The Poverty Industry: The Exploitation of America's Most Vulnerable Citizens, Daniel L. Hatcher

Reviewed by Scott W. Allard


In recent years, scholarship of the American welfare state has given greater attention to the public-private partnerships that powerfully shape the provision of social assistance programs and safety net benefits. Jacob S. Hacker's work on the employer-based private welfare state (The Divided Welfare State, 2002), Steven Rathgeb Smith and Michael Lipsky's book on the evolution of nonprofit service organizations (Nonprofits for Hire, 1993), and Joe Soss, Richard C. Fording, and Sanford F. Schram's arguments about the perils inherent in neoliberal paternalism (Disciplining the Poor, 2011) are notable in this regard. Into this space steps Daniel L. Hatcher's recent book, The Poverty Industry, which further challenges scholars, advocates, and policymakers to take a critical eye to the public-private partnerships commonly present in the delivery of human services.

The Poverty Industry, as the title implies, traces how private corporations and government agencies can conspire to extract resources inappropriately (and at times illegally) from human service programs that serve the most vulnerable in society: children in the foster care and juvenile justice systems, individuals with disabilities, and the aged.

Hatcher throws light on what can be hidden processes in human services budgeting, contracting, and implementation. The Poverty Industry walks through the evolution of legal doctrine regarding rights of vulnerable persons. For example, the author describes the legal basis and evolution of the parens patriae doctrine shaping the rights of children in state systems. Hatcher draws upon reports, news stories, and audits to provide numerous examples of the perverse relationships that can exist between elected officials, administrative agencies, and for-profit firms. The narrative provides compelling evidence that scholars, policymakers, and advocates should take a closer look at the political and business relationships shaping contracting decisions involving for-profit firms. The closing thoughts aptly propose stricter law, tighter oversight, and litigation when necessary.

I valued The Poverty Industry as much for the insights into the subterranean politics of human service provision as for the questions it prompts. Are states with high-performing professionalized agencies less vulnerable to the profiteering motives of for-profit service networks than states with lower-capacity bureaucracies? What kinds of organizational structures and culture permit these types of abuses? Which state agency budget and contracting practices are most likely to prioritize client outcomes? Are issues of financial abuse and corruption more common in markets in which there is limited competition among nonprofit and for-profit contractors?

Hatcher's argument underscores the fact that, too often, we lack insight into the human service programs charged with caring for the most vulnerable members of society because there are too few data sources detailing human service provision. There appear to be no easily accessible data that would provide detailed insight into the contracting trends highlighted in this book. But there is reason to be hopeful that research can catch up and close these gaps. For example, Hatcher discusses the problem of incarceral debt and the state's growing reliance on funding through criminal justice fees. Today, there is an emerging body of sophisticated empirical evidence around incarceral debt and how it perpetuates inequality (see Alexes Harris, A Pound of Flesh, 2016). We should be hopeful scholars respond in similar ways in the other policy settings Hatcher explores.

One finishes the book feeling deeply pessimistic. The text can make it feel as if no agency staff prioritize the care of vulnerable populations. I would argue—and the author's continued commitment to funding human services would seem to agree—that this is not the case. Even if we understand that ethical and moral problems are present in senior leadership settings, the vast majority of human service professionals prioritize the care of their clients. Rooting out the exceptions is the challenge. Ultimately, however, Hatcher's analysis leads to questions that should guide future researchers in political science, public policy, and social work.

More by This Author

Disciplining the Poor: Neoliberal Paternalism and the Persistent Power of Race, Joe Soss, Richard C. Fording and Sanford Schram Reviewed by SCOTT W. ALLARD

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