FREEDOM

Forty years ago, our nation embarked on two huge federal initiatives aimed at improving the lot of African Americans: the War on Poverty and the 1964 Civil Rights Act. The two programs, so different in their assumptions, turned out to be a giant natural experiment in social policy. With the results clearly in, we can distinguish what works to uplift people from what doesn't.

The Civil Rights Act was the capstone on America's long and tumultuous effort to make a reality out of its founding assertion, penned by a conflicted slave owner of genius, that all men are created equal. Henceforward, the act declared, Americans could not discriminate by race in employment, in places of public accommodation such as restaurants, gas stations, and motels, or in any federally aided program. Though, of course, racism lingered long afterward, as a practical matter American society and the opportunity it afforded were now open to all.Marked Improvement

The result was dramatic and unequivocal. Beginning in the mid-1960s, the condition of most black Americans improved markedly. While in 1960, one in three blacks aged 25 to 29 was a high-school grad, for example, by 1972 the percentage had doubled to two out of three. The percentage of black college grads also doubled, from 10% in 1965 to 21% in 1977. Job status and pay showed a corresponding improvement during the '60s and '70s. The proportion of black working women who had white-collar jobs rose from 17% to 50%, while for black working men the increase was from 11% to 28%. The median income of black working men rose from 59% of the median white working man's income to 69%; for black working women, the gain was much greater, from 64% to 93% of white working women's income.

But even as the opportunity opened by the Civil Rights Act resulted in such dramatic gains for the vast majority of black Americans, the condition of a minority of blacks, perhaps one in 10, markedly worsened in the years after 1964, so much so that a recognizable underclass -- defined by the self-defeating behavior that kept it mired in intergenerational poverty -- became entrenched in the nation's cities. The data tell that story vividly: the labor-force participation of black men fell from 83% in 1960 to 71% in 1980, and out-of-wedlock births rose from one in six for blacks in 1950 to over one in two in 1983 and nearly two in three by 1989. As the overall crime rate soared between 1960 and 1980, the black arrest rate (correlating closely with the black crime rate and 10 times higher than the white arrest rate) rose by 38%. Since, to repeat, most black Americans were succeeding, most of this rise in social pathology didn't involve the majority of blacks but was concentrated among that one-tenth who made up the underclass.

However small a minority, the new underclass was so spectacularly visible because of the blight and disorder it created in the nation's cities that pundits of all kinds spilled oceans of ink trying to explain its origin. What's clear in retrospect is that racism can't be to blame, since just at the moment that the underclass came into existence the Civil Rights Act was permitting blacks to flood into the mainstream. In addition, the 1960s economic boom makes it hard to ascribe the growth of the underclass to a lack of jobs.

Blame instead the enormous changes unfolding in American culture in exactly those years: the sexual revolution, the counterculture's contempt for the "system," the celebration of drugs, dropping out, and rebellion. When this change in our nation's most fundamental values and beliefs filtered down from the elites who started it to those at the very bottom of the social ladder, the consequences were catastrophic. The new culture devalued virtues that the poor need to succeed and celebrated behavior almost guaranteed to keep them out of the mainstream.

The War on Poverty certainly didn't cause the 1960s Cultural Revolution. Quite the reverse: it was itself the pure emanation of the new culture's world view. But it played such a decisive role in the formation of the underclass because it was one of the principal channels through which the new world view got transmitted to the worst-off Americans who fell into that class.

At the heart of the War on Poverty was the utterly debilitating message that the worst-off were victims: that the larger society, "the system," rather than their own behavior, was to blame for their poverty, their crime, their failure. Either, as War on Poverty architects Lloyd Ohlin and Richard Cloward implausibly argued, there really was no opportunity in the inner city, or, as the much subtler Michael Harrington contended -- in a book that greatly influenced President Kennedy to devise the War on Poverty -- the vast gulf between the worst-off and the prosperous causes the poor to lose heart, to become too demoralized to grasp the opportunity that lies all around them, even to become self-destructive.

In the view of President Johnson, the black poor found themselves so "crippled" by three centuries of racism that they required special help and a different set of standards. As he put it in a speech a year after he launched the War on Poverty on a much more grandiose scale than President Kennedy ever contemplated: "You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, 'you are free to compete with all the others,' and still justly believe that you have been completely fair."

At a moment when poor blacks needed every possible encouragement to move into the mainstream, such a message instead fanned self-doubt and anxiety; indeed, such an imputation of black inferiority as President Johnson's was a kind of soft but corrosive bigotry. What's more, because "the system" was the problem, stacking the deck against blacks so as to defeat their efforts -- and "crippling" them into the bargain -- the War on Poverty, instead of promoting the self-reliance and personal responsibility needed to seize opportunity, emphasized the need for political and legal action to transform the system.

This overall message, mouthed constantly by the legions of politicians and bureaucrats who sponsored and administered the enterprise, was perhaps its most toxic feature. But two programs directly stimulated the growth of the underclass by converting these principles into policy.

The Community Action Program, the War on Poverty's first (and worst) initiative, rests on a bizarre circularity in reasoning: that the poor must become active in improving their lot by demanding more and better services and transfer payments of which they are the passive recipients. As a practical matter, the most spectacular action the program took was the protracted mau-mauing of New York City's welfare offices, which resulted in loosened eligibility requirements, fatter welfare payments, and a huge expansion of the welfare rolls. This campaign went a long way to destigmatizing welfare and establishing it as a right, as if it were reparations for victimization. In this way, Community Action contributed mightily to the long-term dependency that became a defining, and debilitating, feature of underclass life.

So too with another War on Poverty creation, the Legal Services Corporation, designed to use the courts to change "the system." LSC tirelessly sued to raise welfare payments and expand eligibility -- so much so, to take only one example, that a San Francisco affiliate boasted that its efforts had more than doubled California's welfare rolls between 1968 and 1973 and had hiked the average grant by a third, costing the state over a quarter of a billion dollars. Erasing the distinction between the deserving and the undeserving poor, LSC successfully sued to have the drug addiction and alcoholism of many of its clients declared a disability, qualifying them for payments under the government's SSI disability insurance scheme, which thus often became a subsidy for vice. And LSC was equally successful in keeping public-housing tenants from being evicted when family members dealt drugs or even murdered neighbors, making the projects increasingly anarchic for law-abiding residents.

Lax Standards

All this was part of America's decades-long experiment with putting into effect the whole 1960s program for liberating the poor: not just the War on Poverty's generous welfare policies, but also leniency to criminals (so as not to "blame the victim"), lax educational standards aimed at not damaging ghetto kids' self-esteem (which also subverted the War on Poverty's Head Start program), and homeless policies based on the comical fiction that here was yet another class of victims of the system. When the results of such policies became unmistakably clear -- the underclass, a crime wave, decaying cities -- Americans, ever pragmatic and capable of learning from experience, did a U-turn, passing welfare reform and adopting tough-minded Giuliani-style policing in cities across the land. The result: a halving of the welfare rolls and the violent crime rate, and the lowest child-poverty rate ever.

The lesson after 40 years couldn't be clearer. Freedom works; dependency doesn't.

Mr. Magnet is editor of the Manhattan Institute's City Journal, from whose Summer 2004 issue this article is adapted.