Friday, January 24, 2014

The Libertarian Social Welfare Paradigm

It's the purpose of this blog to provide a space for me to create and share ideas for a libertarian vision of social justice, political economy, and social services.  The nagging question that has plagued me for years is to find a approach to implementing social justice that is broadly compatible with the larger libertarian/classical liberal project.  As I've done more research on the policy proposals that libertarians cherish, I've come to a tentative definition that I will use moving forward.

Social justice consists of the creation and maintenance of spontaneous orders in the assistance of the least well-off.  

Spontaneous order is the philosophical concept that distinguishes Hayek as the most important philosopher of science in the past decade, in my opinion.  Building upon ideas of social constructionism and subjectivism, Hayek shows how the free market (not our present system) is not a real thing like a desk is a real thing.  It is the unintended consequence of innumerable uncoordinated human actions.  The concept does not just describe the market, though that was the economist's main focus, but all of the social world.  Language, folkways, culture, institutions--all of these can be seen as spontaneous orders.

What distinguishes a spontaneous order?

I use Charles Johnson's definition of spontaneous orders as Consensual, Polycentric, and Emergent.  Public assistance programs that utilize the concept of spontaneous order give the greatest voice to the knowledge held by those in poverty and those providing services to them.  By placing the funding directly in their hands, people in need can choose in which agency they wish to get services or in which low-income housing complex they wish to reside. The current system tells them where they must live, how much to spend on food, housing, schooling, and other services, and provides steep penalties from deviating from these mandates: abject poverty, untreated illness, prison, and early death.  In addition, there is very little competition between providers of service to the poor, and in the case of monetary assistance, no competition whatsoever.  Without the opportunity to exit to a better institution, people in need cannot vote with their wallets to a better service.  Agencies have no incentive to innovate or be responsive to individual need.  Voters have no ability to tell which programs are working and which ones are not.

What does a spontaneous order approach to social justice look like?

When I say "creation and maintenance of spontaneous orders" I mainly mean the coercive creation of markets through the redistribution of wealth.  I'm not a natural rights libertarian.  I don't believe that property rights are utterly unimpeachable, just very important.  And I take to heart the liberal critiques of Austrian (and neoclassical) economics that assumes all people have equal standing to participate in the market.  It's biased.  This is the remedy.

In accordance with Hayek's Good Society and Milton Friedman's Negative Income Tax, a universal minimum income equal to the poverty line should be instituted via constitutional amendment (with a breakeven point of twice the poverty rate).  If you're concerned about cost, providing this amount of money to every person and child would cost less than the 2007 ARRA stimulus package.  And would have done much more for our society than what the stimulus accomplished.  I would argue, though I need more evidence to back this up, that this system provides greater monetary benefits than the average combination of benefits that persons in poverty draw from the government at present--especially since most programs (except SNAP!) do not reach the majority of people who qualify for them.  Moreover, a minimum income allows a person to spend their money as they see fit, rather than relying on the government to tell them where and how to spend their funds.  I argue that a minimum income benefit should replace monetary assistance and in-kind assistance programs.  This includes SNAP (food stamps), TANF, and SSI (disability for the indigent).  The regulatory barriers to enter these programs are unconscionably high, the benefit amounts are piddling, and do not provide much flexibility in how funds are used.  There are good reasons to believe this sort of wealth redistribution is necessary because people would not provide these funds voluntarily (e.g. free rider problem).  There are also good reasons to be skeptical of these claims.  For the purposes of this discussion, we will assume that the government will continue to perform these functions, and thus, should do them in the way that most respects the dignity and worth of the people receiving funds.

Although there are important arguments for why the government should likewise get out of the business of providing medical insurance, education, and disabilities services, we are unlikely to see the end of these programs at any point in our lifetime.  While the government is performing these services, it should at least provide in them in a way that best uses the knowledge and abilities of those in need and those providing services to provide better, more individualized services that evolve over time.  Surprisingly, most innovations in these areas have actually used this model, though without citing Hayek, as we'll see below.  The goal of each program is to provide the money directly to consumers of that service.  They, in turn, purchase goods and services they value.  In doing so, they do what spontaneous orders do best--empower individuals to make choices meaningful to them and create systems that utilize and respond to local knowledge.  In doing so, they upend the present approach to public services--a revolution for those in need.


