What would a more libertarian welfare state look like? It's a tough question. The orthodox answer is that it would look like charity does today, only it would not be crowded out by government intervention. I like that answer, but I find it unconvincing for many reasons. I cannot ensure that that system will better serve the interests of social justice, that people may fall through the cracks, and that the innovations may not lead to the long-term betterment of those in need.
But, if we are to keep in mind the ideal free charity state in mind, can we find a waystation between that place and where we are today? In other words, what would the privatization of the welfare state look like? This is the positive part of my dissertation. The libertarian critiques of welfare state institutions are pretty robust and easy to make. They are ready to go off the shelf. So to are the free charity cases made by moral philosophers. What's more difficult is coming up with some palatable policy proposals to use libertarian insights to build better institutions. I think I may have (absent the math I need) come up with the broad framework I will advocate for.
Milton Friedman, the famous monetarist economist, came up with an idea for welfare reform that would obviate the need for a welfare state. It was the negative income tax. It set a point at which, if people made below that amount, they would be entitled to a straight check from the government for the difference. Let's say we set that amount for simplicity's sake at $15,000. That's over twice what people get on SSI (government assistance to the disabled) because I am including other government programs for which those recipients qualify But, let's say Frank is part of the working poor. He only makes around $4,000 a year. He would be entitled to $11,000 from the government. Basically, we say that as a society, we cannot allow people to dip below a certain point. A Rawlsian would say that below that amount, they cease to have the ability to be enjoy their basic freedoms and be self-authors.
Let's call this value the Basic Income. All people are entitled to it. It is dispensed via a system similar to DirectExpress (a debit-card like system for SSI) every two weeks or every week. There are no restrictions on how the money can be spent. The vast majority of welfare recipients spend their money from the government in rational ways. For some, they give more weight to housing and food than to medical care and substance abuse treatment. For others, they value their drug of choice, unhealthy foods, or dangerous habits over healthier alternatives. This is part of respecting people as rational self-authors and empowering them as agents of change in their lives.
With a system in place that provides a basic income to all, a world without government intervention would require robust institutions of private charity and mutual aid. While some libertarians argue that government interference in social support institutions crowds out private investment, the most salient point against government as a redistributive mechanism is its overwhelming inefficiency and self-perpetuation sustained by the knowledge problem inherent in coordinating from the top down. I propose that whatever percentage of funds currently used to fund redistributive social support programs be liberated from government control so that people can fund organizations and causes directly. Not only would this address the knowledge problem inherent in federal control over social support institution by empowering people to become more involved with their redistributed funds, it would foster an immense amount of competition, innovation, and entrepreneurship in the social service sector by injecting market forces and prices into a previously restricted market.
Privatizing redistribution provides market forces in charity on the back-end of client service. The price of a particular social good to an individual, groups, or society as a whole is valuable information. However, the most important information in a system is contained in the prices for service. The entire point of a social safety net is that people of lesser means cannot afford the help they need, and therefore, must receive help in procuring services. If consumers of services are given a set amount of income to help themselves, they can afford to pay user fees for various services at these charitable institutions. By injecting price mechanisms on the front end, we support the inclusion of market forces (competition, innovation, and entrepreneurship) into a currently noncompetitive system and gain an objective measure of consumer satisfaction that is sorely lacking. Our back-end subsidization of the system provides information on giver satisfaction, and user fees provide information on consumer satisfaction.
That's the proposal in a nutshell. 1) Negative income tax and abolition of the welfare state institutions. 2) Privatization of redistribution. and 3) User fees in social service programs. There are many benefits to a system such as this, but I will name only a few here. This system would lead to better engagement with resources due to a sense of ownership of services (this is my therapist, counselor, food allowance). They will engage more sincerely with treatment when it is not coerced as in the current system and they will feel empowered as individuals. The system would also serve to create a class of social entrepreneurs who seek to capitalize on the new money found in low-income housing, healthcare, and other services. It would allow immense flexibility and experimentation that the current system cannot accommodate. Most importantly, it would provide for better oversight of our social welfare institutions both on the front-end through individual support recipients giving according to their conscience and knowledge and on the back-end with individual donors seeking services from competing entities. It would liberate donor, recipient, and service worker from the suffocating anti-humanism in the current system, and mold people of lesser means to become successful individuals by spending their money in their long-term best interest.
