Libertarian Follies
| March 13th, 2006At The Y Files, Cathy Young writes:
It’s my impression that most democrats and lefties realize that being smart is not an absolute guarantee against needing help at retirement. Even smart people can be hurt by bad investments, bad decisions or bad luck. The delusion that poverty is primarily caused by stupidity is the province of smug libertarians (see: Murray, Charles), not Democrats.
That said, I think it’s also the case that stupid people are more likely to wind up poor than smart people, all else held equal. So what? Stupid people don’t have less of a need to eat in retirement. Saying “smart people will all successfully plan for retirement,” even if it were true (and it’s not), would still be no answer to the question of what to do about elder poverty.
I’m not sure what “workplace diversity measures” means. Is it just affirmative action, or is Cathy also referring to laws making it illegal to fire people, or refuse to hire them, based solely on their race? I disagree with her either way.
The flaw in Cathy’s thinking - and in the thinking of most libertarians - is that she mistakenly writes as if the government were the only possible threat to freedom. In fact, the government is only one of many threats to freedom.
“Freedom,” as libertarians use the word, never seems to mean anything other than freedom from government intrusion. Real freedom, however, means having a wide range of attractive options. When someone’s options are eliminated by the marketplace, by illness, or by lack of available assistance, that is as real a threat to their freedom as government intrusion.
When a black person has their economic opportunities reduced by widespread racism in the marketplace, that is a more significant threat to their freedom than when the daughter of a wealthy person has to pay estate taxes.
When someone too old to find work has no money, that is a far more significant threat to their freedom than high marginal income tax rates are for the freedom of well-off people.
The inability of libertarians to understand this is why they don’t understand that a poor, untaxed person who has nowhere to sleep but under a bridge, is in fact less free than a well-off person faced with the tyranny of reasonable government regulations or even the horror of progressive tax rates.
Edited to add: Okay, that last paragraph was unfair - possibly even as unfair as “Democrats seem to believe that Americans aren’t smart enough to manage their retirement….” is. I don’t mean to say that libertarians are heartless, or that they don’t understand at all that poverty can limit freedom. But I do think that libertarians massively overestimate the tyrannical effects of mild government regulation and taxes, and massively underestimate how constraining of freedom discrimination and the marketplace can be.
March 13th, 2006 at 1:10 am
I understand this point perfectly, and I think many (but by no means all) other libertarians do, too. I suspect that, in general, the economic left is at least as guilty as economic libertarians when it comes to not understanding the arguments of the other side.
I’m not saying that you’re attacking a strawman, since there are libertarians whose argument is little more sophisticated than this, but you are attacking one of the weaker versions of the case for libertarianism.
This comment was written by Brandon Berg.Report this comment to the moderators
March 13th, 2006 at 7:33 am
But Cathy’s paragraph does make precisely that argument. She conflates two things that are completely different: moral freedom and economic freedom. For moral freedom, the government just has to butt out. Get out of the bedroom, don’t look over my shoulder at the library computer, let me make my own decisions that affect only other consenting adult individuals. But for economic freedom, the government has a role: in mitigating the tyranny of the market and ensuring, at the very least, equality of opportunity and a safety net to keep innocent citizens from starving to death. Someone working for $5.15 an hour is not free to save for retirement; they’re spending their whole income on rent and don’t have enough left over for food and heat, let alone savings. Someone working three jobs is not free to make unfettered decisions about their children’s education; they don’t have the time, money and expertise to send their kid to private school or home-school it, or even to make a completely informed decision about those options.
This comment was written by Grace.Report this comment to the moderators
March 13th, 2006 at 8:48 am
The basic difference is, in the realm of ideas, restraint from interference is all that’s needed–while in the realm of money, power also plays a part.
This comment was written by pbg.Predation is part of economic life, and you not only have to be smart (as in prudent), you have to also be able to defend yourself.
A GM employee could be seen to make a prudent life-choice to work for the big company and retire with a good pension–until GM decides to take back elements of that pension.
That’s not lack of intelligence, that’s lack of power. (unless you get into the juvenile “Well, they should have been smart enough to know not to trust GM, and smart enough to become millionaires and put their money into bullion.”)
Democrats know that people are smart, and they know that part of that intelligence is to supply muscle against the forces that can squash people’s lives.
And anybody sufficiently smart would see that protection against predators is part of planning for retirement–and that collective protection is the only one that makes sense.
The problem is that many libertarians view America as being peaceful and predator free–or worse, that the only predators are Eevil Gummint. Anybody who’s brushed the fangs of the health-care industry knows different. Without power, even the clever, resourceful and virtuous in this society die impoverished and alone, and that is what Democrats get that libertarians do not.
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March 13th, 2006 at 8:49 am
On retirement:
Suppose the federal laws governing pension trustees prohibited them from investing in any entity that exceeded 25 million dollars in value. This would put the stocks that are traded on the major stock exchanges off limits. The public purpose would be to acknowledge that an economy that is dynamic is better than one that is stale. It would reduce one of the barriers to entry, access to capital, to the great displeasure of folks who favor monopoly, regardless of whether that monopoly is publicly owned or privately owned.
The inverse, that of effectively restricting access to capital to all entities that are not traded on the major exchanges, is the net effect of most retirement regulation. This distortion of access to capital from individual savings is being repeated for medical savings accounts and college savings accounts. The progressives, those folks that hate both capitalism and monopoly except when they themselves are the owners, go along through the team effort of state treasurers.
Limiting the size of the entities to which pension trustees may invest would slap back at monopoly both against rich individuals and against the increasingly adventurous progressives. It would slap back at the phony baloney stuff the spews from CATO as to savings. When credit rating folks offer their little thoughts on states as to the “funded” level of public employee pension schemes the sole focus is the exertion of power to transfer local tax dollars, and local savings, into a river of cash that flows to wall street. This is hardly part of a small government philosophy. It is economics, Albania style.
I do favor a dynamic and efficient economy, based on decentralization and choice. I do see that the aggregation of management of savings into fewer and fewer hands is about as vibrant and free as a Soviet era five-year plan. But hey, I’m only The Wild Economist, what would I know?
Any vote to subsidize wall street or to subsidize empire-builder-state-treasurers is about as anti-capitalist as one could get. It is also about as un-egalitarian and inequitable as one could get as well. Your choice in the present scheme is limited to picking from two alternative slavemasters.
This comment was written by PDXNAG.Report this comment to the moderators
March 13th, 2006 at 11:43 am
The flaw in Cathy’s thinking - and in the thinking of most libertarians - is that she mistakenly writes as if the government were the only possible threat to freedom. In fact, the government is only one of many threats to freedom.
