Some Libertarian Basics

Further food for thought for bleeding heart statists: if government is a charity, its a very strange charity that, to the extent it gives charitably, focuses its charitable efforts on the already rich, i.e. American citizens. It is like a homeless shelter that only provides rooms to the college educated.

So maybe its time to drop the “charity” metaphor and call a spade a spade: government is a coercive organization that steals from everyone to give to the few. Its a group that “takes care of its own,” allows no competition within its self-drawn borders, and spends most of its resources finding ways to expand its own authority. It insists the services it provides are “necessary.” Mafia-run charity? Let’s stick with Mafia.

“If I give a lot of money to charity, then I am generous. If you give a smaller fraction of your money to charity, then you are less generous.”

Why add in “fraction”? If I was a poor person, or a person running a charity I’d much rather have 1% of Bill Gate’s fortune than 10% of a middle-class American’s. To me then, it would seem that Bill Gates giving 1% was being extraordinarily generous.

The simple fact that in such a scenario Bill Gates wouldn’t have to work as many hours to fund a $1,001 check to a charity as another man might to write a $1,000 check doesn’t affect which check is larger.

I’d like to add my humble opinion that governments do not really help the poor with any of their programs. They help themselves and the well politically connected. Yes I know that most politically connected people are rich, so I guess the quote “generally those who contribute most to charities have considerable say over how the money is used.” can apply to a government “charity” as well.

The biggest difference between charity and government is that if a charity fails, its gone. If the government fails it denies failure, points the finger elsewhere, and forces more money from the people it claims to be helping.

In other words, if you can’t get it on your own, and you can’t find someone to give it to you, you can’t have it.

That’s pretty much a tautology.

Say we’re on a bus trip with 100 people and stop to have dinner at a mall. 90 people have money to buy dinner, but 10 people forgot their wallets.

First, we decide everyone needs food, so we’re going to pool our resources, since we can spread the cost. Then someone mentions that we could negotiate a deal with one of the vendors if we all buy the same meal. Lots of people grumble but a chorus of “ok” sounds like a majority so the “group” decides to do it.

Everyone breaks up into cliques and elects a representative. Then the representatives decide what we’ll have for dinner, and how much everyone should pay ($8 each to cover the 10 who can’t pay). Then the vendors hear what we’re doing and start lobbying. The Chinese food stall offers $50 to a representative if he changes his vote. The pizza place offers to throw in free cookies if they are chosen. Finally, we find out that we’re all having Filet o Fish value meals, with Diet Coke and fries.

When the reps go to pay, they realize they don’t have enough money. More than 10 people didn’t pay, or someone pocketed some money. It changed hands about 3 or 4 times. They have to order some cheaper food to get enough.

Everyone lines up to get their food, but at the end, there are 7 people in line and the food has run out. The 7 have to buy their own meal, but one of them is a person who forgot their wallet. A friend pays for his meal.

The guy who paid for three meals is really pissed off, and he uses the f-word about 10 times a minute for the entire bus ride home when talking to his friend. He also makes loud comments about the manhood of one representative and threatens to beat up another. The seven people who didn’t get food are angry. Several people hated the fish and just ate fries. Some gave their sandwich to others, but a few just threw them out. That pissed off two fat people who were still hungry later on the bus and a couple other people on general principle, who lectured the others. When we got back home, most people asked, who is the moron who came up with that idea?

8,

Man, you own! A better description on the real workings of the State has not been written.

[Comment removed for supplying false email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog.–Econlib Ed.]

El Prez asks if national defense and law enforcement should be funded with voluntary contributions.

Aside from the obvious Constitutional argument (these powers are specificially enumerated in it), to help me decide if something is okay to be provided by government I ask the following question.

How easy is it to determine if it truly produces the intended result?

National Defense – Very easy. Win or die.
Law Enforcement – Easy. Justice is served on net or not.

With government redistribution the true results aren’t as easily determined. It’s easy to find the one person it seemed to help, but the 10 it hurt are invisible. Since such efforts are judged on intent rather than result, there’s no natural correction of bad results born from good intentions.

The libertarian philosophy does not do well when cooperative action is superior to personal actions, but enforcement is required to achieve cooperative action.

