Redefining the Poverty Debate: Why a War on Markets is No Substitute for a War on Poverty

Description

The political debate about poverty is entirely dominated by groups calling for more income transfers to the poor. However, now that the scope of our welfare state has reached - or even surpassed - Scandinavian levels, surely this approach has run its course. Award-winning author Kristian Niemietz lays out another approach to dealing with the problem of poverty - one that focuses on addressing the problems caused by government interventions that raise the cost of living. These interventions are enormous in their effect on the poor. As the author points out, the poverty lobbies are more or less silent on these crucial matters. This has not always been the case. In the past, free-trade movements, for example, had been seen as pro-poor movements. Alongside radical market reforms, the author proposes wide-ranging welfare reform to encourage work and remove the penalties on family formation. This would include a form of negative income tax system and the localisation of welfare decisions. The author 8 Acknowledgements 9 Foreword by Gisela Stuart 11 Summary 15 List of tables and figures 18 1 One-club golfers – a critique of the poverty industry 25 Anti-poverty lobbies, then and now 25 Wrong priorities in the poverty debate, and why it matters 30 The opposition to low-paid employment 35 The state-centric poverty alleviation strategy: a fair-weather approach 41 2 A new anti-poverty approach 50 Taking on the critics 53 3 Housing 56 House prices on the rise 56 Why are housing costs a problem? 59 What is going wrong? 74 What should be done? 86 childcare 91 Childcare costs on the rise 91 Why does it matter? 93 What is going wrong? 97 What should be done? 99 5 Food 102 Food prices on the rise 102 Why is it a problem? 103 What is going wrong? 104 What should be done? 110 6 energy 117 Energy prices on the rise 117 Why is it a problem? 118 What is going wrong? 124 What should be done? 132 Summary 139 7 Regressive taxation 140 8 Work – supply and demand 146 Work is better than its reputation 146 Workless households: scale and significance 151 Single parenthood: a digression 156 Labour demand 163 Implications for policy 172 9 Welfare 174 Polarised work incentives, polarised employment patterns 175 From resentment to reciprocity 184 A denationalisation of welfare 192 10 conclusions 205 Real incomes are determined by prices and incomes 207 Pro-poor policy – the impact of market reforms 209 Who will benefit? 215 Pro-poor policy – the need for welfare reform 217 References 225 About the IEA 250