Tuesday, July 24, 2012
Sunday, July 8, 2012
A response to Let It Bleed
Josh was nice enough to send my way an article from the Crooked Timber blog critiquing the moral philosophy of Bleeding Heart Libertarian position(s?) on labor law. I figured it would be best to respond here, since this is where I normally write about this stuff.
There has evidently been a long conversation back and forth between the BHL and Crooked Timber folks, which is a really heartening thing to see. The article raises some important points about the BHL approach thus far towards workplace inequality. Unfortunately, the article also falls victim to many of the same pratfalls as other policy analyses I have seen from the left.
The post begins by convincingly explaining the terribleness of domination in the workplace. So far, nothing too controversial. Making people not pee while working is evil.
There are many vagaries in contract law that allow for this to happen, and these should be remedied through regulation... Well, just what kind of regulation should be pursued?
Let's take the example of voting for John Kerry, as given in the article. Let's say we wanted workplaces to ban the termination of any employee for supporting (through voting, organizing, or talking about) a political party. This would surely help an average blue collar, Bruce Springsteen-type worker employed by an evil capitalist Limbaugh dittohead. He could not be fired just because he disagreed with his boss at the polls, on the streets of his community, or in the lunchroom. I can see how that would be a good thing for him.
But what about a woman who wants to work for a senatorial 2012 reelection campaign? Can she be fired for organizing for the other party in her spare time? Would you want that person working for you? Would you trust her to work the long and grueling hours in a campaign and put forth her best effort if she did not believe in the cause? Should that campaign be allowed to ask who she is going to vote for before hiring her?
This example extends out throughout the political realm. Would a Democratic direct-mail firm employ someone who supports Romney outside the office? Would AFSCME? I argue that it would be impossible to craft legislation that would lead to a just outcome in many of these cases, let alone all of them. This is a great example of the unintended consequences of legislation. While it may do what it was designed to do, it may do other things that work against the interests of justice.
Furthermore, who determines what constitutes just cause for firing a person? What is the model here? The unionized public workforce is must be terminated with just cause. This had lead to police departments with unfirable employees that abuse their power, pensioned employees that are felons, the notorious rubber rooms in New York City public schools, among other abuses. The right to have just cause for firing instantiates an apparatus that may be overly deferential to fairness and justice.
Another unintended consequence of such regulation would be to simply shift those nakedly political reasons for firing a person and find a simple way around regulation. There are always loopholes in regulations.
Speaking of loopholes, those who are most adept and finding and exploiting those loopholes? Larger corporations who help write those regulations! Regulatory capture is the process by which large corporations in a given domain take control over the regulatory and legislative apparatus. Who will now how to get around a new regulation? The people it is intended to affect the most.
More than its mere predictive value, regulatory capture and it's cousin rent seeking are so profitable because they limit competition in the market. When new safety standards were set on toys, it was Mattel pushing the legislation and small businesses who were fighting against it, as only large corporations have the ability to money to implement the new regulatory regime. This eliminates the greatest true check on workplace domination other than general human decency--the ability of workers to change employers.
These are all knowable consequences of workplace regulation. Any person applying basic public choice theory to workplace regulation knows that what is argued in the article is far too simplistic and idealistic. The public choice objections are not addressed in the article. Feasibility is an important part of justice. I would argue that it should be a first-order concern, or that we should value second-order concerns more greatly. If we know that a regulatory regime would predictably lead to significant injustice, then deciding between a BHL or left-regulatory regime is a matter for empirical, not philosophical analysis.
In that analysis, we must take into account not just the here-and-now timeslice on which the article would base its sense of justice. We must take into account the progression of workplace domination through the centuries. The story that arises from a historical analysis is one where competition, rising living standards, and technology make workers' lives better at an exponential rate. A person in antiquity would owe all of their money to a lord, who would let them keep a pittance of their labor. Subsequent to that, one's job was likely to remain their job for life, as there were a very limited number of trades into which a person could enter and travel between places was much more difficult. Compare that to today when a person could pack up and leave without giving notice at a job to start at a competing firm for more money. One could pack up and leave for another country to find employment in an industry.
