Without government, who will take care of the poor? One government defines poverty as $11,888/yr for an individual.
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Firstly, it is usually argued by libertarians/anarcho-capitalists that laissez faire economics is the most/only effective way to increase capital accumulation, which consequentially increases efficiency and lowers costs, improving living standards for everyone. So, in an anarchist's mind, poverty is at most a problem that will solve itself in time. The typical illustration of this is to compare those living in poverty now with royalty two hundred years ago. Considering most have have cell phones, computers, refrigerators, stoves, and all sorts of other electronic stuff that didn't exist then, one could reasonably conclude modern people in poverty live better than middle age royalty. I don't mean to downplay their struggle. My point is to emphasize that we do live in the real world, with scarcity, and there's no escaping that; we're at least doing better than we were.
Beyond that, on the topic of current poverty, two points:
Private charities are 70% efficient, whereas government is only 30%. So voluntary giving could be a little less than half of the current involuntary charity and still have the same total dollars spent on charity. Article with citations [Apparently this is incorrect. See Avi's comment.]
Most anarchists would argue that the minimum wage creates poverty by pricing low skilled workers out of the labor market. Absent the minimum wage, less people would need to be supported, or at least completely supported, by charity. AEI Forbes
Most Austrians would argue that inflation perpetrates poverty by preventing and devaluing their savings while multiplying investments for those wealthy enough to invest significant amounts. Essentially, this amounts to a wealth transfer from the poor to the wealthy by limiting the poor's consumption while enabling the wealthy to consume more. An illustration of this can be seen in the fact that poor people don't have enough savings to both keep the liquid assets the need in case of emergency and invest in inflation-affected assets. They save enough for emergencies and before they can save enough more to invest, their emergency savings have devalued to the point that the emergency fund is deficient. So they continually keep their money in low interest high liquidity bank accounts trying to keep up with inflation, while the wealthy have enough to invest a significant portion of their savings in highly inflationary but low liquidity assets, multiplying their money with inflation. By ending government, one could end currency monopolies, restoring competition in the currency market and end (or significantly limit) inflation, giving the poor a fair(er) chance to accumulate capital and improve their circumstances. Thus decreasing the need for welfare support.
Aside from arguments trying to rationalize making poor people's life even harder or wish the problem away and pretend it would disappear or does not really matter, there are at least a couple of practical answers:
- Charity, organized in various ways, did and still does “take care of the poor” in many places. For all the talk about “welfare” being inefficient and demeaning to the recipients, charity is usually worse in both these respects but historically it has been the main alternative to the modern welfare state.
- International organizations like the UN World Food Programme and UNHCR. Again, there are many debates on the economical and social effects of these programmes but they take care of the basic needs of millions of people in places where states can't or won't help them.
I used to be a libertarian, I'm not anymore, but this is the way I used to think and, I think, the way many liberarians think.
As a former libertarian, I would argue that a very small minority of those on welfare are on welfare because they aren't able to support themselves, considering what they are born with. Some people are born with disabilities that make it completely impossible to make a living, but these people can be paid with government money or by private charities, it doesn't make a big difference.
I think most libertarians deep down think that it's better that people get what they "deserve" if that means we get rid of the inefficient, expensive mess that is the welfare system. They also usually think that the welfare system makes people less involved in their own lives, they get used to someone else making the choices for them. When people are faced with the free marked reality, they will (hopefully) adapt to it and be forced to lead their own lives.
Lower taxes and less regulation would also make it considerably less expensive to live, and it would make it possible to make choices that make sense for a poor person, but not for a rich person.
Today, I would say the most common reason people are poor isn't that capitalism is inherently bad for poor people, but that it's very lucrative to fool people in desperate situations, like with predatory lending, addictive substances like sugar, alcohol, tobaco, drugs, consumption, smart phones etc. You need a stable life to keep these forces in check, and it's very hard to fight them when you're already down economically and psychologically.
The key question is: Will there be enough law and order that people feel safe investing in themselves, their families, their businesses, and their communities? If so, in the long run a minarchist society can generate immense amounts of wealth -- enough that even (relatively) low paying jobs pay a lot by absolute standards. If not, life will suck for almost everybody, and people will wish for a government to "take care of the poor", even if it taxes away potential prosperity.
Many people will be poor.
Many people have a standard of living that is lower than the original poster's absolute standard. In Marxist terms, a social class' standard of living is the level of material goods that members of that class insist upon before having, raising, educating, and equipping enough children to replace themselves in the next generation.
In today's world, we see that the working classes of many countries (including Europe, Russia, and most of the United States) have a standard of living that is higher than they can afford -- so they have lower-than-replacement-rate fertility.
