Rethinking Poverty

Income, Assets, and the Catholic Social Justice Tradition

James P. Bailey

• Publisher: University of Notre Dame Press
• Year: 2010
• Print ISBN: 9780268022235
• eBook ISBN: 9780268076238
• Topic: Theology & Religion
• Subtopic: Christian Denominations

In Rethinking Poverty, James P. Bailey argues that most contemporary policies aimed at reducing poverty in the United States are flawed because they focus solely on insufficient income. Bailey argues that traditional policies such as minimum wage laws, food stamps, housing subsidies, earned income tax credits, and other forms of cash and non-cash income supports need to be complemented by efforts that enable the poor to save and accumulate assets. Drawing on Michael Sherraden's work on asset building and scholarship by Melvin Oliver, Thomas Shapiro, and Dalton Conley on asset discrimination, Bailey presents us with a novel and promising way forward to combat persistent and morally unacceptable poverty in the United States and around the world.

Rethinking Poverty makes use of a significant body of Catholic social teachings in its argument for an asset development strategy to reduce poverty. These Catholic teachings include, among others, principles of human dignity, the social nature of the person, the common good, and the preferential option for the poor. These principles and the related social analyses have not yet been brought to bear on the idea of asset-building for the poor by those working within the Catholic social justice tradition. This book redresses this shortcoming, and further, claims that a Catholic moral argument for asset-building for the poor can be complemented and enriched by Martha Nussbaum's "capabilities approach." This book will affect current debates and practical ways to reduce poverty, as well as the future direction of Catholic social teaching.

Notes

Note to the Introduction

1. See, for example, Larry M. Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (New York and Princeton, NJ: Russell Sage Foundation and Princeton University Press, 2008); Doug Henwood, “Our Gilded Age,” The Nation (June 30, 2008); and Scott Horton, “Bush’s Gilded Age,” Harper’s Magazine Online (September 18, 2009), available online at www.harpers.org.

Notes to Chapter 1

1. Norman R. F. Maier, “Reasoning in Humans II: The Solution of a Problem and Its Appearance in Consciousness,” Journal of Comparative Psychology 12 (1931): 182.

2. Ibid., 183.

3. Ibid., 188–89.

4. Stuart Rutherford, The Poor and Their Money (New York: Oxford University Press, 2000), 1.

5. Charles M. A. Clark, “Christian Morals and the Competitive System Revisited,” Journal of Economic Issues 40, no. 2 (2006): 268.

6. Séverine Deneulin, Mathias Nebel, and Nicholas Sagovsky, “Introduction,” in Transforming Unjust Structures: The Capability Approach, ed. Séverine Deneulin, Mathias Nebel, and Nicholas Sagovsky (Dordrecht: Springer, 2006), 1.

7. John Black, Oxford Dictionary of Economics (New York: Oxford University Press, 2003), 361.

8. Ibid., 362.

9. Michael Sherraden, “From Research to Policy: Lessons from Individual Development Accounts,” Journal of Consumer Affairs 34, no. 2 (2000): 162.

10. See William O’Neill, S.J., “Poverty in the United States,” in Resources for Social and Cultural Analysis: Reading the Signs of the Times, ed. T. Howland Sanks and John A. Coleman (New York: Paulist, 1993), 72.

11. Ladonna A. Pavetti, “Welfare Policy in Transition: Redefining the Social Contract for Poor Citizen Families with Children and for Immigrants,” in Understanding Poverty, ed. Sheldon H. Danziger and Robert H. Haveman (New York and Cambridge, MA: Russell Sage Foundation and Harvard University Press, 2001), 230.

12. For more fully developed arguments of this perspective, see, among others, George Gilder, Wealth and Poverty (New York: Basic Books, 1981); Lawrence Mead, The New Politics of Poverty (New York: Basic Books, 1992); Lawrence Mead, ed., The New Paternalism: Supervisory Approaches to Poverty (Washington, DC: Brookings Institution Press, 1997); Charles Murray, Losing Ground: American Social Policy 1950–1980 (New York: Basic Books, 1984).