The flaw Amp attributes to “most” libertarians is more specifically their belief that the powers outside of government that Amp fears were not created by governments themselves. Corporations are fictional entities created by the government. Landlords are created by the government using force to exclude some people from parts of the earth. Heirs are created by the government enforcing the wishes of the dead on the living. Restraints against abuses of power by the wealthy and massive “redistributions” (really predistributions) of wealth can be justified without violating any libertarian principles, and in fact honoring them better than the right-libertarians who have unfortunately captured the term “libertarian” in present-day America.
Moral freedom and ecconomic freedom ARE inseperable, however moral freedom does not lead to the ecconomic outcomes that right libertarians think they do.
This comment was written by Decnavda.Report this comment to the moderators
March 13th, 2006 at 12:01 pm
I don’t understand this argument.
People who make $5.15/hour are already forced to turn over 6.2% of their wages to FICA and another chunk to the state and federal government in tax withholding. The FICA withholding is, according to the government’s accounting fictions, “saving for retirement” in the form of funding Social Security and Medicare. So presumably if there were no FICA (or better, no tax withholding at all) they could voluntarily put aside up to 6.2% of their wages for savings in an IRA and be no worse off than they were before.
You might say, “Oh, but if they wouldn’t put aside that money if they’re not forced to, because they have all these other pressing costs that they need to pay now.” There are certainly cases where that’s true, but it doesn’t follow from that that being forced to put the money aside is the best thing for them. Having lived on around $5,000 a year myself (due to a combination of low-paying jobs and long-term unemployment), I can tell you that when you don’t have enough money to spare for savings, being forced to put the money aside anyway has a direct consequence: debt. If (ex hypothesi) I’m being forced to put aside money that otherwise could have paid off current bills, then those bills still have to be paid off somehow, and when I don’t have the money now, that means they have to go on the card. And the debt accumulates a lot quicker than whatever “returns” I’m supposedly getting on my “investment” in Social Security and Medicare.
This comment was written by Rad Geek.Report this comment to the moderators
March 13th, 2006 at 12:03 pm
Amp, could you please consider using the term “right-libertarian” when making arguments that apply primarily to them? I realize that simply saying “liberarian” is probably clearer both in your mind and to most of your readers, however:
1. Outside of the U.S. the term libertarian has generally not refered only to those with a right-wing conception of property rights, and left-libertarians are gaining greater prominence in the U.S. as well. For example, a major figure in the worldwide left-libertarian movement, Philippe Van Parijs, has recently taken over John Rawl’s former chair of political philosophy at Harvard.
2. Allowing the right libertarians to control the use of the term “libertarian” is a major victory for right libertarians specifically in making the possibility of left-libertarianism seem oxymoronic, and a victory for right-wing ecconomics generally in America, where concern for individual liberty is such that anytime the debate is framed as individual liberty versus government regulation or redistribution, those on the side of regulation or redistribution are going to lose.
This comment was written by Decnavda.Report this comment to the moderators
March 13th, 2006 at 12:25 pm
This is a common misunderstanding (and there are a number of libertarians, even, who encourage it by their practice). “Freedom” in the political sense that libertarians use it doesn’t mean “freedom from government intrusion;” it means “freedom from violent coercion” (hence the “non-initiation of force principle”). Government comes into the picture only when libertarians go on to suggest that government officials don’t have any special prerogatives to violently coerce peaceful people any more than ordinary civilians do. (But this entails — though vulgar libertarians don’t tend to recognize it — that systematic violence such as lynch law in the Jim Crow South, or union-busting gang violence, or pervasive male violence against women, are just as much matters for libertarian concern as invasive government is.
Nor do most libertarians claim that this is the only thing that can be intelligibly described as “freedom,” or that it’s the only valuable form of freedom, or even that it’s the most important form of freedom to any particular person at any particular time. What libertarian theory does demand is that you not try to promote other forms of freedom at the expense of freedom from violent coercion, because forcing people against their will to be “free” in other senses is (1) unlikely to work well, or (2) immoral, or (3) both. (Which one of these options the libertarian appeals to will vary depending on what kind of libertarian she is.)
(More to say, but it’ll have to wait until after work…)
This comment was written by Rad Geek.Report this comment to the moderators
March 13th, 2006 at 12:46 pm
The problem, Rad Geek, is that in the US those libertarians who are visible to those of us non-libertarians hold, espouse & publicize the views that Amp is responding to. Granted, in Washington state the Libertarian party also endorsed SSM, but they also hold the stereotypical right wing economic positions.
I’m curious about the “state created landlords” thing mentioned earlier. Are libertarians against landlords? I figured, based on the vocal libertarians in the US, that if you wanted to rent out your property that is just fine but that it would be better if there were no governmental interference with how/to who you rent. More details, please.
This comment was written by Jake Squid.Report this comment to the moderators
March 13th, 2006 at 1:02 pm
Rad Geek wrote:
Well, following that line of reasoning, it’s obvious to me that all we need to do to save SS forever is to enlist MBNA and its fellows to lobby on our side. After all, if SS is helping them tempt struggling wage slaves toward their magnificent 23.99% interest slices of Heaven, credit card orgs, banks, and their brethren in the predatory lending industry have a vested interest in keeping the program alive. Unfortunately, that would also mean that they have a vested interested in keeping the taxation system which feeds SS as regressive as it is now, but you can’t have everything… ‘Scuse me. I need to get Harry Browne on the phone…
This comment was written by alsis39.5.Report this comment to the moderators
March 13th, 2006 at 1:10 pm
First, it was me, not Rad Geek, defending left libertarianism.
This comment was written by Decnavda.As for the landlord thing, while their are many types of both left and right libertarians, the step that crosses one from right to left is in dealing with natural resaorces, such as land, but also including oil, minerals, air, broadcast spectrum, etc. Libertarians mostly all agree that property can arise from labor - if you make it, it’s yours. But who created land, ect.? No living human, that is for sure. Right libertarians think that property from land can arrise from discovery, use, or just being the first to assert the claim. Left libertarians think that each person has a natural right to use of the entire earth, or at least an equal share. Asigning property rights in natural resources may be practically necessary to prevent people from interfering in each other’s use, but those denied their fair share of resources should at least be compensated by those with more, and reasonable restrictions on use may be premissible as long as the point of the restrictions is to allow the greatest use by all. The government enforces all of this by sending guys with guns to arrest “treaspassers” when the exclusive rights of the “owners” of natural resources are violated.
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March 13th, 2006 at 2:30 pm
Loaded words are inherently hard to use in analysis.
The spectrum of beliefs about the proper role of government is too broad to be reduced to a small list of loaded words. It would not capture the notion that holding one set of beliefs, momentary understandings, does not also mean exclusion of other competing and conflicting beliefs. I look upon libertarianism as a description of a set of concepts rather than of political alignment. Self-labeling by any group is odd, in that it seeks to weaken debate by substituting the weight of the number of followers for the rigor of reason and debate.