Aha, but what about those who are poor? They have less options than the people in the middle and upper classes, therefore government must intervene to provide a fair playing field for all. Again, we lose sight of how much better off the poor of today are than even those of a few decades ago. Of people in poverty today 98% have a refrigerator, a stove and oven, and a television; 81% have a microwave; 78% have air conditioning. Similarly, their choices in employment have grown considerably. Competition in the marketplace is the bullwark against employer domination.
The article drastically undervalues the importance of exit from a job and the ability to start a new one. My father left his job to start his own advertisement circular for a few years. He then went back into the industry. It was a rough time for our family, but that transition was not unjust as the language in the article would make you believe. It may be easier for single people with no children to move jobs, but it's not unduly difficult for married adults with children to either. It is part of an overall calculation where a person decides whether the bullshit they put up with at work is worth disrupting the lives of their family members so that he or she can pursue another job. Sunk costs and psychological sequellae included, it does not meet my standards for injustice. In that slice of time, the injustice that lead that worker to leave will not be eradicated, but the uncoordinated actions of workers through time to leave unjust conditions for better ones does lead to the reduction and eradication of workplace injustices such as those outlined in the article.
Two other small notes on the article: I hate it when people on the left trot out hackneyed stereotypes of libertarians. This article contains two of them: that libertarianism means a person can sell themselves into slavery forever with a court-enforceable binding contract and that sexual harassment is not of concern (or in the article not coercive) to libertarians. I can't speak of all of us, especially the old guard, but those two points are hogwash. We are not all absolutists. We do not all believe in unimpeachable, unassailable property or contract rights. We are not all Robert Nozick. You should read more of us. You'll find we're not assholes.
One bright point of this article, however, was its criticism of BHL's reliance on a Universal Basic Income without ever really specifying what that would mean or look like. I'm a little new to the UBI idea and the BHL treatment of it. I brought it up at IHS and was pointed to a journal article by Pete Boettke where he gives a critique of that approach. I also plan to write a paper evaluating UBI versus a negative income tax. But before I do that lit review, I won't know the arguments for the UBI against the criticisms in the article. But, I find those feasibility concerns to be very convincing and agree with the authors that gesturing uncritically towards a UBI to alleviate coercion concerns is an easy shortcut.
However, as noted above, the authors themselves fall victim to a similar shortcut when they gesture uncritically towards "regulation" without once explaining what that would look like.
There has evidently been a long conversation back and forth between the BHL and Crooked Timber folks, which is a really heartening thing to see. The article raises some important points about the BHL approach thus far towards workplace inequality. Unfortunately, the article also falls victim to many of the same pratfalls as other policy analyses I have seen from the left.
The post begins by convincingly explaining the terribleness of domination in the workplace. So far, nothing too controversial. Making people not pee while working is evil.
There are many vagaries in contract law that allow for this to happen, and these should be remedied through regulation... Well, just what kind of regulation should be pursued?
Let's take the example of voting for John Kerry, as given in the article. Let's say we wanted workplaces to ban the termination of any employee for supporting (through voting, organizing, or talking about) a political party. This would surely help an average blue collar, Bruce Springsteen-type worker employed by an evil capitalist Limbaugh dittohead. He could not be fired just because he disagreed with his boss at the polls, on the streets of his community, or in the lunchroom. I can see how that would be a good thing for him.
But what about a woman who wants to work for a senatorial 2012 reelection campaign? Can she be fired for organizing for the other party in her spare time? Would you want that person working for you? Would you trust her to work the long and grueling hours in a campaign and put forth her best effort if she did not believe in the cause? Should that campaign be allowed to ask who she is going to vote for before hiring her?
This example extends out throughout the political realm. Would a Democratic direct-mail firm employ someone who supports Romney outside the office? Would AFSCME? I argue that it would be impossible to craft legislation that would lead to a just outcome in many of these cases, let alone all of them. This is a great example of the unintended consequences of legislation. While it may do what it was designed to do, it may do other things that work against the interests of justice.
Furthermore, who determines what constitutes just cause for firing a person? What is the model here? The unionized public workforce is must be terminated with just cause. This had lead to police departments with unfirable employees that abuse their power, pensioned employees that are felons, the notorious rubber rooms in New York City public schools, among other abuses. The right to have just cause for firing instantiates an apparatus that may be overly deferential to fairness and justice.
