Mancur Olson

Book review on The rise and Decline of nations by Mancur Olson

Poverty Won
When government presumes to reshape society, the result is likely to be gory.
by Myron Magnet
Reparations for slavery, you say? Well, we tried that experiment, in the $20-plus trillion spent on
welfare, Medicaid, housing, and food stamps for the mostly minority poor since Lyndon Johnson
declared his War on Poverty in 1964. As Amity Shlaes shows in her cautionary Great Society: A
New History, those trillions only made matters worse. As the clamor swells to compound LBJ’s
mistake, Shlaes provides a sobering postmortem, dissecting how and why, when government
presumes to reshape society, the result is likely to be gory.
It took LBJ a lifetime to learn that lesson, and he learned it the hard way. He began his
government career as an ardent New Dealer, first as a tireless functionary charged with pressing
Texas farmers to limit their crops, on Franklin Roosevelt’s cockeyed theory that overproduction
caused the Great Depression, and then as one of FDR’s most energetic congressional lieutenants,
ramming through New Deal programs—many of doubtful constitutionality. He firmly believed
that the New Deal had heroically wielded the power of the federal government to defeat the
slump, though as Shlaes showed in her earlier best-selling book, The Forgotten Man (2007), it
only prolonged it.
* * *
When vice president Johnson assumed the presidency upon John F. Kennedy’s assassination in
November 1963, his sunny faith in the boundless power of government to do good shone
undimmed. In his State of the Union Address at the start of the new year, he declared his aim to
unleash that power in an “unconditional war on poverty” that would “cure” that scourge once
and for all. In the spring, his vision expanded further still. With unemployment low and national
prosperity high, he said, America could now afford to create a “Great Society,” abolishing the
country’s remaining pockets of poverty and also stamping out racial injustice across the land.
Those who mistakenly feared the big government would see that “far from crushing the individual,
government at its best liberates him from the enslaving forces of his environment.”
Overseeing this grandiose project would be the slain president’s brother-in-law, Sargent Shriver,
who, as head of Kennedy’s Peace Corps, had sent young Americans to improve a lot of the
downtrodden in foreign climes. Now he would do the same for America’s own poor, teaching
them how to organize their communities for political activism, bringing intensive
pre-kindergarten education to their children, providing them job training and showering them
with social and legal services.
Into the mix from the start, Shlaes argues, went a stiff shot of socialism. Michael Harrington, an
early Shriver advisor famous for his bestselling The Other America(1962), which had
highlighted the persistence of poverty in the world’s richest country, especially in Appalachia,
professed unabashed socialism that sought wholesale income redistribution by the government to
remedy inequality. And one of the anti-poverty project’s earliest and most powerful supporters,
United Auto Workers chief Walter Reuther, saw his lifelong effort to improve the wages,
pensions, and health benefits of his union workers as a gradual realization of the mid-century
Scandinavian-style socialist equality he dreamed of. In 1962, New Deal acolyte Reuther had
hosted and sponsored the first convention of Students for a Democratic Society at the
union-owned FDR Four Freedoms Camp in Port Huron, Michigan, which Harrington attended
and which adopted a Tom Hayden-framed statement condemning American racial and income
inequality, and calling for an anti-poverty program and a sort of community activism the
the statement termed “participatory democracy.” It is a coincidence linking socialism, the War on
Poverty, and ’60s student radicalism understandably tickles Shlaes.
* * *
Recalling the unstoppable momentum of FDR’s First Hundred Days, Johnson moved fast. In
July 1964, he signed the Civil Rights Act, aiming finally to realize the promise of the 14th and
15th Amendments, as the 1870s civil rights acts, had failed to do. But the section of the law that
outlawed racial discrimination in public accommodation—restaurants, and hotels, for
example—came with a cost that government efforts to remake society often entail. The
Constitution, objected one Florida senator at the time, guarantees “the right for every free
American to do that which he wishes with his own property”—a single small restaurant, say, as
opposed to a railroad in interstate commerce. As Shlaes observes, “A law that defined new rights
at the national level was taking away from individuals the authority of their own conscience, and
substituting a federal, national conscience to overrule them. And who knew whether the federal
government’s conscience would always be better?”