Thus there are no “libertarians.” Jake Squid’s point is clear:
There are folks who only claim to represent Libertarian views.
Restraining the exercise of monopoly power is a notion that should overlap with most common labels, from Liberal to Capitalist to Free Market to [everything but the monopolist themselves]. In economics the notion of the extraction of economic rent is bad, never “good.” It represents the absence of freedom of the consumer to obtain reasonably priced goods and it is the absence of an effective opportunity for competitors to enter the market to offer the goods at a lower price. Only a mis-self-labeled Libertarian would openly promote reducing the individual liberty of the masses to serve the liberty of one to extract economic rent. It is all relative. Protection of oil monopolies, under the notion of the free market and so-called Libertarian ideology, is just one example of mis-labeling of ideologies for political ends.
It feels like we are living a perpetual masquerade ball where we take head counts of the most popular labels, costumes, rather than summarize and describe the actions and beliefs of the folks behind the masks.
I say unmask the impostor, as you have.
Decnevda, assume that natural resources have no inherent value only a potential value when used to meet the demands of consumers. There is a notion even in the Mining Claims Act that the resource that is claimed must be put to use, implicitly meaning that it reaches consumers rather than be horded so as to prevent delivery to the market. The value of the resources is determined in the market by the aggregation of demand by the ultimate consumers. I suppose your “left” libertarian could form a consumer cooperative and designate a party to perform the extraction of the resource, or act in like manner to a horder by preventing the resource from reaching the market. A capitalist would say that the market itself is the most efficient way to assign a value to the resource, based on consumer demand. [Pardon me, I just used a mask as an identifier, oh well.]
This comment was written by PDXNAG.Report this comment to the moderators
March 13th, 2006 at 3:04 pm
I agree resources only have potential value to user and no inherient value, as well as that the free market is the most efficient way to determine the value of resources. The question is who do we, as a society, assign as the initial owner? A left libertarian believes that it should be all of us equally. In theory, that means that the rights to extract the resources should be auctioned, and the proceeds distributed equally to all. Practically, there might be more efficient means of taxation to capture the fair market value of the resource, and possibly better ways to use the money to increase everyone’s freedom than simply dividing it up, but the auction/division is the ideal. Whether the actually extraction is done by an individual, corporation, or co-op does not matter inheirently.
This comment was written by Decnavda.I would also agree that everyone’s views just are what they are and should be assessed on their merits, and that lables are primarily used for political purposes. But politics matters.
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March 13th, 2006 at 3:26 pm
I can’t recall the last time I saw a more dead-ondeconstruction of Libertarianism: The flaw in Cathy’s thinking - and in the thinking of most libertarians - is that she mistakenly writes as if the government were the only possible threat to freedom. In fact, the government is only one of many threats to freedom.
This comment was written by The Headpiece for the Staff of Ra.Report this comment to the moderators
March 13th, 2006 at 3:30 pm
Real freedom, however, means having a wide range of attractive options.
I don’t disagree, but you don’t even need to go this far to reject libertarian conceptions of freedom. A less controversial conception of freedom might be “the absense of arbitrary interference/domination.” That can come from the state or from various private/civil society sources. We need a strong civil society to keep the state in check, and vice-versa. The goal is to craft a state has the powers and limits and institutional design best calibrated to fend off to fend off the twin threats of imperium (state domination) and dominium (private domination).
This comment was written by djw.Report this comment to the moderators
March 13th, 2006 at 4:00 pm
I like your defense of stupid people. Being stupid doesn’t mean you deserve to have bad things happen to you, yet often people have no compassion for someone if they can just call that person ’stupid’. It’s not just money, but also health issues, like getting a girl pregnant just shows he’s an irresponsible idiot, therefore we don’t need to worry about that happening.
Another related thing is when people blame parents for doing a bad job making sure their kids aren’t watching porn on the internet or staying away from drugs, as though blaming the parent somehow stops the kid from being harmed.
I have always hated the way smug Libertarians think that calling people stupid somehow gets their policies off the hook for all the damage they cause.
This comment was written by John Howard.Report this comment to the moderators
March 14th, 2006 at 7:50 am
Sorry, I should have been a lot clearer - I was assuming that the libertarians’ fantasies had been granted and that there was no Social Security or any other form of government safety net, but that people making minimum wage were expected to scrimp and save for their own retirement entirely unassisted. Someone who could actually accomplish that feat wouldn’t be “smart”, they would have magic powers. Especially because if the libertarians had their way, there presumably wouldn’t BE a minimum wage, so they’d be working for even less.
This comment was written by Grace.Report this comment to the moderators
March 14th, 2006 at 10:38 am
because of some ideal of pride, merely reinforces that inequality by allowing the privileged class to continue ignoring their advantages. Martin Luther King made the following comment about faith, which critique seems applicable to any discussion aboutpolitical or legal philosophy as respects rights and freedoms: “Any religion that professes to be concerned with the souls of men and is not concerned with the slums that damn them, the economic conditions that strangle them, and the social conditions that cripple them, is a
This comment was written by Pacific Views.Report this comment to the moderators
March 14th, 2006 at 10:44 am
What porti0n of the workforce remains at minimum-wage level for the duration of their working lives? (Some 50+ years at this point for most folk.)
I used to get the minimum wage. In high school. And then later, after the dot com collapse, I got the minimum wage again. In neither case was it a permanent condition.
This comment was written by Robert.Report this comment to the moderators
March 14th, 2006 at 11:08 am
Grace:
97% of the US work force makes more than minimum wage, and half of those who don’t are under 25 and/or part-time workers. 1.1% of full-time (40+ hours per week) workers and 1.8% of people 25 and over make minimum wage or less. You’re not expected to save for retirement while making minimum wage, because you’re not expected to make minimum wage for your entire life.
If you do, you’ve failed. You had your chance, and you blew it. Then you had another chance, and you blew that one, too. And almost certainly several more. It may take magic powers to save adequately for retirement on minimum wage, but it doesn’t take magic powers to get a job that pays more.
Also, the problem with Social Security (one of them, anyway), is that it isn’t a safety net. It’s a dragnet.
This comment was written by Brandon Berg.Report this comment to the moderators
March 14th, 2006 at 11:30 am
Thanks, Brandon. I’m going to put this on a banner when I do my lecture tour entitled “Why I Will Never Embrace Libertarianism.”
This comment was written by alsis39.75.Report this comment to the moderators
March 14th, 2006 at 12:50 pm
I simply do not believe Brandon’s 97% number. Where does it come from? And does it include:
1. Undocumented workers
2. People making minimum wage in states and localities where the minimum is higher than the national minimum
3. People making more than the current national minimum, but less than what the national minimum would be if it had been indexed to inflation when established at its current level?
I actually agree that eliminating the minimum wage would be a good policy, but only AFTER the establishment of a subsistence level basic income.
