Think Tanks, Economic Freedom & Poverty

Jeff: We’ve got for our podcast today, “Conversations on Leadership Matters,” a person by the name of Matt Warner who, in my own research, is a very interesting person, very interesting background, and I think is really going to offer a lot of insight and possibility for some very significant conversation with us today. Matt is president and CEO of a think tank called Atlas Network. And I wanna welcome you, Matt. I don’t wanna steal your thunder. So tell us a little bit about yourself and about Atlas Network.

Matt: Sure. Well, thanks for having me. We’re based out of Arlington, Virginia, just outside Washington, DC. We’re coming up on 40 years old as an organization, Atlas Network, and it’s a nonprofit that was started to support other think tanks. It’s kind of even more unusual. So it’s a niche endeavor, but the goal is to support think tanks through grant-making, training, networking, and awards so that the field, the broader field of working at a think tank is not a lonely one, but one where you can learn from a lot of peers. And that is what we try to do.

And the reason why that is important to us is that we see think tanks, these are organizations, typically nonprofits who are working on research on all kinds of topics, but the ones that we work with emphasize research on economics and economic freedom, the relationship between individuals and the state and the way that that relationship influences the kind of economic prosperity that can emerge. And so we partner with 500 think tanks in 100 countries that are working on topics that are relevant to them, but under this broader theme. And our job is not to control them or tell them what to do. It’s to facilitate the network learning and to invest judiciously in their work to achieve that increased prosperity that is so important.

Jeff: Matt, that’s fascinating. So, I mean, there’s this so…when we unpack that, there’s so many different ways we can go with that. So you’re more facilitators than you are originators. Is that a safe way to look at it? So you share information maybe by, at your core as an organization, being curious, being good students, being good observers. Is that kind of a safe way to look at how you do what you do?

Matt: Absolutely. It’s actually central to our strategy is decentralized instead of centralized leadership and decision making. So it’s very important to our model that we don’t have a franchisee set up around the world where we’re making decisions from Washington DC. That’s been done in other contexts and it has not been successful because local leadership, the knowledge that cannot be transferred from people in their own communities who live there, who are from there is so central to discovering solutions that are really going to work in context. And so we certainly do try to identify successful ideas, successful practices, and then re-disseminate those among the network. But it is not in the spirit of expected compliance. It’s for people. When we think of think tank leaders, we actually do think of them as entrepreneurs because they are creating something new that they need to be the ones driving.

Jeff: They need to be driving, it sounds like, in their own context. So what is sort of maybe what works, it’s kind of a homely way to say it, but what works in, you know, India, in a small community in India may not work be the same strategy that works in a small community in rural Ireland, for example. Is that maybe a easy way to think about it?

Matt: Yeah, and I can give an example. In Burundi, a low-income country in Africa with a fairly authoritarian government, we supported a partner, a think tank there on the ground that identified a series of changes that they thought would increase economic opportunity for low-income people, particularly people who have what are essentially illegal businesses, very small businesses. And they’re only illegal because the costs to join the formal sector and register as a legal business are out of reach for the average low-income entrepreneur.

So they identified a series of reforms, and what was important about what they identified is they had to consider both what is going to work to achieve prosperity and what is not going to trigger too much wrath from sometimes unpleasant government. And so that local knowledge is so key to figuring out what is possible. And they were able to work with the government to identify things that would be in the interest of everybody, a win-win. So that’s lowering the fees to become a legal business, that’s making it simpler. You know, a low-income entrepreneur cannot spend 6 months going to 12 different bureaucratic offices. You know, they need to make money every day to survive.

And so all of these prohibitions, these perhaps unintended, perhaps intended, I don’t know, but really make it difficult, because if you’re not formal, if you’re not a legal business, then you can’t really ever grow because you don’t have any legal protection for your goods. And, in fact, the government itself is a potential predator as local policemen want bribes to not take all your stuff or they take all your cash because they can, you have no recourse. And so that success in Burundi had a big impact on legal businesses registering

Jeff: Well, that, exactly, if you’re too successful, you’re suddenly above the radar rather than below it and it can all end. So that sounds like, I mean, in a little research I was doing, I came across just a fascinating concept that Atlas uses, that you use, called development economics. So what you’re talking about, essentially, is development economics, is that right?

