The Use of Knowledge in Society by FA Hayek 1945

Synopsis/Commentary by Asderathos

H.1

What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough.If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions. The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.

If all relevant information is available the most preferable outcome is only a matter of logical mathematics. Any such formula must account for the minutest degree of variable in use of commodities.
 
H.2

This, however, is emphatically not the economic problem which society faces. And the economic calculus which we have developed to solve this logical problem, though an important step toward the solution of the economic problem of society, does not yet provide an answer to it. The reason for this is that the "data" from which the economic calculus starts are never for the whole society "given" to a single mind which could work out the implications and can never be so given.


The production of such a formula is not the problem at hand nor the whole solution, because in its completion the data to which it may be applied is not available, nor could any single mind wield either.

H.3

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

The problem of such a formula is characterized by conflicting interests of individuals [who only know their interests themselves at any given time, in totality].

H.4

This character of the fundamental problem has, I am afraid, been obscured rather than illuminated by many of the recent refinements of economic theory, particularly by many of the uses made of mathematics. Though the problem with which I want primarily to deal in this paper is the problem of a rational economic organization, I shall in its course be led again and again to point to its close connections with certain methodological questions. Many of the points I wish to make are indeed conclusions toward which diverse paths of reasoning have unexpectedly converged. But, as I now see these problems, this is no accident. It seems to me that many of the current disputes with regard to both economic theory and economic policy have their common origin in a misconception about the nature of the economic problem of society. This misconception in turn is due to an erroneous transfer to social phenomena of the habits of thought we have developed in dealing with the phenomena of nature.
 

A rational economic organization [structure/concept] must include certain methodical questions. 

The human problem of the formula has been obscured in preference to the math; because of how we've come to study nature [via science?]. 

II H.5

In ordinary language we describe by the word "planning" the complex of interrelated decisions about the allocation of our available resources. All economic activity is in this sense planning; and in any society in which many people collaborate, this planning, whoever does it, will in some measure have to be based on knowledge which, in the first instance, is not given to the planner but to somebody else, which somehow will have to be conveyed to the planner. The various ways in which the knowledge on which people base their plans is communicated to them is the crucial problem for any theory explaining the economic process, and the problem of what is the best way of utilizing knowledge initially dispersed among all the people is at least one of the main problems of economic policy—or of designing an efficient economic system.

H.6

The answer to this question is closely connected with that other question which arises here, that of who is to do the planning. It is about this question that all the dispute about "economic planning" centers. This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals. Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning—direction of the whole economic system according to one unified plan. Competition, on the other hand, means decentralized planning by many separate persons. The halfway house between the two, about which many people talk but which few like when they see it, is the delegation of planning to organized industries, or, in other words, monopoly. SOCIALISM

H.7

Which of these systems is likely to be more efficient depends mainly on the question under which of them we can expect that fuller use will be made of the existing knowledge. And this, in turn, depends on whether we are more likely to succeed in putting at the disposal of a single central authority all the knowledge which ought to be used but which is initially dispersed among many different individuals, or in conveying to the individuals such additional knowledge as they need in order to enable them to fit their plans with those of others. A Communist Central Plan
 

III H.8

It will at once be evident that on this point the position will be different with respect to different kinds of knowledge; and the answer to our question will therefore largely turn on the relative importance of the different kinds of knowledge; those more likely to be at the disposal of particular individuals and those which we should with greater confidence expect to find in the possession of an authority made up of suitably chosen experts. If it is today so widely assumed that the latter will be in a better position, this is because one kind of knowledge, namely, scientific knowledge, occupies now so prominent a place in public imagination that we tend to forget that it is not the only kind that is relevant. It may be admitted that, as far as scientific knowledge is concerned, a body of suitably chosen experts may be in the best position to command all the best knowledge available—though this is of course merely shifting the difficulty to the problem of selecting the experts. What I wish to point out is that, even assuming that this problem can be readily solved, it is only a small part of the wider problem.

H.9

Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances. To know of and put to use a machine not fully employed, or somebody's skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques. And the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.

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H.10

It is a curious fact that this sort of knowledge should today be generally regarded with a kind of contempt and that anyone who by such knowledge gains an advantage over somebody better equipped with theoretical or technical knowledge is thought to have acted almost disreputably. To gain an advantage from better knowledge of facilities of communication or transport is sometimes regarded as almost dishonest, although it is quite as important that society make use of the best opportunities in this respect as in using the latest scientific discoveries. This prejudice has in a considerable measure affected the attitude toward commerce in general compared with that toward production. Even economists who regard themselves as definitely immune to the crude materialist fallacies of the past constantly commit the same mistake where activities directed toward the acquisition of such practical knowledge are concerned—apparently because in their scheme of things all such knowledge is supposed to be "given." The common idea now seems to be that all such knowledge should as a matter of course be readily at the command of everybody, and the reproach of irrationality leveled against the existing economic order is frequently based on the fact that it is not so available. This view disregards the fact that the method by which such knowledge can be made as widely available as possible is precisely the problem to which we have to find an answer.
 

IV H.11

If it is fashionable today to minimize the importance of the knowledge of the particular circumstances of time and place, this is closely connected with the smaller importance which is now attached to change as such. Indeed, there are few points on which the assumptions made (usually only implicitly) by the "planners" differ from those of their opponents as much as with regard to the significance and frequency of changes which will make substantial alterations of production plans necessary. Of course, if detailed economic plans could be laid down for fairly long periods in advance and then closely adhered to, so that no further economic decisions of importance would be required, the task of drawing up a comprehensive plan governing all economic activity would be much less formidable.

H.12

It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan. The belief that changes, or at least day-to-day adjustments, have become less important in modern times implies the contention that economic problems also have become less important. This belief in the decreasing importance of change is, for that reason, usually held by the same people who argue that the importance of economic considerations has been driven into the background by the growing importance of technological knowledge.

H.13

Is it true that, with the elaborate apparatus of modern production, economic decisions are required only at long intervals, as when a new factory is to be erected or a new process to be introduced? Is it true that, once a plant has been built, the rest is all more or less mechanical, determined by the character of the plant, and leaving little to be changed in adapting to the ever-changing circumstances of the moment?

H.14

The fairly widespread belief in the affirmative is not, as far as I can ascertain, borne out by the practical experience of the businessman. In a competitive industry at any rate—and such an industry alone can serve as a test—the task of keeping cost from rising requires constant struggle, absorbing a great part of the energy of the manager. How easy it is for an inefficient manager to dissipate the differentials on which profitability rests, and that it is possible, with the same technical facilities, to produce with a great variety of costs, are among the commonplaces of business experience which do not seem to be equally familiar in the study of the economist. The very strength of the desire, constantly voiced by producers and engineers, to be allowed to proceed untrammeled by considerations of money costs, is eloquent testimony to the extent to which these factors enter into their daily work.

H.15

One reason why economists are increasingly apt to forget about the constant small changes which make up the whole economic picture is probably their growing preoccupation with statistical aggregates, which show a very much greater stability than the movements of the detail. The comparative stability of the aggregates cannot, however, be accounted for—as the statisticians occasionally seem to be inclined to do—by the "law of large numbers" or the mutual compensation of random changes. The number of elements with which we have to deal is not large enough for such accidental forces to produce stability. The continuous flow of goods and services is maintained by constant deliberate adjustments, by new dispositions made every day in the light of circumstances not known the day before, by B stepping in at once when A fails to deliver. Even the large and highly mechanized plant keeps going largely because of an environment upon which it can draw for all sorts of unexpected needs; tiles for its roof, stationery for its forms, and all the thousand and one kinds of equipment in which it cannot be self-contained and which the plans for the operation of the plant require to be readily available in the market.

