How about you?
In 47 years of life, I’ve never experienced the United States as politically polarized as it is today. To be honest, I was not alive – or too young to remember and not personally affected by – The Great Depression, Richard Nixon scandal or Vietnam War polarization. However, economics and globalization have always fascinated and intrigued me – especially how both these concepts are connected to social problems. My social work career, focusing on individuals, groups, families, organizations and communities who are vulnerable and oppressed, is directly linked to systemic oppression – especially economics, poverty, and policies. Karl Polanyi’s writings in The Great Transformation, The Political and Economic Origins of Our Time is fascinating in that not only does Polanyi utilize existing social theories, he is under-credited with developing some innovative social theory of his own.
One of Polanyi’s most poignant concepts is “embeddedness”. “The term “embeddedness” expresses the idea that the economy is not autonomous, as it must be in economic theory, but subordinated to politics, religion, and social relations.”[1] Social theory/systems theory would support this. “There is, for Karl Polanyi, an ongoing political struggle between the ‘dis-embedding’ force of the free market and the ‘re-embedding’ efforts of social protection. It is one very useful way of understanding the politics of modern capitalism.”[2] Studied historians will agree that understanding and evaluating history is essential as it offers the only “extensive evidential base for the contemplation and analysis of how societies function” [3] and people need to have some sense of how societies function simply to run their own lives but even more so run their communities and governments. Karl Polanyi chose to understand the economic problems of the period by studying the history of ideas that constituted them. “He said that to understand pivotal historical events, including the breakup of the Gold Standard and the breakdown of international relations during the first half of the twentieth century, we have to consider the role of economic thought accumulated over centuries which influenced how those events took place and were understood.”[4] While there are many economic thoughts which could be highlighted, one controversial economic program which affects my research population, refugees resettled in the United States, is SNAP (Supplemental Nutrition Assistance Program). I think it’s important to help you, the reader, understand its history…
Speaking of economics, there is a profound misunderstanding in the United States in how and why the SNAP (formerly food stamps) program developed. Most people assume the program was aimed at helping feed unemployed people living in poverty. The reality is food stamps were created out of the United States Department of Agriculture (USDA) in the early 1930’s as a federal agriculture policy designed to increase farm prices and help sustain American farmers suffering from the economic upheaval of the Great Depression. “Massive crop surpluses led to low prices for farmers. At first, President Franklin D. Roosevelt’s administration tried paying farmers to plow under surplus crops and kill livestock. In theory, decreasing the supply would raise farm prices incentivizing farmers to get their crops to market. But the plan was met with outrage from hungry citizens who said they could have put the destroyed “surplus” food to good use.[5]” The early Great Depression was marked by a “paradox of poverty amidst plenty.” After Roosevelt’s failed attempt to supplement farmer’s income he tried another plan. Government purchased excess crops at a set price and distributed them at little or no cost to poor Americans. “This system was also met with criticism, this time from the sellers of food goods. Wholesalers and retailers were upset that government distribution bypassed “the regular commercial system,” undercutting their profits.”[6] Fast forward to the current SNAP system in which USDA is still the funder and beneficiary of SNAP. President George W. Bush understood this, and sanctioned a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product.
