Government programs benefit the poor at the expense of the rich. Those are the terms on
which many public welfare programs are sold. But is that really the case? The
economist Milton Friedman doesn’t think so and called this the Robin Hood myth.
Friedman argued that instead of taking from the rich to help the poor, most
welfare programs benefit the middle-class at the expense of the very poor and the
very rich. This happens because of a simple rule, known as Director‘s law.
In a democratic system, laws are passed by 51 percent of the people voting one way against
49 percent of the people voting another. You might think the bottom 51 percent will
pass laws at the expense of the top 49 percent, but that is rarely the case.
Directors law implies that the bottom 51 percent tend to not only be less fortunate,
but also less likely to have the ability to organize themselves and be politically successful.
The top 51 percent are able to use their power to control politics. But they are,
by definition, also most comfortable with how things are and hence often the
last to seek political change. The most effective people in political activity
are running from the lower middle class through the upper-middle class.
They are the people who are literate, who write the news, who envy the very rich, and who seek
political change. And what kind of policies do they want? Welfare programs for themselves.
One famous policy that runs throughout almost all democratic societies is
state-financed higher education. It is sold on the grounds of providing equal
opportunities to everybody to get an education. But what are the facts? Who
is really benefiting? Who are the people who are attending public universities?
It’s usually people who come from the middle, and upper-class families. Occasionally
there is someone from a lower-class family, but that’s a small fraction
Children from middle and upper-income families often
attend public education for the longest periods,
gaining new skills and building strong networks that enable them to get higher-paying jobs.
The taxpayers pay for it, including parents from the bottom of the income distribution whose
children are unlikely to attend college and in the rare instance that they do so, often drop out.
Friedmann called state-financed higher education a program to
impose taxes on the people in Watts to send the children from Beverly Hills to college.
What are your thoughts? Was Friedmann right? And if so, what’s a good alternative to help create
equal opportunities in a democracy? Share your thoughts in the comments
below and read the description for more information about Friedmann and our work.
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