Matt: Yes. It’s the way that…it’s the study of how societies grow economically and all of the different challenges associated with that because each society has its own history, its own culture, its own norms, the way that people expect other people to behave. And so all of that has to be taken into account. And the broader field of development economics, which is a very broad mainstream field, you have a lot of people working, whether it’s for their country’s version of USAID or some other sort of foreign relations, endeavor, development economics is a debated field as most fields are because there’s different approaches. You may know the name Jeffrey Sachs, he wrote the book “The End of Poverty” and he had a very top-down approach, a very centralized decision making approach to solving poverty.

And he’s most famous for the Millennium Villages project, which was a $300 million project over 10 years in mostly Africa, where he said, “What we need to do is we need to solve all the problems at once. We need to solve education, we need to solve health, we need to solve a better crop yields, etc.” And there’s a book, if anyone is interested, written by a journalist who was at first favorable towards what Jeffrey Sachs was doing. But the books she wrote about it ended up being a real take down. She really pulled the curtain back and revealed how unsuccessful this was, and, in fact, created had a lot of injustice in the way that they went into communities, disrupted everything that had been working with their own ideas and left them worse off.

And so, in development economics, one of the key things that people are now trying to figure out is something I call the outsider’s dilemma, which is, as an outsider, you wanna help. But sometimes when we try to help, we actually make things worse because we are outsiders. And so how do we engage the local knowledge, not just in terms of having a couple of meetings with the community and then letting that influence what we’re doing in their community, instead reverse that and come in and support people who already have their own ideas in that community and they’re getting much more successful. They’re gonna… A lot of…the term used is sticky. We want institutional change that sticks. So how do achieve sticky change? Meaning it stays successful for a long period and helps this community achieve permanent prosperity, that’s what we’re after.

Jeff: So that’s almost…I know you wrote a piece titled “Cut Foreign Aid to Help the World’s Poor.” So that’s in relationship, I think, to the phrase you just used, the outsider’s dilemma. So you were talking a little bit about a Ugandan village and introduce new kind of methods and crops for farming. Can you talk a little bit about the outsider’s dilemma and this piece you wrote and just say a little more about making things stick? I think that’s a really important piece for our audience to understand.

Matt: Yeah. So that particular example in Uganda, you know, researchers from New York City and Washington, DC decided that this village called Ruhiira, it was a village of 7,000 farmers. And they traditionally grew a type of banana, a little more starchy, kind of like a plantain. And this was a staple of their diet, a staple of the, you know, the community commerce, and they had been growing it for a long time. And the researchers from afar said, “What you ought to be growing is corn. You’ll get more crop yield if you use corn, and we’re gonna give you money so that you can switch your crops from bananas to corn, and then you’ll be richer.”

Well, the village was enthusiastic and excited. I mean, here were these foreigners bringing…they spent about $300,000 on the project and they did, in fact, increase crop yields, and they had, you know, a bumper crop of corn. But the problem here, and this is when we get to the complexities of trying to do centralized economic planning, is there was nothing to do with the extra corn. Their village was too remote to get it to markets where there was any demand for corn. They didn’t have anywhere to store it. And so it ended up rotting and attracting a rat infestation to that village.

So what started with a sentiment from the villagers of enthusiasm and gratitude for these foreigners coming in, they end up resenting this because they were worse off. They had a rat infestation, they didn’t have the bananas that they usually grew. And that’s the difference between a model where entrepreneurs take on risk using their own knowledge about, you know, whether something’s gonna work. Not that that entrepreneurs are always successful, but the ones that are solve these problems, versus a more outsider bureaucrat-led approach.

And I’ll just emphasize that the difference there is who bears the cost of failure. If the person bearing the cost of failure is not in charge, is not making their own decisions, that, I think, is unjust because the researchers who pushed that, I’m sure they were well-intentioned. I don’t think it was malicious. They’re no worse off after this failed experiment, but that village is. And so we have to align decision making, and that’s why freedom’s important, the freedom of the individual because that’s a hedge model or dispersed decision making so that we don’t go all in on one centralized decision and then ruin everybody’s life, right?

