Postrel: If you're a person of low skills, there are two ways in good times you can get a low-paying job. You can go stand on the corner, on Pico Boulevard in Los Angeles, and wait for construction contractors to come and pick up day labor, which may pay more but is risky--they may not pick you--and requires a fair amount of initiative. This is, of course, what a lot of immigrant laborers do. Or you can go to a government office where a job will be guaranteed to you for which there is not actually value in the economy. If you are laboring on a construction site, it's actually worth whatever you're paid. It seems to me that you're rewarding people who have less initiative and contribute less value. Does that bother you at all?
Hobbs: It's relatively easy to adjust the incentive structure so that a person is a lot better off taking a job from the street corner than that government job. But the answer to your basic question is yes. I think that it's worth having that kind of a fall-back position, and not just for the business cycle, but just because it's a lot better for people to work than not to work.
Murray: The question that you're raising is peculiarly a problem of wealth. I could give you many reasons why I think that providing these jobs from the government disrupts some very valuable dynamics-- dynamics that create niches for people where they're not trudging off to rake leaves in front of the courthouse and proclaiming to the world what a loser they are. Valued niches. And I can talk about that at length, and I believe it. Then I back off and I say to myself: The fact is that individuals are differently blessed. Some people come up with the short end of the stick, and that genuinely is not their fault. Here is this extraordinarily wealthy country. Is it really that awful to provide a fall-back position? That is one of the reasons why the liberal agenda has held sway for so long, because of that fundamental, bothersome contrast.
Kaus: You mean in part because the liberals have a point?
Murray: In part because the liberals have a point, you confrontational devil, you.
Postrel: Where will we be in 15 years?
Hobbs: Another 15 years in the future we're going to find ourselves, I hope, in a situation where we have virtually nobody who's not working at a job, public or private, in our society. Two things are going to drive that. One, the welfare side we were talking about. The second is the business side or economic side. Because I can't see how we can sustain ourselves as a competitive force without converting people who are not productive into people who are productive. I also think that the further we get into this, the more momentum we're going to see, because the sort of thing that's happened in Kenilworth Parkside [where tenant management of public housing transformed the community] the last 15 years is capable of happening in many places in the country. If we convert welfare to a system of work, then we're going to begin to see the evidence of social disruption, the evidence of illegitimate children being born--that's going to diminish. I think crime will diminish, too, because the men will become part of the family again instead of being substituted for by the government. So I am really optimistic.
Kaus: I'm probably not quite as optimistic as Chuck, but I'm basically optimistic. There are self- correcting mechanisms. One is that people vote with their feet. The ghettos are emptying out. They're now so violent that anyone who can get out is leaving. Washington, D.C., for example, lost population between the last censuses. Detroit has lost half its population. The second corrective mechanism is the political dynamic, which is that people realize the current welfare system doesn't work and are in the process of changing it. The larger problem when you look at 15 years out is not the problem of the underclass but the problem of stratification in society in general along the lines of wealth and brains. We live in a world economy where unskilled labor is not enough to make a lot of money. Pay correlates very closely with skills and smarts. We're coming into decades when people who are rich will be very tempted to say, "I'm rich because I'm smarter than the people who are poor." When I look 15 years out, that's what actually troubles me more than the underclass.
Murray: This stratification issue is a fundamental one 15 years out. As for the chances of dealing with the underclass, I actually have been stunned by my experience the last two months. There is simply much more potential for radical reform out there than I thought. Maybe in 15 years the world will look more like Chuck thinks than I would have thought. But suppose you say that a lot of the crime and disorder in the inner city right now is created by the breakdown of the family. In 1993, the 18-year-olds were born in 1975. That means the generation which is committing an awful lot of crimes grew up in neighborhoods where maybe half of the families still had fathers. Fifteen years from now, the 18-year-olds will have been born in 1990, at a time when maybe 20 percent of those kids had fathers. So, insofar as family breakdown is a cause of a lot of problems, we ain't seen nothing yet. I published an article in '88 called "The Coming of Custodial Democracy," where I envisioned a situation in which the rich folks and the smart folks don't want these people on their consciences any more. So they consign them to outer darkness, or to the equivalent of Indian reservations, and throw whatever goods over the walls they need to keep them quiet. I still think there's a real potential for that. That sounds like a very dangerous situation to me if you want to sustain our democratic system. If you then add in the possibility that the white underclass is going to start to mushroom--and I'm dead serious when I talk about that--then all bets are off.
Hobbs: Let's hope, Charles, for once you're wrong.
Murray: I hope so too.
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Apart from state-by-state differences, total school spending in the United States is routinely underestimated because of other measurement problems. As Lieberman and other analysts have pointed out, official school spending statistics leave out an awful lot. A partial list of expenditures excluded from federal data includes business and foundation donations, donated time, pension contributions, the cost of negotiating contracts, the cost of training teachers, remedial education in colleges, judicial costs, out-of-pocket parental expenses, and federal educational programs in departments other than Education (such as Head Start). Since real per-pupil spending even as currently measured shot up 62 percent from 1973 to 1993 (according to the ALEC study), an accurate analysis of total spending would no doubt find an even bigger jump.
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