H.16

This is, perhaps, also the point where I should briefly mention the fact that the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form. The statistics which such a central authority would have to use would have to be arrived at precisely by abstracting from minor differences between the things, by lumping together, as resources of one kind, items which differ as regards location, quality, and other particulars, in a way which may be very significant for the specific decision. It follows from this that central planning based on statistical information by its nature cannot take direct account of these circumstances of time and place and that the central planner will have to find some way or other in which the decisions depending on them can be left to the "man on the spot."

V H.17

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used. But the "man on the spot" cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.

H.18

How much knowledge does he need to do so successfully? Which of the events which happen beyond the horizon of his immediate knowledge are of relevance to his immediate decision, and how much of them need he know?

H.19

There is hardly anything that happens anywhere in the world that mightnot have an effect on the decision he ought to make. But he need not know of these events as such, nor of all their effects. It does not matter for himwhy at the particular moment more screws of one size than of another are wanted, why paper bags are more readily available than canvas bags, or whyskilled labor, or particular machine tools, have for the moment become more difficult to obtain. All that is significant for him is how much more or lessdifficult to procure they have become compared with other things with which he is also concerned, or how much more or less urgently wanted are the alternative things he produces or uses. It is always a question of the relative importance of the particular things with which he is concerned, and the causes which alter their relative importance are of no interest to him beyond the effect on those concrete things of his own environment.

H.20

It is in this connection that what I have called the "economic calculus" proper helps us, at least by analogy, to see how this problem can be solved, and in fact is being solved, by the price system. Even the single controlling mind, in possession of all the data for some small, self-contained economic system, would not—every time some small adjustment in the allocation of resources had to be made—go explicitly through all the relations between ends and means which might possibly be affected. It is indeed the great contribution of the pure logic of choice that it has demonstrated conclusively that even such a single mind could solve this kind of problem only by constructing and constantly using rates of equivalence (or "values," or "marginal rates of substitution"), i.e., by attaching to each kind of scarce resource a numerical index which cannot be derived from any property possessed by that particular thing, but which reflects, or in which is condensed, its significance in view of the whole means-end structure. In any small change he will have to consider only these quantitative indices (or "values") in which all the relevant information is concentrated; and, by adjusting the quantities one by one, he can appropriately rearrange his dispositions without having to solve the whole puzzle ab initio or without needing at any stage to survey it at once in all its ramifications.

H.21

Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan. It is worth contemplating for a moment a very simple and commonplace instance of the action of the price system to see what precisely it accomplishes. Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose—and it is very significant that it does not matter—which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all this without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes. The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.

VI H.22

We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid. (Even when quoted prices have become quite rigid, however, the forces which would operate through changes in price still operate to a considerable extent through changes in the other terms of the contract.) The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.

H.23

Of course, these adjustments are probably never "perfect" in the sense in which the economist conceives of them in his equilibrium analysis. But I fear that our theoretical habits of approaching the problem with the assumption of more or less perfect knowledge on the part of almost everyone has made us somewhat blind to the true function of the price mechanism and led us to apply rather misleading standards in judging its efficiency. The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. This is enough of a marvel even if, in a constantly changing world, not all will hit it off so perfectly that their profit rates will always be maintained at the same constant or "normal" level.

H.24

I have deliberately used the word "marvel" to shock the reader out of the complacency with which we often take the working of this mechanism for granted. I am convinced that if it were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind. Its misfortune is the double one that it is not the product of human design and that the people guided by it usually do not know why they are made to do what they do. But those who clamor for "conscious direction"—and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously—should remember this: The problem is precisely how to extend the span of our utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do.

H.25

The problem which we meet here is by no means peculiar to economics but arises in connection with nearly all truly social phenomena, with language and with most of our cultural inheritance, and constitutes really the central theoretical problem of all social science. As Alfred Whitehead has said in another connection, "It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them." This is of profound significance in the social field. We make constant use of formulas, symbols, and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess. We have developed these practices and institutions by building upon habits and institutions which have proved successful in their own sphere and which have in turn become the foundation of the civilization we have built up.

H.26

The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coördinated utilization of resources based on an equally divided knowledge has become possible. The people who like to deride any suggestion that this may be so usually distort the argument by insinuating that it asserts that by some miracle just that sort of system has spontaneously grown up which is best suited to modern civilization. It is the other way round: man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible. Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the "state" of the termite ants, or some other altogether unimaginable type. All that we can say is that nobody has yet succeeded in designing an alternative system in which certain features of the existing one can be preserved which are dear even to those who most violently assail it—such as particularly the extent to which the individual can choose his pursuits and consequently freely use his own knowledge and skill.

VII H.27

It is in many ways fortunate that the dispute about the indispensability of the price system for any rational calculation in a complex society is now no longer conducted entirely between camps holding different political views. The thesis that without the price system we could not preserve a society based on such extensive division of labor as ours was greeted with a howl of derision when it was first advanced by von Mises twenty-five years ago. Today the difficulties which some still find in accepting it are no longer mainly political, and this makes for an atmosphere much more conducive to reasonable discussion. When we find Leon Trotsky arguing that "economic accounting is unthinkable without market relations"; when Professor Oscar Lange promises Professor von Mises a statue in the marble halls of the future Central Planning Board; and when Professor Abba P. Lerner rediscovers Adam Smith and emphasizes that the essential utility of the price system consists in inducing the individual, while seeking his own interest, to do what is in the general interest, the differences can indeed no longer be ascribed to political prejudice. The remaining dissent seems clearly to be due to purely intellectual, and more particularly methodological, differences.

H.28

A recent statement by Professor Joseph Schumpeter in his Capitalism, Socialism, and Democracy provides a clear illustration of one of the methodological differences which I have in mind. Its author is pre-eminent among those economists who approach economic phenomena in the light of a certain branch of positivism. To him these phenomena accordingly appear as objectively given quantities of commodities impinging directly upon each other, almost, it would seem, without any intervention of human minds. Only against this background can I account for the following (to me startling) pronouncement. Professor Schumpeter argues that the possibility of a rational calculation in the absence of markets for the factors of production follows for the theorist "from the elementary proposition that consumers in evaluating ('demanding') consumers' goods ipso facto also evaluate the means of production which enter into the production of these goods."*1

H.29

Taken literally, this statement is simply untrue. The consumers do nothing of the kind. What Professor Schumpeter's "ipso facto" presumably means is that the valuation of the factors of production is implied in, or follows necessarily from, the valuation of consumers' goods. But this, too, is not correct. Implication is a logical relationship which can be meaningfully asserted only of propositions simultaneously present to one and the same mind. It is evident, however, that the values of the factors of production do not depend solely on the valuation of the consumers' goods but also on the conditions of supply of the various factors of production. Only to a mind to which all these facts were simultaneously known would the answer necessarily follow from the facts given to it. The practical problem, however, arises precisely because these facts are never so given to a single mind, and because, in consequence, it is necessary that in the solution of the problem knowledge should be used that is dispersed among many people.

