The Niskanen Center’s approach to markets and the social safety net blends ideas from political traditions that are often seen as antagonistic. From classical liberalism we take the idea that a commercial, cosmopolitan social order is unrivaled at promoting tolerance, innovation, cooperation, and prosperity. Accordingly, we believe a “presumption of liberty” ought to apply to basic economic activity. At the same time, modern liberal thought has established that justice requires robust social insurance systems that guarantee to all the dignity and autonomy of broadly shared prosperity. Our view is that these two traditions were never in tension, and indeed combine to form a more coherent theory of a free and just society. This belief is embodied in our following policy interests:
Economic Growth & Social Insurance
Welfare need not be a gateway to government dependency. On the contrary, the best research shows that well-designed safety nets can boost economic growth by supporting risk taking, human-capital formation, labor market dynamism, and positive public attitudes toward market liberalization.
21st Century Cash Assistance
Our economy appears likely to experience significant labor-market disruption as automation technology and artificial intelligence continue to rapidly improve. Universal Basic Income has been proposed as a potential solution; however, so far the debate has produced more heat than light. In order to move the conversation forward, we conduct research into the conceptual, economic, and political dimensions of 21st century cash assistance.
Over-Regulating the Poor
The last two decades in the United States have seen direct cash assistance to poor households scaled back in favor of in-kind benefits. Meanwhile, stringent, value-laden conditions have been attached to welfare, including punitive work and drug testing requirements, and increasingly complex administrative burdens have been shifted onto beneficiaries. Burdening the poor with additional economic costs while limiting their options simply contributes to their marginalization. We support efforts to simplify and streamline poverty programs in order to enhance bureaucratic performance and ensure recipients are treated with dignity and respect.
Economists extol the virtue of decentralization of program delivery, also known as subsidiarity, for reasons of asymmetric information. That’s just jargon for the truism that in close communities everybody knows everybody, fostering trust and solidarity. In contrast, a centralized, bureaucratic welfare system does damage to civil society. We therefore support innovations in welfare and healthcare delivery models that promote self-determination.