Homeless Industrial Complex
What is it and why should I care?
In a recent discussion on Chico First, someone asked for an explanation of what I mean when I say “Homeless Industrial Complex.” If you think this is going to be a one-sentence explanation, you don’t really know me.
Supply chains
I will begin where you don’t expect it, with a pencil. In case you have never heard this presentation before, spend a few minutes watching this ancient video by Milton Freedman. He is an economist and is talking about the magic of the market pricing system, but that is not the point I’m making.
In this video, after describing the thousands of people and equipment that were needed to produce the humble pencil, he asks this seemingly simple question. “What brought them together and induced them to make this pencil?” (see 1:47
)
And then he says this, to draw a contrast to the free market mechanism. “There was no commissar sending out orders from some central office.” That is what I want you to think about. The idea of a commissar sending out orders from a central office.
There is a famous story about the reforms Nikita Khrushchev imposed as he assumed the role of Soviet Premier after the death of Stalin. He ordered farmers to switch their crops from wheat to corn, and in one year, there was a severe bread shortage throughout the Soviet Union. That is what a commissar can do. A commissar can decide, fund, and order certain things to happen. That simple act can set an entire cascade of consequences in motion and produce outcomes that no one wanted or intended.
Sometimes the “commissar” is not a single person, but an institution or a state government legislature working with a Governor to implement certain policies, pass laws, and secure the funding to make them happen as imagined.
Military-Industrial Complex
The term “Homeless Industrial Complex” is derived from the famous farewell speech by President Dwight D. Eisenhower, given in 1961, as John F. Kennedy was about to take office. (see 8:49 https://www.c-span.org/video/?15026-1/president-dwight-eisenhower-farewell-address )
Before first using the term “military-industrial complex” he said this: “Until the latest of our world conflicts, America had no armament industry.” Then, “American makers of plowshares could, with time, and if required make swords as well.” ( 7:22) That transformation of industrial production to swords instead of plowshares begins as a policy. Then the legislature passes laws and budgets, and then the various institutions of procurement and production, paid handsomely, begin to implement the policy, and swords begin falling from the ends of production lines.
I happen to know that one of the first signs of this transformation during the early stages of WWII was you could no longer buy a tractor. That capacity was transformed into the production of tanks and other war equipment. This lasted until after the war, and even then, tractors were on a strict allocation system. I know this because my dad bought one of the first available after the war, in Mississippi. As we know from the Covid lockdown, supply chains, once disrupted, do not suddenly spring back to life.
Transforming the procurement, production, and distribution of goods takes time. From the end of WWII on September 2 of 1945 to the lockdowns beginning in March of 2020, the supply chain for American goods had almost 75 years (74 years, 6 months, 30 days to be precise) to evolve. Only recently has it begun to open, and it is far from going smoothly.
So, what is the “Military Industrial Complex”? Eisenhower: “Our, toil, resources, and livelihoods are all involved. So is the very structure of our society. In the counsels of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the Military-Industrial Complex. (8:48) The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic process.”
The combination he is referring to is that of influence and power. Given enough influence and power, a Commissar can do just about anything. Eisenhower then warns us. “We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense, with our peaceful methods and goals.”
Homeless Industrial Complex
The similarity of this label to the above is meant to highlight the analogy of one complex to another. To further deepen our understanding, let’s examine the words used here, “Industry”, “Homeless” and “Complex.”
An industry takes in resources and uses labor to produce something. For the pencil, the lumber industry provides wood to the pencil industry. Nobody works for free. But wood is not enough to make a pencil. You need graphite and glue and brass and rubber and paint, not to mention the capital required to design and manufacture the pencil-making factory. You need the transportation system to get raw materials in, and then out to the distribution system. You need banking and retail outlets and demand for pencils. Moving various raw materials through a system that makes pencils available in your local store is a complex system indeed.
Let’s not forget the laws that regulate this industry, either. It is not enough to own the land to grow the trees that are harvested sustainably to make the wood that you ship to the pencil factory. There are environmental laws, safety laws, banking laws, labor laws, endangered species laws, contract laws, and so forth.
Taking all of that into consideration, just for a lowly pencil, “Our, toil, resources, and livelihoods are all involved. So is the very structure of our society.” Taken all together in its full complexity, we could call this system the “Pencil Industrial Complex.”