This comment was written by Decnavda.Report this comment to the moderators
March 14th, 2006 at 1:16 pm
I suppose it would be too much to hope that the suits who decide what “subsistence” means would have to live as “subsistence” citizens for a few months. You know, so they can see whether it really elevates one’s character or not. >:
I need to learn to stay off threads like these. Given my own prospects, they inevitably end up giving me nightmares that would put Wes Craven to shame. >:
This comment was written by alsis39.75.Report this comment to the moderators
March 14th, 2006 at 1:44 pm
According to the BLS, in 2004 about 2.7 percent of hourly workers earned minimum, which comes to about 1.6% of all workers. So Brandon’s figure is conservative. Figures on undocumented workers are nonexistent, naturally. To the best of my knowledge, nobody collects statistics on the what-ifs Decnvada mentioned.
This comment was written by Robert.Report this comment to the moderators
March 14th, 2006 at 1:46 pm
Forcing the people who decide what “subsistence” means to live on that income for a few months would be a great idea, just as it would probably be a great idea to force the people who currently decide what the minimum wage is to live on that for a few months. While we are at it, could we force the people who currently decide what should be given to SSI, TANF, and Food Stamp recipients to live off of THAT for a few months? A lot people seem to think my clients live in mansions and drive cadilacs.
This comment was written by Decnavda.Report this comment to the moderators
March 14th, 2006 at 1:53 pm
The BLS also does not include my 2nd category, which includes, for instance, California, with one out of every eight Americans. Part of the reason for the what-if number 3 is that the salaries of many people working just barely above the minimum are also determined by the minimum. So anyone who gets a $0.10 per hour raise after working the minimum for six months is no longer a minimum wage worker, but it is highly likely that they would not be earning the current minimum if the minimum did not exist.
This comment was written by Decnavda.Report this comment to the moderators
March 14th, 2006 at 3:06 pm
So anyone who gets a $0.10 per hour raise after working the minimum for six months is no longer a minimum wage worker, but it is highly likely that they would not be earning the current minimum if the minimum did not exist.
Why did they get the 10 cent raise?
This comment was written by Robert.Report this comment to the moderators
March 14th, 2006 at 3:35 pm
They got the ten cent raise because it is cheaper to pay the extra 10 cents an hour than to hire and train another worker at minimum wage, and the raise makes any other job the employee could get - at minimum - a reduction in pay. Without the minimum, both the new employee wage and the trained employee wage could be lower and have the same effect of locking in trained employees.
This comment was written by Decnavda.Report this comment to the moderators
March 15th, 2006 at 3:00 am
Decnavda:
You’re right—I hadn’t considered the effect of state minimum wages, nor had I considered that there might be a bulge in the distribution at a level trivially above minimum wage. I couldn’t find data that detailed for hourly wages, but here’s what I found on an annual basis:
Exhibit A: For workers 15 years and older who worked at full-time jobs and who worked for 50 weeks or more, 15.3% made less than $20,000 in 2004, and 7.4% made less than $15,000. I’m not 100% sure, but I believe that this category consists of workers who were employed for at least 50 weeks and who worked at a full-time job at some point during the year (i.e., they didn’t necessarily work full-time for the whole year).
I realize that this excludes those with unstable employment, who probably have lower wages, but this is the best I can do with the data I have.
Exhibit B:
Some characteristics of households in the lowest income quintile (which tops out at $18,500):
-58.9% are non-family households (with 94% of these being one-person households).
-37.9% are headed by people over 65, and 9.8% by people under 25.
-59.5% had no income earner. In only 16.9% did the householder work full-time for more than half of the year (of those who worked full-time year-round, only 7.4% were in the lowest quintile).
-49% own their own homes (Not really relevant, but still interesting).
Alsis:
This comment was written by Brandon Berg.Cute. But the mere fact that you find it objectionable doesn’t mean that it’s wrong.
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March 15th, 2006 at 8:04 am
to manage their retirement or their children’s daycare and schooling. They support not only greater government reach into the economy but their own version of government-imposed morality (through workplace diversity measures, for example). It’s […]Continue reading at Alas, a blog … posted 2:35 am at Alas, a blog
This comment was written by feminist blogs.Report this comment to the moderators
March 15th, 2006 at 10:27 am
Thanks Brandon, the numbers from A are closer to what I expected. The numbers in B are interesting, but I am not sure how they impact our discussion. And I think they argue against your “You blew it” theory. If roughly one in seven citizens blow their life’s chances, maybe we should rethink the chances we are giving them. But I suppose that’s a subjective judgement that cannot be strictly proven with numbers.
This comment was written by Decnavda.Report this comment to the moderators
March 16th, 2006 at 3:06 pm
Brandon Berg:
Whether this is true or false, it’s irrelevant.
There is some population, greater than zero, of people who, whether for reasons that are culpable or reasons that are blameless or a mixture of the two, will make wages at or not very much above minimum wage their whole lives. Whether or not this makes them “failures,” whether or not it makes them bad people or foolish people or contemptible people or pitiful people, they are going to get old and they are going to reach a point in their lives where it will be very hard for them to continue working, and if they have neither accumulated savings nor a pension (gov’t issued or private), then they are going to suffer a lot in their old age.
But that doesn’t mean that they deserve to suffer, or to suffer that badly, whatever you may think of how they have lived their lives. It’s perfectly reasonable to think that a free society could — indeed ought to — include things like mutual aid for health, retirement, etc. needs in old age, charity for people facing extreme poverty, and so on. The only requirement is that people can’t legitimately be forced to turn over money for it. That’s what’s wrong with government “welfare” programs, not whatever vices or failings you might think the proposed recipients might have.
Moralistic contempt for poor people forms no essential part of the libertarian argument against the moral legitimacy of Social Security or other government “welfare” programs. In fact free market economics suggest that an end to government interventionism will help out the people with the worst economic prospects the most, since government intervention and ossified structural poverty systematically hurt poor people and aid the rich. The idea that libertarian theory is the body of economic thought of, by, and for Ebenezeer Scrooge has just got to die.
This comment was written by Rad Geek.Report this comment to the moderators
March 16th, 2006 at 4:01 pm
Uhhh… no, Brandon. Fear of destitution coupled with the fear that some asshole will proclaim a complex problem a mere matter of “blown chances” –thus absolving society of any obligation to do anything for the destitute, isn’t anything close to cute. Unless Sanrio has produced a new line of “Hello Kitty, Street Person” toys and I missed it. >:
This comment was written by alsis39.75.Report this comment to the moderators
March 16th, 2006 at 4:30 pm
Moralistic contempt for poor people forms no essential part of the libertarian argument against the moral legitimacy of Social Security or other government “welfare” programs. In fact free market economics suggest that an end to government interventionism will help out the people with the worst economic prospects the most, since government intervention and ossified structural poverty systematically hurt poor people and aid the rich. The idea that libertarian theory is the body of economic thought of, by, and for Ebenezeer Scrooge has just got to die.
