I'm not sure why, but I really enjoy writing responses to these "questions to libertarians" articles going around the internet. It could be because anything original I write is pretty obtuse. So, time for some funsies courtesy of the Examiner's "The Welfare Question Libertarians Don't Want You To Ask." Since this actually pertains to my area of research, I'm going to really like this one.
Here's our first money question: If the free market is so great at providing for poor people, why are there so many poor people in the most unregulated and least taxed free market in the First World?
I'm sure you probably think that's just an ideological canard when libertarians say that we don't actually have anything close to a free market. There's a sincere problem in libertarian circles of defending the existing market forces based on the idea of how a free market would actually function. There are libertarians that are kind of okay with the status quo of the market. I'm not. Lots of us aren't. And we are starting to do a better job of describing why a freed market is different and is much better for the poor than the present state of big business and big government dominance.
Anyway, the US is #10 or #19 depending on which rankings you use in economic freedom worldwide. Still near the top, but not the most unregulated in the world. But getting to your actual point, the constrained version of a market system that we have has benefited poor people immensely. There's still massive inequality and that may be something to truly lament. But the material circumstances of poverty in this country are far better than they were twenty, fifty, or a hundred years ago and a distant cry from a live of poverty in a less economically free country. You can point to the importance of government programs in that progress, and while I would debate their merits, what ultimately made refrigerators, air conditioners, TV, and phones available to the poor was the market economy.
I think the next question you had pertains to "if helping the poor means letting rich people keep their money so they can engage in charity and philanthropy, then why with our present state of the mega-rich aren't the poor doing well?" The correlate of this argument is that if we taxed people more and got more money into the system, it would be better off for poor people. I find that kind of thinking does not stand up to a modicum of critical scrutiny. Of all the funds the government redistributes, less than 10% goes to people experiencing poverty. The majority is redistributed to the rich and well-connected, who form interest groups that capture the political process. That's why even though nominal tax rates are quite high for the rich, they can lobby for deductions and hire enough accountants to keep as much money as possible. Tax revenue does not equal more services for the poor!
Why not? Well people experiencing poverty are a heterogenous group that face multiple, severe barriers to meaningfully engaging in the political process to capture redistributed funds. Naked transfer payments are unpopular, so they are forced into a mish-mash of overlapping programs designed to assist the "deserving poor." They could be forced to leave their kids and work. Or may lose health coverage if they move to a different state. Payments in TANF are less than half of the poverty line in each state. How exactly can you make sure that people in need will win in the political process of getting money?
The fact is these programs are terrible. They are doing some good, but they do that very inconsistently. If you care about the poor and care about social justice, you should be looking at structural reform. What does that reform actually look like? Well, it looks like a market. If you want to give money to the poor, give money to them. Give them a minimum income like Hayek or Friedman or the Bleeding Heart Libertarians have been advocating over decades. When you put government in charge of determining what people need, you create a game for the interests that stand to profit by getting government privileges for their company or business. You create static systems, inured to change and unresponsive to individual needs. You create incentives for government to transfer costs to those in poverty while at the same time ratcheting up spending by each bureau. Ultimately, by trusting a system rather than a person, you take away their dignity, self-determination, and hope.
The fact is, contra your post, libertarian economics and caring for the poor are a natural and necessary fit. Social welfare dollars are scarce. Knowing where that money is best used should be left to those in poverty and the people designing and implementing services to help them. This is the basis of libertarian economics, and it's downright humanist. The incentives in a centrally planned system are awful, and as long as you are doing the baseline redistribution social justice requires, you should use the superior (though not close to perfect) market system.
You can argue that churches, charities, and mutual aid societies are too selfish or profit-driven to provide a real support system. There are some good historical and philosophical reasons to doubt that assertion, but I'm actually quite sensitive to it. There's something inherently unstable in saying that "in the long run, this leads to the best outcome for all" instead of "we are doing something directly to help you that we think will work." That's why I like the basic income.
Jon Tomasi's notion of "minimal distributive adequacy" is instructive here. Can I argue that a free market would provide enough to the poor that they would be better off in real material terms than an egalitarian system of low economic growth and heavy regulation of commerce? Sure. But assuming that would be unconvincing, let's instead try and think about ways of actually getting money to the poor so they can use it in a way that makes sense in their lives. And let's revolutionize the systems they interact with to provide them with the choice and competition that leads to more robust and responsive help.
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