13. Pavetti, “Welfare Policy in Transition,” 269.

14. Ibid., 273. Pavetti reports that the former recipients of welfare “typically work more than thirty hours during the weeks they are employed.”

15. Ibid., 269.

16. David T. Ellwood, Poor Support: Poverty in the American Family (New York: Basic Books, 1988), 18–25. Contrary to the beliefs of many conservatives, however, Ellwood contends that the welfare system had only limited effects on the family.

17. See, for example, Mary Jo Bane and David T. Ellwood, Welfare Realities: From Rhetoric to Reform (Cambridge, MA: Harvard University Press, 1994) and Mary E. Hobgood, “Poor Women, Work and the Catholic Bishops,” in Welfare Policy: Feminist Critiques, ed. Elizabeth Bounds, Pamela Brubaker, and Mary E. Hobgood (Cleveland: Pilgrim Press, 1999).

18. Pavetti, “Welfare Policy in Transition,” 269.

19. Gary Burtless and Timothy M. Smeeding, “The Level, Trend, and Composition of Poverty,” in Understanding Poverty, ed. Sheldon H. Danziger and Robert H. Haveman (New York and Cambridge, MA: Russell Sage Foundation and Harvard University Press, 2001), 37.

20. Michael Sherraden, Assets and the Poor: A New American Welfare Policy (Armonk, NY: M. E. Sharp, 1991), 3.

21. Robert H. Haveman and Edward N. Wolff, “Who Are the Asset Poor? Levels, Trends and Composition, 1983–1999,” in Inclusion in Asset Building: Research and Policy Symposium (St. Louis: Center for Social Development, Washington University, 2000), 2.

22. Throughout this book, I will use the phrases “asset building” or “asset development” as shorthand for the complete phrase, “asset building for the poor.”

23. This criticism of the adequacy of current definitions of poverty and human well-being is shared by others. For example, Amartya Sen, a Nobel Prize–winning economist, argues that standard measures of development, e.g., Gross National Product (GNP) or personal income level, are inadequate indicators of development because they fail to assess whether the goal or purpose of development has been met. For Sen, this goal is the cultivation of “substantive freedoms—the capabilities—to choose a life one has reason to value” (Amartya Sen, Development as Freedom [New York: Anchor, 2000], 74). If the goal of development is to cultivate human capabilities, it follows that “poverty must be seen as the deprivation of basic capabilities rather than merely as lowness of incomes, which is the standard criterion of poverty” (ibid., 87). Cf. Martha C. Nussbaum and Jonathan Glover, Women, Culture, and Development: A Study of Human Capabilities (New York: Oxford, 1996). Here, and in many other places, Nussbaum provides a philosophical defense of the capabilities approach to human development that is consistent with, but not identical to, Sen’s economic argument. The capabilities approach and its relationship to asset building and Catholic social thought are discussed at length in chapter three of this book.

24. The literature on assets and wealth does not adhere to a consistent definition of either assets or wealth. As these terms are used in the asset-building literature, they refer primarily, although not exclusively, to economic assets, financial or real (i.e., property, real estate, or other material holdings). In this same literature, the functional differences between assets and wealth vis-à-vis income are stressed. I discuss these functional differences in what follows. It is of course possible, and sometimes desirable, to speak of wealth and assets in non-financial terms (i.e., a particular quality of a person’s character can be described as an asset) but, for the most part, this chapter will focus on these terms as indicators of one’s financial condition.

25. Sherraden, “From Research to Policy,” 162.

26. Melvin Oliver and Thomas Shapiro, Black Wealth/White Wealth: A New Perspective on Racial Inequality (New York: Routledge, 1995), 2.

27. Edward Scanlon and Deborah Page-Adams, “Effects of Asset Holding on Neighborhoods, Families, and Children: A Review of the Research,” in Building Assets: A Report on the Asset-Development and IDA Field, ed. Ray Boshara (Washington, DC: Corporation for Enterprise Development, 2001), 25–50. For more recent reviews of the literature that corroborate the findings of Scanlon and Page-Adams, see Robert I. Lerman and Signe-Mary McKernan, “Benefits and Consequences of Holding Assets,” in Asset Building and Low-Income Families, ed. Signe-Mary McKernan and Michael Sherraden (Washington, DC: Urban Institute Press, 2008), 195–206.

