Unrestrained free markets destroy the middle class, push working people down the economic ladder and concentrate wealth at the top. But promoters of this hyper-capitalism, who dominate the U.S. media debate, simply blame the poor for poverty, as Lawrence Davidson explains.

By Lawrence Davidson

Most of the poverty in the United States is artificially manufactured. It is poverty created in the pursuit of “free market ideals,” expressed in recent times by the imposition of neoliberal economic policies – the sort of policies that cut taxes on the wealthy, do away with fiscal and other business regulations, shred the social safety net, and erode middle-class stability – all while singing the praises of self-reliance and individual responsibility.

As a result we have done very well in making the rich richer and the poor both poorer and more numerous.

How many poor people are there in the United States? According to Current Population Survey (CPS), which puts out the government’s official figures, as of 2012 about 15 percent of the population, or some 46.5 million people, were living in poverty. The rate for children under 18 comes in higher, at about 21.8 percent.

The U.S. government measures poverty in monetary terms. In 2012 poverty was defined as yearly total income of $23,050 or less for a family of four. The figure is adjusted for individuals or other size families. Then there is the depressing fact that “most Americans (58.5 percent) will spend at least one year below the poverty line at some point between the ages of 25 and 75.”

There happens to be more than one level to this economic version of hell, and so we should take note of the category of “deep poverty.” Deep poverty is defined as having an income that is 50 percent of the official poverty level. This part of the population is growing.

In my area, which takes in southeast Pennsylvania and southern New Jersey, the percentage in deep poverty runs from 5 to 19 percent, depending on the county. These are people who, according to social service and charity workers, “have given up hope” and “given up on finding jobs.”

Consider what all this really means. Our economic system is condemning at least 48.5 million people to high rates of un- or underemployment, poor performance in school and at work (when it is available), poor nutrition and eating habits, high instances of drug abuse, high crime rates, homelessness, high rates of preventable diseases, shorter life-spans, and all the other vicissitudes typically associated with a life of poverty.

Yet neoliberals and their allies would say none of this is society’s fault or responsibility, rather it is the fault of the individual who, living in a “free” economic environment, makes his or her own choices and then must live with the consequences.

Well, that is one particularly inhumane way of looking at the situation. However, we have proof from relatively recent U.S. history that poverty can be ameliorated through government action without seriously disrupting “market choice.”

Back in the mid-1960s millions of citizens marched on Washington for “jobs and freedom,” and President Lyndon Johnson responded with his War on Poverty programs. Those programs reduced poverty significantly and did so without transforming the U.S. into a socialist republic. Unfortunately, this momentum was not to last.

Two things brought it to a crashing halt: a murderous war in Vietnam and the tragically wrongheaded neoliberal economic policies mentioned above. We are still stuck in this rut. We are still at war (though now it is in the Middle East) and our economic policies continue to be self-destructive.

Cognitive Dysfunction

The neoliberal outlook is demonstrably wrong in a significant way. The notion that the poor can make “free and rational choices” and thus can be held responsible for their situation is incorrect. There is accumulating evidence that poverty literally “messes with your mind” in a way that obstructs responsible choices.

In fact, the “free market” contributes to an environment that makes the poor decidedly unfree: confused, preoccupied, and feeling overwhelmed and hopeless. In other words, being poor makes you cognitively dysfunctional.

The latest research to show this was published in August 2013 in the journal Science and is titled “Poverty Impedes Cognitive Function.” The gist of the argument is, “Poverty captures attention, triggers intrusive thoughts, and reduces cognitive resources.” In other words, the more preoccupied one is with troubles, the less able one is to muster the “cognitive resources” necessary to rationally “guide choice and action.”

Most people find themselves overwhelmed with problems now and then, but not constantly. What living in poverty does is to hit a person with a toxic cocktail of overwhelming problems day in and day out: financial problems, health problems, parenting issues, victimization by criminals and others, and the problem of just finding and keeping a job.

The authors also point out that the IQ difference between those living in poverty and those living above the poverty line can be as high as 13 points. This difference is not a function of genetics or race. It is created by the environment of poverty itself.

This study is political dynamite. It lends support to the assertion that as long as neoliberal economics claims our allegiance, we will continue to condemn tens of millions of our citizens to a life not only of want, but also of high anxiety and poor cognitive ability. This puts the lie to the popular myth that the poor are disadvantaged because most of them are congenitally lazy.

It likewise challenges the conclusions of such works as Richard Herrnstein and Charles Murray’s The Bell Curve, which attributed at least part of the statistical difference in intellectual performance between American blacks and white to genetics. In truth, whatever statistical difference there is does not reflect inherent intellectual ability so much as high levels of long-term stress, which reduces a person’s ability to develop and apply their cognitive strengths.

It is quite interesting how the authors of the Science article conclude their piece. As it turns out, they have chosen to sidestep the real implications of their own data. Thus, they tell us “this perspective has important policy implications. First, policy-makers should beware of imposing cognitive taxes on the poor.”

What does that mean? It means that policy-makers should try to reduce the number of forms the poor have to fill out, the number of “lengthy interviews” they have to experience, the number of “new rules” they have to “decipher,” all of which “consume cognitive resources” that we now know the poor have less of than those who are better off.

Also, policy-makers should time their demands on the poor for specific periods when they are best able to handle them, such as when they receive whatever periodic income that they do get and momentarily feel less monetary stress. These conclusions constitute a rather shocking anticlimactic letdown!

The authors have helped us see the enormous damage poverty does. In response society has a moral obligation to deal with more than forms and lengthy interviews. History tells us that we can do, and indeed have done, much better.

Short of radical changes in our economic thinking, what the poor in the U.S. need is another “War on Poverty.” Indeed, the obligation is not just a moral one. There is a collective economic self-interest to minimize poverty for to do so will decrease income inequality, increase overall health, promote social stability and lessen crime. It will also promote consumption, which should make the capitalists among us happy.

Do our politicians understand any of this? Seems not. Just this week the House of Representatives voted to cut the Food Stamp program by some $40 billion. That is neoliberal economics in action and proof positive that ideology and prejudice are stronger than scientific research when it comes to policy formulation.

Is there a way to reverse this stupidity? Yes, but it will take mass action. It is time to consider replaying the 1960s and force the politicians to act responsibly despite themselves.

Lawrence Davidson is a history professor at West Chester University in Pennsylvania. He is the author of Foreign Policy Inc.: Privatizing America’s National Interest; America’s Palestine: Popular and Official Perceptions from Balfour to Israeli Statehood; and Islamic Fundamentalism.