H.30

The problem is thus in no way solved if we can show that all the facts, ifthey were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world.

H.31

That an economist of Professor Schumpeter's standing should thus have fallen into a trap which the ambiguity of the term "datum" sets to the unwary can hardly be explained as a simple error. It suggests rather that there is something fundamentally wrong with an approach which habitually disregards an essential part of the phenomena with which we have to deal: the unavoidable imperfection of man's knowledge and the consequent need for a process by which knowledge is constantly communicated and acquired. Any approach, such as that of much of mathematical economics with its simultaneous equations, which in effect starts from the assumption that people's knowledge corresponds with the objective facts of the situation, systematically leaves out what is our main task to explain. I am far from denying that in our system equilibrium analysis has a useful function to perform. But when it comes to the point where it misleads some of our leading thinkers into believing that the situation which it describes has direct relevance to the solution of practical problems, it is high time that we remember that it does not deal with the social process at all and that it is no more than a useful preliminary to the study of the main problem.

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External Links to Document

http://www.econlib.org/library/Essays/hykKnw1.html

http://home.uchicago.edu/~vlima/courses/econ200/spring01/hayek.pdf

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FA HAYEK - http://asderathoslchaimclassicalliberalism.blogspot.com/2010/01/friedrich-august-von-hayek.html

FDR's Letter to Luther C. Steward about Public Sector Unions

August 16, 1937

My dear Mr. Steward:

As I am unable to accept your kind invitation to be present on the occasion of the Twentieth Jubilee Convention of the National Federation of Federal Employees, I am taking this method of sending greetings and a message.
Reading your letter of July 14, 1937, I was especially interested in the timeliness of your remark that the manner in which the activities of your organization have been carried on during the past two decades "has been in complete consonance with the best traditions of public employee relationships." Organizations of Government employees have a logical place in Government affairs.
The desire of Government employees for fair and adequate pay, reasonable hours of work, safe and suitable working conditions, development of opportunities for advancement, facilities for fair and impartial consideration and review of grievances, and other objectives of a proper employee relations policy, is basically no different from that of employees in private industry. Organization on their part to present their views on such matters is both natural and logical, but meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the Government.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that "under no circumstances shall this Federation engage in or support strikes against the United States Government."
I congratulate the National Federation of Federal Employees the twentieth anniversary of its founding and trust that the convention will, in every way, be successful.

Very sincerely yours,

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Mr. Luther C. Steward,
President,
National Federation of Federal Employees,
10 Independence Avenue, S.W., Washington, D.C.
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SOURCE -
http://www.presidency.ucsb.edu/ws/index.php?pid=15445#axzz1Ja9JpaGC
http://www.scribd.com/doc/37000401/FDR-Opposes-Federal-Unions
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APP Note: Although this letter appears to be signed, "Very sincerely yours, Mr. Luther C. Steward, President, National Federation of Federal Employees, 10 Independence Avenue, S.W., Washington, D.C.," the letter is from Roosevelt to Steward. The placement of the addressee's name and address at the bottom of the document was an editorial decision in the original "Public Papers and Addresses of Franklin D. Roosevelt." The American Presidency Project's policy is to reproduce documents in their original form.

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Citation: John T. Woolley and Gerhard Peters,The American Presidency Project[online]. Santa Barbara, CA. Available from World Wide Web: http://www.presidency.ucsb.edu/ws/?pid=15445.

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Read more at the American Presidency Project:Franklin D. Roosevelt: Letter on the Resolution of Federation of Federal Employees Against Strikes in Federal Servicehttp://www.presidency.ucsb.edu/ws/index.php?pid=15445#ixzz1Ja9pPUDY
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In the current political climate the issue of public sector unions [that is unionization of govt. workers] has become an issue, [using colloquial misnomers of political affiliation] the left has claimed the right to be working to destroy "Collective Bargaining Rights", making no distinction between Public & Private Sector, Unions. The right has blanketly stated that FDR [The Father of the Modern Union] was against Govt. Sector Unions. Upon investigation, this letter has shown that FDR believed that govt. workers should be set apart to the point that they be prohibited from striking; I'll leave the particulars to nuanced interpretation.

-Asderathos, 4-15-2011

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Jefferson's Letter to Madison Sep 6, 1789