Interesting, RadGeek. I just want to say that I appreciate your comments, because I’ve just recently discovered libertarianism that isn’t of the “conservative statism but with a side order of pot-smoking and legalized prostitution” variety, and am trying to learn more about it.
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March 16th, 2006 at 6:03 pm
What RadGeek said.
This comment was written by Robert.Report this comment to the moderators
March 16th, 2006 at 6:51 pm
In fact free market economics suggest that an end to government interventionism will help out the people with the worst economic prospects the most, since government intervention and ossified structural poverty systematically hurt poor people and aid the rich.
Have there been any real world examples of this?
This comment was written by Jake Squid.Report this comment to the moderators
March 16th, 2006 at 7:13 pm
Jake Squid: Have there been any real world examples of this?
I’m not sure what you’re asking for. Real world examples of government intervention and ossified structural poverty hurting poor people and aiding the rich? Sure, lots. Kleptocratic government is a pretty well-known phenomenon, both in the U.S. and abroad.
Or real world examples of the benefits of free markets for the worst-off? Well, sure; but it’s harder here because there are so many different cases to consider and because there isn’t any way to quantitatively compare actual state-distorted markets with counterfactual free markets under otherwise equivalent circumstances, or actual free markets with counterfactual state-distorted markets under otherwise equivalent circumstances. But here are some examples of ways in which freer markets would help the worst-off more than the better off: by ending the “War on Drugs” (which imprisons and destroys the lives of lots of people, usually the worst-off people, because the best-off people rarely take the fall); by stopping police harassment of women in prostitution; by ending agricultural subsidies that systematically subsidize huge planters and agribusiness to the detriment of the rural poor; by drastically reducing food prices currently inflated by those same agriculture subsidies and price floors (which matter more to the worst-off than to the best-off); by repealing the (regressive) payroll tax, thus directly increasing poor people’s income by a greater percentage than rich people’s; by removing regulations and red tape that systematically constrain small competitors against established corporate players; etc. There’s a lot of different ways in which government intervention harms the poor, and a lot of different ways in which prosperous free markets tend to help the worst-off most of all (N.B.: as opposed to pseudo-prosperous mercantilist markets of the sort that bond traders and politicians like to promote). I realize this hasn’t clarified very much but I’d really probably need a more specific question to give a better illustration or explanation.
This comment was written by Rad Geek.Report this comment to the moderators
March 16th, 2006 at 8:19 pm
Rad Geek,
I guess what I’m asking is… Are there any real world examples of a free market unfettered by government intervention? All the examples that you give are possible with the same amount of government intervention in a free market economy - you’d just have to have a government with economic policies matching those that you have named. IMHO, you can never have a pure free market economy. Even if it were possible, I have less faith than you in the ability of a free market to counteract the worst we see in the freest market economies that we see now. I’ve never understood how monopolies are prevented in a free market economy, for example.
I guess it comes down to two things for me (with my current knowledge). First, I don’t see the possibility of having an economy totally independent of government. Second, I believe that most of the problems that you identify as consequences of government intervention that exacerbates the problem of the poor would be solved by taking the money out of elective politics (publically financed campaigns, no accepting of gifts by elected & appointed officials, etc.). In short, I don’t see how the promise of Libertarian economic theory is any better than that of non-privately financed electoral politcs managed economy theory (if you can understand what I mean by that last label) & I’m trying to understand why Libertarians think that a freer market would be best.
This comment was written by Jake Squid.Report this comment to the moderators
March 16th, 2006 at 10:12 pm
Jake, the best example of a nearly-pure free market out there was Hong Kong.
This comment was written by Robert.Report this comment to the moderators
March 17th, 2006 at 2:38 am
Rad Geek:
Whether poverty is the result of bad luck or bad behavior is a very important factor in deciding how to deal with it. If the poor aren’t responsible for their lot—if the only difference between them and us is luck—then maybe income redistribution isn’t such a bad idea. On the moral side, it’s not their fault. And on the practical side, there’s not much moral hazard. It’s not as though subsidizing bad luck is going to encourage people to be less lucky.
But if the poor are poor due to bad behavior—things like dropping out of school, getting involved with drugs or crime, not showing up for work, or having chlidren before they can afford them—then things are different. Morally, it is their fault. And practically, incentives matter. When you subsidize bad behavior, you get more of it. When you pay people to have children they can’t afford, more will. When you promise to give people money in retirement, they’ll save less. When you pay people not to work, fewer will. Policies that mitigate the effects of bad behavior are much more costly than those that mitigate the effects of bad luck.
And my point isn’t that people who fail to fulfill the basic requirements of successful adult living deserve to have something bad happen to them. It’s that all this talk about the “tyranny of the market” and how some people can’t be free without massive government intervention is utter rubbish. The primary barriers to escaping poverty in the US today are cultural, not material, and there can be no long-term solution to the problem of first-world poverty that fails to take that truth into account.
Jake:
It’s interesting that the first thing that comes to your mind as an example of abuses of the free market is monopolies, yet your solution to this problem is to give even more power to the biggest, most abusive monopoly there is: the government.
That said, monopolies, by definition, do not exist in free markets. Colloquially, people use the word “monopoly” to refer to a company that has a vaguely-defined supermajority of the market share, but this is both semantically and economically incorrect. It’s very difficult to exercise monopoly power without true insulation from competition, and simply having 90% of market share doesn’t give you that. Can you give an example of an abusive monopoly that wasn’t given monopoly privilege by a government?
Other than that, the problems with government intervention are legion. Tell me your favorite interventions, and I’ll tell you what’s wrong with them.
Also, I doubt very much that taking the money out of politics will make things much better. First, if everything is controlled by moneyed interests, then why do we still have a corporate income tax, and why do the rich still pay the highest personal tax rates? Why does something like 70% of the Federal budget go towards giving money away to the lower and middle classes? Anyway, your proposed solution doesn’t address the problem of concentrated benefits and dispersed costs.
This comment was written by Brandon Berg.Report this comment to the moderators
March 17th, 2006 at 5:52 am
It’s not so much about smarts or decisions to me. To me it’s more about time and the fact that if we give retirement investments more time everyone would be a lot better off.
Here’s an idea:
At birth, every American baby has a 401K type account opened for him/her for $10,000. At an average growth rate of around 7% which can happen, by the time that person is 65, he’ll have around $1.5 million to retire with. Each person would be taxed over his/her lifetime to pay back the original $10,000.
At current birthrates it would cost around $40 billion/year to get it running, but once the babies hit the workforce it doesn’t really cost anything since the $10,000 gets paid back.