There are two systems at play here – social benefit and economic benefit. Socially, SNAP provides the following:[7]
- SNAP helps the poorest of Americans: almost 90% of SNAP households live below the poverty line, and about 40% of SNAP households have incomes less than half of the poverty line (approximately $9,155 for a family of three)
- Families with the greatest need in SNAP receive the largest benefits
- SNAP took 2.4 million children out of severe poverty in 2005 (brought their incomes to above 75% of the poverty line)
- SNAP reduces the likelihood of being food insecure (i.e., cannot rely on consistent access to sufficient amounts of food) by 30% and being very food insecure by 20%
- SNAP currently helps over 40 million Americans avoid hunger: 49% of SNAP recipients are children and 52% are households that include children (meaning that a total of 76% of all SNAP benefits go to households with children)
Before you counter-argue the idea of user dependence and fraud, please carefully review the economic benefits:[8]
- According to the USDA’s Economic Research Service, each $1 billion of retail generated by SNAP creates $340 million in farm production, $110 million in farm value-added, and 3,300 farm jobs
- Every $1 billion of SNAP benefits also creates 8,900-17,900 full-time jobs
- An additional $5 of SNAP benefits generates $9 in total economic activity
- 83% of SNAP benefits, equal to $53.4 billion, were spent at 36,500 supermarkets around the U.S.; the remaining 17% was spent at 180,000 small retail stores (including grocery stores, farmers’ markets, wholesalers, and meal services), for a total of $11 billion
- SNAP beneficiaries spend more dollars on food in local stores than eligible non-participants
- An increase in SNAP participation by 5% would result in 2.1 million low-income Americans receiving $973 million in SNAP benefits, generating $1.8 billion in new economic activity
You see, critics of SNAP (based on a social paradigm) fail to see and understand the economic truth (and benefit) to this complex program. All these statistics are presented to say Polanyi’s writings were relevant in 1944 and are just as relevant today. The economy truly is (in its complexity) embedded in politics, religion, and social relations. A fundamental concept integrated by Polanyi is that market liberalism (an ideology which views the development and promotion of a market economy with minimal state intervention as an essential aspect of the protection and promotion of individual liberty) makes demands on ordinary people that are simply not sustainable. The implementation of SNAP is one such example. “Workers, farmers, and small business people will not tolerate for any length of time a pattern of economic organization in which they are subject to periodic dramatic fluctuations in their daily economic circumstances. In short, the neoliberal utopia of a borderless and peaceful globe requires that millions of ordinary people throughout the world have the flexibility to tolerate—perhaps as often as every five or ten years—a prolonged spell in which they must survive on half or less of what they previously earned.” Polanyi believes that to expect that kind of flexibility is both “morally wrong and deeply unrealistic”. [9] The economic crisis of 2008 shook the baby boomers to the core. Since 2008, there’s been a search for a new set of economic ideas by which we might understand the world and implement change to resolve problems of financial crisis and other economic problems such as inequality.[10] I’m with Polanyi who believes “progress could only come through conscious human action based on moral principles.” [11] How about you?
[1] http://dieoff.org/_History/TheGreatTransformation.htm
[2] https://warwick.ac.uk/newsandevents/features/polanyi/
[3] https://www.historians.org/about-aha-and-membership/aha-history-and-archives/historical-archives/why-study-history-(1998)
[4] https://warwick.ac.uk/newsandevents/features/polanyi/
[5] https://www.salon.com/2014/09/01/the_rights_food_stamp_embarrassment_a_history_lesson_for_the_haters/
[6] https://www.salon.com/2014/09/01/the_rights_food_stamp_embarrassment_a_history_lesson_for_the_haters/
[7] https://www.snaptohealth.org/snap/the-real-benefits-of-the-snap-program/
[8] https://www.snaptohealth.org/snap/the-real-benefits-of-the-snap-program/
[9] http://dieoff.org/_History/TheGreatTransformation.htm
[10] https://warwick.ac.uk/newsandevents/features/polanyi/
[11] http://prospect.org/article/karl-polanyi-explains-it-all
About the Author
Jean Ollis
11 responses to “How about you?”
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Jean,
SNAP! You took me to school on this topic, thanks! Nice tie-in to your dissertation problem.
So, your last challenge from Polanyi, “conscious human action on moral principles.” What is moral anymore? Who decides what is moral? What standard is morality held up against?
I am pessimistic that our globalized economy and world would know how to unite in a conscious human action based on moral principles. Our SNAP program, food stamps, and Welfare systems have good motives, to help those in need. Ministering to the “least of these” is always the right choice (Matt. 25:40).
I have lived with and served people groups in Africa and Afghanistan who know war, death, hunger, poverty, isolation, and need at a scale that most Westerners collecting food stamps would be considered rich by comparison. Nevertheless, people need that cup of water from people like you, and your research, to point them to Christ.
Stand firm,
M. Webb
Hi Mike! You pose a great question – What is moral anymore? Who decides what is moral? What standard is morality held up against?
Tough questions with perhaps no perfect answers. As Christians we might want to use our Christian lense. Are you familiar with the Universal Declaration of Human Rights? http://www.un.org/en/universal-declaration-human-rights/
I find this global document to be a good moral compass…
Hi Jenn,
What a great closing, “I’m with Polanyi who believes “progress could only come through conscious human action based on moral principles.”How about you?”