Thomas Jefferson's Letter To James Madison Paris, Sep. 6, 1789 http://www.let.rug.nl/usa/P/tj3/writings/brf/jefl81.htm http://press-pubs.uchicago.edu/founders/documents/v1ch2s23.html I sit down to write to you without knowing by what occasion I shall send my letter. I do it because a subject comes into my head which I would wish to develope a little more than is practicable in the hurry of the moment of making up general dispatches. [The Earth Belongs To The Living: Debt] The question Whether one generation of men has a right to bind another, seems never to have been started either on this or our side of the water. Yet it is a question of such consequences as not only to merit decision, but place also, among the fundamental principles of every government. The course of reflection in which we are immersed here on the elementary principles of society has presented this question to my mind; and that no such obligation can be so transmitted I think very capable of proof.--I set out on this ground, which I suppose to be self evident, "that the earth belongs in usufruct[1] to the living": that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society. If the society has formed no rules for the appropriation of it's lands in severality, it will be taken by the first occupants. These will generally be the wife and children of the decedent. If they have formed rules of appropriation, those rules may give it to the wife and children, or to some one of them, or to the legatee of the deceased. So they may give it to his creditor. But the child, the legatee, or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject. Then no man can, by natural right,oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might, during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be the reverse of our principle. What is true of every member of the society individually, is true of them all collectively, since the rights of the whole can be no more than the sum of the rights of the individuals.--To keep our ideas clear when applying them to a multitude, let us suppose a whole generation of men to be born on the same day, to attain mature age on the same day, and to die on the same day, leaving a succeeding generation in the moment of attaining their mature age all together. Let the ripe age be supposed of 21. years, and their period of life 34. years more, that being the average term given by the bills of mortality to persons who have already attained 21. years of age. Each successive generation would, in this way, come on, and go off the stage at a fixed moment, as individuals do now. Then I say the earth belongs to each of these generations, during it's course, fully, and in their own right. The 2d. generation receives it clear of the debts and incumberances of the 1st. the 3d of the 2d. and so on. For if the 1st. could charge it with a debt, then the earth would belong to the dead and not the living generation. Then no generation can contract debts greater than may be paid during the course of it's own existence. At 21. years of age they may bind themselves and their lands for 34. years to come: at 22. for 33: at 23. for 32. and at 54. for one year only; because these are the terms of life which remain to them at those respective epochs.--But a material difference must be noted between the succession of an individual, and that of a whole generation. Individuals are parts only of a society, subject to the laws of the whole. These laws may appropriate the portion of land occupied by a decedent to his creditor rather than to any other, or to his child on condition he satisfies the creditor. But when a whole generation, that is, the whole society dies, as in the case we have supposed, and another generation or society succeeds, this forms a whole, and there is no superior who can give their territory to a third society, who may have lent money to their predecessors beyond their faculties of paying. What is true of a generation all arriving to self-government on the same day, and dying all on the same day, is true of those in a constant course of decay and renewal, with this only difference. A generation coming in and going out entire, as in the first case, would have a right in the 1st. year of their self-dominion to contract a debt for 33. years, in the 10th. for 24. in the 20th. for 14. in the 30th. for 4. whereas generations, changing daily by daily deaths and births, have one constant term, beginning at the date of their contract, and ending when a majority of those of full age at that date shall be dead. The length of that term may be estimated from the tables of mortality, corrected by the circumstances of climate, occupation &c. peculiar to the country of the contractors. Take, for instance, the table of M. de Buffon wherein he states 23,994 deaths, and the ages at which they happened. Suppose a society in which 23,994 persons are born every year, and live to the ages stated in this table. The conditions of that society will be as follows. 1st. It will consist constantly of 617,703. persons of all ages. 21y. Of those living at any one instant of time, one half will be dead in 24. years 8. months. 3dly. 1[8],675 will arrive every year at the age of 21. years complete. 41y. It will constantly have 348,417 persons of all ages above 21. years. 5ly. And the half of those of 21. years and upwards living at any one instant of time will be dead in 18. years 8. months, or say 19. years as the nearest integral number. Then 19. years is the term beyond which neither the representatives of a nation, nor even the whole nation itself assembled, can validly extend a debt. To render this conclusion palpable by example, suppose that Louis XIV. and XV. had contracted debts in the name of the French nation to the amount of 10,000 milliards of livres, and that the whole had been contracted in Genoa. The interest of this sum would be 500. milliards, which is said to be the whole rent roll or nett proceeds of the territory of France. Must the present generation of men have retired from the territory in which nature produced them, and ceded it to the Genoese creditors? No. They have the same rights over the soil on which they were produced, as the preceding generations had. They derive these rights not from their predecessors, but from nature. They then and their soil are by nature clear of the debts of their predecessors. Again suppose Louis XV. and his cotemporary generation had said to the money-lenders of Genoa, give us money that we may eat, drink, and be merry in our day; and on condition you will demand no interest till the end of 19. years you shall then for ever after receive an annual interest of 125/8 per cent. The money is lent on these conditions, is divided among the living, eaten, drank, and squandered. Would the present generation be obliged to apply the produce of the earth and of their labour to replace their dissipations? Not at all. I suppose that the recieved opinion, that the public debts of one generation devolve on the next, has been suggested by our seeing habitually in private life that he who succeeds to lands is required to pay the debts of his ancestor or testator: without considering that this requisition is municipal only, not moral; flowing from the will of the society, which has found it convenient to appropriate lands, become vacant by the death of their occupant, on the condition of a paiment of his debts: but that between society and society, or generation and generation, there is no municipal obligation, no umpire but the law of nature. We seem not to have percieved that, by the law of nature, one generation is to another as one independant nation to another. The interest of the national debt of France being in fact but a two thousandth part of it's rent roll, the paiment of it is practicable enough: and so becomes a question merely of honor, or of expediency. But with respect to future debts, would it not be wise and just for that nation to declare, in the constitution they are forming, that neither the legislature, nor the nation itself, can validly contract more debt than they may pay within their own age, or within the term of 19. years? And that all future contracts will be deemed void as to what shall remain unpaid at the end of 19. years from their date? This would put the lenders, and the borrowers also, on their guard. By reducing too the faculty of borrowing within it's natural limits, it would bridle the spirit of war, to which too free a course has been procured by the inattention of money-lenders to this law of nature, that succeeding generations are not responsible for the preceding. [The Earth Belongs To The Living: Govt.] On similar ground it may be proved that no society can make a perpetual constitution, or even a perpetual law. The earth belongs always to the living generation. They may manage it then, and what proceeds from it, as they please, during their usufruct. They are masters too of their own persons, and consequently may govern them as they please. But persons and property make the sum of the objects of government. The constitution and the laws of their predecessors extinguished then in their natural course with those who gave them being. This could preserve that being till it ceased to be itself, and no longer. Every constitution then, and every law, naturally expires at the end of 19 years. If it be enforced longer, it is an act of force, and not of right.--It may be said that the succeeding generation exercising in fact the power of repeal, this leaves them as free as if the constitution or law has been expressly limited to 19 years only. In the first place, this objection admits the right, in proposing an equivalent. But the power of repeal is not an equivalent. It might be indeed if every form of government were so perfectly contrived that the will of the majority could always be obtained fairly and without impediment. But this is true of no form. The people cannot assemble themselves. Their representation is unequal and vicious. Various checks are opposed to every legislative proposition. Factions get possession of the public councils. Bribery corrupts them. Personal interests lead them astray from the general interests of their constituents: and other impediments arise so as to prove to every practical man that a law of limited duration is much more manageable than one which needs a repeal. This principle that the earth belongs to the living, and not to the dead, is of very extensive application and consequences, in every country, and most especially in France. It enters into the resolution of the questions Whether the nation may change the descent of lands holden in tail? Whether they may change the appropriation of lands given antiently to the church, to hospitals, colleges, orders of chivalry, and otherwise in perpetuity? Whether they may abolish the charges and privileges attached on lands, including the whole catalogue ecclesiastical and feudal? It goes to hereditary offices, authorities and jurisdictions; to hereditary orders, distinctions and appellations; to perpetual monopolies in commerce, the arts and sciences; with a long train of et ceteras: and it renders the question of reimbursement a question of generosity and not of right. In all these cases, the legislature of the day could authorize such appropriations and establishments for their own time, but no longer; and the present holders, even where they, or their ancestors, have purchased, are in the case of bonâ fide purchasers of what the seller had no right to convey. Turn this subject in your mind, my dear Sir, and particularly as to the power of contracting debts; and develope it with that perspicuity and cogent logic so peculiarly yours. Your station in the councils of our country gives you an opportunity of producing it to public consideration, of forcing it into discussion. At first blush it may be rallied, as a theoretical speculation: but examination will prove it to be solid and salutary. It would furnish matter for a fine preamble to our first law for appropriating the public revenue; and it will exclude at the threshold of our new government the contagious and ruinous errors of this quarter of the globe, which have armed despots with means, not sanctioned by nature, for binding in chains their fellow men. We have already given in example one effectual check to the Dog of war by transferring the power of letting him loose from the Executive to the Legislative body, from those who are to spend to those who are to pay. I should be pleased to see this second obstacle held out by us also in the first instance. No nation can make a declaration against the validity of long-contracted debts so disinterestedly as we, since we do not owe a shilling which may not be paid with ease, principal and interest, within the time of our own lives.--Establish the principle also in the new law to be passed for protecting copyrights and new inventions, by securing the exclusive right for 19. instead of 14. years. Besides familiarising us to this term, it will be an instance the more of our taking reason for our guide, instead of English precedent, the habit of which fetters us with all the political heresies of a nation equally remarkeable for it's early excitement from some errors, and long slumbering under others. _____________________________________________________________________

[1] - Usufruct: right to the use and profits of the property of another without damaging it; the legal right to use and derive profit or benefit from property that belongs to another person, as long as the property is not damaged

The Weight of the Poor, A Strategy to End Poverty

http://www.thenation.com/article/weight-poor-strategy-end-povertyby Frances Fox Piven and Richard Cloward

This article appeared in the May 2, 1966 issue of The Nation.

How can the poor be organized to press for relief from poverty? How can a broad-based movement be developed and the current disarray of activist forces be halted? These questions confront, and confound, activists today. It is our purpose to advance a strategy which affords the basis for a convergence of civil rights organizations, militant anti-poverty groups and the poor. If this strategy were implemented, a political crisis would result that could lead to legislation for a guaranteed annual income and thus an end to poverty.

