Schansberg: In Pursuit of Happiness and Good Government — Still

December 22, 2014

by Eric Schansberg, Ph.D.

Over the last 30 years, Charles Murray has been one of the most influential thinkers on domestic policy matters. Murray was trained as a sociologist, but has a terrific understanding of economics and political economy. His work is multi-disciplinary, readable, relevant and often provocative.

This year marks a key anniversary for two of Murray’s books. Losing Ground is 30 years old now — and was the book on welfare programs in the 1980s. Quite controversial when published, the book’s logic became the conventional wisdom on welfare policy within a decade. In Pursuit of Happiness and Good Government is 25 years old now — far less famous, but arguably a more powerful and potentially important book.

Losing Ground

Losing Ground came on the scene in 1984, at a time when conservatives were already bothered by various aspects of redistribution to the poor — in particular, the inherent disincentives for those receiving assistance. Murray’s book bolstered those arguments and laid the groundwork for growing concerns about welfare over the next decade.

Most liberals were still largely enamored with the federal War on Poverty — and downplayed or dismissed Murray’s arguments. Their concerns about welfare would emerge over the next decade — as they increasingly recognized that all was not well with the war. They were never as concerned about disincentives. Instead, they focused on other metrics, such as the impersonal, “dehumanizing” bureaucracy used to implement welfare.

The thesis is that welfare changed “the rules of the game” for those in the lower income classes. The rules had been changed by well-intentioned elites — and the response to those incentives and the outcomes of the war were not what had been hoped or expected. Four decades and more than a trillion dollars later, the poverty rate is similar and the problems of poverty are arguably worse.

An easy way to see this: $20,000 per year in government benefits will be interpreted quite differently by those who can earn $30,000 or $80,000. The resulting disincentives for those with fewer means — to work, to get married, to save, etc. — discouraged many people from engaging in productive, long-term behaviors. This encouraged a cycle of poverty, which undermined the work ethic and family structure and stability. (Murray develops this theme more fully in his recent book Coming Apart.)

Of course, there’s more to life than incentives and narrow understanding of economics. Other social changes also undermined family structure and stability, making things even worse. The results have not been pretty: lower labor-force participation for able-bodied males, dramatic increases in children from single-parent households, etc.

In 1996, federal welfare reform stifled some of the worst aspects of the original War on Poverty. States gained more control and were encouraged to experiment with policy design. This new freedom was attractive to states and almost certainly a better way to implement policy. On something as complex as welfare policy, trying 50 different things is almost certainly better than insisting on a single federal approach.

In particular, states were told to implement “time limits” — to lessen the damage to long-term incentives. And they were encouraged to use “categorization and discernment” in doling out benefits — distinguishing between the particular needs of those in poverty (e.g., job skills, transportation, child care).

Although welfare policy continues to be problematic, Losing Ground’s work on welfare’s inherent disincentives still echoes over time. Hopefully, in the years to come, we will gain more ground than we’ve been losing.

In Pursuit of Happiness and Good Government

I learned about In Pursuit of Happiness and Good Government through an article in Reason magazine during the 1992 election. The editor asked a number of influential thinkers to recommend a book for the new president to read (whether Bush or Clinton). The most frequent choice was In Pursuit of Happiness and Good Government, a book about which I had not even heard.

The book has never been all that popular, because it talks about policy in broad terms. But its general approach is also what makes it so valuable. In a word, what are we trying to accomplish with public policy and what are the constraints in using government to achieve various ends?

Murray uses a modified version of psychologist Abraham Maslow’s “Hierarchy of Needs” exercise as his framework: material needs, safety, dignity and self-esteem, and self-actualization. Individuals have goals in each category. It follows that government policy should aim to be helpful — or at least to avoid harm — in each of those categories.

Murray notes that there are often trade-offs between the categories, especially with public policy. What if government policy makes a modest gain in one area, but at the expense of other goals? For example, the government might provide material support in a way that undermines dignity or self-actualization. This leads to vital but often overlooked questions about effective policy.

Murray also describes “thresholds” and “enabling conditions.” Thresholds are the minimal amounts of a category required to have a satisfying life. For example, one needs “enough” food, clothing, shelter, human relationships, etc. — to survive and at least minimally thrive. Reaching the thresholds is vital. Exceeding thresholds can certainly be an improvement, but, on average, the gains are surprisingly modest. For example, people report similar levels of happiness whether they are barely above or far above threshold levels.

“Enabling conditions” can be considered part of a government’s responsibility — setting up “conditions” that enable people to achieve happiness on their own terms. For example, government should help provide safety for its citizens; might provide material support up to a threshold for the indigent; and should broadly establish a general environment in which people can pursue dignity and self-actualization in their daily lives. Again, getting to thresholds is vital. Beyond that, government will not be able to accomplish nearly as much — and might easily interfere with the pursuit of happiness, given policy trade-offs.

With a more thorough view of personal and policy goals, the possibility of trade-offs looms large. Early in the book, Murray conducts a thought experiment: If you and your spouse were to die, would you rather that your children be raised by people in Thailand who have the thresholds in terms of material goods and safety — and completely share your values? Or would you rather have them raised by Americans who are wealthy but have troubling values? Most people would choose the former, implying that there’s much more to life and happiness than access to material standards of living.

Murray concludes with the role of what author and political theorist Edmund Burke called “little platoons” — the small, community-based groups (schools, churches, civic groups, etc.) in which we find much of our support, friendship, resources, etc. In little platoons, we’re more likely to find fulfillment and true help — not just for material goals but to pursue the higher ends for which we have been created. State and federal governments are not little platoons, but they play a vital role in establishing an environment in which little platoons can be effective.

In Pursuit of Happiness and Good Government continues to be a must-read for those who are interested in implementing (good) public policy. Murray doesn’t provide a ton of answers. But in the context of complex issues like personal happiness and public policy, asking good questions is at least half of the answer. If your New Year’s resolutions include reading on public policy, put this book at the top of your list.

The author, an adjunct scholar of the Indiana Policy Review Foundation, is a professor of economics at Indiana University Southeast.

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