Jeff: Right. Well, I’m fairly moderate to conservative given the work that I do or the space in which I operate in higher ed, certainly the way higher ed is perceived today. And, you know, one of the things that I think a lot about in terms of capitalism is, you know, there is a school of thought where capitalism is operated by greed, etc., etc., etc. And I tend to think of capitalism as more of enlightened self-interest. And when you talk about kind of, you know, who bears the cost of failure there, one of the beauties of, I think, an organic capitalist system is that the people who are taking the risks are also the people who are going to bear that cost of failure. So they’re more circumspect, more considerate, and sort of more localized in their knowledge of executing the plan than, “Hi, we’re here from, you know, X, Y, and Z, and we’re here to help you.” I mean, is that part of what you’re talking about here? Part of… Am I following you okay?

Matt: Yes. I mean so our organization is nonpartisan and we just really are. It’s not even something we discuss. We have a very diverse staff. Our mission is less about this…you know, the various public debates over, you know, is capitalism bad or good? It’s more about what actually works to increase cooperation and value creation. And so, it’s instead of it being a left versus right debate, I think it’s really a centralized decision making versus decentralized decision making, and to use an academic term, which I think is useful, is the idea of polycentricity, that is multiple hubs of decision making is a model by which optimal outcomes can happen. It’s not perfect, but it’s as compared to what.

And so the things that I think get confused when we discuss capitalism is whether we’re defining capitalism as, you know, pro business versus growth market. And if you’re pro business, then I think you do tend to favor unjust policies like bail outs, etc. I mean, I think most of the resentment in our country in the U.S. is justified after the 2008 crisis, because whether you got made whole or not was largely dependent on whether you were part of a big institution. And a lot of people who have a lot of money were made whole and a lot of people who don’t have a lot of money lost their homes and we’re not made whole.

And so I just see that as a natural consequence is this, A, sense of resentment, B, what does that now mean about decision making going forward? And that’s the big problem with like the recent $2.2 trillion bail out because if we go back to Hayek versus Keynes, these are two major economic figures in the debate in the ’30s and ’40s and ’50s in the U.S. And the Hayek’s side said de-centralized and the Keynesian side said centralized, which was focused on using the centralized decision making power of the federal government to try to manage the ups and downs of an economy.

And so, I call this now the Keynesian excuse because if we look at the $2.2 trillion package, the reason they can…part of the reason they can get away with completely unrelated expenditures in here that have nothing to do with the purported reason for the package is this Keynesian idea that it actually doesn’t really matter where the money goes. We just need to get the money out there. And that’s actually absurd. It really does matter where the money goes. There’s a difference between value creation and either no value creation or destruction. And so how you spend your money, whether you’re a government or a person or a business, does have consequences.

Jeff: Well, it does. And I do wanna talk about not just the last great recession, but also this Cares Act and the 2.2 trillion. But before I do that, I think I wanna just…I think, as we move into that, I wanna just clarify for our local audience what I think you’re talking about here in terms of sort of localized, contextualized economic development. And the way that we would experience here in Dubuque, Iowa, or at least I should say the way I experienced that here is I’ve served for many years on an economic development association, and over and over again, it’s fascinating to watch the contrast between what might be understood as kind of a big box entity and their investment in our local community and local entity and its investment in our local community.

So over and over again, at least from my perspective in economic development in a place like Dubuque, Iowa, in a state like Iowa, it really is interesting how those businesses with local roots, with local origins not only have a sustaining power, but also reinvest in the community philanthropically through the community foundation, through various other supports of nonprofits in ways that, honestly, most of the big box stores, corporations just don’t do. Is that something you’ve picked up in your research as well?

Matt: Well, there’s a book that’s actually been updated more recently, but the first version I believe in the 1990s about good capitalism and bad capitalism. And it’s a comprehensive survey of not just how different economies are doing, but what is the makeup of those economies as a function of firm size or the size of businesses. And where we’re most successful is when we have not just big companies or not just small companies, but we have a healthy mix of big, medium, and small. And I think, look, we all have preferences and that’s fine. That’s good. We all have preferences. The point is, how do we get to express those preferences in a just way?

One of the most efficient and effective ways to express those preferences is through consumer patronage, where we choose to shop. And one of the challenges is when we have sentiments around local businesses versus what we perceive to be outside businesses, we can certainly favor, and we don’t even need to explain why local businesses. But the question is, how can we justly express that preference? Is it by making sure that we ourselves only patronize a local business? Or is it through using the power of government to prevent others from expressing their preference through shopping at those places? And I think that’s where it gets really tricky.

