the other. That a free society so outlined, tends toward greater material equality than any other tried is a side-effect, not the main justification.

Individual freedom is the main objective and justification.

He may use the state to alleviate poverty, but regrets substituting coercion for voluntary action.

The Egalitarian will too, but may go further. Equality will always come into conflict with freedom. "One cannot be both an egalitarian, in this sense, and a liberal.

Price: $2.99 Add to Cart
  • Lifetime guarantee
  • 100% refund
  • Free updates