FREE ENTERPRISE WITHOUT POVERTY by Leonard M. Greene

FREE ENTERPRISE WITHOUT POVERTY

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KIRKUS REVIEW

Single-answer economic solutions have always been in vogue, whether it be the single tax or a return to the gold standard. Computer manufacturer Greene is founder and president of his own foundation, the Institute for Socioeconomic Studies, and dabbles in economic cures: his is the ""graduated income supplement"" (GIS), a guaranteed fixed, taxable income that would be provided for every American. Since it would be taxable, the graduated income tax would assure that this ""demogrant"" would benefit the poor more than the wealthy, who would give most of it back in taxes. This system would replace all the various income supplements and transfer payments currently in effect, from Aid to Families with Dependent Children to farmers' subsidies. Greene says the advantages are several: the GIS, unlike the current system, is not based on needs assessment, which he sees as inherently arbitrary (it sets up categories and then tries to fit people into them); therefore, it is also less bureaucratic and much easier to administer; it won't cost us any more than current programs; and if has the great advantage of stifling neither the American family nor the American work ethic. Greene correctly shows the inequity of the current welfare system that pays people to live in one-parent families, or puts a lid on income as a requirement for assistance, so that some can make more on welfare than at a job; and he has a lot of examples to illustrate his points (though these are likely to be exceptions). The GIS wouldn't act as a barrier to persons trying to earn more, since their total after-tax income would actually be more. Thus, disincentives would disappear and the economy could go back to ""normal"" with a work-force of eager income maximizers. Greene's formula has the merit of calling attention to the inhumanity of needs assessment as the basis for the welfare system, and the GIS does make a certain elemental sense--forgetting for a moment the difficulty of administering a system dependent on tax returns and the political ramifications of such rigid centralization. But even if it had no blemishes, Greene's plan would still be yet another single-technique solution to the economy, and the track record isn't encouraging.

Pub Date: May 20th, 1981
Publisher: Norton