I actually think there is a lot of change that happens not through legislation, but through culture, through the way that we kind of update our preferences and what we think is okay. And I think movements that have pointed out some of the arguments you’ve just made about the benefits of local businesses, through persuasion, I think that is an effective way to change the way people perceive where they wanna shop. At the same time, there’s no doubt that there are great efficiencies that come from successful. They have to do it well, larger companies, economies of scale, etc. And that has real impact on the pocketbooks of very low-income families. They can really make the difference between what they can afford.

So, to me, a free market or a model of capitalism says, “Let’s be very careful about when we use government power to decide how or to express our preferences in a marketplace. Because when we do that, we are, I think, undemocratically taking away other people’s opportunity to vote with their pocket books in terms of where they like to shop.

Jeff: Yeah, yeah. I see what you’re saying there. And I think my question, at least from my perspective, wasn’t so much I wasn’t trying to set up an either-or dichotomy. And I think your response is, it’s more of a both hand, which I agree with. I think one of the things I’ve noticed in my work in economic development is, to get back to your earlier word, there is a tendency specifically in times like these, whether it’s the recession or now, whatever is the fallout from this COVID-19, there’s a stickiness, a sticktoitiveness to organic entrepreneurs, even in communities like Dubuque, that has a lasting quality to it.

And I think that lasting quality is because of some of the things you’re talking about. It’s about relationships. It’s about a lot of it. Sometimes it’s about family, it’s about community and civic pride. I mean, it’s just an interesting…it is its own different culture is what I’m suggesting. And I would imagine if that’s happening here, not only is that the case all over the country, but I suspect it’s also one of the cultural commonalities across the world. Is that a fair assessment in your experience?

Matt: Sure. Look, if the efficiency gains from a big box store, let’s say, you know, let’s stipulate that you can get some of the same goods or a wider choice of goods for a slightly less…slightly smaller price, many will prefer to pay a slightly higher price in service to the values they have around the civic sense of, “I know these people. I trust them. I like to talk with them. I know they’re gonna be around and I can be part of that relationship.” There’s nothing wrong with any of that, but at the same time, that requires that you have the discretionary income to make that choice. I have no problem with that. I just also get nervous if we try to ensure that only those exchanges at the higher price are allowed, in which case, then people who don’t have a choice that, I think, is unjust.

Jeff: Right, right. I think you’re right, and this is a fascinating line of discussion. So in kind of classically Midwest Iowa here, kind of the paradox of what we’re talking about here is, and the classic example, and I’m not railing on Walmart here. Walmart provides a great service at a very low cost for a lot of people. I think over the last 20 or 30 years, however, you know, and you’ve read about this and we both have just the consequence of that choice at a very low price for a lot of smaller communities is, in fact, the economic death of those main streets because the hardware store doesn’t exist anymore. The clothing store doesn’t exist anymore. And it just is kind of the way, I guess, things go. Is that how you would describe it, or does the death of sort of that hardware store also create another kind of opportunity? Is that just the way our system works? How do you think about that in Midwest, in the context of Midwest America, small town America?

Matt: Well, I think whenever that happens, what I first think of is you have to imagine all of the “votes” that were cast in relation. And I don’t mean votes for elected officials. I mean votes for which stores they wanted to stay. Now you could say people by virtue of where they shop. So in those cases, you do have people who wanna keep the local hardware store alive and they’re willing to pay more for that and they’re willing to have less selection. But if there is not enough, what determines if it’s enough is simply a matter of economics.

And so people have to realize that all of these decisions, we can make some political decisions and pretend that there aren’t economic consequences and that these things don’t cost money. But whether a hardware store survives is a function of total revenue and total cost and whether there’s a profit to be made or whether there’s an endowment from a philanthropist to keep it going. And so all these things have monetary consequences, and the question is, okay, well, who pays?

And one of the most important things about Hayek’s work, Friedrich Hayek’s work is to help us understand that prices are information. And when we try to control prices or we try to artificially influence them, overdoing it is hiding information from ourselves. Prices, tell us what someone is willing to sell something for. And if it doesn’t sell, then that tells the seller that it’s too high, and if it’s too high, but he can’t manage to lower it without losing money, then that is not a good that we should be trying to continue because it’s sub-optimal and it’s costing money to the economy.

