A review of What Government Can Do: Dealing With Poverty and Inequality, by Benjamin I. Page and James R. Simmons

Liberals sometimes write serious books that challenge conservatives to refine our arguments and think more deeply about our principles. What Government Can Do is not one of these books. Though its authors are prestigious professors (Page at Northwestern, Simmons at Wisconsin), and its endnotes groan with scholarly citations, the book is surprisingly simplistic and often simply wrong.

Three times the authors quote a famous Lincoln line to support their main premise: "that government for the people entails, among other things, policies that greatly reduce the extent of poverty and economic inequality." These repeated invocations imply that Lincoln would have backed their agenda of mammoth increases in domestic spending and steep tax hikes for "the rich." They picked the wrong man to quote. Lincoln clearly distinguished economic opportunity from economic leveling, or as he said on March 6, 1860: "I take it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don't believe in a law to prevent a man from getting rich; it would do more harm than good."

They even quote the Preamble to the Constitution, that government should "promote the general welfare." In this respect, they come across as an academic version of Beavis and Butthead: "Heh, heh, heh…They said WELFARE!" A more mature interpretation of the Framers' meaning would have taken account of what Madison wrote. The "first object of government," he explained in The Federalist, is the protection of different and unequal faculties of acquiring property."

Page and Simmons's use of data is no more convincing than their quotesmanship. The economic growth of the 1980s and '90s undercuts the notion of widespread American squalor, so they note "offsetting costs that do not show up in dollar terms," such as the loss of leisure that people incur when they work harder. A few pages later, though, they define poverty in dollar terms alone. If they were consistent, Page and Simmons would have adjusted for the increased leisure available to the jobless, since a wealth of free time would presumably "offset" a shortage of money.

Moreover, they define poverty not as a matter of actual need but relative economic standing. According to the survey data, they claim, Americans think that anyone who makes much less than the median income is poor. Such a definition is convenient for those who want to perpetuate high levels of welfare spending. If "the poor" consist of the lowest-earning 20 percent, then it's a good bet that one out of every five Americans will always be poor.

Page and Simmons assert that countries with high levels of equality, such as Japan and Germany, tend to outgrow countries with unequal incomes, such as Australia and the United States. Their source for this claim is an old study that relies on older data. They could have easily retrieved more recent numbers from the Organization for Economic Cooperation and Development's website (www.oecd.org). Between 1995 and 2000, both the United States and Australia saw gross domestic product grow by 24 percent. Germany grew by only nine percent and Japan only seven percent. (I look forward to a second, revised edition with the word "oops.")

When discussing specific proposals, they flunk the threshold test of genuine policy analysis: a frank appraisal of tradeoffs. Is Social Security heading for deficits? Easy, just raise taxes. Health care? Simple, just adapt a Canadian-style single-payer system. Unemployment? Guarantee everyone a good job at a good wage, with government as an employer of last resort. Page and Simmons never take seriously the idea that such moves might damage economic growth and private-sector job creation—has has been the case in the very countries they cite as models. They also overlook other serious costs. Canadians may have good access to routine care, but they pay for it with long waiting lists at hospitals. 

As for unequal educational outcomes, they say, "the obvious answer is some form of affirmative action." Like most advocates of racial preferences, they cannot admit that discrimination in favor of one group necessarily means discrimination against others. Neither can they acknowledge the absurdities of racial classification itself. The Census Bureau defines race as a matter of self-identification, but the Equal Employment Opportunity Commission tells employers not to ask job applicants about their racial identity. So how can companies tell who belongs to what group? There's some literature on how to classify people by appearance, but no one has updated it in more than a decade. Besides, it's all written in Afrikaans.

The discussion of education has a revealing gap. The authors ignore the most successful federal education program of all—the G.I. Bill of Rights. This measure opened college doors for millions of World War II veterans, leading to the expansion of existing institutions and the establishment of others. (The first classes at Claremont McKenna College consisted mainly of veterans.) In this case, even the most hard-shell conservative has to admit that federal policy worked. So who do Page and Simmons pass up this debating point? The answer is that the G.I. Bill was essentially a voucher program, and if the approach did so much for colleges, it might also work for elementary and secondary schools. But since the authors spend several pages trying to cast doubt on vouchers, a discussion of the G.I. Bill would be "off message."

Of course, we have veterans in the first place because government has to defend the country against external threats. Not until page 211 do Page and Simmons get around to this rather important function, and their tone is dismissive. "Perhaps we could spend less on the military and more on long-starved 'discretionary' budget items for education and jobs." Such a proposition was silly even before September 11. By the end of the Clinton administration, the number of active-duty military personnel was at its lowest point since 1940.

So what can government do? More precisely, what is its proper function? For an answer, lay aside this book, turn on the news, and watch the latest actions of Americans in uniform.