But LBJ had no such misgivings as he sped ahead. After all, observed Labor Department
bureaucrat Daniel Patrick Moynihan, modern central planners, unlike the ideological reformers
of the past, were professionals, social scientists armed with statistics, using “quantitative analysis
to point the way” as they shaped social and economic policy. The president trusted them
implicitly. He had assembled a team of advisers who were the best and the brightest—his
“Harvard’s,” as he called them. How could they fail?
In August, Johnson officially launched Shriver’s anti-poverty agency, the Office of Economic
Opportunity (OEO). Its Job Corps enrolled thousands in training programs, though OEO’s chief
function turned out to be funneling vast amounts of money to local groups to organize the poor
for community action—in effect, Port Huron’s “participatory democracy.” If this sounds like
gobbledygook, it was. What happened in practice is that taxpayer money went to such radical
activist outfits as Chicago’s Woodlawn Organization, inspired by far-left puppet master Saul
Alinsky, and the Blackstone Rangers, a criminal gang, to carry out voter registration drives and
create “opportunities for the poor to participate in protest actions” (such as rent strikes) or to
teach them how to “combat police violence.” Farcically, the federal government was paying
radicals to protest against local government, to the disgust of urban mayors. “The War on
Poverty,” chortled one activist, “became a government for those of us in opposition.”
* * *
It was hardly surprising that the nation’s mayors bristled over federal interference in their cities,
the more so as OEO money was going to wild-eyed outsiders rather than to their own
social-service and job-training agencies. City officials also looked askance at Head Start, the
Great Society’s prekindergarten education program. Wasn’t education a local responsibility?
they fretted. Yet OEO was hiring outside civil-rights activists as teachers. Southerners didn’t like
their Afro-centric focus or their treatment of the Civil War, and they feared Head Start augured
the nationalization of the entire public school curriculum. Moreover, because Head Start kept the
kids all day instead of two or three hours, and provided them with medical care and social
workers, local citizens feared it was a vast indoctrination machine, the start of Antonio
Gramsci’s long march through the institutions.
Job training, early childhood enrichment, organizing communities to protest systemic
racism—was any of this helping? Was it even addressing the real problem? Observers like
Harrington and Moynihan had misgivings. Formerly, black and white unemployment rose and
fell in tandem. Now, however, blacks stayed unemployed while white employment rose. Could it
be that many young blacks had so few basic life skills that they had given up and were
unemployable? Were they a “new lost generation?” Harrington wondered.
Yes, Moynihan replied in his famous 1965 report to the president, which argued that the black
family was fracturing, increasingly unable to provide children with the nurture required to
develop the focus needed to get an education or hold a job. That, he suggested, was the core
problem government had to solve.
* * *
Other observers saw the same problem but offered a more direct solution. Thomas Sowell, then
a Howard University professor acknowledged the “social and economic problems” of his fellow
blacks but called for “our own self-development as a people.” Some black preachers sounded the
same theme. “It’s far more important that things be done by Negroes rather than that they be
done for them—even if, for a while, they’re not done as well,” said one. Another declared that
education was “the Negro’s debt to himself.” The growing black middle class shared that
optimistic self-help view. The 900,000 monthly buyers of Ebony magazine, celebrating its 20th
anniversary in 1965, agreed with publisher John Johnson, a proudly self-made millionaire, that
what defined success was raising a family, sending kids to college, and “earning an MBA or
making an outstanding professional contribution.” In other words, it’s not just a matter of having
Dad married Mom but of having families capable of transmitting the virtues that enable
success. That cultural reality—the shared beliefs, values, and obligations that make a family—is
something social scientists, with their measures and statistics, seem unable to see.
Certainly, Lyndon Johnson couldn’t see it. The more meager the result of the War on Poverty, the
firmer grew his conviction that government was the answer. In June 1965, he gave one of the
most wrong-headed presidential speeches in history. “You do not take a person who, for years,
has been hobbled by chains and liberate him, bring him up to the starting line of a race and then
say, ‘You are free to compete with all the others’”—as if the history of black Americans had
permanently crippled them and made them inferior. No longer did Johnson see the government’s
job as providing equal opportunity. Now, he said, it would provide “equality as a fact and
equality as a result.” The author of FederalistNo. 10, who saw redistributionism as the ultimate
tyranny of the majority, would spin in his grave.