The strategy is based on the fact that a vast discrepancy exists between the benefits to which people are entitled under public welfare programs and the sums which they actually receive. This gulf is not recognized in a society that is wholly and self-righteously oriented toward getting people off the welfare rolls. It is widely known, for example, that nearly 8 million persons (half of them white) now subsist on welfare, but it is not generally known that for every person on the rolls at least one more probably meets existing criteria of eligibility but is not obtaining assistance.

The discrepancy is not an accident stemming from bureaucratic inefficiency; rather, it is an integral feature of the welfare system, which, if challenged, would precipitate a profound financial and political crisis. The force for that challenge, and the strategy we propose, is a massive drive to recruit the poor onto the welfare rolls.

The distribution of public assistance has been a local and state responsibility, and that accounts in large part for the abysmal character of welfare practices. Despite the growing involvement of federal agencies in supervisory and reimbursement arrangements, state and local community forces are still decisive. The poor are most visible and proximate in the local community; antagonism toward them (and toward the agencies which are implicated with them) has always, therefore, been more intense locally than at the federal level. In recent years, local communities have increasingly felt class and ethnic friction generated by competition for neighborhoods, schools, jobs and political power. Public welfare systems are under the constant stress of conflict and opposition, made only sharper by the rising costs to localities of public aid. And, to accommodate this pressure, welfare practice everywhere has become more restrictive than welfare statute; much of the time it verges on lawlessness. Thus, public welfare systems try to keep their budgets down and their rolls low by failing to inform people of the rights available to them; by intimidating and shaming them to the degree that they are reluctant either to apply or to press claims, and by arbitrarily denying benefits to those who are eligible. A series of welfare drives in large cities would, we believe, impel action on a new federal program to distribute income, eliminating the present public welfare system and alleviating the abject poverty which it perpetrates. Widespread campaigns to register the eligible poor for welfare aid, and to help existing recipients obtain their full benefits, would produce bureaucratic disruption in welfare agencies and fiscal disruption in local and state governments. These disruptions would generate severe political strains, and deepen existing divisions among elements in the big-city Democratic coalition: the remaining white middle class, the white working-class ethnic groups and the growing minority poor. To avoid a further weakening of that historic coalition, a national Democratic administration would be constrained to advance a federal solution to poverty that would override local welfare failures, local class and racial conflicts and local revenue dilemmas. By the internal disruption of local bureaucratic practices, by the furor over public welfare poverty, and by the collapse of current financing arrangements, powerful forces can be generated for major economic reforms at the national level.

The ultimate objective of this strategy--to wipe out poverty by establishing a guaranteed annual income--will be questioned by some. Because the ideal of individual social and economic mobility has deep roots, even activists seem reluctant to call for national programs to eliminate poverty by the outright redistribution of income. Instead, programs are demanded to enable people to become economically competitive. But such programs are of no use to millions of today's poor. For example, one-third of the 35 million poor Americans are in families headed by females; these heads of family cannot be aided appreciably by job retraining, higher minimum wages, accelerated rates of economic growth, or employment in public works projects. Nor can the 5 million aged who are poor, nor those whose poverty results from the ill health of the wage earner. Programs to enhance individual mobility will chiefly benefit the very young, if not the as yet unborn. Individual mobility is no answer to the question of how to abolish the massive problem of poverty now.

It has never been the full answer. If many people in the past have found their way up from poverty by the path of individual mobility, many others have taken a different route. Organized labor stands out as a major example. Although many American workers never yielded their dreams of individual achievement, they accepted and practiced the principle that each can benefit only as the status of workers as a whole is elevated. They bargained for collective mobility, not for individual mobility; to promote their fortunes in the aggregate, not to promote the prospects of one worker over another. And if each finally found himself in the same relative economic nevertheless clear relationship to his fellows, as when he began, it was nevertheless clear that all were infinitely better off. That fact has sustained the labor movement in the face of a counter pull from the ideal of individual achievement.

But many of the contemporary poor will not rise from poverty by organizing to bargain collectively. They either are not in the labor force or are in such marginal and dispersed occupations (e.g., domestic servants) that it is extremely difficult to organize them. Compared with other groups, then, many of today's poor cannot secure a redistribution of income by organizing within the institution of private enterprise. A federal program of income redistribution has become necessary to elevate the poor en masse from poverty.

Several ways have been proposed for redistributing income through the federal government. It is not our purpose hereto assess the relative merits of these plans, which are still undergoing debate and clarification. Whatever mechanism is eventually adopted, however, it must include certain features if it is not merely to perpetuate in a new guise the present evils of the public welfare system.

First, adequate levels of income must be assured. (Public welfare levels are astonishingly low; indeed, states typically define a "minimum" standard of living and then grant only a percentage of it, so that families are held well below what the government itself officially defines as the poverty level.) Furthermore, income should be distributed without requiring that recipients first divest themselves of their assets, as public welfare now does, thereby pauperizing families as a condition of sustenance.

Second, the right to income must be guaranteed, or the oppression of the welfare poor will not be eliminated. Because benefits are conditional under the present public welfare system, submission to arbitrary governmental power is regularly made the price of sustenance. People have been coerced into attending literacy classes or participating in medical or vocational rehabilitation regimes, on pain of having their benefits terminated. Men are forced into labor on virtually any terms lest they forfeit their welfare aid. One can prize literacy, health and work, while still vigorously opposing the right of government to compel compliance with these values.

Conditional benefits thus result in violations of civil liberties throughout the nation, and in a pervasive oppression of the poor. And these violations are not less real because the impulse leading to them is altruistic and the agency is professional. If new systems of income distribution continue to permit the professional bureaucracies to choose when to give and when to withhold financial relief, the poor will once again be surrendered to an arrangement in which their rights are diminished in the name of overcoming their vices. Those who lead an attack on the welfare system must therefore be alert to the pitfalls of inadequate but placating reforms, which give the appearance of victory to what is in truth defeat.

How much economic force can be mobilized by this strategy? This question is not easy to answer because few studies have been conducted of people who are not receiving public assistance even though they may be eligible. For the purposes of this presentation, a few facts about New York City may be suggestive. Since practices elsewhere are generally acknowledged to be even more restrictive, the estimates of unused benefits, which follow probably yield a conservative estimate of the potential force of the strategy set forth in this article.

Basic assistance for food and rent: The most striking characteristic of public welfare practice is that a great many people who appear to be eligible for assistance are not on the welfare rolls. The average monthly total of New York City residents receiving assistance in 1959 was 325,771, but according to the 1960 census., 716,000 persons (unrelated or in families) appeared to be subsisting on incomes at or below the prevailing welfare eligibility levels (e.g. $2,070 for a family of four). In that same year, 539,000 people subsisted on incomes less than 80 per cent of the welfare minimums, and 200,000 lived alone or in families on incomes reported to be less than half of eligibility levels. Thus it appears that for every person on welfare in 1959, at least one more was eligible. The results of two surveys of selected areas in Manhattan support the contention that many people subsist on incomes below welfare eligibility levels. One of these, conducted by Greenleigh Associates in 1964 in an urban-renewal area on New York's upper West Side, found 9 per cent of those not on the rolls were in such acute need that they appeared to qualify for emergency assistance. The study showed, further, that a substantial number of families that were not in a "critical" condition would probably have qualified for supplemental assistance.