A libertarian crossroad would have no stop signs. People could stop if they wanted to or drive through if that was there choice. The result would be chaos.

Most everyone would agree to stop *if everyone else agrees to as well* and *if there is enforcement on that agreement*. You need both.

You might not see healthcare as an joint issue like the cross roads (or like defense spending, fore example). But others do. That is the source of the disagreement.

But we know the answer to your theory because we do have facts about charity for healthcare before the government started paying for healthcare.

It was terrible and most poor people did without much healthcare except from the charity of doctors.

Why do you pretend otherwise?

Floccina,

El Presidente please tel me what you think a person needs.

If I can’t get it on my own, then I can’t have it. Asking from others is shameful.

It’s just the new orthodoxy, nothing more.

“In other words, if you can’t get it on your own, and you can’t find someone to give it to you, you can’t have it.”

That’s pretty much a tautology.

Not really. A third option is to find a social interaction in which needs are met through cooperation as opposed to individual effort or charity. If I’m not mistaken, that’s the basis of classical economics: the interaction of individuals, specializing and meeting the needs of others, is what allows them to have their own needs met and more as they desire. But that’s just Adam Smith and David Ricardo. Maybe we should disagree? Or maybe we say that the market dispenses justice. That’s one proposition I don’t think too many libertarians can defend in good conscience, with a straight face, or for any length of time. At best, they might argue that the market might dispense less injustice, and I’d want to see the argument and the evidence for that.

Martin Feldstein has already produced research on how inefficient government charitites would be compared to private charities. He shows that it would take $1.63 of government funding to produce the benefits of every $1.00 spent through private charities.

Sig: A “libertarian crossroad” would be privately owned. It is impossible to generalize about what sign may or may not be displayed. I personally would want to keep my crossroad a safe and orderly as possible.

El Prez,

Re: your response to Dan Weber. I see no reason for the involvement of the state in that interaction, especially if we stick to the idea of cooperation; which to my mind is defined by its voluntary nature. No libertarian would argue against people getting together voluntarily to cooperate in the relief of suffering or poverty. Why do you assume the necessity of the state to organize this?

“A libertarian crossroad would have no stop signs. People could stop if they wanted to or drive through if that was there choice. The result would be chaos.”

I guess someone missed the story about the city in Denmark that, after years of major traffic jams and countless accidents tried something new. The removed all the road signs. Traffic congestion was immediately reduced and accidents drop off almost to zero.

The assumption that people are idiots who can’t take care of themselves or each other is the base on which all statist apologetics are founded.

Public goods
One problem with the “public goods” argument for State (government, generally) provision of charity (e.g., health care for the poor) is that oversight of State functions is a public good which the State itself cannot provide. Assumption by the State of responsibility for the provision of charity (or any other public good) transforms the market failure which the “public goods” analysis describes, but does not eliminate it.

Traffic control
In Manoa Valley, City and County of Oahu, Hawaii, Lowrey Avenue terminates at the intersection of Oahu Avenue and Manoa Road, producing a five-way intersection. Every street faces a stop sign. There is no light. An ethic has evolved, of passage through the intersection in order of arrival. Sometimes people cheat, but it works, in general. I conjecture that the success of this convention relates to the relatively small number of people who must pass through this intersection every day and to the stability of the resident population of upper Manoa. In times of maximum traffic (0530 to 0830, 1500 to 1800) some time is lost by this custom, relative to a system which would allow multiple cars from the same street to pass together. A signal system which minimized total wait time would sense the number of waiting cars or would use time of day as a surrogate. Individual drivers cannot sense the relevant information (number of cars, anyway), and the simple rule is easier informally to enforce (with honks and one-finger salutes) than would be some time-sensitive function of the number of cars which have preceeded you.

Eduardo Zambrano
Formal Models of Authority: Introduction and Political Economy Applications
Rationality and Society, May 1999; 11: 115 – 138.

