Let's talk about poverty.
Nearly everyone today is concerned about this question of poverty.
We hear it on every hand.
There are people around this country who are not getting enough to eat.
They don't have enough money.
They may not have a job.
Hands may be turned against them.
The conditions they face are unpleasant, unsatisfactory, and sometimes downright tragic.
The situation is real.
There is poverty in the land, but before we start aiming at possible errors that exist
in our society, perhaps we ought to take a good look at this to see just what it is we're
talking about when we talk about poverty. In a sense, you know, every man is impoverished,
and in a sense every man has wealth of certain types. Poverty is an imprecise word. When
When we say a person is poor, what do we really mean? As poor as what? Is there any absolute
standard? No, there isn't. Poverty usually invokes an idea of great lack of privation
of going without, and we have that kind of poverty. That is true. But in a very real
In a sense, any person who is trying to do something and finds force used to prevent
him has been impoverished by that action even though he may have many dollars and still
can't get what he wants. Because poverty is, in a sense, an impoverishment of the person.
But let's talk about it both philosophically and economically, and let's take the economic
condition first. I suppose many people today think that poverty is merely a lack of money,
and that if people had enough money, that would probably solve the problem, and the
people having that immediate lack, if they just had more money given to them, then the
problem would be resolved. This is very far from the case. It's very far from being true.
Many people may think that way, but that doesn't make it accurate. It doesn't make it correct.
You and I, as human beings, require certain goods and services in order to stay alive.
And interestingly, money is only a medium of exchange and is of no practical value unless there are goods and services in existence for which we can exchange the money.
Thus, if a person had a lot of money, say, imagine someone on an island or out in the desert,
and he has a big stack of gold that he may have uncovered there. He's got thousands and thousands
of dollars. That money is of no particular value. This man would still be a poor man,
even though he has all this money, unless he could trade it for something else that he needed and
wanted more. So the important thing is to realize that we are talking in an imprecise area when
When we're talking about poverty and begin by realizing that dollars in themselves will
not solve anything. They have to be dollars related to other things. Now, what is obviously
meant when we talk about poverty? We're talking about the conditions of people. Sometimes
they are black, sometimes they are Mexican-American, American-Indian, possibly some minority,
group that I haven't mentioned, or possibly just people belonging to the majority. They
can all have difficult times. Anybody can have a difficult situation. And we usually
think of it as occurring when this person doesn't have enough food to eat, a place
to stay, the proper clothing, the proper medical treatment, and so on. That's really what we're
talking about when we say poverty. I think we usually are. That's what we mean to imply.
When we say those people are poor, what we are really saying is they don't have enough
of these basic things in order to get along on, and we wish very sincerely that they had
more of these things. Well, now it is a fact that the things that those people need, and
that all of us need, are not created out of nothing. Wishing for them to come into existence
does not solve anybody's poverty problem.
If we are going to have the goods and the services, I'm speaking here now, of the food,
the clothing, the shelter, the medical attention, etc., if we are going to have those things
for people who don't have them, they are going to have to be produced somewhere by somebody.
They don't grow on trees, they don't arrive by magic, somebody has to bring them into
in existence. And that is what we're all trying to do, or many of us are trying to do. Now,
we have in this country a major obstacle to curing the poverty problem, and that is the
government. The government is without a doubt the biggest obstacle that we have to overcome
in trying to deal with this problem where it does exist.
Let me point out something to you. A matter of, say, 200 years ago, we had not yet had
an industrial revolution anywhere in the world. At that time, the standard of living for anyone
in the world was incredibly below where most of our standards are today in this country.
It would have been a rare thing, just as recently as 200 years ago, for even what we would think
of as a wealthy man, to have a good meal, a warm room to stay in, a comfortable bed,
or anything like what we think of today as adequate medical attention.
Those things simply weren't available.
They weren't available because they hadn't been produced.
And we got started producing them.
