I approach the topic of poverty from the perspective of a radical pragmatist. Eighty percent of my closest friends are ex-something, because I have worked most of my professional life in the Center for Neighborhood Enterprise, an organization I founded 34 years ago. Prior to that, I was involved in the Civil Rights Movement. Then in the 1960s, I was mugged by reality and joined the American Enterprise Institute (AEI). I went there to work with Peter Berger and Bob Nesbitt, who were studying the role of "mediating structures" or intermediary institutions like families, churches, and other voluntary associations. (1) They asked me to go in-residence at AEI to write about these subjects from the perspective of a practitioner, someone on the front lines in low-income neighborhoods finding solutions.
I left the Civil Rights Movement in the late 1960s when I realized that a lot of poor blacks were the victims of a bait-and-switch game, in which we generalize about all the conditions of blacks and, as a result, the remedies help only those at the top who are well-educated. I find the same problem as we look at the issue of poverty as a whole.
We cannot generalize about poor people. I have identified four categories of poor people. There are those in Category One whose characters are intact but have who have no money because they have lost a job or a breadwinner has passed away. There are others in Category Two whose whose characters are intact but, as a result of our welfare system's perverse incentives to stay single and unemployed, conclude that achieving is not worth it. In Category Three, there are people who are disabled and need help, though even in the disabled population, you have people who are discouraging their children to read because they will lose a $600 Supplemental Security Income (SSI) check. Finally, there are those in Category Four, individuals with character deficits who are poor because of the chances they take and the choices they make. (2) Category Four concerns most of us. Those are the people that, given money and services, are injured by a helping hand.
When we generalize about the poor, we have problems finding solutions for poverty. People on the Left tend to look at all poor people as if they fall into Category One, while people on the Right tend to look at all poor people as if they fall into category Four. Therefore, we miss each other when considering remedies. The people in Categories One and Two use the system in the way it was intended, as an ambulance service, not a transportation system. They receive help, but then they move off. Applying the same remedies to Category Four, however, is disabling to those people.
It is also true that we did not associate poverty and pathology until the 1960s. (3) The black community is often a moral barometer of the health of the nation. Yet, in ten years of the Depression, when the United States had a negative GNP and a nearly 25 percent unemployment rate (4) and the unemployment rate in the black community was over 40 percent, (5) the marriage rate in the black community was higher than it was in the white community despite times of economic deprivation and racism. (6) In 1925 in New York City, 85 percent of black families had a man and woman raising children. (7) In stark contrast, in 2015, the black illegitimacy rate was close to 75 percent. (8)
Fred Siegel's book The Future Once Happened Here, (9) from the Manhattan Institute, is very telling. He explained that radical liberal social activists in the 1960s concluded that one of the ways to reveal the moral shortcomings of capitalism was to flood the system with welfare recipients. (10) In detaching work from income, and thereby diminishing men and the role they played as fathers, (11) welfare dependency, drug addiction, and school dropouts would increase, ultimately "opening [the nation up] to radical change." (12) These policies, espoused by Carl Piven and others, were followed by government action to actually recruit people into the welfare system. (13) These efforts lifted the stigma of welfare as social insurance and replaced it with the idea of "welfare rights," and in the case of blacks, replaced it with the idea of reparations. (14) Thus the black family and other families began to decline, followed by out-of-wedlock births and poverty. (15)
The question that I want to address, but to which I do not often hear a satisfying answer, is: "What are the solutions?" When I read Robert Putnam, Charles Murray, Lawrence Mead, and other scholars, they are long on the analysis of the problem but short on the solutions. (16) Thus, I would like to offer what I believe are solutions. We have the word "enterprise" in our name because we believe that the principles that operate in our market economy should operate in our social economy, and that our market economy is driven by entrepreneurship.
We recognize that the percentage of the people in our market economy are entrepreneurs is in the single digits,...