Jeff: You know, one way to think about that too, though, is I think the hardware store is a good example. Years ago when we were just starting off and we had our first home, there was a local hardware store, and then one of these larger well-known, very large well-known, stereotypical phrase is big box stores appeared within a sight line of this hardware store. And I can remember learning how we were… I think I was working on the toilet or something like that, trying to figure out, fix it.

And so I’m going to the local hardware store and getting this one little piece and he’s walking me through this. And, you know, he said, “Now go back to your house and do this.” So I went back and I did it incorrectly, and I came back again and I explained what I did. And then we were talking and I said, “Aren’t you a little worried about what’s going on down the street?” And he said, “Well, no.” He said, “I’m not.” I said, “How can you not be worried about your business when you’ve got that kind of competition?” And he said, “Because of this.” And, of course, the this was, he was taking the time to walk me through the fix of the toilet. And I think that store is still in business for that reason.

So that would be an example, I guess, of maybe a value added of information, to use a Hayek’s phrase, your use of Hayek’s phrase, kind of a value add of the information that would allow me as a consumer or motivate me as a consumer to pay slightly more, but I’m getting more for what I’m spending. Is that kind of how you see things?

Matt: Absolutely. I think that’s a great example of, look, we all have preferences and it’s up to us to value those, the ways that we find value in them. And so, big box stores are not, you know, objectively better than small businesses. They’re just both offering some combination of products and services. And we, as individuals, can seek out and make determinations about what we prefer. Now, if not enough of us for a certain service provider, it may not survive, but that’s also a signal, you know. I mean, that’s how we move forward and get more optimal.

And that’s also how it inspires innovation because you’ll start to see that people who haven’t had competition, when they start to have it, then they can push themselves to get creative about, “Okay, how do I position us and market us? And what maybe different products or services can I provide to differentiate myself so that consumers continue to patronize us?” And when we do industrial policy or government policy that tries to preserve one snapshot of where we are in an economy and pretend that that can just endure, we’re preventing innovation, we’re preventing change forward and optimum. And it’s never perfect, but it’s always on its way.

Jeff: Yeah, that’s why I like the phrase enlightened self-interest. So good entrepreneurs are always identifying ways to innovate, to be even more relevant and attractive. And that is often snuffed out if that incentive doesn’t exist to change and innovate. And, at least in my business, such that it is, as we refer to ourselves as a business, you know, the fear of failure is a great motivator. It really is. It’s also a great innovator. And, you know, we try to keep that in mind here, even as we’re a university. And so I wanna talk a little bit about, you’ve invoked a Hayek, and I would assume by extension a 20 or 30 years later, Friedman and kind of that whole divide with the Keynesians. And so you’ve got that kind of political economic sort of divide.

And, you know, we haven’t talked much yet about the Cares Act and the 2.2 trillion, whatever we wanna call that, through the federal government. But I mean it does beg the question, what do you see as, in your project, to be some of the longer term challenges of this shorter term solution called the Cares Act? It may be a necessary solution. It may be a shorter term solution. It may be a great solution. I’m being agnostic in asking the question. As someone who thinks about this kind of thing regularly, and now as we experience this massive, massive influx of cash, if you wanna call it that, of economic stimulus from the government, how do you think about this? What do you think about the longer term challenges that are going to be as a result of this?

Matt: Yeah. Well, I think one thing, right off the bat, I saw a very helpful meme that someone has posted that was a Venn diagram. It was three circles, and one said, “People who are concerned about coronavirus.” The other one said, “People who are concerned about the growth in authoritarian power in government.” And the third was, “People who are concerned about an economic slowdown on low income people.” And the person posting it said, “I’m in the middle, I care about all three.” And it was a way to sort of remind us that our politics tends to make us think we have to be one thing. Are you this or are you this. Are you for this? Are you for this? Well, all three are important.

So in looking at the Cares Act, I look at it from the point of view of first understanding that this is complicated, understanding that we’re learning as we go. You don’t have to be someone who is… You know, in order to care about the economic shutdown, it doesn’t mean you have to be dismissive of the health concerns that are going on. And in order to care about what executive power and what congressional power, what comes out of this that doesn’t…nor does that mean that you’re dismissive of the health concerns. So the reality is there is a long standing pattern that, in a crisis, as Rahm Emanuel said after the recession, “You don’t let a crisis go to waste.” It means politicians know that there is this honeymoon window where scrutiny is at bay, where you can get a lot done very quickly. That if you’re not in a crisis, each little proposal is going to be dissected ad nauseam and scrutinized and debated, etc.