“Aside from the important issue of how it is that a ruler may economize on communication, contracting and coercion costs (bold mine. MK), this leads to an interpretation of the state that cannot be contractarian in nature: citizens would not empower a ruler to solve collective action problems in any of the models discussed, for the ruler would always be redundant and (italics in the original. MK) costly. The results support a view of the state that is eminently predatory, (the ? MK.) case in which whether the collective actions problems are solved by the state or not depends on upon whether this is consistent with the objectives and opportunities of those with the (natural) monopoly of violence in society. This conclusion is also reached in a model of a predatory state by Moselle and Polak (1997). How the theory of economic policy changes in light of this interpretation is an important question left for further work.”

“your generosity is reflected in what you do with your own money, not in what you do with other people’s money. If I give a lot of money to charity, then I am generous. If you give a smaller fraction of your money to charity, then you are less generous. But if you want to tax me in order to give my money to charity, that does not make you generous.”

I love it… Care if I use it?

First time I have heard an economist talk about government as a mafia. I have been making the comparison for a while – the only difference is that the mafia is very good at keeping its promises!!

Richard,

Private charities would have much less of a problem with “free riding” than one-size-fits-all, top down, government run charities.

Nobody here is making an argument for a libertarian utopia. That’s called a straw man argument. If you think you will ever have a direct say in where your tax dollars go then your own understanding of how government actually works is sadly lacking.

Quoting Richard
first post “In fact the evidence that you want to support government funding for health care already exists. Does the charity of people provide enough blood and organ donations? Why would you think it would be different with money? ”

My response: The only reason why the blood and organ donation charities are underfunded is because the government is interfering with the markets and making it illegal to sell blood (not plasma) and bodily tissues/organs. Government interference = supply/demand not reaching equalibrium.

Richard’s second post: “All I’m arguing is that we know that charities will most likely be severely underfunded even on a level playing field; this is just standard economics.”

My response: If the government didn’t prop up crappy charities with tax dollars, then the really competent players would be the only ones on the field. Your “always underfunded despite fair playing field argument” does not compute. On what do you base your theory?

As long as government remains more interested in politics and self-preservation than competently fulfilling its obligations, charities will be necessary to fill the gap left by bureaucratic, self-interested government social welfare programs that have alterior motives. For example, Medicare, Medicaid and Social Security act as a kind of unemployment insurance. A couple of people at MIT studied this usage several years ago and published two studies about it. Look it up for yourself.

Richard,
to some extent, charitable contributions, even absent tax subsidy, are consumption goods. The empirical question (or at least a empirical question) is whether the de facto provision of the consumption good produces an efficient amount of whatever the charity is de jure aimed at producing.

“But being libertarian does not mean you have to have a cold heart. You can be a bleeding heart, but you show it by what you do, not what you advocate forcing other people to do.”

Brilliantly said.

It’s amazing to hear the accolades heaped upon retired congresspersons who “fought for kids” or some such…. Think of Clinton and the millions he received in speaking fees, Edwards, Obama, and on and on. At the same time, ask a liberal voter why they like these plutocrats and you’re told “they helped the poor and defenseless.” But never with their own money.

What if, in every govt. decision, the question was asked, “How does this effect liberty?”

“I remember when ‘liberal’ meant being generous with your own money.”

–Will Rogers

One can agree that there may be needs or expectations that are best satisfied through voluntary association response or action. It appears that over time, these voluntary associations all too often take on a life of their own,growing in scale, bureaucratic in organization, and diminishing in effectiveness in maintaining fidelity to their original mission and values. Such associations begin to look a lot like government. It appears that adherence to the principle of subsidiarily as an organizing governance standard could mitigate this tendency. requiring funding on an annual basis would also help.
Large bureaucracies can be defined as ” an organism which can absorb an infinite amount of energy with no apparent movement or effect”.

Sig,

Here’s one example (several, actually, in the article) of something approximating a “libertarian crossroads:”

http://www.wired.com/wired/archive/12.12/traffic.html

leo the lion,

I believe the difference would be that private organizations and charities do have to make their cost to benefit ratios public. It’s easy to find out how well the charities serve their purposes. You can alway chose to stop supporting them if or when they fail their missions. They know this so it keeps them a lot more honest and focused on their mission or in providing the service they promised.

