The thesis of this book is that welfare increases poverty. It cannot reduce poverty.
Prior to the 1960s, the prevailing view of the past 300 years or so was that welfare should be aid in the form of things like housing (think Dickens's Bleak House), not a direct dole out of money to the poor. Welfare was thought to encourage sloth and laziness: by increasing the value of being unemployed vis a vis being employed, the classic market response is to increase supply of the unemployed. It also increased illegitimacy (which is a chief cause of poverty) because as long as the man is not legally responsible for the child, his income does not count against hers for welfare benefits. Furthermore, in experiments across the US between poor populations in the same city, some of whom receive welfare and some of whom don't, the breakup of marriage (another cause of poverty) was about 40% higher among families receiving welfare.
At the crux of the issue is to what degree the system is to blame or the individual. If the system is to blame, then self-sufficiency no longer becomes morally superior to independence. Those who have succeeded and escaped poverty are not to be commended. Placing the blame on the system also removes from the impoverished any idea that they can succeed. The very reward structure of status and money to those who have separated themselves and climbed the social ladder is what fosters the near classless society that has thrived in America unlike any other nation. A classless society is one of the chief goals of liberalism. Their placing the blame on the system is thus self-refuting and undermines their own goal.
Welfare means that it is easier to get along without a job. Because it is easier to get along without a job, it is easier to ignore education. It is easier for a man to have a baby without being responsible for it. It is easier for a woman to have a baby without having a husband. It is easier to get away with crime. Thus it is easier to obtain drugs, and to support a drug habit.
Removing welfare would mean parents would do more in their children's education--they don't want them living off their money. Parents would buckle down and try harder to make their kids not have children unless in a stable family--they don't want to be stuck paying for their grandkids. Young people would find that they are in fact work ready--doing menial jobs and gaining the work ethic that comes with them is suddenly preferable from the alternative. Finally, those low income families who have been doing the right thing would be vindicated and not ridiculed.
If an impartial observer from a foreign land looked at the data of the black lower class from 1950-1980 and given no information about social and public policy changes of that time period, he would think that outright, virulent racial discrimination against the black poor had dramatically increased during the late 1960s and 1970s (the time when the welfare system really took off). Of course, the opposite actually happened. Until the late 60s, the black lower class had been making steady economic gains vis a vis whites. This came to a screeching halt with the welfare reforms of the late 60s.
At the end, Murray breaks form and asks a strikingly personal question. If you were a parent and knew your kids would be orphaned tomorrow, which family would you rather send them to:
1) A very poor family, in which they will sometimes, but not often, lack food and be badly clothed, but the parents have worked hard all their lives, make sure the children study and go to school, and value independence; or
2) A less-poor family, in which the parents have never worked, don't value education, but your children will have enough food and clothes, provided by others.
The first choice is the clear winner; our current system prefers the second.
All in all, a thoroughly-researched work, full of data rather than rhetoric, but still interesting to read.