Losing Ground

"Charles Murray took the economic concept of moral hazard – the concept that if you reward people for bad behaviour then they behave badly – and turned it into prose. Reading the book moved me a notch to the right. It posed a challenge to liberals – to get more rigorous in our analysis. It showed the simple facts didn’t look so good for us and that we needed to address questions like, “Is welfare causing women to become single mothers?” Murray really challenged the way I thought. It turned out his facts were largely wrong, so it’s really more a book to read for an example of how someone can shift the debate with potent use of clear arguments. Losing Ground was the intellectual basis of the push to reform welfare in the United States, not in terms of the actual ideas but just in terms of challenging the orthodoxy. And, of course, welfare was reformed in 1996."

"By 1984, conservatives had won a lot of important arguments about public policy. But there are real problems in the mid 80s for Americans that conservatives don’t have the answers to and one of them is the urban crisis that started in the 50s and 60s and was only getting worse. Welfare dependency was getting worse; there was a new problem of homelessness that was very shocking to people living in big population centres. This was regarded by many people as a big indictment of the new, more open economy. This book is not exactly social science: in many ways it is a work of imagination. It relies on what he calls his ‘thought experiments’, where he invites you to look at problems from very different angles and other people’s points of view. He suggests thoughts in your head that you can’t prove exactly but seem persuasive when he shows them to you. What he tried to show was that the intensification of welfare dependency was not a result of the economy malfunctioning and that, paradoxically, the solution to the problems of the extremes and very ugly forms of poverty that were becoming visible was not greater support from government but less. These were ideas that had been germinating in conservative minds in one way or another – George Gilder’s Wealth of Poverty, published in 1981, had some early sketches of some of these ideas. But Murray really sealed the case. This is the book that was the intellectual antecedent of the welfare reform of the middle 1990s that now most people regard as one of the great successes of American public policy. Very unsentimental thinking, yes. And later on he goes in some directions that are more questionable. A lot of people would not want to follow down those paths to The Bell Curve. Just because you recommend one book by an author doesn’t mean you have to endorse every one of them. And, by the way, the idea works. One of the things we have seen happen since welfare reform is an increase in labour force participation among black families, especially black men. You saw very rapid rises in black incomes in the 90s and in certain cities, like NYC, black households earn as much as white. Those gaps have been closed – which is not to say that there don’t remain huge gaps in wealth as opposed to income. I would say is that we have had two great spikes of conservative domestic policy creativity. One in the late 70s and early 80s and another in the middle of the 1990s. Obviously more things happened between 1975 and 1983 than happened in 1994-1995, so they are not equal spikes, but it’s at the core of what you might call the silver age of conservative policy achievement."