Government has no such requirements and you can’t opt out once they create a program no matter how poorly it functions. What incentive do they have to be honest or provide decent service? Anyone who has ever dealt with a governmental bureaucracy can attest to this reality.

Dear Sig: Time lapse of a Hanoi roundabout without traffic signals.

It’s a little chaotic as you hypothesized, but not wholly unworkable.

(El Presidente): “There are several reasons for using the social institution of government to address redistribution. They basically boil down to the idea that people will do less than is needed if left to do it alone.”

Any large organization could give money away. Try “There are several reasons for using the institution of Wal-Mart (or “the Catholic Church”, or “the AFL-CIO”, or “the Mafia”) to address redistribution. They basically boil down to the ida that people will do less than is needed if left to do it alone”.

Doesn’t work, does it? “The State” is people. The argument that a uncoerced market will under-supply “public goods” (including remediation for tragedies of the commons) applies with equal force to State actors. Who will coerce them? Why should they spend their resources on public goods? Just because you wish they would? I wish that the Mafia would so use its resources. I wish everyone would just agree to be nice. I wish I had a flying carpet.

(El Presidents): “…(O)nly one institution has the power of force to bring (redistribution) about when anything less is insufficient.”

Who shall force the enforcers? People in government have no more incentive to give to the poor than do people in MacDonalds. The State is a corporation. Corporate oversight is a public good. Oversight of State functions is a public good which the State itself cannot provide. State assumption of responsibility for the provision of public goods transforms the “free rider” problem at the root of “public goods” analysis but does not eliminate it.

(El Presidente): “There are several reasons for using the social institution of government to address redistribution. They basically boil down to the idea that people will do less than is needed if left to do it alone.”
(Malcolm): “Why should (State agents) spend their resources on public goods? Just because you wish they would? I wish that the Mafia would so use its resources. I wish everyone would just agree to be nice. I wish I had a flying carpet.”
(El Presidente): “Some of us choose to act as well. I’ve put my financial and professional future at stake in this endeavor. It’s more than just wishing on my part.”

Which endeavor? Supplying charity or gaining access to the tools of State coercion?

(Malcolm): “Who shall force the enforcers? People in government have no more incentive to give to the poor than do people in MacDonalds.”
(El Presidente writes): “The electorate is charged with doing so under our system of governance.”

The discussion then becomes whether democratic feedback mechanisms work in a mass democracy. More precisely, the issue is whether voluntary or the coercive mechanisms of the State yield a better result (health care for the indigent, schooling for children of the poor, etc.).

(El Presidente writes): “If that has become too difficult, then we need to clarify, simplify, and monitor more effectively. I am not opposed to reform. I am not persuaded that railing against a state as a social institution when no better alternative can be given is a good use of anybody’s energy.”

A better alternative can be given: to incline public opinion (therefore, voters) against a State role in charity, and to rely on extended family and voluntary organizations. For the reason I gave (oversight of State functions is a public good which the State cannot supply), the “public goods” argument for State provision of charity fails.

(El Presidente writes): “As for incentives, who wouldn’t give to poor people if they got paid to do so? What sort of sick individual would refuse to help others even when they received tangible benefit unless they had a better offer? Maybe the problem is that we aren’t making a good enough offer, and perhaps that has something to do with the sentiment that ‘it’s mine, mine, mine, mine, mine; all mine.’ (stomp feet repeatedly).”

“To” is a statement of intention. Whatever one is paid “to” do, one can pocket the money and default. Economists call this “the agency problem”. In the public sector, we see bloated bureaucracies and useless consulting contracts given to friends who sing the praises of the bureaucracies which hire them. After President Clinton signed the welfare reform bill into law, social service agencies and the relevant committees in the Hawaii State legislature held an informational briefing on the expected financial impact. I attended. The room was SRO with expensively dressed late-middle aged “Executive Directors” of this group or that. Evidently the poverty business pays well.

(malcolm): “Which endeavor? Supplying charity or gaining access to the tools of State coercion?”
(El Presidente writes): “The endeavor of getting people what they need, one way or another. I’ve worked through NGOs and government.”

“One way or another.” Please consider “another”. I recommend Charles Murray’s “Losing Ground: American Social Policy 1950-1980”.