We suddenly learned how not to do things by hand, but to apply power to processes of production,
and as we began doing that, we began to multiply the amount of food, clothing, shelter and
other things that we could have, and then guess what happened? The government stepped
in and began to regulate it, and as they began to regulate, they began to reduce the amount
of Goods and Services that were available. And so the great breakthrough that began to
occur along about 1760 has never been permitted to run its full course. And instances of this
crop up all the time today. For example, take this country right now. In this country, according
The United States government gets 34% of all its taxes from people who are earning less
than $3,000 a year. That's right. 34% of its total income comes from people who are
earning less than $3,000. Now, what does that do? That inhibits those people in this low
of Money, The Theory of Money and State, The Theory of Money and State, The Theory of Money
Take another situation that exists in this country. Right now, for instance, it is virtually impossible for certain persons in minority groups to get jobs at all because the union keeps them out.
The union has a closed door policy so that only certain persons can get in, and many
of them have actual policies which exclude members of certain minority groups, including
blacks, Mexican Americans, and so on.
And so here are the people that need jobs and could benefit by them, but here you have
the union, and guess why the union can get away with it?
The union can get away with it because it is essentially backed by the government in
these policies.
So here is another example of it. Here is another way in which the government is hampering
the solution that we need to find in this area. It has passed a number of laws, and
they amend them and then pass them over again, called minimum wage laws. Now this establishes
a minimum wage at a specified level, and it automatically means that poor people who cannot
produce above or up to the level of the minimum wage are not going to be able to get a job
at all.
For instance, if the minimum wage is set by the government at $1.60 an hour, let's say,
just for saying, and we have a man here who could produce up to the value of a dollar
This is the government's operation that does this. Here are the kind of problems that we
run into. Take another area that the government has gotten into, the area of farm subsidies.
We have heard, for instance, how the government has wanted to help the little farmer. And
let me assume that there are people in government who have very good hearts and very good intentions.
And so they've started out to help the little farmer with subsidy of one sort or another.
The man with thousands and thousands of acres is so much so, in fact, that the farm population
is leaving the rural areas, as you know, and moving into the urban areas, and the farm
areas are becoming more and more consolidated with bigger and bigger farms, and they get
government support for growing things, for not growing things, and for following the
government rules all the way down the line.
So you have this type of thing which creates an areas of poverty that allegedly the government
is supposed to be trying to cure and yet this is the result. What we are going to have to
understand if we are going to ever get to the place where we're going to deal with poverty
intelligently is this. We are going to have to realize that the chains and restraints
must come off the marketplace. The only way that poverty can really be cured is by processes
relating to human liberty.
You and I are not in any position to say what another man's wealth may be. People value
things differently. Some men would find great wealth in having leisure time, the ability
to go out and look at a sunset or to read a book. And to them, that is wealth. If you
take that away from them, they would be poor indeed, even though they might have a great
deal of money. Other people would be interested in money and would care less about a sunset.
This is a matter of human individual judgment and value. And, of course, if we are going
In order to try to do what we can about poverty, we must free up humanity so that individuals
can, without authoritarian restraints placed upon them, pursue their own ideas of what
would be enriching for them. And thus we can move toward an area of enrichment rather than
toward this business of impoverishment. I'd like to suggest, in fact, that the only real
The real poverty we have is a kind of spiritual poverty, the kind of poverty that you get
when you are thwarted, when you want to do something, that what you want to do is worthwhile,
and then for some reason someone else, other than yourself, imposes arbitrary rules and
restraints on you, takes your money, whether you have a great deal or a little, inhibits
your actions, punishes you, locks you up or does something, so that you cannot do what
What do you want to do? There is the impoverishment of human beings, of the human spirit. It
is the impoverishment that occurs when people impose their wills on other people for any
reason whatever. And the imposition, of course, is done by force or the threat of force.
If we are going to move toward a rich country, it is going to have to be rich in many ways,
not merely in the way that some economic or political czar would dictate, and those riches
will be found in the voluntary actions that individuals can take when they are left alone
to pursue whatever it is that they want to pursue.
