According to many neoliberal politicians and economists, assistance to the unemployed and poor always creates more of the poverty it aims to alleviate; therefore removing welfare benefits and social support is necessary to compel the ‪‎poor‬ and unemployed to work. What is the origin of this erroneous, but still widely accepted, idea?

Analizing Karl Polanyi‘s canonical writings, Margaret Somers & Fred Block show in their article that this idea is rooted in the bifurcated view of human nature that emerged in Anglo-American culture in tandem with the birth of Political Economy in the late 18th century.

In that setting, a “free market” society consisted of two ‘races:’ property owners and laborers. While the first embodied the high moral character of Enlightenment rationality, the latter, also known simply as ‘the poor’ because they had to work to survive, were designed not as moral actors but as people who were motivated only by base instincts. They could do little more than ‘think through the body.’

Thomas Robert Malthus, one of the founders of classical political economy, expressed alarm that despite a ‘generous’ welfare system, poverty in England kept increasing. While others pointed to the effects of large-scale displacement from agriculture and rural crafts, Malthus reasoned from what Somers & Block call “the perversity thesis”—the claim that assistance to the unemployed always creates more of the poverty it aims to alleviate. In this conception, receiving unearned resources incentivizes the unemployed not to seek work, thus perpetuating their own condition.

The linchpin of the perversity thesis—just as in modern economic theory—is that scarcity is the normal state of human life. Hunger alone disciplines the unemployed to seek work and control childbirth. Remove that scarcity by ‘artificial’ means—like food stamps, unemployment benefits, or an adequate minimum wage—and the incentive to work also disappears. In his diatribe against the poor for procreating recklessly, Malthus adds a slippery caveat about the contrasting behavior of the well-off: while the lower classes are biologically driven to respond to base incentives, the better-off exercise ‘moral restraint’ and ‘prudence’ in the face of sexual temptation.

Somers & Block stress that Malthus’ enduring “contribution” was to make scarcity into the ‘virtuous suffering’ that underpins the possibility of a productive workforce. This belief continues to justify the eradication of policies and regulations that once laid the groundwork for greater equality and a flourishing middle class. (To the full article- open access)

>>>See more here on Block & Somers’ superb book The Power of Market Fundamentalism: Karl Polanyi’s Critique