“Why is there so much poverty in America?”
This question opens Poverty, by America, a newly released book by Princeton University Professor of Sociology Matthew Desmond. The book’s emphatic answer is “exploitation.” In fact, all Americans fortunate not to live in poverty, as Desmond sees it, are at least indirectly complicit in exploiting poor Americans and benefit from this exploitation.
Some readers are likely familiar with Desmond as the author of arguably the most controversial article in the New York Times’ “1619 Project.” According to critics, Desmond built his piece presenting slavery and capitalism as fundamentally intertwined on debunked inaccuracies, most memorably the brazen and dubiously sourced proclamation that:
When an accountant depreciates an asset to save on taxes or when a midlevel manager spends an afternoon filling in rows and columns on an Excel spreadsheet, they are repeating business procedures whose roots twist back to slave-labor camps.
Thrillseekers hoping for another such quotable emblem of the far left’s wrong thinking may finish Poverty, by America somewhat disappointed. Wrong thinking abounds in Desmond’s book, but tensions between his better impulses, his academic background, and the need to satisfy a political constituency reveal an author pulled intractably in several directions.
Desmond spends about a third of the book detailing facts on the ground about American poverty with clarity and urgency. He frequently tells detailed stories of Americans in poverty, including many he’s personally known.
These looks at poor Americans’ lives are where Desmond is at his best. We meet a variety of people throughout the book, often burdened with family difficulties, accidents, and more personal limitations and struggles. Desmond has a keen eye for their interactions with the people and institutions intended and designed to help them, which turn more and more adversarial as emergencies mount. Missed days at work, strained relationships with friends and family, along with physical and mental health issues overtake the chance of self-sufficiency or upward mobility.
Desmond conveys the absurdity of welfare bureaucracies that for paternalistic or political reasons spend more in order to provide less aid. In one story alone, child welfare services, foster care, behavioral health services, public housing, and social security disability income all at various points fail to provide service to a young woman sliding into homelessness. Desmond also correctly emphasizes the lasting damage of bad 20th-century policies such as New Deal-era redlining, and later the war on drugs, both catastrophic for urban, mostly poor and black communities.
Frustratingly, Desmond ignores any specific lessons from the best part of his book. Its purpose is to evoke understandable outrage that such tragedies happen in our liberal and wealthy society. The remainder of Poverty, by America is stuck somewhere between a revolution and Elizabeth Warren’s 2020 campaign platform.
Readers never get an explicit definition of exploitation, but Desmond uses the term constantly in his brief book. Broadly, exploitation in Poverty, by America is when poor people aren’t paid for their work as much as they should be, or face rent, consumer prices, and interest rates higher than they should have to pay.
Desmond’s remedies for the workers he considers exploited are a higher minimum wage and a lot more unionization. Historical and economic arguments that such labor market interventions often harm the poorest workers, when acknowledged at all, are treated as admonishments from the establishment for everyone else to stay in their lane rather than an opportunity for ideas to be debated.
Perhaps the book’s worst moment comes during Desmond’s discussion of the very real housing crisis faced by America’s poor. Earlier, when describing the impact of redlining, Desmond would have done well to also focus on mid-twentieth century policy of “urban renewal,” with bulldozed neighborhoods displaced by high-rise public housing. Such disastrous city planning completed the one-two punch redlining began, leaving poor neighborhoods starved of both financial and social capital, which together form the basis for especially urban economic dynamism.
Massive new investments in public housing are at the top of Desmond’s policy wishlist, and he would rather not dwell on what, in his own words, are the “violent and decrepit” results of very recent memory:
But I recommend withholding judgment until you visit Via Verde, a gorgeous affordable housing complex in the South Bronx, complete with a fitness center and a terraced roof planted with garden plots and trees.
We get a couple of other charming blurbs on similar developments, which Desmond calls “not your father’s housing projects.” Indeed, operationalizing these concepts on a national level is more like your great-grandfather’s housing projects, something out of Ebenezer Howard’s Garden City. Parallels in aesthetics are less important (and less problematic) than a similarly dismissive approach to the diverse people with multi-faceted lives who would live there. Desmond showed us earlier in the book that he should know better.
Desmond’s policy proposals almost all double down on collaboration between big government, big business, and big labor–the “system” against which the American left first cut its teeth protesting. Doing so while speaking in the fashionable language of radicalism requires more than a little cognitive dissonance, from which he attempts to distract readers with a man-in-the-mirror pivot.
In Desmond’s framework, we ourselves are “authors of inequality.” This perspective is not without some important insights. Americans, often given to hand-wringing over getting the incentives right for welfare, do no such thing with their own subsidized mortgages and tax breaks. We celebrate the end of legal discrimination without thinking too hard about the undeniable ongoing impacts of our own local zoning laws and neighborhood covenants.
But more often, Desmond’s admonishments to clean our own side of the street sound like this:
We like healthy returns. We like smart products. We like low prices and raise a fuss when they creep up. Fast and cheap—that’s how we prefer to consume in America. But somebody has to pay for it, and that somebody is the rag-and-bone American worker.
Free-market, centrist, and most progressive economists would, at the very least, take issue with Desmond’s neglect that this process–when all people can truly access markets–is how prosperity actually happens, including American workers both “rag-and-bone” and otherwise. Desmond contends with none of those arguments.
The other demand that Desmond can make on aspiring poverty abolitionists is that they vote the right way. As already noted, he leans hard on a higher minimum wage, government-driven (or facilitated) unionization, and public housing. Countless other items on the left-progressive wishlist are given brief but reverent treatment: single-payer healthcare, universal childcare, even that thing where the IRS does your taxes for you.
Earlier in the book, Desmond documented the consistent failure of regulation and government programs to deliver on their promises to poor people. But he has not brought that set of real-world institutions–staffed by and serving real and complicated people, and facing multiple shifting political winds–along for the ride.
He hasn’t brought the real people whose stories he told along either. More precisely, he hasn’t brought real people along at all–either in the ways their many interactions frustrate seemingly simple top-down remedies, nor in how those people acting freely and unburdened from often government-imposed constraints to their participation in markets are engines of each others’ prosperity. Desmond writes that, “poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that.” The sentence is a microcosm of Poverty, by America, sounding almost eloquent until the final clause gets the economics exactly wrong and denies any agency or real choice to poor people themselves. Instead, Desmond challenges his readers to make a choice, mostly to vote for candidates offering poor Americans a higher minimum wage, more unions, and more public housing.
Max Gulker
Max Gulker is a former Senior Research Fellow at the American Institute for Economic Research. He is currently a Senior Fellow with the Reason Foundation. At AIER his research focused on two main areas: policy and technology. On the policy side, Gulker looked at how issues like poverty and access to education can be addressed with voluntary, decentralized approaches that don’t interfere with free markets. On technology, Gulker was interested in emerging fields like blockchain and cryptocurrencies, competitive issues raised by tech giants such as Facebook and Google, and the sharing economy.
Gulker frequently appears at conferences, on podcasts, and on television. Gulker holds a PhD in economics from Stanford University and a BA in economics from the University of Michigan. Prior to AIER, Max spent time in the private sector, consulting with large technology and financial firms on antitrust and other litigation. Follow @maxg_econ.