When we use the word “military” it is a shorthand for something that could be broken down in its many elements and components. It involves military personnel, equipment, arms, production, chains of command, communication and control, governance, justice, etc. It is the catchall phrase for the entire, complex system of national defense, and the projection of national power.
“Homeless” is no different. It is a convenient catchphrase, a euphemism for something much more complex, a rhetorical device to encourage you to think of the word in general rather than in specific terms. If you doubt this, consider that in the entire world, there are only two kinds of people, “housed” and “homeless.” This is not sufficient to describe the immense complexity of the human experience. It has come to mean something very general, and to elicit emotions of compassion, empathy, and generosity, in the same way, the military would prefer you think about soldiers, safety, bravery, and courage. We prefer to think of pencils as writing and drawing instruments, not instruments of murder, though we could think of them that way. I was stabbed in the back by a deranged girl in 5th grade. I still have the tattoo of the lead left in my skin. Fictitious character John Wick showed us how it’s done.
In all three examples, pencils, military, and homeless complexes, the concept is much, much larger than we might think if we only examine the concept superficially. But in reality, industrial complexes are intricate systems of influence and power, all cooperating to produce a defined outcome. Whether that outcome produces the desired result is a separate question. Whether by the forces of market pricing, or the edict of a Commissar, influence and power combine to create and operate a complex system made up of many interacting systems.
What are the components of the Homeless Industrial Complex?
You are now equipped to discover those systems yourself, simply by being an “alert and informed citizen.” I’ll get you started.
Homelessness is the purpose, the problem that needs to be solved, not unlike “Military” and “Pencil” are statements of problems that need to be solved, “national defense” and “writing and drawing” respectively.
“Influence” is a good place to start. Certain narratives get mysteriously promoted, like “homelessness is a symptom of an unjust society”, “but for the grace of God, I could be homeless” and “I’m just one paycheck away from being homeless.” These are all designed to encourage you to think about the word “homeless” in a particular way and ignore the realities of the counternarratives: “society requires justice to exist”, “nothing makes good luck like hard work”, or “99% of people live paycheck to paycheck, and they make it.” The suffering is used to generate sympathy while downplaying addiction, mental illness, and crime. The “housed” are disparaged for their privilege and are encouraged to direct their resources at a specific target to assuage their guilt. You get the idea. It is rhetoric over facts and science, which separate the world of emotions from the objective and empirical realities.
Then comes some policies like “housing first” and “low barrier shelters” “serve them where they are” and so forth. Another important policy is the transformation of the victimhood of homelessness into a human and civil right. “Housing is a human right,” or “you cannot force someone into rehab until they are ready,” “survival crimes should not be punished”, or “the mentally ill have a right to refuse treatment.”
Then comes programs. The federal government charges HUD with the task of dealing with homelessness. They set up extra-governmental bodies to receive and distribute money and help NPOs apply for grants and count the number of homeless in various categories, often known as county Continuums of Care. The Governor proposes various programs to “solve homelessness” and the legislature sets up state agencies, like the California Interagency Council on Homelessness (Cal ICH).
The state legislature passes bills that fund certain policy initiatives, authorizes Cal ICH to create grants to distribute the money, and county CoCs act as the distribution hub for these funds. Various individuals, organizations, and NPOs attached to the CoCs apply for the grants. The grants specify what they must do and how they spend the money. The NPOs become the agents of the state and implement the programs handed down by the “Commissar” state.
The NPOs apply for grants and organize the programs and hire the people needed to deliver the “services.” One recent program involved paying for motel rooms for selected homeless people. It was called “Operation Home key.” Most recently, the City of Chico spent millions of dollars on pallet shelters, paid for by grants related to covid. That shelter is being run by one of the local and largest NPOs. Foodservices, shelter manufacturers, security, construction companies, and even the prior tenant, BMX all got paid from this money. The company that produces the “tank” or pallet shelter in this case, a company conveniently called “Pallet” got paid a couple of million dollars for their products.
At the bottom of this service pyramid are the “homeless”, individuals that have been living in illegal encampments, something that only in recent history has ever been tolerated. That is one measure of the amount of influence the Homeless Industrial Complex has had on our society.
