Money and Power

Consider the life story of Mrs. Czech, featured as the rhetorical centerpiece of an influential article published in The Survey in 1916 by Emma Winslow, home economist at the New York Charity Organization Society. Mrs. Czech was a widow who, for three years after her husband died, “was not obliged to use money in any way.” A charitable society provided her and her six children with food and clothing and paid their rent and insurance. And yet, despite such “theoretically…perfect care,” the Czechs floundered. The mother “apparently…had no interest in the appearance of her home or of her children.” Nor did she care about their food. Soon, the children’s health deteriorated, their faces becoming “sallow and pasty.” At this point, the charity society decided to shift the method of relief into a weekly cash allowance, instructing Mrs. Czech “to do her own buying.” Soon housekeeping “became a delight,” the children’s health flourished, and the formerly indolent widow turned into a “remarkable domestic…economist.” And all because she now had the cash “to buy what she wanted when she wanted it.”

In this vignette, taken from The Social Meaning of Money by Viviana A. Zelizer, a family finds themselves in need of assistance. They have lost their wage earner and hence their source of funds. Instead of replacing the funds, however, the charitable organization replaces the mom’s job by doing all the choosing and purchasing for her. They in effect removed her from the trade necessary to complete her social objective to care for her family.

Even with the best intentions, the desire to release individuals or groups from the work attached to their role in the production of their public objective, causes market failure. And it is by far the most prevalent and damaging market failure in the social sphere.

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