This comment was written by craichead.Report this comment to the moderators
March 17th, 2006 at 8:15 am
Brandon Berg ritted:
First, if everything is controlled by moneyed interests, then why do we still have a corporate income tax, and why do the rich still pay the highest personal tax rates?
Ummm, the many deductions & loopholes in corporate income tax law means that many corporations pay little or no income tax at all (Enron, anybody?). There is, effectively, no corporate income tax. Loopholes like the one allowing your company to operate outside the country combined with almost no enforcement budget for the IRS allow corporations to escape nearly all corporate taxes. If you like, I’ll get you the name of a book that details how these taxes are avoided. Different, but equivalent, loopholes in US tax law allow the wealthy to avoid most income taxes as well. It is simply not true that the rich pay the highest personal income tax rate - we have a progressive tax structure on the books but any rich person who wants to can make use of the loopholes. For example, in Oregon in 2000 (or 2001, I didn’t write it down):
Percent of all income earned by top 2%: 34%
Percent of all Income Taxes paid by top 2%: 24%
Percent of all income earned by bottom 98%: 66%
Percent of all Income Taxes paid by bottom 98%: 76%
This is reflective of federal income taxes as well. So, while the top 2% of all income earners (and this is reported income, mind you) earn 34% of all income, they only pay 24% of all income taxes. Also:
Income Taxes as a percentage of Total Income (AGI):
All Oregonians: 11.3%
Bottom 98%: 13.1%
Top 2%: 7.9%
So effective tax rates aren’t what you think they are. I suggest you look at the data before saying things like that.
Rad Geek,
Brandon Berg is a perfect example about why I fear (even more than currently) for the poor under a free market system. People can’t avoid making moral judgements about others and inevitably people will want to see the poor as at fault for their own poverty (we don’t like to believe that it could happen to us, therefore the poor are morally bad or stupid or whatever). That being the case, you wind up with far fewer resources dedicated to alleviating poverty.
This comment was written by Jake Squid.Report this comment to the moderators
March 17th, 2006 at 9:32 am
[M]onopolies, by definition, do not exist in free markets.
Language is infinitely flexible so anyone can define any word to mean anything, I guess. But classical economics uses the word “monopoly” to refer to circumstances wherein the supply of a product is constrained to keep the price above the marginal cost, thereby depriving society as a whole of some potential benefit. Statements like “monopolies do not exist in free markets” suggest a failure to appreciate how the supply and demand curves for different goods differ.
Classical economics argues that the greatest social good results when we keep producing more of a product until the benefit to be derived from producing one more unit is no greater than the cost of producing that unit. A market with multiple suppliers is sustainable when the marginal cost of each additional item increases, which is often the case. Consider: You’re a farmer with more land than you can cultivate. Which acre do you cultivate first? You cultivate your best acre first - maybe the land with the richest soil, or closest to the water, or closest to your home or equipment, or closest to the rail line for shipping, or some combination of these factors. And if you have opportunity, you might cultivate your second-best acre, also. But, by definition, your second-best acre will not be as good, and you will expect that your cost per bushel of output will increase for that acre. And so on for your third-best acre, your fourth-best, etc. You have “diminishing marginal returns on investment.”
But what about products that have no diminishing marginal returns? For example, what is the marginal cost to i-Tunes of letting someone copy “Hey, Jude”? Damn near $0. Yet the price is $0.99. Somebody has a monopoly on the rights to “Hey, Jude,” and is choosing to restrict distribution of the song for no other purpose than to drive up the price. Now, maybe this dynamic occurs because of some evil government regulation, but that’s far from obvious to me.
More generally, wherever the economies of scale exceed the diseconomies of scale, then each additional unit produces will have a lower marginal cost than the previous unit. This “downward-sloping demand curve,” results in a “natural monopoly” - that is, the most efficient outcome can be achieved by having one firm do all the production of a given product.
Consider a water utility in an area that lacks potable well water. Sure, rival firms could arise, incurring costs to build water-cleaning operations, and then competing to run pipes to each premises. But experience has shown that the least-cost option will arise when the cost of the water-cleaning operation is defrayed among the maximum number of premises - that is, when one firm serves all customers. But then, in the absence of competitors, the monopolist can charge more than its marginal cost, unless government intervenes.
Many natural monopolies are overlooked because of their small scope. Given the high fuel cost to run a cement truck to a given location, the cement trucking firm that is closest to a job will often have a natural monopoly on that job; no, the firm cannot charge an infinite amount for a job, but it can charge more than its marginal cost. Given the degree of congestion on the electric transmission grid, various electric generators have localized monopolies and can charge above-marginal cost for their services. The local baby-sitter may be able to charge substantially more than she would be willing to accept because she knows that the neighborhood parents are disinclined to drive across town to hire a rival baby-sitter.
More significantly, natural monopolies can arise in network economics. No one outlawed the beta format for videotape, but the economies of scale that arose when the majority of people adopted a single format proved to be irresistible. A similar circumstance is arguably happening regarding the Windows operating system. The internet has flourished under the umbrella of utility regulation, arguably to everyone’s benefit. Today telephone companies are seeking to extract rents from internet firms - not because the firms cause the utilities to incur greater cost, but because they provide an opportunity to charge above-marginal cost. The idea that everyone should drive on the right-hand side of the road is arguably no better than the idea of everyone driving on the left, and maybe libertarians would prefer that people be permitted to drive wherever they like on the roads, but frequently one idea achieves a monopoly over the other. Naturally.
And natural monopolies can occur where, as in the “Hey, Jude” example, the marginal cost of production is practically $0. The cost of researching a new drug is great; the marginal cost of producing that drug is small. The cost of building a road is great; the marginal cost of letting people drive on a road is small. The cost of writing a novel is great; the marginal cost of reproducing the books is small. If price were set at marginal cost, the investors would go broke.
I am not aware of many economists that deny the existence of natural monopolies. Rather, the controversies arise regarding whether government intervention does more good than harm.
This comment was written by nobody.really.Report this comment to the moderators
March 17th, 2006 at 9:39 am
In fact free market economics suggest that an end to government interventionism will help out the people with the worst economic prospects the most, since government intervention and ossified structural poverty systematically hurt poor people and aid the rich.
I share much of RadGeek’s perspective here; doubtless government intervention can produce bad results. But I am not persuaded that government intervention cannot also produce good results. Where do we find the highest standard of living, lowest infant mortality, longest life expectancy, etc.? And what degree of government intervention do we find in these societies?
This comment was written by nobody.really.Report this comment to the moderators
March 17th, 2006 at 9:56 am
Whoops. A correction:
Loopholes like the one allowing your company to operate outside the country….
Should have been:
Loopholes like the one allowing your company to operate outside the country with your only foreign holdings being a PO Box & bank account…
I hope that is a little bit clearer.