In a crisis, I mean, the reason they were able to do this so quick is there were so many things in here that they were just already wanting and hadn’t had the public battles yet. And then they just quickly got it all done. And that is alarming because number one, like, you know, previous large bills, nobody knows every little thing that’s in it, nor do they know the implications of it. So I think it comes down to a few principles of first when we make big bets, right, when we centralize decisions. And, you know, I saw a lot of criticism of, like, why are some states shut down and others aren’t? Well, I don’t know the answer, but I do see some value in having a differentiation of approaches because we know so little and it wouldn’t be good to mandate certain people to try certain things, but to let people try certain things, there in lies the difference.

Instead, if we say, “We want one president to make a federal decision that takes care of all of us and then to make one decision on how to then counteract the impacts of that,” stepping outside of politics, that’s just as a decision making model. And I know you are an expert on leadership, but anytime you set centralized decision making too much, what you’re doing is you’re not allowing yourself any out. You’re going all in on one thing and you’re not hedging. You’re not giving experimentation a chance to inform and accelerate learning so that you can pivot to what is working.

And I just think some principles that could be applied here is to be more specific and to use existing mechanisms, not create new bureaucracies that no one knows how to run yet, and absorbs a lot of time and money, and instead just focus on the problem in a way that allows experimentation. And I think, you know, we’re all learning very quickly from different countries and different states. And that’s a good thing because, of course, what we want is an optimal answer, and an optimal answer takes all three of those circles in the Venn diagram into account.

Jeff: Yeah, certainly, I’m sure much older than you, but this isn’t anything we’ve seen in my lifetime. And, you know, the pundits and scholars among us can say, tell us if we’ve even seen anything like this, you know, on a ratio basis like this in the depression. You know, as I think about this and I start to write about this, one of the real challenges for me with COVID-19 is, and I had a colleague point this out to me the other day, I won’t name the state, but a certain state had three deaths from COVID-19, which is, of course, a tragedy. But they also, that same state also had nine deaths by suicide from people who just found out that they’d lost their jobs. And that was the source given for their death by suicide.

And as I look at this, you know, our governor spends a lot of time, you know, every day we get an update on the number of deaths and, you know, the number of cases, and it’s a little. I’m old enough to remember the Vietnam era broadcast where we had the death counts every night on television. But what I think about are, you know, what are we doing? How do we think about, how do we support massive numbers of individuals who are without work, and what that does to a person’s identity, to the family units’ well-being, to the well-being of the community? I don’t know that that’s really being talked about a whole lot in the upper echelons of government leadership. Are you hearing much in that regard or am I just kind of worrying about things too much?

Matt: No, I think it’s been underrepresented or misrepresented. In our public policy response, we are not choosing between wealth and death. There was a lieutenant governor, the lieutenant governor of Texas, and I don’t wanna pick on him. And I’ve, you know, assumed good intentions and this was a heartfelt comment. But he got on television and said, “Hey, I’m over 70. I have grandchildren. No one asked me if I was willing to sacrifice the American way of life and our economic strength in order to save my life. I would rather take my chances because I care about my grandchildren’s future, etc.” Now, there’s nothing wrong with that, but I think what would be better said, what the reality is, is that the choice is not between wealth and death. The choice is between mortality and mortality, because there are consequences to economic shutdowns.

And the people who suffer the most are disproportionately low income and other factors. So people have to understand that policy decision making is complex, and that’s why it’s better if it’s rule-based and not, you know, we don’t pick a company and give them money. We create rules because that is a proper respect for the complexity of what’s going on and gives people the chance to make the best decisions for themselves and their families and their businesses.

Jeff: I appreciate that very much, Matt. And I know we’re running out of time here. I want to talk a little bit about, and this would be related to your work and, I think, probably a fairly good segue to this last part of our conversation. But as we think about poverty maybe here in our country, of course, you’re familiar and I’m familiar, a lots of folks are familiar with the work of Charles Murray, and Robert Putnam, and Arthur Brooks, and the whole gang. And, you know, as they write about poverty, they also…there’s a strong connection between poverty and community, and both the formal and the informal sort of connections in community, through families, through churches, through synagogues, through, you know, YMCAs, and boys and girls clubs.