And it doesn’t stop there. In addition to the programs that provide direct services, the relaxation of the consequences for anti-social behavior has also contributed heavily to the “homeless problem”, including the reforms to the criminal justice system, that made prison less likely and/or shorter, reduced the penalties for certain “survival crimes” like shoplifting and property crimes, and various events and circumstances that make it difficult or impossible for police to effectively enforce so-called “quality of life crimes.”
And let’s not forget the lawyers. We all know about the Martin v. Boise case, brought to us by a Washington DC law firm, Lathom & Watkins, LLP. https://www.lw.com/offices/washington-d-c- We also know about the Warren v. Chico case, also aided by a big “poverty client” law firm. Legal Services of Northern California is an almost $12 million firm operating in 23 Northern California counties. They were recently awarded $650,000 in a voluntary settlement agreement with the City of Chico. https://lsnc.net/
LSNC was assisted by the Western Center on Law and Poverty, a California non-profit firm of over $6 million, founded “in 1967 by a passionate group of attorneys and legal scholars from USC, UCLA, and Loyola law schools.” https://wclp.org/about-wclp/
Here is a question: Since their impoverished clients cannot afford to pay, where does the combined $18 million in annual revenue come from? You guessed it. They are part of the Homeless Industrial Complex too.
What about the volunteers? I often hear many people involved in the Homeless Industry do not get paid at all, so how can they be part of the industry? I don’t know any volunteers who are starving because they choose to “volunteer” their time in the service of others. This is silly. Every volunteer has the means to house themselves, feed themselves, and provide themselves with enough free time to volunteer some of their time. They are not just volunteers, they are wealthy, at least by any third-world poverty standards. Why they chose to do this, and how they support themselves is their business, but they are part of the industrial complex just the same.
The NPOs, the CoC, the Law firms, state and federal agencies, legislatures, governors, and even volunteers are all part of the complex, interacting systems that make the homeless industry possible. Conceptualized at the highest level, you can understand they all work together, even if they don’t know each other, cooperating in the process of creating, operating, and sustaining an immense Homeless Industrial Complex that, in the aggregate, imposes tremendous influence and power on our civil life.
Every individual who contributes to the process of delivering a pencil to consumers does not know everyone else in the complex system, beginning to end. The same holds for the military, and so with the homeless industry. Cooperation is created one transaction at a time.
Here is the one big difference. In the pencil industry, if the damn thing doesn’t write, you get your money back and the industry goes away. If the military fails to protect the country, the country is occupied by foreign forces. In all market industries, outcomes matter. The same market forces that created them can destroy them. Consumers must be satisfied with the outcome, or they don’t buy. Without a buyer, no market industry can survive.
This is the distinction between market industries, and government industries, which we conveniently call “institutions.” They are created by government edict, and as a result, unless they fail spectacularly, they persist regardless of the outcome. There is no market check and balance built into each transaction. There is only one transaction that matters, and that is elections. Once that contest is decided, politicians have years to implement their programs, for whatever reasons or motivations they may have.
Even worse, while the politicians have power subject to regular election cycles, the agencies and institutions persist for much longer, and the ability to reject their “services” is very limited. Try to skip registering your car and see how that works out for you.
When a dictator assumes power and can control the instruments of that power, they are hard to displace. It took the Russians 70 years to escape Communism, and that only finally happened because the corruption and graft were so bad, that the society collapsed under its own weight.
I don’t know how this translates to the Homeless Industrial Complex or any other observation we can make about our local, state, or federal government institutions. One thing we can probably agree upon is that none of them seem to be working for us very well. We all have the growing feeling that our civil society is collapsing under its own weight. I think that is true and correct.
If this is true for our government institutions in general, why would we assume that the institutions connected to “homelessness” would be doing better? By any objective measure, the problems the homeless industry set out to solve years, even decades ago, have become worse.
I could close with the tired meme about idiocy and its method of repeating the past failures in the hope that something better and different will occur. I’m going with a different theory. I’m going with the 70-year theory, that beyond a certain point of corruption and inefficiency, civil society collapses under its own weight.
That is when the trouble really begins. The only thing that can save us, in my humble opinion, is “an alert and informed citizenry.” Writing this article is me doing my part.