Another unintended consequence of such regulation would be to simply shift those nakedly political reasons for firing a person and find a simple way around regulation. There are always loopholes in regulations.
Speaking of loopholes, those who are most adept and finding and exploiting those loopholes? Larger corporations who help write those regulations! Regulatory capture is the process by which large corporations in a given domain take control over the regulatory and legislative apparatus. Who will now how to get around a new regulation? The people it is intended to affect the most.
More than its mere predictive value, regulatory capture and it's cousin rent seeking are so profitable because they limit competition in the market. When new safety standards were set on toys, it was Mattel pushing the legislation and small businesses who were fighting against it, as only large corporations have the ability to money to implement the new regulatory regime. This eliminates the greatest true check on workplace domination other than general human decency--the ability of workers to change employers.
These are all knowable consequences of workplace regulation. Any person applying basic public choice theory to workplace regulation knows that what is argued in the article is far too simplistic and idealistic. The public choice objections are not addressed in the article. Feasibility is an important part of justice. I would argue that it should be a first-order concern, or that we should value second-order concerns more greatly. If we know that a regulatory regime would predictably lead to significant injustice, then deciding between a BHL or left-regulatory regime is a matter for empirical, not philosophical analysis.
In that analysis, we must take into account not just the here-and-now timeslice on which the article would base its sense of justice. We must take into account the progression of workplace domination through the centuries. The story that arises from a historical analysis is one where competition, rising living standards, and technology make workers' lives better at an exponential rate. A person in antiquity would owe all of their money to a lord, who would let them keep a pittance of their labor. Subsequent to that, one's job was likely to remain their job for life, as there were a very limited number of trades into which a person could enter and travel between places was much more difficult. Compare that to today when a person could pack up and leave without giving notice at a job to start at a competing firm for more money. One could pack up and leave for another country to find employment in an industry.
Aha, but what about those who are poor? They have less options than the people in the middle and upper classes, therefore government must intervene to provide a fair playing field for all. Again, we lose sight of how much better off the poor of today are than even those of a few decades ago. Of people in poverty today 98% have a refrigerator, a stove and oven, and a television; 81% have a microwave; 78% have air conditioning. Similarly, their choices in employment have grown considerably. Competition in the marketplace is the bullwark against employer domination.
The article drastically undervalues the importance of exit from a job and the ability to start a new one. My father left his job to start his own advertisement circular for a few years. He then went back into the industry. It was a rough time for our family, but that transition was not unjust as the language in the article would make you believe. It may be easier for single people with no children to move jobs, but it's not unduly difficult for married adults with children to either. It is part of an overall calculation where a person decides whether the bullshit they put up with at work is worth disrupting the lives of their family members so that he or she can pursue another job. Sunk costs and psychological sequellae included, it does not meet my standards for injustice. In that slice of time, the injustice that lead that worker to leave will not be eradicated, but the uncoordinated actions of workers through time to leave unjust conditions for better ones does lead to the reduction and eradication of workplace injustices such as those outlined in the article.
Two other small notes on the article: I hate it when people on the left trot out hackneyed stereotypes of libertarians. This article contains two of them: that libertarianism means a person can sell themselves into slavery forever with a court-enforceable binding contract and that sexual harassment is not of concern (or in the article not coercive) to libertarians. I can't speak of all of us, especially the old guard, but those two points are hogwash. We are not all absolutists. We do not all believe in unimpeachable, unassailable property or contract rights. We are not all Robert Nozick. You should read more of us. You'll find we're not assholes.
One bright point of this article, however, was its criticism of BHL's reliance on a Universal Basic Income without ever really specifying what that would mean or look like. I'm a little new to the UBI idea and the BHL treatment of it. I brought it up at IHS and was pointed to a journal article by Pete Boettke where he gives a critique of that approach. I also plan to write a paper evaluating UBI versus a negative income tax. But before I do that lit review, I won't know the arguments for the UBI against the criticisms in the article. But, I find those feasibility concerns to be very convincing and agree with the authors that gesturing uncritically towards a UBI to alleviate coercion concerns is an easy shortcut.
However, as noted above, the authors themselves fall victim to a similar shortcut when they gesture uncritically towards "regulation" without once explaining what that would look like.
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