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Fall 2006
ISSN 0890-913X
Volume 22, Number 1

The Politics of Poverty and the Poverty of Politics

J.R. Clark, University of Tennessee at Chattanooga
Dwight R. Lee, The University of Georgia
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JournalofPrivateEnterprise,VolumeXXII,Number1,Fall2006ThePoliticsofPovertyandthePovertyofPoliticsJ.R.ClarkUniversityofTennesseeatChattanoogaDwightR.LeeTheUniversityofGeorgiaHowmuchshouldgovernmentdotohelpthepoordirectlythrough,taxesandtransfersdesignedtoreduceincomeinequality,insteadofindirectlybyconfiningitselftothelimited,butimportant,tasksnecessaryfortheprivateproductionofwealththroughspecializationandmarketexchange?In"CapitalismandFreedom,"Friedmanarguesverylittle.Hecomesclosetoarguingthatthestateshouldnotconcernitselfatallwithreducingincomeinequality,thoughhedoesleavethedoorslightlyopenonthegroundsthatstateredistributioncanserveasinsurance(162-63).Andhemakesapositivecaseforsomestateactiontoalleviatepovertyusingtheargumentthatsuchalleviationisapublicgood,orinhiswords,createsa"neighborhoodeffect"thatprivatecharitydoesn'tfullyconsider(191).Twoconsiderationsarerelevanttoanycasefordirectgovernmenttransfersfromthenon-poortothepoor:1)theactualdegreeofinequality,and2)theeffectivenessofgovernmenttransfersatreducinginequalityinwaysthatreducepoverty.Asexpected,Friedmandoubtsthatinequalityisaseriousproblem,orthatdirectactionbygovernmenthasdonemuchtoreduceinequalityandpoverty.Withrespectto1),Friedmanstatesthata"[s]trildngfact,contrarytopublicconception,isthatcapitalismleadstolessinequalitythanalternativesystemsoforganizationandthatthedevelopmentofcapitnlisrnhasgreatlylessenedtheextentofinequality"(169),andhisdiscussionofprogressiveincometaxes,publichousing,wageandpricesupports,andSocialSecuritypointsouthowineffectivetheyhavebeenJ.R.ClarkandDwightR.Lee84
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