How has this approach to social justice being used right now?

Education reform is an odd coalition of libertarians and local activists who seek to put more power in the hands of parents, teachers, and principals and away from school boards, legislators, and bureaucracy.  Through the provision of school vouchers, competition and choice create better schools and more satisfied parents.  Backpack funding (where the money metaphorically follows the student in her backpack) dislodges the funding mechanism away from bureaucracies that favor the rich and well-connected over the poor and marginalized.  This education market is a spontaneous order--one characterized by individual actors using their own subjective preferences to make choices constrained by rules that are universal and well-announced.  The choices made within these orders create more satisfied parents and better systems for their children.

Perhaps most jarring to me was that Medicaid reform was being led in the same direction.  The research I am working on this semester is looking at the consumer-directed model of services.  In its pure form, this conception of medical assistance to the indigent and the disabled provides funds directly to the consumer.  She can then use these funds on things that are important them--personal assistance from family or a paid helper, renovations to their home for physical limitations, counseling, or social interaction.  Though I have done less research on them, the state implementation of Health Savings Accounts paired with catastrophic coverage plans also builds on the ideas of consumer direction.  Though less prevalent than the consumer-directed plans mentioned previously, pilot projects in a number of states have shown superior results to traditional Medicaid.  Unfortunately, these consumers are still acting within an health economic environment that systematically suppresses (and inflates) the price of services while preventing health providers from repackaging and innovating in service provision.

Most important to my subject area and personal interests, spontaneous order needs to be the organizing concept of redistribution to the poor.  In the present model, individuals experiencing poverty must wade through a morass of public assistance programs that are time-limited, do not meet basic needs, remain plagued with devastating communication problems, and subject to severely perverse incentives.  A basic minimum income provides what the present system cannot--a responsive system based on individual needs.

It is utterly uncontroversial to me to assert that the present welfare system exists for the powerful to exert social control over the lives of the poor.  All EBT purchases are tracked in every state.  TANF's legal mandate is to encourage marriage and two-parent families and reduces mothers to poverty if they choose to take care of their children rather than work for minimum wage.  Housing vouchers, in attempting to weed out the truly "deserving poor," discriminate against anyone who in the 10+ years it takes to get assistance actually find just a temporary residence.  SSI's work disincentives forces anyone who wishes to maintain their income into the shadow economy or to subsist on their checks.  SNAP won't even let you buy toilet paper.  A provides funds that can liberate individuals from oppressive institutions like the welfare bureaucracy, the idiotic and capricious whims of the legislature, but also discriminatory employers, abusive partners, and a damaging environment.

Does this mean we should create as many of these as possible?

I haven't really identified a limiting principle on where I think this should stop.  I would argue that there are cases in which government action to create a spontaneous order would be prudent and effective.  Education may be one case.  Disabilities another.  Health care.  Basic income.  Finding a limiting principle is less important to me at the moment than my primary task--creating a model for public policy that empowers individuals, and through an evolutionary process aided by the market, creates better and more responsive public services.

What about the "support network?"

This is a question I got in one of my classes this year.  I suppose it is a holdover from the Randian days of libertarianism in which "I have no obligation to help you, therefore you get no help."  There is a significant role for the voluntary sector of non-profits and charities in the system I've created.  They have the knowledge to fill in gaps that large programs such as those advocated here, just cannot see and cannot be responsive to. A program to provide job training, sex education, or youth engagement would provide a more natural home inside a basic income system--one that actually provides for the basic needs of human beings.  We would be surprised how much  more successful socialization or public health programs are when people can actually feed, clothe, and house themselves.  Even public services within cities or counties may fill in gaps.  Local governments can better gauge the needs of their citizens and have more stringent controls than a federal government that can print money at will.  Competition between and within these municipalities again trends towards the features of a marketplace.