* * *
Having sown the wind, however, the Great Society now began to reap the whirlwind. Fanning
protest, empowering gang bangers and radicals, belittling local authorities: all this was playing
with fire. And a fire broke out. Over six days in mid-August, some 34,000 rioters destroyed Los
Angeles’s Watts ghetto, leaving 34 dead, over 1,000 injured, and 1,000 destroyed and looted
buildings worth $40 million. “When you keep telling people they are unfairly treated and teach
them disrespect for the law,” said L.A.’s police chief, “you must expect this kind of thing sooner
or later.” Nor was it just the community organizers who were telling this to the minority poor. So
was all of the elite culture at the time, while the elites also celebrated sexual promiscuity,
recreational drugs, dropping out, and questioning all authority. It was this cultural shift, more
than anything else, that accounts for the skyrocketing rates of underclass social
pathology—out-of-wedlock pregnancy, drug abuse, crime, school dropout, non-work—that
began in 1964.
LBJ doubled down on redistributionism, the War on Poverty’s new elixir. Just before the riots,
he had signed Medicaid, medical insurance for the poor, into law. The next year, he decided to
supersize the urban renewal program begun in 1949. From its brutalist, Marcel Breuer-designed
concrete bunker in Washington, the new Department of Housing and Urban Development would
spend $7.5 billion on slum clearance, Johnson vowed, razing functioning communities and
replacing them with anti-human Le Corbusier-inspired subsidized-housing towers. Like giant
filing cabinets for anonymous, interchangeable items of mortality, these soon turned into
graffitied, garbage-strewn, urine-reeking, gang-terrorized dystopias, though the real failure was
more social than architectural.
The cost of all this ran out of control. Medicaid, for example, budgeted at $400 million for 1967,
instead of cost $1.1 billion. OEO’s legal services component blossomed into the new field of
public-service law, whose class-action suits, argued before an all-too-willing Warren Court,
remade whole swaths of society, with no need to consider the cost. At the same time, Johnson
was fighting a war in Vietnam, costly in treasure as well as in blood. The nation’s economy
strained at the seams, as taxes and borrowing rose, the dollar fell, and inflation began to erode
living standards.
It became clear, moreover, that LBJ was losing both wars. Early in February 1968, as the Tet
Offensive raged in Vietnam, Robert Kennedy declared that “a total military victory is not within
sight or around the corner.” Later that month, the Kerner Commission Report on the riots, as
Shlaes sums it up, “effectively damned Johnson’s civil rights laws and War on Poverty as
On March 31, Johnson’s daughter, Lynda, dropped by the White House, having just seen her
husband off to fight in Vietnam. Her parents were shocked at how worn and thin she looked.
“Why do we have to go to Vietnam?” she asked her father. Johnson only stared at her with a look
his wife hadn’t seen on his face since his beloved mother’s death. That evening he went on
television and announced he would not seek another term.
* * *
There’s one short coda to this sad tale. Richard Nixon won the 1968 presidential
contest—elected, says Shlaes, to “kill the Great Society.” But he didn’t. Instead, Moynihan
enticed back to Washington from a comfortable berth at Harvard, convinced him to replace
welfare with a whole new system, the Family Assistance Plan, that would incentivize work with
income supplements. But as a wise ex-senator once explained to me when I suggested an
improved replacement for an existing federal program that would cost no more than the old, I
would in fact end up doubling the cost, since Washington never kills old programs but leaves
them to run alongside new ones. So Moynihan and Nixon found. No one was willing to abolish
Medicaid, housing subsidies, and the like. The new program would just be a hugely costly
add-on. In 1970, Moynihan fled back to Cambridge, his plan dead.
Now that we are again “telling people they are unfairly treated and teach[ing] them disrespect for
the law,” while socialism and anti-Americanism grow louder every day, Amity Shlaes’s
a powerful warning is more crucial than ever.
Myron Magnet, a National Humanities Medalist, is the author of The Dream and the Nightmare:
The Sixties’ Legacy to the Underclass (Encounter Books) and, most recently, Clarence Thomas
and the… read more. For more information on Mancur Olson check on this:

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