How does all of that work together or does all of that work together, in your opinion, as part of the solution, maybe the organic solution to helping kind of ease just the atrocity of poverty on these communities on our communities? Is that sort of the one model in contrast to, you know, the federal government coming in and throwing all kinds of money at a particular community? Is that really the either-or dichotomy there and that’s our reality, or is there a both-and solution here? What’s your sense? Do Murray and Putnam and those kind of have it more right than Roosevelt? How do you see that?

Matt: Well, they certainly help us understand how important community is, how important, you know, we are social beings, socialization, and the ways that, at the margin, [inaudible 00:48:19] communities don’t solve any problems organically. So that’s very, very important. Let me throw out one more name that, I think, is very influenced by how I did about, and I recently got to meet him, is a guy named Maurice Lim Miller. He is a MacArthur Grant Prize winner and was a political appointee under President Obama. He had been working in a low income population as a social service provider in Oakland, California for a number of decades. And his experience developed some really important insights about a very good question, which is, how can…and this is where the outsider’s dilemma applies in this context as well. How can you help communities prosper when the viable [inaudible 00:49:18] of prosperity is more a function of their community behavior than it is any government program? And so, what he has pointed out is that what we need to do, which much likely [inaudible 00:49:33] tries to discover and to support the initiative of locally led organizations, think tanks throughout the world. It works to support the initiatives taken by communities and individual families, and it’s much more successful because they are driving that change.

And he actually has a rule for his staff, which is, if you help one of our clients, that is one of the low income families, you’re fired. And the reason is, is because it’s so important and it’s so relevant to their path to prosperity for them to not become distorted by what we think they need. And it’s really a fascinating insight because it actually kind of… You know, the caricature debate, it’s called the bootstrap myth. You know, historically, you might have conservatives saying, “Look, people are poor because they don’t work hard and what they need to do is pull themselves up by their bootstraps and carve a path to prosperity.”

And what maybe people on the left will say is, “You are insane that you’re privileged. Other people don’t have those advantages, and you rely on a lot of social capital that helps give you what you have. You didn’t earn that,” right? But the reality is, it is true that people who are doing well have relied on social capital, and that’s important. It’s also important in low-income community. And a government program is not social capital. And what Maurice Lim Miller discovered is that it actually undermines the social capital that will pay off for them. So what we need to do is support their initiatives, their ideas, their plans for achieving prosperity.

Jeff: You know, Matt, I mean, that’s really… I need to…I’d love to meet this guy as much as I love to meet you. And so we were right about on our hour, and I’m wondering, there’s so much more I wanna talk about that we haven’t talked about. And I’m also cognizant of the fact that you’ve got four children that are banging on the door of your car right now, I’m sure, trying to get to see dad. But, really, I sincerely appreciate you being available and I would love to talk more with you and I’m hoping we can get you to campus sometime. We’d love to have you here. I’d love to feature a series of public lectures and invite our community to hear from you and learn from you. And I hope you’d be amenable to that invitation at some point in the future.

Matt: I’d be absolutely honored. I appreciate that idea.

Jeff: Yeah, no, there’s a lot to talk about here. I love to get you in front of our students. I’d love to get you in front of our community. We try to be a place. We’re an unconventional university. We have an enormous number of our students. You know, over half of our students are Pell Grant eligible, is one way to look at socioeconomic strata it’s in, and yet I’m, so I’m proud of the way that these students are earning an education and going out and doing something with it. What we have found is with many of our students from challenged backgrounds, it’s often the case that they’re the highest functioning member of, often and sadly sometimes, a very dysfunctional unit. And so, what we try to do is create the space for them to thrive and facilitate an opportunity for them to grow and to expand upon their God-given abilities.

And it’s really been…it’s a privilege to be able to work in that space and to follow along. I’ve been doing this, you know, for almost a quarter of century now. So students that came, you know, with nothing, and to see and follow what they’ve done with their lives over the last 20 years has really been fun and meaningful for us. And I’d like to be able to introduce you to those stories on the beginning of that journey and now as the inner mid-careers, because I think I know they’d be an inspiration for you as well. So, Matt, thank you. Thank you.

Matt: Yeah. I’d be very interested in learning more and getting to know what you guys are doing out there. So thank you very much.

Jeff: Yeah. God bless. Stay healthy.

Matt: Same to you.

Jeff: Thank you.

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