This comment was written by Jake Squid.Report this comment to the moderators
March 17th, 2006 at 1:21 pm
nobody.really, I think so far the answer to your question would be in mixed economies like Denmark or Sweden. You know, places where neither the state nor free enterprize has exclusive power.
This comment was written by alsis39.75.Report this comment to the moderators
March 17th, 2006 at 7:24 pm
First, I don’t see the possibility of having an economy totally independent of government. Second, I believe that most of the problems that you identify as consequences of government intervention that exacerbates the problem of the poor would be solved by taking the money out of elective politics (publically financed campaigns, no accepting of gifts by elected & appointed officials, etc.).
This is a dangerous idea. Lets take the premise that funding strongly determines elections. If the government were to fully and exclusively fund campaigns, then the only people who would determine a candidate’s election budget are elected politicians. The conclusion is that currently elected government officials would strongly determine the outcome of future elections. At least the way it is right now, people without connections or power have some chance. In the system you propose, only the governing political elete and those they favor could ever become governing political elete!
This comment was written by Mike Enright.Report this comment to the moderators
March 17th, 2006 at 9:20 pm
Mike,
Publically funded elections mean that all candidates for a position have the exact same election budget as all of their opponents. What is your problem with that?
This comment was written by Jake Squid.Report this comment to the moderators
March 17th, 2006 at 10:12 pm
Jake, what happens when David Duke runs for office? How much taxpayer money do you want to shovel in his direction?
This comment was written by Robert.Report this comment to the moderators
March 17th, 2006 at 10:57 pm
Robert. One of the cornerstones of public elections is that only candidates with “significant” proveable backing get financed. There is a strong possibility Duke wouldn’t qualify. Granted, this is one of those “devil in the details” issues that usually requires some significant fine tuning.
Even if Duke did get backing under public finance laws, do you really think that his ideas could stand against more positive ideas on an equal footing? Perhaps more exposure to his extremist ideas would be a good thing, raising the corner on the “racism is a thing of the past” malarkey that keeps getting spread around, and letting us see just how much has been shoved under that particular rug.
This comment was written by odanu.Report this comment to the moderators
March 17th, 2006 at 11:07 pm
One of the cornerstones of public elections is that only candidates with “significant” proveable backing get financed….
David Duke got more than 50 percent of the white vote when he ran for Senate in 1990 - about 32% overall. You gonna tell me that a candidate who can draw a third of the electorate isn’t going to get funding? In that case, it’s completely bogus.
…Even if Duke did get backing under public finance laws, do you really think that his ideas could stand against more positive ideas on an equal footing?
Is this a serious question? Which species do we belong to? The one where some of us torture one another for fun, last time I checked.
Having “but people will be decent in the end” as the backstop against disaster is a less than overwhelming selling point for an electoral system.
If Duke had gotten state funding, he could very well have won.
Public financing has to go in one of two directions: either it ends up making it easier for nutjobs to run credible campaigns on the taxpayer’s nickel, or it ends up restricting the candidacies to those approved of by the public financing committee (IE the current government).
Neither option is even slightly appealing.
This comment was written by Robert.Report this comment to the moderators
March 17th, 2006 at 11:11 pm
odanu, David Duke actually did quite well in his LA Senate race, taking a majority of the white vote.
And yes, I’d rather see even David Duke get public campaign money, since I think that the benefits of publicly financed campaigns for public office would greatly outweigh the distaste of some public money going to odious political candidates.
Mike Enright’s idea that public campaign financing would be written in such a manner that the current incumbents get to choose who does and doesn’t get financing on an individual basis strikes me as a silly worry in a functioning democracy.
This comment was written by Charles.Report this comment to the moderators
March 17th, 2006 at 11:24 pm
I haven’t been able to find funding numbers for David Duke’s senate race, but without those numbers, I think any prognistication on how well he would have done with public funding is pointless.
Likewise, even with funding numbers, unless he was massively outspent, I’d assume that he did about as well as he would have done with anything except massively outspending his opponent. I’d guess that his positions were about as well known as they could have been, and that he would have needed to blanket the airwaves to have significantly reduced his negatives.
I’m not sure why the decisions of rich people to financially support or not support particular candidates should be taken as a good protection against horrible candidates like David Duke (and without data, I’m unwilling to assume that that was what protected us from having Duke in the Senate).
This comment was written by Charles.Report this comment to the moderators
March 18th, 2006 at 12:00 am
Me either. (Stupid Google - we demand our perfectly-organized free information NOW!) So yeah, it’s difficult to say with any meaningfulness what the financial picture was.
This comment was written by Robert.Report this comment to the moderators
March 18th, 2006 at 3:03 am
Actually, Charles, I’ve actually been reflecting on this, and I think David Duke is actually the example that we ought to be looking at. Not for the money issues - it’s not important whether government money is what puts a despicable candidate over the top.
Rather, it’s the fact of compelling support from the public for figures and views they may find deeply repellent. This is an across-the-board issue: everyone has candidates who they would profoundly unwilling to support. I don’t want David Duke to get my money. Barry is an opponent of the Slade Gorton for President ticket. And so on.
Even worse, being required to have tax dollars aiding a campaign means we are compelling the promotion of political speech. I can think of few non-corporeal punishments more awful for many people. Give us $20 to pay for Pat Robertson’s televised spot on why gay marriage causes global warming, or we’ll throw you in jail. If a private citizen did it, it would be extortion.
I can see that there are some merits to a publicly-funded system. But this objection seems to me insuperable.
This comment was written by Robert.Report this comment to the moderators
March 18th, 2006 at 5:15 am
If a private citizen did pretty much any of the things a government does, it would be unacceptable (e.g. sieze your house, tear it down, and build a road through it), so that is a non-argument.
I’d accept a system in which everyone had a refundable tax credit to allocate for political contributions. Now, that would still mean that in some sense your tax money might go to someone who wasn’t paying taxes who would then allocate it to David Duke or the green party, but that is reaching a level of indirection that I can’t begin to care about.
Another solution would be to allow people to register their names on a list of people unwilling to contribute to a particular candidate, where the candidate’s public funding would be cut by the fraction of the population who registered to object to funding that candidate. I wouldn’t expect that many people to go to the effort of doing this, so I wouldn’t expect it to have much effect, except in the case of particularly famous and particularly odious candidates. Perhaps only people who paid taxes would be able to register, although I strongly prefer a system in which money is allocated on a per person basis, not a per tax dollar basis (although even that would be better than the current system).