This is one of the problems we have in dealing with poverty. I know many young people today
who would in fact favor a free market, would like to believe in private ownership of property
and the right of a man to manage his own property, but when they contact other men who are supposed
to be examples in this area, they find that these other men do not want to permit them
to dress as they please, to think as they please, to act as they please, and are in essence
Making these young people poor by imposing on them and substituting another set of values
which are foreign to the young people.
The same thing works in reverse, where you see it happen in reverse.
In other words, the older people likewise are impoverished when others, whether they
are young or old, step in and won't let them do what they want to do with what is theirs,
Their person, their property, their clothing, their lifestyle, their money, whatever it
is, impoverishment comes from imposed restraints on a free being. Now that's impoverishment.
And if we're going to get rid of it, we're going to have to learn the lesson of letting
people alone and letting them, if I may say it, do their own thing in their own way so
Getting back again to the economic aspects of it. It's extremely important that we realize
that the industrial revolution and the accompanying revolution in automation and in computerization
and so on that we have now, that these things have never been permitted up to date to run
their full course. The government continues to step in and hamper and tie our hands and
prevent the creation of the wealth, even the material wealth such as the food and the clothing
and so on, that we could produce if we were left free to do it. We are going to have to
somehow convince a great many people that we will have a better world and one that is
is filled with more riches of every kind, including the economic riches that we want.
When we learn to let people establish their own incentives, to take the restraints off
them so that people can produce and can produce profitably, so we don't try to limit the
amount of profit that a person can make in any area, we simply open it up and believe
Only a truly libertarian approach such as I am outlining is ever going to have any effect
on the poor. The idea that you can take money or property from someone and then hand it
to someone else and by this process cure poverty is completely mistaken. There is a total amount
There is a lot of wealth in the world at any given instant.
Certain people have more, other people have less.
But if you take and simply shift it, you take it out of the hands of A and put some of it
into the hands of B, you are still dealing with the same total amount of wealth.
There has been no wealth produced and there has been no poverty dealt with.
All that has happened is that you have shifted some things around, but the total remains
the same.
Now consider this point.
If you have a large group of people who are very productive and you begin taking their
money and their property away from them and inhibiting their actions, reducing the amount
of profits that they can make by productive action, they are going to be less and less
interested in producing, obviously.
If there's no incentive for them to do it, why should they do it?
So that means that if you begin inhibiting productive people, there will be less total
production.
If at the same time you turn around and take persons who at the moment may not be productive
in spite of their wishes to be, but you now take wealth from those who have produced and
you channel it into the hands of those who are at this time not producing, what you do
is you take the existing amount of wealth and you place it out at a level where it can
be consumed more rapidly. That does not solve poverty. That increases poverty and spreads
it out farther. And that is precisely what we have been doing in this country thanks
to government interference. The government actively began to get into this problem of
of Dealing with Poverty in the 1930s during the Great Depression, and that was their solution.
At that time, we had a relatively few truly impoverished people. I happen to know because
I was one of them myself. However, at beginning at that time, the government began to try
to solve the poverty problem by redistributing the wealth. Now what is the situation today?
Let me tell you that today, right now in this country, we have many more impoverished persons than we had back in the 1930s.
Many more. And in a great many instances, the conditions that these poor people face are more serious than they were before.
The government has spent a hundred billion dollars in solving or trying to solve the poverty problem through the program of redistributing the wealth, and all it has accomplished is that it has redistributed the poverty, and there's more poverty spread out for more people than was true when they started.
Now clearly that's wrong, we're clearly going in the wrong direction.
The business of redistributing does not solve a problem, it merely redistributes the problem.
Now if you're going to solve the problem, you have to get at it another way.
And the only way to do it is, I believe, the libertarian approach to help the poor.
And what is that?
You stop inhibiting them, open the doors and let them produce.
They want to. They are good producers. You know, we somehow failed to realize that everything
we have in this country came as a result of poor people who were willing to deal with
absolutely bare-bored natural resources. They had nothing to fall back on, and they produced
because they were not inhibited. Now that's how we got started.