Whereas most Sub-Saharan African societies have a standard of living that is lower than their current level of poverty -- so their populations are rising rapidly. Note that most of these governments cannot afford to give all of their residents the amount of income mentioned in the original post.
The poor can get richer.
A few generations ago, most people in what is now the "developed world" were poor -- even when measured by the original poster's absolute standard. In Botswana, Hong Kong, Korea, and Japan, there are still people who remember that time.
In poor countries where it is safe -- and necessary -- to save, people tend to save a large fraction of their monetary income. 30 - 40 percent savings rates are common in countries that do not have Social Security systems. Similarly, lightly taxed, rapidly growing businesses often reinvest 30 - 40 percent of their revenues. Even in countries like the United States, wages, salaries, payroll taxes, and similar expenses typically amount to only 55 - 70 percent of GDP (depending on which "fringe benefits" are included in the calculation).
In industrializing countries, it is common for investments to have 15 percent annual internal rates of return. In poor countries where it is safe to invest, the combination of high returns and high reinvestment rates allows per capita income to increase rapidly.
Compound growth is amazing. A 3 - 8 percent annual improvement compounds to a doubling in 10 - 25 years, and a 10-folding in 35 - 100 years. This has enabled Botswana and Hong Kong to rise out of poverty, even in the post-1973 world.
In most societies, families try to take care of their own. Of course, they are limited by their own resources. Also, they may need to practice "tough love" by letting a wayward family member suffer the consequences of their choices and/or addictions.
In "developed" countries, the foster care system and the day-care system try to match the care provided by healthy, intact families. Governments count themselves lucky when these systems come close.
Governments create many poverty problems.
- Governments define poverty levels. Many people are materially and spiritually just as well off as their grandparents were. The grandparents lived before the government defined a "standard of living", so maybe they did not consider themselves poor!
If the government is not trying to "take care of the poor", the following causes of poverty go away:
- A minimum wage of 10 $/hour makes it illegal to earn 8 $/hour.
- Governments impose many taxes, both directly and indirectly.
- Governments establish standards for goods and services. Some of these standards are arbitrary, or for the benefit of particular suppliers. These standards can make important things (like food, housing, or sanitation) too expensive for poor people.
- Some governments encourage immigration of other poor people.
- Many governments provide (and/or restrict) schooling. Bad schools can cause poor alumni.
- Some governments have policies that break up families.
- Some governments have policies that discourage poor people from saving or investing money, or that restrict the rate of return that poor people can earn on their savings. Many American investments are restricted to millionaires.
On the other hand:
- Without government schools, it is likely that fewer children would receive schooling.
- Some people are either such poor investors, or have such rotten luck, that a guaranteed investment with a negative real rate of return is better than what they would choose to invest in.
- A prosperous country with a minarchist government might have even more immigration.
Many poor people will not be taken care of.
Some societies are much poorer than others.
Some societies have more "social trust" or "social capital" than others. Some societies have more broken families than others.
Intelligence varies widely. Within a given ethnic group, it varies along a bell curve. The average intelligence of some ethnic groups is higher or lower than of others.
Wealth varies widely. In particular, wealth based on ownership of shares of corporations tends to follow a power law. This power law is a consequence of compound growth. If the average annual growth rate (for a 5- or 10- year period) of a group, city, or corporation is sampled from a bell curve, after several iterations there will be a few very large groups, many medium size groups, and lots of small groups. Unless people deliberately pool their investments, there will be a lot more (relatively) poor people than (relatively) spectacularly rich people.
Sometimes people have bad luck. Weather, crop cycles, business cycles, injuries, illnesses, and diseases are all unpredictable. People will take measures to prevent some of them, or mitigate their effects.
Purchasing insurance can be thought of as making a charitable contribution that is guaranteed to be useful to you if you are in a particular situation. Most of the time, the insurance premium is just as gone as if you had donated to charity. But when you need it (for a particular reason), the insurance is there.
Many people feel better about accepting insurance settlements than accepting charity, precisely because they paid their "fair share" of the premiums.
Fire insurance, life insurance, and even unemployment insurance started as voluntary forms of insurance when the "developed world" was still "developing".
Today, it is common for poor Indian farmers to purchase better insurance for their children's hearts than is available from any American insurance company. (The Indian pediatric heart surgeons have amazing economies of scale.)
Charities can try to help
If contributions to charities are voluntary, the amount donated to charities will be much less than is currently collected as taxes by "developed" countries. On the other hand, the donations will be voluntary, and the donors will have the choice to only donate to groups that appear to be doing good. More donors would be able to afford to sponsor religious missions, which used to be very common.