This comment was written by Charles.Report this comment to the moderators
March 18th, 2006 at 8:03 am
EVEN if 100% of adult poverty is purely the result of bad decisions made by the individuals themselves, and EVEN if it were morally acceptable to let people starve to death as a result of making bad life choices, what about those children they’re irresponsibly having? It’s not their fault they were born. Is Brandon advocating mandatory loss of custody and state-run orphanages? Doesn’t sound very libertarian to me …
This comment was written by Grace.Report this comment to the moderators
March 18th, 2006 at 9:35 am
So I guess the Libs wouldn’t be too crazy about the current Voter-Owned Elections in Portland. I personally think that it’s a great idea. If some local David Duke wants to qualify for campaign funding that way, let him. Cockroaches should be exposed to the light of day, because it makes them scurry. We’d be at least as safe having them run under their own banners as we are having them subsumed into either of the Big Two, where their machinations are harder to detect because more “respectable” fans of the same sort of policies are there to soft-peddle them to the public.
It’s not, in fact, a politician as blunt as David Duke that you’d have to worry about: It’s the stealth racists and sexists who’d doubtless have elaborate codes and sugar-coated terminology for the sort of crap they’d want to enact if elected. I’m guessing those folks would be more common, and more in need of watching, no matter what sort of public financing we ended up with.
This comment was written by alsis39.75.Report this comment to the moderators
March 18th, 2006 at 10:10 am
Had anice exchange with old college acquaintance Charles, an occasional poster at Alas, regarding public funding of campaigns. Public campaign funding is one of those ideas which sound eminently reasonable and tempt even the purest of conservative hearts.
This comment was written by The Argument Clinic.Report this comment to the moderators
March 18th, 2006 at 10:39 am
“Publically funded elections mean that all candidates for a position have the exact same election budget as all of their opponents. What is your problem with that?”
Do you really mean all candidates? Does that include the libertarian candidate or the green candidate or the candidate from whatever the traditionalist conservative party calls itself these days? Probably not. And how do they determine which primary candidates to fund from the Republicans and Democrats? Everyone who applies. I doubt it.
Someone above talks about “significant provable backing”. How can candidates from third parties prove or develop backing? They have to spend money on campaigns. But that is precisely what is forbidden.
People here think that my notion is “silly”. I suggest you look at campaign finance laws as they are right now! Any campaign finance law that treats limits to incumbants and challangers as equals, as I believe things are now, inherently favors incumbants and makes success much more difficult for challangers. I wonder why they would do this? They are protecting their own position. Why would it be any different in the future? Why would we want to give elected polliticians even more power to protect themselves?
This comment was written by Mike Enright.Report this comment to the moderators
March 18th, 2006 at 12:48 pm
Brandon Berg:
Of course it’s true that how you should treat poor people depends partly on the reasons that they are poor — just as the way you should treat anyone depends partly on their virutes and vices. What I deny is (1) that there’s any reason why, if people are poor because they are foolish or bad or failures, we shouldn’t try to provide for some forms of relief for them anyway (because I don’t think that anyone deserves to suffer like that); and (2) that believing (1) or not believing (1) has any bearing at all on the libertarian arguments against the legitimacy of Social Security, TANF, etc.
Brandon, this only follows if you think that moral hazard, incentive structures, moral desert, etc. are the only reasons that you shouldn’t rob one person in order to help out another. But I don’t think that: I think that robbing one person in order to help out another is immoral. Not because I have any opinion at all about the virtues or vices or the right way to treat the recipient, but rather because of the way that treats the victim. That’s the essential libertarian case against government “welfare” programs. The rest, whether true or false, is a bunch of policy wonkery, and secondary to the moral question of whether or not you can legitimately force people to go along with your favorite social programs. Isn’t it?
Brandon, you are aware that there are forms of taxes other than the personal income tax, aren’t you?
… It doesn’t.
About 19% of the broader budget goes directly to military spending (not counting legacy spending such as veterans’ benefits) and about 9% to repayment of interest on the federal debt. Unless you intend to claim that the rest of the broader budget not devoted to “giving money away to the lower and middle classes” constitutes 2% of the broader budget, it’s not mathematically possible for the Feds to be spending 70% on that.
It’s worth noting here that the two (by far) largest entitlement programs (Social Security and Medicare, at 21% and 14%) that the government maintains are not means-tested and are funded by the regressive FICA tax. Characterizing either program as “giving money away to the lower and middle classes” would be a serious error.
Jake Squid:
Jake, if you think “people” (I’m not sure whom or how many you intend to include) “can’t avoid making moral judgments about others,” and that “inevitably,” “people” “will want to see the poor as at fault for their own poverty,” then why do you trust the government to responsibly and adequately provide for respectful, helpful poverty relief?
The government’s made of people, too, isn’t it?
This comment was written by Rad Geek.Report this comment to the moderators
March 18th, 2006 at 4:49 pm
Rad Geek:
I don’t like theft any more than you do, but we both know they don’t take that coin here. That’s what this post was about. And the point I’m trying to make is that even if you see institutionalized theft as a morally legitimate means of achieving your goals, it’s still a lousy way to run a country.
You’re right; I did overestimate a bit. It’s actually a bit over 60%, not 70%. And I should have said “money and other services,” not just “money.” In 2005, the Federal government spent $251B on Health (excluding VA, but including about $30B in research), $299B on Medicare, $346B on Income Security, and $523B on Social Security. Altogether that’s about 61% of the budget. It’s about two-thirds if you exclude interest payments (which IMO you should, because Congress has virtually no control over them).
Social Security and Medicare aren’t means-tested, but since 95% of the population is in the lower and middle classes, very little of the benefits go to the rich.
And sure, they’re paid for with taxes which come largely from the middle class, but so what? If the government started mailing checks to everyone making over $100,000 per year, you’d call that giving money away to the rich, wouldn’t you? But that money would be coming mostly from progressive income taxes, wouldn’t it?
This comment was written by Brandon Berg.Report this comment to the moderators
March 18th, 2006 at 7:26 pm
I trust the government more than the unfettered free market to allocate resources for the poor because there can be laws requiring allocating resources to the poor in a government whereas, by definition, you can’t have those laws in an unfettered free market. Also, government spending is not decided by individuals. Senator X can’t decide that he is putting his percentage of the budget towards building a spaceport on his own. He needs approval of the rest of the Senate & the House to get that done. In Libertarian utopia, Senator X (who would determine only how he spends his own money) could decide to use all his capital towards building Senator X spaceport. There is a big difference between how a representative republic determines resource allocation & how 300 million private citizens determine resource allocation. But I don’t think I’m being really clear about all this now. Perhaps in a week or 28 when I have time to think & clarify I’ll be able to have this conversation coherently.
Yes, Mike, I really mean all candidates. Usually the criteria for qualifying for public funding for an election campaign is gathering x number of signatures. If you can gather that many signatures, you get funding. End of story. Please go read about publicly financed campaigns. A google search will lead you to the info quickly.
This comment was written by Jake Squid.Report this comment to the moderators
March 18th, 2006 at 8:57 pm