The other survey, conducted in 1961 by Mobilization for Youth, had similar findings. The area from which its sample was drawn, 67 square blocks on the lower East Side, is a poor one, but by no means the poorest in New York City. Yet 13 per cent of the total sample who were not on the welfare rolls reported incomes falling below the prevailing welfare schedules for food and rent.

There is no reason to suppose that the discrepancy between those eligible for and those receiving assistance has narrowed much in the past few years. The welfare rolls have gone up, to be sure, but so have eligibility levels. Since the economic circumstances of impoverished groups in New York have not improved appreciably in the past few years, each such rise increases the number of people who are potentially eligible for some degree of assistance.

Even if one allows for the possibility that family-income figures are grossly underestimated by the census, the financial implications of the proposed strategy are still very great. In 1965, the monthly average of persons receiving cash assistance in New York was 490,000, at a total cost of $440 million; the rolls have now risen above 500,000, so that costs will exceed $500 million in 1966. An increase in the rolls of a mere 20 per cent would cost an already overburdened municipality some $100 million.

Special grants: Public assistance recipients in New York are also entitled to receive "non-recurring" grants for clothing, household equipment and furniture--including washing machines, refrigerators, beds and bedding, tables and chairs. It hardly needs to be noted that most impoverished families have grossly inadequate clothing and household furnishings. The Greenleigh study, for example, found that 52 per cent of the families on public assistance lacked anything approaching adequate furniture. This condition results because almost nothing is spent on special grants in New York. In October, 1965, a typical month, the Department of Welfare spent only $2.50 per recipient for heavy clothing and $1.30 for household furnishings. Taken together, grants of this kind amounted in 1965 to a mere $40 per person, or a total of $20 million for the entire year. Considering the real needs of families, the successful demand for full entitlements could multiply these expenditures tenfold or more--and that would involve the disbursement of many millions of dollars indeed.

One must be cautious in making generalizations about the prospects for this strategy in any jurisdiction unless the structure of welfare practices has been examined in some detail. We can, however, cite other studies conducted in other places to show that New York practices are not atypical. In Detroit, for example, Greenleigh Associates studied a large sample of households in a low-income district in 1965. Twenty per cent were already receiving assistance, but 35 percent more were judged to need it. Although the authors made no strict determination of the eligibility of these families under the laws of Michigan, they believed that "larger numbers of persons were eligible than receiving." A good many of these families did not know that public assistance was available; others thought they would be deemed ineligible; not a few were ashamed or afraid to ask.

Similar deprivations have been shown in nation-wide studies. In 1963, the federal government carried out a survey based on a national sample of 5,500 families whose benefits under Aid to Dependent Children had been terminated. Thirty-four percent of these cases were officially in need of income at the point of closing: this was true of 30 percent of the white and 44 percent of the Negro cases. The chief basis for termination given in local department records was "other reasons" (i.e., other than improvement in financial condition, which would make dependence on welfare unnecessary). Upon closer examination, these "other reasons" turned out to be "unsuitable home" (i.e., the presence of illegitimate children), "failure to comply with departmental regulations'' or "refusal to take legal action against a putative father." (Negroes were especially singled out for punitive action on the ground that children were not being maintained in "suitable homes.") The amounts of money that people are deprived of by these injustices are very great.

In order to generate a crisis, the poor must obtain benefits, which they have forfeited. Until now, they have been inhibited from asserting claims by self-protective devices within the welfare system: its capacity to limit information, to intimidate applicants, to demoralize recipients, and arbitrarily to deny lawful claims.

Ignorance of welfare rights can be attacked through a massive educational campaign Brochures describing benefits in simple, clear language, and urging people to seek their full entitlements, should be distributed door to door in tenements and public housing projects, and deposited in stores, schools, churches and civic centers. Advertisements should be placed in newspapers; sport announcements should be made on radio. Leaders of social, religious, fraternal and political groups in the slums should also be enlisted to recruit the eligible to the rolls. The fact that the campaign is intended to inform people of their legal rights under a government program, that it is a civic education drive, will lend it legitimacy.

But information alone will not suffice. Organizers will have to become advocates in order to deal effectively with improper rejections and terminations. The advocate's task is to appraise the circumstances of each case, to argue its merits before welfare, to threaten legal action if satisfaction is not given. In some cases, it will be necessary to contest decisions by requesting a "fair before the appropriate hearing" before the appropriate state supervisory agency; it may occasionally be necessary to use for redress in the courts. Hearings and court actions will require lawyers, many of whom, in cities like New York, can be recruited on a voluntary basis, especially under the banner of a movement to end poverty by a strategy of asserting legal rights. However, most cases will not require an expert knowledge of law, but only of welfare regulations; the rules can be learned by laymen, including welfare recipients themselves (who can help to man "information and advocacy" centers). To aid workers in these centers, handbooks should be prepared describing welfare rights and the tactics to employ in claiming them.

Advocacy must be supplemented by organized demonstrations to create a climate of militancy that will overcome the invidious and immobilizing attitudes which many potential recipients hold toward being "on welfare." In such a (climate, many more poor people are likely to become their own advocates and will not need to rely on aid from organizers.

As the crisis develops, it will be important to use the mass media to inform the broader liberal community about the inefficiencies and injustices of welfare. For example, the system will not be able to process many new applicants because of cumbersome and often unconstitutional investigatory procedures (which cost 20c for every dollar disbursed). As delays mount, so should the public demand that a simplified affidavit supplant these procedures, so that the poor may certify to their condition. If the system reacts by making the proof of eligibility more difficult, the demand should be made that the Department of Health, Education and Welfare dispatch "eligibility registrars" to enforce federal statutes governing local programs. And throughout the crisis, the mass media should be used to advance arguments for a new federal income distribution program. *

*In public statements, it would be important to distinguish between the income distribution function of public welfare, which should be replaced by new federal measures, and many other welfare functions, such as foster care and adoption services for children, which are not at issue in this strategy.

Although new resources in organizers and funds would have to be developed to mount this campaign, a variety of conventional agencies in the large cities could also be drawn upon for help. The idea of "welfare rights" has begun to attract attention in many liberal circles. A number of organizations, partly under the aegis of the "war against poverty," are developing information and advocacy services for low-income people [see "Poverty, Injustice and the Welfare State" by Richard A. Cloward and Richard M. Elman, The Nation, issues of February 28 and March 7]. It is not likely that these organizations will directly participate in the present strategy, for obvious political reasons. But whether they participate or not, they constitute a growing network of resources to which people can be referred for help in establishing and maintaining entitlements. In the final analysis, it does not matter who helps people to get on the rolls or to get additional entitlements, so long as the job is done.

Since this plan deals with problems of great immediacy in the lives of the poor, it should motivate some of them to involve themselves in regular organizational activities. Welfare recipients, chiefly ADC mothers, are already forming federations, committees and councils in cities across the nation; in Boston, New York, Newark, Cleveland, Chicago, Detroit and Los Angeles, to mention a few. Such groups typically focus on obtaining full entitlements for existing recipients rather than on recruiting new recipients, and they do not yet comprise a national movement. But their very existence attests to a growing readiness among ghetto residents to act against public welfare.