28. Sherraden, Assets and the Poor, 147–67.

29. Rosemary Bray, Unafraid of the Dark: A Memoir (New York: Random House, 1998), 13–15.

30. See chapter 2 for a discussion of the “preferential option for the poor” in the context of Catholic social teaching.

31. Congressional Budget and Impoundment Control Act of 1974, Public Law 93–344, sec. 3, 3.

32. Sherraden, Assets and the Poor, 55.

33. Leonard Burman, Eric Toder, and Christopher Geissler, “Discussion Paper No. 31: How Big Are Total Individual Tax Expenditures, and Who Benefits from Them?” (Washington, DC: Urban Institute, 2008), 13.

34. Ibid.

35. Robert A. Sunshine, The Budget and Economic Outlook: Fiscal Years 2009 to 2019, a report prepared for the Senate Committee on the Budget, 111^th Congress, 1^st sess., 2009, 15.

36. Burman, Toder, and Geissler, “Discussion Paper No. 31,” 13.

37. Ibid.

38. Christopher Howard, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton, NJ: Princeton University Press, 1997), 25–27. The amount spent on Temporary Assistance for Needy Families (TANF) was $17.4 billion; food stamps $31.7 billion; Women, Infants, and Children food program (WIC), $5 billion. See Thomas L. Hungerford, Tax Expenditures: Trends and Critiques, Congressional Research Service (Library of Congress, 2006), 1–24.

39. Howard, The Hidden Welfare State, 27. Cf. Michael Sherraden, “Asset-Building Policy and Programs for the Poor,” in Assets for the Poor: The Benefits of Spreading Asset Ownership, ed. Thomas Shapiro and Edward N. Wolff (New York: Russell Sage Foundation, 2001), 303.

40. Howard, The Hidden Welfare State, 30.

41. Hungerford, “Tax Expenditures: Trends and Critiques,” 2.

42. Laurence S. Seidman, “Assets and the Tax Code,” in Assets for the Poor: The Benefits of Spreading Asset Ownership, ed. Thomas Shapiro and Edward N. Wolff (New York: Russell Sage Foundation, 2001), 335.

43. Ray Boshara, “The Rationale for Assets, Asset-Building Policies, and IDAs for the Poor,” in Building Assets: A Report on the Asset-Development and IDA Field, ed. Ray Boshara (Washington, DC: Corporation for Enterprise Development, 2001), 17.

44. Lillian Woo and David Buchholz, Subsidies for Assets: A New Look at the Federal Budget, Federal Reserve System (Washington, DC: Corporation for Enterprise Development, 2007), 9.

45. Ibid., 10.

46. Michael Sherraden, Inclusion in the American Dream: Assets, Poverty, and Public Policy (New York: Oxford University Press, 2005), 8–9.

47. Sherraden, Assets and the Poor, 68.

48. Hungerford, “Tax Expenditures: Trends and Critiques,” 18.

49. Howard, The Hidden Welfare State, 28.

50. Michael Harrington, The Other America (New York: Macmillan, 1962), 161.

51. Howard E. Shuman, Politics and the Budget: The Struggle between the President and Congress (Englewood Cliffs, NJ: Prentice Hall, 1984), 105.

52. Sondra G. Beverly and Michael Sherraden, “Institutional Determinants of Savings: Implications for Low-Income Households and Public Policy,” Journal of Socio-Economics 28, no. 4 (1999): 457–73.

53. Ibid., 466.

54. Ibid.

55. Sherraden, Assets and the Poor, 127

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Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Acknowledgments
• Introduction
• One Why Asset Building for the Poor?
• Two Assets, the Poor, and Catholic Social Teaching
• Three Assets and Human Capabilities
• Four Asset Discrimination
• Five Toward Inclusive Ownership
• Appendix: A Primer on Modern Catholic Social Teaching
• Notes
• Bibliography
• Index