The Inclusive Economy

If you are like me you already have some strong opinions about poverty. And by “strong” I don’t mean your opinions are particularly loud or obnoxious, but that they are deeply-seated and fundamental to how you see the world. You might think of poverty as being a structural problem, stemming from from systemic racism and sexism. You might think it is a cultural problem, caused, in part, from fatherless homes and substance abuse. You might see it as a moral failing. You might see it as a predictable outcome of a process of globalization and consolidation in industry. These, and several other theories of poverty, arise repeatedly in contemporary debate.

Michael Tanner, Senior Fellow at the Cato Institute, does us a great service by dedicating the first half of his book, The Inclusive Economy: How to Bring Wealth to America’s Poor, to a deep dive into the various historical and contemporary views on poverty. He brings data to bear on the question and essentially demonstrates that each of the various theories are incomplete or ineffective from a policy perspective. He certainly challenged some deep-seated views I’ve held on the subject, and for that I am grateful.

The second half of the book is a detailed articulation of Tanner’s policy recommendations. Tanner rejects the pessimistic view that poverty is inescapable, that the only policy discussion worth having is how to design an efficient program for redistribution. Observing that, “The best thing that government can do now, therefore, is to stop doing all the bad things it currently does,” he proposes libertarian reforms in five basic areas: criminal justice, education, zoning and land use, impediments to savings, and taxes/regulations, showing how each one would help the poor. It is a compelling argument.

As mentioned before, this is not an breezy read. If you are like me, you’ll put it down and ponder what you’ve read for a while, as your preconceptions are challenged. But it is an important book, one worth reading, and one I hope more policy-makers read as well.