To generate an expressly political movement, cadres of aggressive organizers would have to come from the civil rights movement and the churches, from militant low-income organizations like those formed by the Industrial Areas Foundation (that is, by Saul Slinky), and from other groups on the Left. These activists should be quick to see the difference between programs to redress individual grievances and a large-scale social-action campaign for national policy reform.

Movements that depend on involving masses of poor people have generally failed in America. Why would the proposed strategy to engage the poor succeed?

First, this plan promises immediate economic benefits. This is a point of some importance because, whereas America's poor have not been moved in any number by radical political ideologist, they have sometimes been moved by their economic interests. Since radical movements in America have rarely been able to provide visible economic incentives, they have usually failed to secure mass participation of any kind. The conservative "business unionism" of organized labor is explained by this fact, for membership enlarged only as unionism paid off in material benefits. Union leaders have understood that their strength derives almost entirely from their capacity to provide economic rewards to members. Although leaders have increasingly acted in political spheres, their influence has been directed chiefly to matters of governmental policy affecting the well being of organized workers. The same point is made by the experience of rent strikes in Northern cities. Their organizers were often motivated by radical ideologies, but tenants have been attracted by the promise that housing improvements would quickly be made if they withheld their rent.

Second, for this strategy to succeed, one need not ask more of most of the poor than that they claim lawful benefits. Thus the plan has the extraordinary capability of yielding mass influence without mass participation, at least as the term "participation" is ordinarily understood. Mass influence in this case stems from the consumption of benefits and does not require that large groups of people be involved in regular organizational roles.

Moreover, this kind of mass influence is cumulative because benefits are continuous. Once eligibility for basic food and rent grants is established, the drain on local resources persists indefinitely. Other movements have failed precisely because they could not produce continuous and cumulative influence in the Northern rent strikes, for example, participation depended largely on immediate grievances; as soon as landlords made the most minimal repairs, participation fell away and with it the impact of the movement. Efforts to revive tenant participation organizing demonstrations around broader housing issues (e.g., the expansion of public housing) did not succeed because the incentives were not immediate.

Third, the prospects for mass influence are enhanced because this plan provides a practical basis for coalition between poor whites and poor Negroes. Advocates of low-income movements have not been able to suggest how poor whites and poor Negroes can be united in an expressly lower-class movement. Despite pleas of some Negro leaders for joint action on programs requiring integration, poor whites have steadfastly resisted making common cause with poor Negroes. By contrast, the benefits of the present plan are as great for whites as for Negroes. In the big cities, at least, it does not seem likely that poor whites, whatever their prejudice against either Negroes or public welfare, will refuse to participate when Negroes aggressively claim benefits that are unlawfully denied to them as well. One salutary consequence of public information campaigns to acquaint Negroes with their rights is that many whites will be made aware of theirs. Even if whites prefer to work through their own organizations and leaders, the consequences will be equivalent to joining with Negroes. For if the object is to focus attention on the need for new economic measures by producing a crisis over the dole, anyone who insists upon extracting maximum benefits from public welfare is in effect part of a coalition and is contributing to the cause.

The ultimate aim of this strategy is a new program for direct income distribution. What reason is there to expect that the federal government will enact such legislation in response to a crisis in the welfare system?

We ordinarily think of major legislation as taking form only through established electoral processes. We tend to overlook the force of crisis in precipitating legislative reform, partly because we lack a theoretical framework by which to understand the impact of major disruptions.

By crisis, we mean a publicly visible disruption in some institutional sphere. Crisis can occur spontaneously (e.g., riots) or as the intended result of tactics of demonstration and protest, which either generate institutional disruption or bring unrecognizable eruption to public attention. Public trouble is a political liability, it calls for action by political leaders to stabilize the situation. Because crisis usually creates or exposes conflict, it threatens to produce cleavages in a political consensus, which politicians would ordinarily act to avert.

Although crisis impels political action, it does not itself determine the selection of specific solutions. Political leaders will try to respond with proposals, which work to their advantage in the electoral process. Unless group cleavages form around issues and demands, the politician has great latitude and tends to proffer only the minimum action required to quell disturbances without risking existing electoral support. Spontaneous disruptions, such as riots, rarely produce leaders who articulate demands; thus so terms are imposed, and political leaders are permitted to respond in ways that merely restore a semblance of stability without offending other groups in a coalition.

When, however, a crisis is defined by its participants--or by other activated groups--as a matter of clear issues and preferred solutions, terms are imposed on the politicians' bid for their support. Whether political leaders then design solutions to reflect these terms depends on a two- fold calculation: first, the impact of the crisis and the issues it raises on existing alignments and, second, the gains or losses in support to be expected as a result of a proposed resolution.

As to the impact on existing alignments, issues exposed by a crisis may activate new groups, thus altering the balance of support and opposition on the issues; or it may polarize group sentiments altering the terms, which must be offered to insure the support of given constituent groups. In framing resolutions, politicians are more responsive to group shifts and are more likely to accommodate to the terms imposed when electoral coalitions threatened by crisis are already uncertain or weakening. In other words, the politician responds to group demands, not only by calculating the magnitude of electoral gains and losses, but by assessing the impact of the resolution on the stability of existing or potential coalitions. Political leaders are especially responsive to group shifts when the terms of settlement can be framed so as to shore up an existing coalition, or as a basis for the development of new and more stable alignments, without jeopardizing existing support. Then, indeed, the calculation of net gain is most secure.

The legislative reforms of the depression years, for example, were impelled not so much by organized interests exercised through regular electoral processes as by widespread economic crisis. That crisis precipitated the disruption of the regionally based coalitions underlying the old national parties. During the realignments of 1932, a new Democratic coalition was formed, based heavily on urban working-class groups. Once in power, the national Democratic leadership proposed and implemented the economic reforms of the New Deal. Although these measures were a response to the imperative of economic crisis, the types of measures enacted were designed to secure and new Democratic coalition.

The civil rights movement, to take a recent case, reveals the relationship of crisis and electoral conditions in producing legislative reform. The crisis in the South took place in the context of a weakening North-South Democratic coalition. The strains in that coalition were first evident in the Dixiecrat desertion of 1948, and continued through the Eisenhower years as the Republicans gained ground in the Southern states. Democratic party leaders at FMT tried to hold the dissident South by warding off the demands of enlarging Negro constituencies in Northern cities. Thus for two decades the national Democratic Party campaigned on strongly worded civil rights planks but enacted only token measures. The civil rights movement forced the Democrats' hand, a crumbling Southern partnership was forfeited, and major civil rights legislation was put forward, designed to insure the support of Northern Negroes and liberal elements in the Democratic coalition. That coalition emerged strong from the 1964 election, easily able to overcome the loss of Southern states to Goldwater. At the same time, the enacted legislation, particularly the Voting Rights Act, laid the ground for a new Southern Democratic coalition of moderate whites and the hitherto untapped reservoir of Southern Negro voters.

The electoral context which made crisis effective in the South is also to be found in the big cities of the nation today. Deep tensions have developed among groups comprising the political coalitions of the large cities--the historic stronghold of the Democratic Party. As a consequence, urban politicians no longer turn in the vote to national Democratic candidates it hun faillng regularity. The marked defections revealed in the elections of the 1950s and which continued until the Johnson landslide of 1964 area matter of great concern to the national party. Precisely because of this concern, a strategy to exacerbate still further the strains in the urban coalition can be expected to evoke a response from national leaders.

