Consider the Conservative Counterfactual
Poverty reduction based on conservative principles might have gone very differently.

Walt Handelsman/Tribune Content Agency
I’ve written before about how many on the left genuinely seem to struggle to understand how someone could both believe in free markets and also be a good person. It appears they think progressivism is the only moral worldview, so the conclusion follows that anyone who does not hold it must not be a moral person. To cite a personal example, I was told recently by a leftist blogger that I don’t care about poor people, because if I did I would support his preferred prescription for helping them (namely, a massive new confiscation of wealth from the rich of the world). It seems unintelligible, even to a lot of smart progressives, that anyone could have a different idea about how to foster the kind of society that benefits all rungs of the economic ladder.
Their confusion notwithstanding, many free-market supporters do believe there are better ways to aid the poor and bring about social flourishing. It would be hard, for example, to square my vocal support for things like ending the war on drugs and reforming our immigration system with the idea that I’m not concerned about poverty. But many on the left still struggle to accept that it’s possible.
To understand why, it helps to be familiar with the social science concept of a “counterfactual,” or the outcome that would have occurred had circumstances been different. In the public policy world, the counterfactual is often unknown. We can all see the results of the particular mix of policies that were actually enacted; it’s harder to say for sure how the outcome would be different if we had pursed a different course.
Progressives look at redistributionist policies and see the obvious ways they help the poor. A person living below the poverty line who receives a check from the government is noticeably better off then he would have been if he hadn’t received it, all else being equal. They see as the counterfactual that the person would have had to go without whatever he ultimately bought with the money in that check.
The free-market supporter sees a vastly different counterfactual. For her, the question is not what would happen in the absence of the welfare program, all else being equal, but what would happen if all else weren’t equal. What would society look like if, in place of redistributionist policies, we had implemented free-market policies? How might technology have evolved and shaped the world in ways that improved the standard of living for everyone? How might a growing economy and thriving private sector have increased the opportunity available to all? Once this type of counterfactual comes into focus, it starts to make sense how someone could think the poor would be better off without progressive policies than with them.
The dichotomy between the leftist perspective and its free-market counterpart manifests in the two sides’ attitudes toward the American welfare state. Since the slate of policies known as the “war on poverty” went into effect five decades ago, the pre-transfer poverty rate has remained stagnant even as the post-transfer poverty rate (i.e., the number of people living in poverty after government assistance is factored in) has declined. Under the left’s counterfactual, that’s an unqualified success. Not counting government aid, the poverty rate in 2012 was near 30 percent. With government aid, it stood at 16 percent. To their minds, real people have been lifted above the poverty line through government redistribution. What more evidence could one need that welfare programs work?
But the right’s counterfactual tells a different story. We look at the flat pre-transfer poverty rate and see evidence that the welfare state, while laudable in its success at helping some people meet their immediate material needs, has failed at increasing the proportion of the country able to get by without government assistance. We wonder why, if welfare is really a “hand up,” the programs have not led to a reduction in the pre-transfer poverty rate as well as a reduction in the post-transfer one. And given the conspicuous lack of evidence that redistribution has done anything to address the problem’s underlying causes, we’re optimistic about what both poverty trends could have looked like if we’d gone a different way in 1964.
It’s important to realize here that standing against a certain policy proposal is not the same as standing with the status quo. When right-of-center reformers say Obamacare is a bad law, they're not endorsing the health care system that was in place immediately before its passage. Similarly, when conservatives and libertarians question the wisdom of the “war on poverty,” we are not putting a stamp of approval on the levels of poverty that existed 50 years ago, or on the ones that remain today. Our position isn’t that poverty does not matter. We just recognize the chosen prescription has turned out to be a poor one.
Tags: poverty, conservatives
