Theoretical Foundations for Government Subsidies to Low-Income People

Abstract

Measurement is essential in the making and carrying out of policy or in the administration of scarce resources. The theoretical underpinnings we have examined are conceptually helpful but operationally frustrating. The price system in which the phenomenon of poverty continues, despite its unique economic performance, has not solved the problem of a minimum acceptable standard of living for each member of the society nor the problem of relative poverty, economic disparity, or distributional inequity. Whatever the name, matters are skewed in favor of those who have the economic power to make the price system work in their direction. This is to be expected. The key condition for making the price system work more favorably for any group is the continuation of the democratic freedom for any group to organize, to lobby, and to marshall its ingenuities to influence policies making the price system work more favorably in the interests of the less powerful. In a democratic society, the apparently powerless poor must in their own self-interest seek to become the powerful poor through their own organizational and lobbyist ingenuities.