The weakening of the urban coalition is a result of many basic changes in the relationship of local party leadership to its constituents. First, the political machine, the distinctive and traditional mechanism for forging alliances among competing groups in the city, is now virtually defunct in most cities. Successive waves of municipal reform have deprived political leaders of control over the public resources--jobs, contracts, services and favors--which machine politicians formerly dispensed to voters in return for electoral support. Conflicts among elements in the urban Democratic coalition once held together politically because each secured a share of these benefits, cannot now be so readily contained. And as the means of placating competing groups have diminished, tensions along ethnic and class lines have multiplied. These tensions are being intensified by the encroachments of an enlarging ghetto population on jobs, schools and residential areas. Big-city mayors are thus caught between antagonistic working-class ethnic groups, the remaining middle class, and the rapidly enlarging minority poor.

Second, there are discontinuities in the relationship between the urban party apparatus and its ghetto constituents which have so far remained unexposed but which a welfare crisis would force into view. The ghetto vote has been growing rapidly and has so far returned overwhelming Democratic majorities. Nevertheless, this voting bloc is not fully integrated in the party apparatus, either through the representation of its leaders or the accommodation of its interests.

While the urban political apparatus includes members of new minority groups, these groups are by no means represented according to their increasing proportions in the population. More important, elected representation alone is not an adequate mechanism for the expression of group interests. Influence in urban politics is won not only at the polls but through the sustained activity of organized interests--such as labor unions, homeowner associations and business groups. These groups keep watch over the complex operations of municipal agencies, recognizing issues and regularly asserting their point of view through meetings with public officials, appearances at public hearings and the like, and by exploiting a whole array of channels of influence on government. Minority constituencies--at least the large proportion of them that are poor--are not regular participants in the various institutional spheres where organized interest groups typically develop. Thus the interests of the mass of minority poor are not protected by associations, which make their own or other political leaders responsive by continuously calling them to account. Urban party organizations have become, in consequence, more an avenue for the personal advancement of minority political leaders than a channel for the expression of minority-group interests. And the big city mayors, struggling to preserve an uneasy urban consensus, have thus been granted the slack to evade the conflict-generating interests of the ghetto. A crisis in public welfare would expose the tensions latent in this attenuated relationship between the ghetto vote and the urban party leadership, for it would thrust forward ghetto demands and back them with the threat of defections by voters who have so far remained both loyal and quiescent.

In the face of such a crisis, urban political leaders may well be paralyzed by a party apparatus which ties them to older constituent groups, even while the ranks of these groups are diminishing. The national Democratic leadership, however, is alert to the importance of the urban Negro vote, especially in national contests where the loyalty of other urban groups is weakening. Indeed, many of the legislative reforms of the Great Society can be understood as efforts, however feeble, to reinforce the allegiance of growing ghetto constituencies to the national Democratic Administration. In the thirties, Democrats began to put forward measures to circumvent the states in order to reach the big-city elements in the New Deal coalition; now it is becoming expedient to put forward measures to circumvent the weakened big-city mayors in order to reach the new minority poor.

Recent federal reforms have been impelled in part by widespread unrest in the ghetto, and instances of more aggressive Negro demands. But despite these signs that the ghetto vote may become less reliable in the future, there has been as yet no serious threat of massive defection. The national party has therefore not put much pressure on its urban branches to accommodate the minority poor. The resulting reforms have consequently been quite modest (e.g., the war against poverty, with its emphasis on the "involvement of the poor," is an effort to make the urban party apparatus somewhat more accommodating).

A welfare crisis would, of course, produce dramatic local political crisis, disrupting and exposing rifts among urban groups. Conservative Republicans are always ready to declaim the evils of public welfare, and they would probably be the first to raise a hue and cry. But deeper and politically more telling conflicts would take place within the Democratic coalition. Whites--both working-class ethnic groups and many in the middle class--would be aroused against the ghetto poor, while liberal groups, which until recently have been comforted by the notion that the poor are few and, in any event, receiving the beneficent assistance of public welfare would probably support the movement. Group conflict, spelling political crisis for the local party apparatus, would thus become acute as welfare rolls mounted and the strains on local budgets became more severe. In New York City, where the Mayor is now facing desperate revenue shortages, welfare expenditures are already second only to those for public education.

It should also be noted that welfare costs are generally shared by local, state and federal governments, so that the crisis in the cities would intensify the struggle over revenues that is chronic in relations between cities and states. If the past is any predictor of the future, cities will fail to procure relief from this crisis by persuading states to increase their proportionate share of urban welfare costs, for state legislatures have been notoriously unsympathetic to the revenue needs of the city (especially where public welfare and minority groups are concerned).

If this strategy for crisis would intensify group cleavages, a federal income solution would not further exacerbate them. The demands put forward during recent civil rights drives in the Northern cities aroused the opposition of huge majorities. Indeed, such fierce resistance was evoked (e.g. school boycotts, followed by counter-boycotts), that accessions by political leaders would have provoked greater political turmoil than the protests themselves, for profound class and ethnic interests are at stake in the employment, educational and residential institutions of our society. By contrast, legislative measures to provide direct income to the poor would permit national Democratic leaders to cultivate ghetto constituencies without unduly antagonizing other urban groups, as is the case when the battle lines are drawn over schools, housing or jobs. Furthermore, a federal income program would not only redeem local governments from the immediate crisis but would permanently relieve them of the financially and politically onerous burdens of public welfare*--a function which generates support from none and hostility from many, not least of all welfare recipients.

We suggest, in short, that if pervasive institutional rescuer particular reforms are not yet possible, requiring as they do expanded Negro political power and the development of new political alliances, crisis tactics can nevertheless be employed to secure particular reforms in the short run by exploiting weaknesses in current political alignments. Because the urban coalition stands weakened by group conflict today, disruption and threats of disaffection will count powerfully, provided that national leaders can respond with solutions, which retain the support of ghetto constituencies while avoiding new group antagonisms and bolstering the urban party apparatus. These are the conditions, then, for an effective crisis strategy in the cities to secure an end to poverty.

No strategy, however confident its advocates may be, is foolproof. But if unforeseen contingencies thwart this plan to bring about new federal legislation in the field of poverty, it should also be noted that there would be gains even in defeat. For one thing, the plight of many poor people would be somewhat eased in the course of an assault upon public welfare. Existing recipients would come to know their rights and how to defend them, thus acquiring dignity where none now exists; and millions of dollars in withheld welfare benefits would become available to potential recipients now--not several generations from now. Such an attack should also be welcome to those currently concerned with programs designed to equip the young to rise out of poverty (e.g., Head Start), for surely children learn more readily when the oppressive burden of financial insecurity is lifted from the shoulders of their parents. And those seeking new ways to engage the Negro politically should remember that public resources have always been the fuel for low-income urban political organization. If organizers can deliver millions of dollars in cash benefits to the ghetto masses, it seems reasonable to expect that the masses will deliver their loyalties to their benefactors. At least, they have always done so in the past.

http://asderathoslchaimamericanleft.blogspot.com/2010/01/cloward-piven-strategy-to-end-poverty.html
http://www.thenation.com/article/weight-poor-strategy-end-poverty