Montana Viewpoint


October 12, 2009

Few people remember what life was like for elderly Americans before Medicare was enacted in 1965. You can use all the statistics you want, but the fact is that a lot of our grandparents and great-grandparents didn’t have a lot to look forward to in their old age, especially if they got sick, and more especially, if they were poor. Poverty itself was viewed much differently then. Most Americans felt that the poor elderly were responsible for their own poverty and didn’t deserve government help because of that. Some of that poverty was caused by spending on medical problems, and once Medicare was enacted the rate of poverty in the elderly went down substantially.

Our notion of poverty changes over time. How many of those considered poor in 1960 had televisions or cars. They were, even in the early 1960s, considered luxury items, now they are considered almost necessities, and people who are now classified as poor have at the very least, a television.

So as times change our concept of poverty changes. Should it? Is a person with a TV set living beyond their means? Should a person with an automobile be entitled to government help? In short, is our concept of poverty relative to the standard of living?

Like it or not, we do change our definition of poverty to reflect the times. A person who lives in a cabin with no running water surely qualifies for poor in 2009 just as they did in 1950, but a person living in a trailer house with electricity, running water, a TV and a car, although they weren’t considered poor in 1950, might qualify today.

The idea that poverty is relative to the normal standard of living is an old one, and goes back to the beginnings of the study of economics. Adam Smith, the first economist, god of free Marketeers and Rugged Individualists because of his belief that the economy was a force of nature guided by “an invisible hand,” recognized that changing times changed definitions of wealth and poverty.

Smith was a Scottish philosopher who wrote the first major work on economics called the Wealth of Nations, published in 1776. Poverty was about more than not having money, Smith wrote:  “The reason poverty causes pain is not just because it can leave people feeling hungry, cold and sick, but because it is associated with unfavourable regard.”

I could paraphrase what Smith wrote, but nobody can explain it more understandably than Smith himself:

‘A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct.’

The reason the linen shirt was important was because of the message it conveyed to others. It was something valuable because it created a good impression that could be sold to an employer. What might have been a luxury item at one time could come to be considered a necessity of life in a later time. It is strange to think that having health care insurance could have ever been considered a luxury, but it’s sure a necessity today. President Harry Truman proposed a universal health insurance plan in 1945. It flopped, but twenty years later, Truman would be the first American to sign up for Medicare.

If you think Medicare isn’t a necessity of life see what happens when you try to take it away from the elderly. And if it’s a necessity of life for people over 65, you can bet it is for everyone.


Montana Viewpoint© is carried by 20 Montana weekly newspapers, including those in Helena and Billings, with a combined circulation of over 60,000. There is no charge for publication.

Jim Elliott is Chairman of the Montana Democratic Party and a former state senator from Trout Creek.

The opinions expressed in this column are his, and do not necessarily reflect the opinions of the Montana Democratic Party.

Jim Elliott
Phone: 406-827-3671
Mail: 100 TC Road, Trout Creek, MT 59874