Book Review “Redefining the Poverty Debate” by Kristian Niemietz

Kristian Niemietz from the Institute of Economic Affairs (IEA) published an excellent book ( Redefining Poverty Debate.pdf) in which he argues why a war on markets is no substitute for a war on poverty. Niemietz joined the IEA in 2008 as Poverty Research Fellow and is now a Ph.D. student in public policy at King´s College London where he also teaches economics.

The book criticises the arguments of the „anti-poverty lobby“ and finds the current benefits system to be neither an adequate nor indeed an effective response. The answer does not lie in increasing benefit levels. Helping the poor to free themselves from poverty should not mean absolving the individual from all responsibility and nurturing a culture of victimhood, entitlement and dependency.

The book focuses on the United Kingdom. The UK is an outliner in terms of the failure of employment and family policy. Britain spends more on family benefits than virtually any other country in Europe. It also has a specific combination of high levels of single-parent families and high joblessness among single-parent families. Niemietz proposes a variety of policy recommendations: First, employment protection legislation which entrenches that long-term unemployment should be liberalised. Second, a new benefit system should remove penalties against family formation. Third, effective marginal tax rates should be reduced. Fourth, specialist assistance to those with weak labour market attachment should be managed and financed at the local level. Corroborating his recommendations, the first and the last recommendation are in accordance with empirical evidence from labour market reforms in Germany.