REVIEW: Desmond, Poverty, by America

I once read a quote from the author Nick Hornby about how he regrets naming his About a Boy the way he did because it makes for awkward sentences like, "I'd like to ask about About a Boy." I wonder if this author feels the same way about his book Poverty, by America, by Matthew Desmond. Or perhaps it creates the opportunity for fun, like I can say this post is a review of Poverty, by America, by Matthew Desmond, by Brandon Minster. Then YOU can write a reply to a review of Poverty, by America, by Matthew Desmond, by Brandon Minster, by whoever you are. Eventually one of these will get the attention of Matthew Desmond himself, and if HE then replied.... But let's not get ahead of ourselves.

As someone interested in Millennial Social Thought (MST), I take an interest in poverty. The stated goal of economic zionism is the end of poverty. Desmond's book ends with three basic ideas of how to reduce, if not end, poverty in America. But the majority of the book makes an argument that what causes poverty in America is not so much the improvidence or fecklessness of the poor, and not even the indifference of the non-poor, but the actual carefully uninformed approval of the middle class. It's a bold take, given that most people who read the book are probably going to be in this group. But by the time you've read all of his argument, it's hard to disagree.

To begin with, Desmond would define poverty a little differently. Most folks would probably say poverty is a shortage of money, but Desmond writes, "Poverty isn't simply the condition of not having enough money. It's the condition of not having enough choice and being taken advantage of because of that" (p.78). Just as the benefit of money comes from the opportunities and experiences it facilitates, the thing that matters about poverty isn't the small amount of cash in your hand but the exploitation that results. Desmond sets for himself the task of convincing exploiters that they exploit. Not some nebulous, "somewhere" rich person, but you in the suburbs. And to paraphrase the famous Upton Sinclair quote, it is difficult to get a man to understand his exploitative gains when his social position and self-regard depend on him not understanding it.

Hiding most of this from the prosperous is the duality of American life. The middle class think they understand the poor because their lives include the same basic activities: procuring housing, buying food, working for income. But the fact that these things have the same name doesn't mean they are the same activity. As Desmond explains (p. 78),

There is not just one banking sector. There are two--one for the poor and one for the rest of us--just as there are two housing markets and two labor markets. The duality of American life can make it difficult for some of us who benefit from the current arrangement to remember that the poor are exploited laborers, exploited consumers, and exploited borrowers, precisely because we are not. Many features of our society are not broken, just bifurcated. For some, a home creates wealth; for others, a home drains it. For some, access to cresit extends financial power; for others, it destroys it. It is quite understandable, then, that well-fed Americans can be perplexed by the poor, even disappointed in them, believing that they accept stupidly bad deals on impulse or because they don't know any better. But what if those deals are the only ones on offer? What good is financial literacy training for people forced to choose the best bad option?

I once had a job working for a firm that advised banks on schemes to increase financial literacy, but nowhere in those schemes was the underserving of poor neighborhoods addressed. You cash your paycheck at the check-cashing store when the bank branch is a multi-transfer transit ride away, not because you have been misled to think that the check-cashing store is better than the bank.

Desmond also seeks to undermine middle-class anti-welfarism by identifying the many ways the middle class benefit from welfare by a different name. The largest example is the home mortgage interest deduction, which results in a transfer many times that of Temporary Assistance for Needy Families. Desmond identifies three possible reasons for not seeing tax deductions as welfare. The first is just economic confusion--it can't be a government handout if it never came from the government's hands, right? He patiently explains how letting you keep a sum of money is financially identical to sending you a check for that amount. His second reason is that the well-off believe they are entitled to government assistance, but the poor are not. I guess this would be like looking on government as an insurance program, and if we have paid in through taxes we feel entitled to withdraw. If this is the case, then progressive taxation is actually shooting the poor in the foot, and they'd be better off with a flat-tax system that allows the poor equal claim on government resources because they paid into the system, as well. Finally, Desmond's third possibility is "we like it. It's the rudest explanation, I know, which is probably why we cloak it behind all sorts of justifications and quick evasions" (p. 102).

This is in line with Leo Tolstoy's conclusions in What Then Must We Do?, which Desmond quotes (p. 119).

I sit on a man's back, choking him and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by all possible means--except by getting off his back.... It is really so simple. If I want to aid the poor, that is, to help the poor not to be poor, I ought not to make them poor.

But the self-awareness of Tolstoy is missing in the American discourse. We aren't on their backs, they have drug problems. We aren't choking them, no one wants to work anymore. Desmond writes, "If this is our design, our social contract, then we should at least own up to it. We should at least stand up and profess, Yes, this is the kind of nation we want. What we cannot do is look the American poor in the face and say, We'd love to help you, but we just can't afford to, because that is a lie" (p. 102).

Desmond ends with three propositions: "Life the floor by rebalancing our social safety net; empower the poor by reigning in exploitation; and invest in broad prosperity by turning away from segregation. That's how we end poverty in America" (p. 170). It's the second idea that I want to spend some more time pondering. Desmond advocates for replacing profit maximization with profit sufficiency, but what would we take as the idea of sufficient? The long-run growth rate? That's doable, but how do we still get the efficient allocation of resources without the availability of supernormal profits? Extremely high marginal rates? But then how do we undermine the view that government resources are for the wealthy because they paid for them with taxes?

While those questions might remain, Desmond's book is still worthwhile and important. The first step to correcting an unjust system is recognizing the injustice. Poverty, by America does just that, and goes a long way towards making the average American face up to it.