Yesterday I attended a presentation by Naomi Schaefer Riley on the subject of her new book, "The New Trail Of Tears." The topic of the book is the deplorable conditions and extreme poverty that exist on Indian reservations in the United States today. Riley traveled in both the Eastern and Western U.S. and spent considerable time on several of the larger reservations as part of her research. She came back with plenty of stories -- of unemployment, idleness, extreme levels of alcoholism and drug abuse, and of violence. Yet all of this is in the face of high levels of spending by the Bureau of Indian Affairs and other federal bureaucracies, not to mention that some tribes run casinos that generate large monthly checks for every tribal member. How then could conditions be so bad?
Riley's fundamental diagnosis is that the problems of the reservation-based Indians stem from lack of property rights. By federal law, reservation land is held "in trust" for tribe members. That means that nobody owns anything, which in turn means that tribe members have nothing to sell, and nothing to use as security to borrow. Starting businesses becomes virtually impossible. There's nothing to do but sit idle and live off the handouts. It's a little microcosm of socialist utopia.
To me, the most fascinating (if tragic) part of the story is the complete lack of comprehension, among the people who set up these systems, of what makes for a successful human community, whether economically or otherwise. Allow people to own things and to trade them freely (a system sometimes going by the name of "capitalism"), and before you know it you get New York, with very little need for input by government functionaries and busybodies. Prevent people from owning things or trading them, and you get the Pine Ridge Indian Reservation. So a massive and well-funded government bureaucracy, tasked with "helping" the Indians, sets up Pine Ridge (and many others like it), and keeps it the way it is, completely resistant to change, for decade after decade. How could they possibly be so unobservant and so ignorant? (Let alone, so overcome with loathing for the American enterprise system and everything that it stands for.) By the way, also complicit are the Congress (also, as to many if not most of its members, filled with dislike for the American enterprise system, as well as with the hubris that they can devise something so much better directed by themselves), and also the leadership of most of the Indian tribes (who are only too happy to get the control over the economic resources that goes to the leaders under a socialist model).
Well, fortunately, back here in New York, we are the capital of capitalism. We have the success of the enterprise system all around us, right in front of our eyes, so we can observe how it works at close range and apply the lessons of its success to quickly eliminate our remaining pockets of poverty. Right??? Hah!! What we actually have is a political class that hates capitalism and enterprise as much or more than do the BIA bureaucrats and the Indian tribal leaders. Bashing banks, "Wall Street," and/or some other successful business (ExxonMobil anyone?) is the sure route to the top in New York politics. And to "help" the remaining poor? We have our own little analogs of the Indian reservations, otherwise known as the New York City Housing Authority and all the new "affordable housing" initiatives.
NYCHA and the new "affordable housing" really could not be more like the Indian reservations. You are granted your apartment by the grace of the authorities, and you can live there for life; but you can't own it. Therefore, you can't sell it, and you can't borrow against it. The incentives, once you're in, to stay in place and live off the handouts, are enormously powerful. And thus we find in the NYCHA projects a poverty rate exceeding 50% (even in the midst of Manhattan, the wealthiest county in the country!) and an average tenure exceeding 20 years.
But here at the Manhattan Contrarian, I have been advocating for several years for getting rid of the socialist NYCHA model and giving the public housing away to the residents. Thus will they get meaningful property rights, and the remaining poverty will quickly decline and disappear. Surely, someone is listening? No, actually, what is occurring is that just yesterday the City Council approved a massive new socialist-model "affordable housing" complex to be built in the South Bronx.
Yikes! This soon-to-be-built new project even looks like the projects of old. It's close to 1000 units.
So, for those of you who were hoping that there was some chance for this part of the South Bronx to start to move up in the world, get over it. Our City Council is doing everything in its power to assure that this area will remain a permanent slum, and the residents permanently in poverty -- the better to be loyal supplicants for the continuation of their handouts.