Cashing Out

| Wed Mar. 9, 2011 12:11 PM PST

Matt Yglesias, who's a big fan of cashing out welfare benefits and thinks that "folk morality" gets in the way of implementing better policies, points us to a short piece in the Economist about a pilot program to help the homeless in London:

The Square Mile has more rough sleepers than any other London borough except Westminster: 338 were identified by Broadway, a charity, over the past year, most of whom had spent more than a year on the streets....Broadway tried a brave and novel approach: giving each homeless person hundreds of pounds to be spent as they wished....One asked for a new pair of trainers and a television; another for a caravan on a travellers’ site in Suffolk, which was duly bought for him. Of the 13 people who engaged with the scheme, 11 have moved off the streets. The outlay averaged £794 ($1,277) per person (on top of the project’s staff costs). None wanted their money spent on drink, drugs or bets.

Hold on a second. Am I reading this right? Broadway identified 338 long-term homeless, but only 13 actually engaged with them? Something doesn't add up here. It hardly seems credible that if you offered 338 people free money or stuff with no strings attached, only 13 would take you up on it. But if that is what happened, then the big result from the experiment isn't that 11 out of 13 people benefited in some way, it's that only 13 out of 338 were even willing to participate.

I don't know. Maybe Broadway identified 338 homeless people but only approached 13 of them? In any case, it hardly matters: it's one thing to surprise a handful of people with an offer of assistance and receive fairly modest requests. It would be quite another to set this up as a large-scale, ongoing program. Does anyone doubt for a second that once people figured out what was going on, the size of the requests would skyrocket quickly?

There's an enormous literature on the pros and cons of cash welfare vs. in-kind benefits (i.e., housing, food stamps, Medicaid, etc.), and this is hardly going to be settled in a few blog posts. But as with anything else in a democratic society, social welfare programs have to deal not just with the technocratic merits of one approach over another, but with the views of the taxpayers who are funding the programs. And taxpayers, like it or not, are wary about handing out large sums of money to people with no strings attached. For one thing, Broadway's experiment aside, a fair amount of no-strings cash would get spent on booze, drugs, and gambling, and taxpayers are understandably non-thrilled about their money being used that way. It may be that this is a small price to pay for the benefits of cashing out, but that's a case that has to be made, and it can't be made by simply dismissing concerns over morality. Moral concerns have a claim on our attention that's as legitimate as any other kind, after all.

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