Marvin Olasky & Effective Assistance to the Poor
John Mason
April 1, 1996
IN assisting the poor, whether charitably or through government mediation, two dangers confront us. One finds actual and potential recipients facing incentives to modify their behavior in what could become destructive ways to qualify for assistance. The other lies with providers, whether individuals or levels of government (local, state, national). The incentive providers face is to let others do it—other individuals or levels of government—thus getting the poor assisted but at less cost to "me." Economists assign clever titles to these dangers, "moral hazard" in the first case and "free riding" in the second.
Most poverty commentators emphasize one danger or the other but typically not both. Marvin Olasky is no exception, stressing as he does the damaging potentials of moral hazard. In his Tragedy of American Compassion and subsequent essays he performs valuable service by investigating the abcs (literally) of effective charity prior to the advent of the modern welfare system. Though he readily extends the lessons of his historical review to the present, the usefulness of his analysis for the current scene is severely limited—due in good part to reasons his own historical account lays bare.
Amidst the growing prosperity afforded by the industrial revolution following the Civil War, middle-class families providing the bulk of charity volunteers began moving away from the central cities, contributing to what Olasky calls "economic segregation." Concurrently, the proddings of Social Darwinism (discouraging any assistance to the poor) and the teaching of the social gospel (with its emphasis on government action) practically weakened the sacrificial commitment to volunteer. As volunteers pulled back, charity organizations turned ...
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