The Magazine

Learning for Dollars

Bloomberg's fanciful antipoverty program.

Jul 9, 2007, Vol. 12, No. 40 • By HEATHER MAC DONALD
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But the cure in this case will be worse than the disease. Introducing cash rewards for conduct that is simply part of what it means to be a conscientious parent or student is no way to inculcate a more functional value system. Creating the expectation of immediate cash for behavior that provides a long-term payoff, such as studying in school, will further shorten the poor's time horizon, rather than lengthen it. Civil society requires individuals to undertake countless actions in the private sphere out of a sense of duty and propriety. The state cannot possibly devise a payment schedule complex enough to capture those actions, nor should it try.

Liberal supporters of the Bloomberg payment plan claim that conservatives should love it--after all, it involves money, doesn't it? And we all know that the only thing conservatives care about is money and the market. But the market is made up of entities and individuals involved in discretionary, profit-seeking transactions. There should be nothing discretionary about encouraging your child's education or providing him with medical care (especially when that care is free). These behaviors are moral obligations, not economic exchanges. Nor are the "conditional cash transfers" comparable to tax incentives for corporate investment, for the same reason: Tax breaks, rightly or wrongly, aim to influence optional spending.

"But the program works in Mexico," say its defenders. Leaving aside whether Mexican poverty policy cries out for emulation, Mexican peasants are facing a "struggle" for subsistence, unlike America's inner-city poor. A campesina's decision to take her child to the doctor may in fact jeopardize her livelihood, making the $200 offset, for example, which the Bloomberg administration intends to pay parents simply for taking their child to an annual medical check-up, a significant cushion against risk. New York is a different universe. The Bloomberg plan will pay parents $40 a month merely for maintaining taxpayer subsidized health insurance--the barrier to doing which is apathy and inertia, not a Dickensian struggle for survival.

Should the Bloomberg payment experiment go large-scale, as its architects hope, it will create a bizarre caste system, in which one part of society bribes the other to behave in ways that the paying class regards as basic to responsible human life. So far, the Bloomberg administration has not articulated any principle for distinguishing who is in that paying class, and who in the payee class, other than a crude income test. The program will enroll families at or below 130 percent of the federal poverty level. How will the administration explain to parents at 140 percent of the federal poverty line that their children should attend school simply because it is in their long-term self-interest, when their neighbors are getting paid for the same behavior?

Nor has City Hall said what its end game is. Once the payments are institutionalized, it will be difficult to dislodge the expectations that they create. Welfare advocates are already arguing that the bounties are not large enough. Expect a constant push from the poverty industry to raise the price of good behavior, to broaden the payee class, and to compensate a greater range of conduct--making sure that one's child has had breakfast or takes his books to school would seem to be as worthy of being remunerated as downloading a child's test scores. And once word gets around classrooms that some students are taking home $500 for doing well on tests, good luck persuading other students that they should study for the love of learning or the prospect of a better future.

Throughout his mayoralty, Bloomberg has pursued conventional liberal solutions to poverty, going on an affordable-housing building spree, for example, and seeking to water down the work requirements in welfare reform. His latest endeavor at least breaks with that conventional wisdom by correctly diagnosing the behavioral roots of entrenched poverty. Its remedy is blind, however, to the moral basis of civil society. If Bloomberg really wants to earn the title of independent, he should promote marriage as a way of reducing poverty. Now that would be a radical idea.

Heather Mac Donald is a contributing editor to the Manhattan Institute's City Journal.