How do these align with Social Work values, theories, and models?

This probably isn't as important to most of the people reading this as it is to me.  My project for the past...5 years has been to link my political beliefs and my profession.  It's been a heartening journey, one where I've found new stones to stand on each week.  Here are my takes on social workers and other helping professions should adopt this approach to social justice.

1) It best approximates the ethics and values of the profession.  If you take seriously the mandate that people have a right to dignity, respect, and self-determination, you cannot in good conscience support the present lot of welfare programs--except that to replace them with nothing would be worse.  There is no reason why the barriers for eligible people to gain benefits should be so high.  Or that the benefits should pay so little.  Or that they should exclude millions of people in need.  Or that people should have so little control over their money and services.  You cannot take the decision-making power away from the individuals receiving and providing services and putting it in the hands of bureaucrats far removed from the problem without severely violating the ethics and values of the profession and the mandate of social justice itself.  That this is not a bigger issue in our profession is embarrassing and outrageous.

2) Social workers who help the poor toil in a planned economy.  I hate to use the word socialist perjoratively (especially since I like some brands of socialism), but that's what it is.  A client comes into my office in need.  I can hook her up with only the federal programs I mentioned.  There may be some state or local programs too, depending on where we are.  But that's it!  I can help her apply and wait for Medicaid (in some states).  I can try and get her SSI if she has a disability (but that takes a long time and she will most likely be denied).  I can get her on TANF (but that requires her to work and pays less than half of the federal poverty level in income for only five years).  That's my job.  Helping her interface with the interminable, unknowable bureaucratic mess.  All the while, I can provide her empathetic psychological support and link her up with other service providers--who in turn are subject to the same system of Medicaid and state funding as me.

What would it look like if my clients actually had the money they needed to survive?  How would services be different if the poor could shop for agencies, counselors, and providers?  What if they could leave relationships they deemed to be oppressive or not responsive?  What if people didn't have to worry that if they peeved off the wrong person, their benefits would be cut off?  What if they had control?

For me, I would love to put myself on the market for social services, as social workers who serve people with greater income do to a certain extent.  Competition leads to better outcomes.  And it leads to better reimbursement for providers who provide exemplary service.

What about the problems with markets?

Doesn't this model require a belief in markets that is not based in empirical fact and notions of justice?  The textbook model of economics is completely unrelated to how the real world actually works.  Everything is imperfect.  Solutions are temporary, cobbled together, and may not make things better (particularly for all people) in the short run.  This is the vision of the market that I share!  This is the vision of the market that libertarians share!  Market imperfection or market failure occurs.  They can be systematically biased against the asset poor.  Knowledge is not equally available to all.  I find it difficult to imagine a reality where the opposite would could be true.

What the public choice school argues is that these failures need to be compared with the failures of government action.  Examining the incentives within a bureaucratic system, there is utterly poor representation for those receiving any of these services and none for those providing them either.  Decisions that make up over 90% of what happens within the helping relationship are made far away from people who never touch the real work being done.  Those actors face incentives to hide the bad stuff, tout the good stuff, always argue for a bigger budget with more control, and never truly solve the problem you were setting out to fix.  The incentives punish the altruist and reward the knave.  And as a street-level bureaucrat, it leaves burned out just from dealing with the system--not from your clients.

When I compare the two systems, it ultimately comes down to a moral question.  Who should have control over your life--you or the government?

By way of conclusion..

What I have described here is a paradigm shift in social welfare policy.  It is one that is already under way.  The libertarian paradigm is suited to our present time--one with spiraling debt, growing inequality, and increased distrust in government.  What it offers is an alternative to the social control apparatus of the modern welfare state--one that values individual strength, resilience, and ability.  A truly humanist paradigm that allows marginalized and oppressed people greater control and autonomy in their daily lives.  It provides for the basic needs of those in poverty upon which community, neighborhood, and local programs can build a society that reflects the values and efforts of its people.  It is a progressive program.  It is a libertarian program.  And it is our best hope to achieve the ideals of social justice.

No comments:

Post a Comment