Many people think that poverty somehow helps to ensure poverty. It doesn't if government stays
out of it. Poverty only, as a matter of fact, helps to stimulate the idea of riches. The man
who is poor, if you leave him alone, is very apt to become the richest man because he's got more
One of the very important things is to permit the profit motive to function freely, because
that's the thing that will inspire the very poor to make maximum effort.
It really is discouraging, whether you're poor or semi-poor, to know that the harder
you work, the less you're going to have as a reward.
That's not very good, is it?
And this is the kind of thing that government does to us.
comes in and prevents us from doing our best, it inhibits our action, deprives us of our
profits, regulates what we can do, interferes with our choices, dominates us and then punishes
us and then says, we're curing poverty. Well, obviously, this is the problem.
Let me give you a couple of other ideas that are important here. The government always
tries when it's dealing with a problem to centralize it and to put it in ever larger
and larger bureaucratic combines. Today, for instance, when it comes to welfare, we have
moved out of the local areas and we're trying to consolidate it at first at state level
and then at the national level. This is exactly the reverse of the methods that should be
be followed.
And please don't think now that I'm suggesting that the government could do it right, even
if it tried to, because I'm not trying to suggest that.
I'm just trying to show that the natural tendency of the state is to take a bad matter and make
it increasingly worse so the condition is compounded, the problem just multiplies and
multiplies because that's the way government functions.
operates with the idea that if you have a problem, it can be institutionalized and then
it becomes an ongoing program. Now if you take the government out of the picture and
you have a problem, you turn it over to the market and then the only ongoing program is
a solution that can be developed and sold profitably by people who can be ingenious enough to come
up with solutions, and they are always there to be had if the handcuffs are taken off and
we can go to work on it.
The poverty that we have in this country is a disgrace.
It's a terrible condition.
It is particularly bad when you stop for a moment and think that only a few decades ago
So, this nation was clearly in the forefront of all the nations of the world when it came
to an economy.
We were the richest, we were the most plentiful in every area you could think of, and today
that isn't necessarily true in many areas.
And the reason isn't that we are not capable of production, the reason is that we have
government dominating our lives, dominating our production, getting involved in trying
One Christmas this occurred.
A man had neglected to buy a Christmas present until the very last minute, and then just
The day before Christmas, he remembered it, and he went down to the department store to
get the gift that he wanted to get, and of course, there was an immense crowd there,
and he had to struggle to get through the crowd, and finally he did, and he selected
a present, and he got the clerk to wrap it, and the clerk was all bedraggled, and her
hair was frazzled, and the crowd was all around, and he finally looked at the curtain, and
he said, boy, I've never seen a crowd like this, this is really something.
And she looked up at him and there was a big smile on her face and she said, Yes, sir,
this is the best day we've ever had.
And he took the package and thanked her, and he paid for it, and then he went over to the
post office to mail it.
And of course, it's the same crowd, the people all over, pressing in on every side, and he
got into the right line and had to wait his way up to the counter, and he finally got
in front of the counter, and here was the clerk there, equally worn out and edgy.
So he said to the clerk, boy, he said, this is certainly some crowd, and the clerk at
the post office said, yeah, this is the worst day we've ever had.
I think that illustrates the point.
When we are dealing with the government, everything that comes up is a problem.
It has to be institutionalized, and then you live with the problem.
You got an ongoing program relating to the problem, and this provides jobs for politicians,
And it provides all kinds of money and the rest of it to keep that thing going.
There really isn't any particular point in solving it.
But now when you don't have the government to work with and you go to the marketplace,
well then there's a real incentive assuming a free market so that the problem can be solved.
And somebody then will come forward and look at it as the girl did in the department store,
that this is really a great opportunity and then something gets done.
So when we're thinking about poverty, let's look at it and realize what we've got to
contend with. It isn't merely a lack of money. It isn't a lack of food or other things that
we couldn't provide. It is a lack of freedom. And a people who lose their freedom are impoverished,
hopelessly impoverished, even though they have the wealth of creases stacked up beside
and Their Doors. True riches are contained in the right of each man to follow his own
star to make the best of himself that he can.