Thanks for the education on SNAP. I had no idea many of the economic benefits.
Two difficult questions that I have been trying to work through–Should non-profits be running these programs rather than the government? And, were food stamps designed to be forever ongoing, or were they designed as a temporary solution to help people until they could get back on their feet?
I respect your training and education on this topic, and I understand there is not enough time for you to answer my questions, but if you could give me just a little bit of your insight, it would be helpful.
Jay,
Thank you for posing challenging questions…
Should non-profits be running these programs rather than the government?
When social work/social services began the government wasn’t involved. Churches were the first social service organizations because they were focused on helping those in poverty, orphaned, widowed. However as churches evolved and turned inward, the need was shifted to the government…
And, were food stamps designed to be forever ongoing, or were they designed as a temporary solution to help people until they could get back on their feet?
When you ask if food stamps were designed to be forever do you mean for the person using the stamps or as a government program? Food stamps as a government program began during the depression – disappeared for a bit – and were brought back during Kennedy’s presidency. Lyndon Johnson made it a permanent government program. Interestingly, “Over the years, the program has been re-authorized, expanded and contracted depending on the political powers and the state of the economy. Supporters of the Food Stamp Program include a mixture of farm lobbying groups, labor unions and advocates for the poor.” I think the key is food stamps help alleviate hunger for children…are their misuses? Sure – but there are misuses in every place in life. Is it meeting a need? Yes. A hunger need, an economic need, and a labor need. And a sad truth is that minimum wage is not a “living wage” – the majority of SNAP users are using the program as it should be – to supplement a food insecurity.
https://www.huffingtonpost.com/entry/food-stamp-recipients-working-poor_us_58cac50fe4b00705db4d1364
Wow Jean, what an informative blog post! I feel like I have such a better understanding of the food stamp (SNAP) program and how it benefits people and our country’s economy. I can always count on you bringing out the underrepresented or underprivileged in your blogs and connecting them to the topic at hand. I love this quote you highlighted…“progress could only come through conscious human action based on moral principles.” I couldn’t agree more, human action is always needed in order to impact human suffering…and this should be all of our moral principle.
Thanks Jake! The food insecurity issue is so complex – I always want to err on the side of providing, not judging.
Hey Jean, wow what a great post! Thank you for the background on SNAP. I did not know that and yet it makes a lot of sense. It’s interesting that we’re facing the same irony with immigration, especially DACA. Trump will, at the end of the day, protect the dreamers because they generate over a billion dollars for the country. And to keep his supporters happy, he will blame the democrats for having to do so. But, given your support of SNAP, I’m curious as to your thoughts about universal basic income as a moral decision of our time to protect people from economic fluctuations. 🙂 I was also interested in your ability to connect systems theory to Polanyi’s concept of embeddedness. Wouldn’t it be interesting to listen in on a conversation between Polanyi and Friedman?
Chris, you threw me for a loop. I was not familiar with universal basic income – but found an interesting article discussing Findland’s trial of this concept with unemployed citizens. This statement from the article caught my eye: “This is really about seeing how a basic unconditional income affects the employment of unemployed people.” Yes! This is a legitimate experiment. Does the disadvantage of unemployment and lack of resources contribute to the self-esteem and resources needed to access employment? Maybe it does! I plan to watch it play out…
https://www.theguardian.com/inequality/2018/jan/12/money-for-nothing-is-finlands-universal-basic-income-trial-too-good-to-be-true
Jean,
I love how you brought some little (at least to me) known history about food stamps and the great depression. I feel like I went to school and learned something new. I did not know any of those stats on SNAP and the positive results it creates. I do think we have an obligation to intervene and find solutions to the needs around us. How do critiques respond to these argument? I know many love to cite those that spend their whole lives on supplements and are not “contributing back”. Sometimes I have seen figures of how many working class people it takes to support a (Snap) family. Statistics can be displayed to tell the story politicians want. (We see this in the refugee crisis) What do you believe is the criteria for deciding how a country moves forward in its social programs? How do we keep this from simply being a decision about cost?
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