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Panhandlers receive way too much derision and judgment from the general public. They have various stigma ladened insults hurled at them regularly. Constantly derided as “bums”, “beggars, and “mendicants. All terms lacking any sense of dignity. However, what true societal harm have panhandlers inflicted upon society through their attempts to cajoling passing motorists into parting with their spare change?  At worst panhandlers are a minor nuisance and their actions violate insignificant local ordinances. But I will have to draw the line at loitering on private property. From a property rights standpoint, that issue is much more problematic. Why as a society are we so repulsed by the notion of an individual asking for money? We as individual economic agents reserve the right to voluntarily decline to part with our spare change and continue on our merry way. Early this week I was grappling with this question and concluded that panhandlers aren’t a menace at all. That many of the local ordinance aiming to curtail the behavior is nothing more than an overaction to a victimless crime.

Upon stumbling across this idiosyncratic epiphany I naturally conducted a quick survey of the internet to see if any else shared my contrarian perspective on begging.  No other than the great Leonard Read wrote an article back in the 1950s arguing that panhandling was less harmful to the economy and society than taxpayer funding of government services. Read details how not only is the action of giving money to a panhandler voluntary but it does not damage the economy anymore so than an individual choosing to retire. It should be noted that again this article was written before the baby boomer generation retiring. The drastic increase in spending on Social Security and Medicare entitlements has made retirement much more detrimental to the U.S. economy. That point aside, Read mentions how government services assist in creating inflation while panhandling does no such harm. Anyone unacquainted with how inflation works may be confused by this statement. Essentially, he is implying that instead of raising funds through the politically inconvenient act of a tax hike, the government will merely print more money to fund whatever programs and services require allocations. Introducing more money into the economy naturally decreases the value of the currency causing inflation. Thus, making a strong case that panhandling is less harmful to society than government services.

However, I take one issue with this pithy and insightful essay penned by the founder of the Foundation for Economic Education. He describes panhandling in a quasi-neutral light. It doesn’t harm society, but also doesn’t benefit society. I would beg to differ on this point. I view panhandlers as being creative and enterprising individuals who have found a novel method of generating income despite their difficult circumstances. I would be so bold to assert that they resemble entrepreneurs. Perhaps and most likely the nature of panhandling has changed over the past sixty-plus years. To persuade to part with their money, beggars have over the years incorporated elements of entertainment in their persuasion techniques. I once saw a gentleman with a sign that read:

“ Too honest to steal, too ugly to strip”

Not only was this sign humourous but it also exhibits the wit of a talent marketing strategist. If wasn’t for his unfortunate shift in vicissitudes could have been quite the asset in the boardroom. Now he provides the service of entertainment to bored the bored motorists of Chandler, Arizona. Those who are amused by his witty sign, compensate him for his innovation. Another more risque example of panhandlers earning their money through entertainment was a witness at the very same traffic intersection. There was an attractive young lady who appeared to be well-washed and not homeless. Adorning a bikini top and short-shorts with her thong conspicuously exposed.  Needless to say, she was swiftly crossing backing forth between the median and the sidewalk of the intersection graciously accepting paper bills from male motorists. These fellows weren’t parting with mere pocket change! Another sign that I once saw that particularly struck me as clever read:

“ I bet you can’t hit me with a Nickle”

Before you are quick to pass judgment upon a panhandler remember this, it is a grind just like another vocation. It is merely an unorthodox means of earning an income. If anything, panhandlers contribute more to society than those on welfare who do not work. At the very least, beggars attempt to entertain, making them impromptu service providers. Good service demands just compensation.

19 thoughts on “The Contribution of Beggars to Our Economy

  1. Wow (again); these are excellent observations that the libertarian in me concurs wholeheartedly with! But at the same time, what “value” does begging add to the production possibility frontier? After all, begging simply results in a naked transfer of resources from A to B. Does the virtue signalling aspect of giving a dollar to a beggar count for something?

    Liked by 1 person

    1. Potentially. I was thinking more narrowly on this one. Having parallel the a monetized YouTuber. Someone who’s vocation is purely centered on entertaining others.

      In terms to what it does for PPF, very little of anything. Then again, the same can be said for one for the majority of reality-television stars. I say majority, because some use their 15-minutes of fame as opportunity for product endorsement or their own entrepreneurial pursuits.

      There is an argument for a value in the social currency gained through giving a dollar to a beggar. There is a ton of value in being able to virtue signal. Depending on individual preferences having the moral high ground could be invaluable.

      I also believe we could also divide beggars into various subcategories. There is vast difference between a talent trumpet player collecting money in a hat on a NYC subway platform and the beggar who is holding up a barely legible sign. One is a quasi-entrepreneurial entertainer and the other is attempting to capitalize on personal tragedy.

      I suppose with the multitudes of various approaches to panhandling there could almost be different genres of begging. I do personally admire the ingenuity of some of these individuals. Some of these signs and means of persuasion are brilliant!

      Liked by 1 person

      1. Great points. Also, the same could be said of sports, since nothing is really “produced” except for the outcome of a game. But that said, whether it be sports or reality TV, many people (perhaps short-sightedly, as they could presumably be doing other things with their time) really enjoy such shows as “Jersey Shore” or whatever or really enjoy spending a whole afternoon at a ball game. In other words, such leisure pursuits, though arguably shallow when compared to other pursuits, at least produce some “entertainment value” that people are willing to pay for. With respect to beggars, however, what is their “entertainment value.”

        Liked by 1 person

        1. If there is any entertainment value it is short lived. Such as getting a chuckle out of an assuming sign requesting money from people. That is only a moment of entertainment. Whereas at least with reality television you are guaranteed approximately 20-minutes of entertainment per an episode ( hypothetically).

          I am starting to see your point. Perhaps these ploys to persuade people to part with their spare change are lower in entertainment value than I originally postulated.

          Liked by 1 person

        2. Wait up: I think you are right, after all! The best of the best panhandler’s take will be much smaller than the lowest paid ball player, and this difference in income will reflect the two levels of entertainment value!

          Liked by 1 person

        3. Excellent rebuttal. I posted a reply, but it is awaiting moderation, so in the meantime, allow me to share my reply to tje rebuttal here as well: “Excellent post, especially the idea that beliefs are a matter of degree (i.e. the subjective approach to belief), not a binary duality. But that said, why should atheism be the default belief in case of doubt about the existence of a God or multiple gods? The whole point of Pascal’s Wager is to show that the default belief should be belief in God! Now, I am not saying that Pascal is right, but what I am saying is the answer to the second-order of what are default beliefs should be is not at all clear!”

          Liked by 1 person

  2. Cf. Adam Smith, The Wealth of Nations, Book 1, Chapter 2 (note the second sentence, which is usually omitted whenever Smith is quoted):

    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely.”


        1. Agreed. The father of political economy was one hell of a thinker. A great example for philosophers and economists alike. Actually, the more I think about it he is great example to emulate for anyone interested in ideas.

          I read an article recently stating that at the end of his life , Smith deemed Theory of Moral Sentiments to be greater achievement than writing The Wealth of Nations. Which is interesting because after his death TWNs is the book with the more notoriety.

          Liked by 1 person

        2. In addition to the “invisible hand”, Adam Smith also came up with the idea of “an impartial spectator” in The Theory of Moral Sentiments: an imaginary device that helps us decide between right and wrong. For me, one of the things I like about Smith the moral philosopher, is that markets cannot work without some semblance of morality. Property rights and contracts are not enough; we also need virtue!

          Liked by 1 person

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