Perverse welfare incentives

[Garth Zietsman]

Oh my!  This from the Freakanomics blog

Nick Kristof, writing in the N.Y. Times:

This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability.

Many people in hillside mobile homes here are poor and desperate, and a $698 monthly check per child from the Supplemental Security Income program goes a long way — and those checks continue until the child turns 18.

And:

This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire.

Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments.

Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. 

And:

“One of the ways you get on this program is having problems in school,” notes Richard V. Burkhauser, a Cornell University economist who co-wrote a book last year about these disability programs. “If you do better in school, you threaten the income of the parents. It’s a terrible incentive.”

It's sometimes hard to imagine that incentives would produce such perverse effects, and yet they do.  Locally I understand there is a thriving business passing on TB so people can collect some or other welfare allowance.

This however is a very badly designed welfare program.  Randomized experiments have shown that paying parents welfare for sending their kids to school, having vaccinations etc works pretty well.  That has to be a better incentive scheme than paying parents for keeping their kids stupid.

Personally I prefer the Hayekian/Mankiw scheme of a flat tax and a universal basic income grant (and no other social program) to be spent however people want.  That takes government discretion out of the picture and brings the market into the picture.  

Garth

[Erik Peers]

That works out at R720,000 per child to keep them illiterate. Pretty much the same it cost me per child to give them a private school education.

If one adds that to the US grant, that makes something like R1.5mil per child, x 3 in my case adding up to R4.5 mil. Quite an incentive to encourage your wife to drink while she is pregnant.

Ok, I am double counting, but it puts the microscope on the absurdity of state intervention. The law of unintended consequences. I trust (and hope) that that was not a result envisaged by the lawmakers.

A universal income grant, to be spent at the discretion of the adults, will in some instances cause the money to be wasted (?) on booze, but I still believe that parents know better for their children than the state does, if not incentivised by the state to make decisions not in the interest of the child.

Personally I would favour the idea of Milton Friedman, which was to make all schools private, and to issue education dollars to parents which may only be spent on education, instead of cash. That way one combines a free market for education, and state protection of minors.

Garth

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[Garth Zietsman]

That works out at R720,000 per child to keep them illiterate. Pretty much the same it cost me per child to give them a private school education.

Oi vey I didn't do the numbers but that's a lot. 

A universal income grant, to be spent at the discretion of the adults, will in some instances cause the money to be wasted (?) on booze, but I still believe that parents know better for their children than the state does, if not incentivised by the state to make decisions not in the interest of the child.

I don't want to turn a libertarian forum into a progressive forum but the evidence is that it is much less wasteful to give money than concrete charity such as food or specific services.  Giving money also is better for freedom and market solutions. 

I don't know if Hayek actually mentioned a concrete figure for his universal basic income (Mankiw does not).  Charles Murray did come up with some figure that was quite generous if I remember and Julian le Roux calculated a figure for SA.  It is something that adds up to all current non-judicial system spending divided by the population.

I don't however agree that all parents know better than the state what will be good for their children. Yes as a general rule people do (and indeed must) know more about their specific situation than the state can but that's not to say they do anything like an optimum job with that information.  Sometimes the problem is weird beliefs e.g. that exposure to strangers within the first 5 years causes transfer of wicked spirits or bad luck - common in rural India. Sometimes the problem is plain stupidity.  Often parents don't have the best (or even a decent) outcome for their children in mind.  

You could of course argue (as some libertarians have) that people don't have to put their kids needs above or even on par with their own, that they are entitled to be as selfish as they wish and abandon their kids if they see fit.  My view is that if you produce kids you have freely entered into a one sided contract to look after them properly, so you do have to put a reasonable value on your child's needs.

Still one needs to be very careful before one allows the state to override parents choices.  The case for the benefits needs to be very solidly made and it should (in my view) be something that the vast majority of parents would freely choose anyway.  I have in mind a rule similar to how some speed limits are set - they leave a road unregulated for a time and note what the 80th percentile speed is and set that as the speed limit.  In other words solidly establish whether the "speed limit" has decent effects beyond any doubts and then use something like the "80th percentile" rule.

Garth

[Julian le Roux]

I agree with you Garth - IF people insist on taxation (to right the wrongs of past government systems, for example), then all the government spending (including for courts, national defense etc.) should go to an unconditional adult BIG (i.e. you only receive the grant when you reach around 16-18).  The fact that a BIG welfare program is virtually non-existent (and is usually only promoted by libertarians) tells you all you need to know about the true opinions and intentions of progressives / welfare statists.

I think it would be an interesting political experiment if someone started a Basic Income Grant party, especially in South Africa.  I'm not saying I would agree with it, or that it would find any traction, just that it would be interesting.  A few months back I put together some thoughts in this regard (forgive the outdated calculations):

++++

This party would be focused on diverting almost all the budget to a monthly BIG for every citizen over 16 (no means test, no racial discrimination).  By my crude calculations, where everything in the current budget except safety and defence is directed to BIG, that equals about R2200 per month per adult (R920 billion / 12 / 35 million).  All the hospitals, schools, roads, parastatals and housing provision would be privatized (either sold to pay for BIG, or ownership transferred to the respective community).  Of course, all this would be done gradually over 10 or so years.

The benefits of this concept that come to mind:

1. It has populist appeal while holding onto almost all libertarian principles.  We can even try to justify the taxation in liberty terms, based on the idea that those companies / individuals with high incomes have benefited from the monopolies and favours of past governments, at the expense of the poorest.  We can easily argue for all the laissez faire policies, because bigger economy =more tax revenue = bigger BIG
2. A BIG is clearly the best type of BBBEE possible.  What's more empowering than spending power?
3. It sends a strong message of respect to poor people (that they are trusted to be able to spend the money wisely), and builds their self-esteem.  Their sense of responsibility and self-respect been devastated by decades of a nanny state that treats them like children who need to controlled.
4. If we make the BIG conditional on not having a criminal record, we increase the marginal cost of committing crime dramatically...which should reduce the crime rate substantially.
5. It’s a simple idea that’s easily communicated to even the most apathetic / uneducated.
6. It pacifies the poor unemployed youth, whose anger and idleness is the greatest threat to the stability of SA society.  They will then have a stake in the success of the economy.  They can then use that money to start small businesses or get training, or provide financial guarantees to potential employers who need compensation for the risk of employing them in first-time jobs.  The huge injection of cash and buying power into the townships will support a flourishing informal economy.
7. It uses the incentives of democracy to our advantage.  Democracy is just about bribing the electorate with other people’s money.  So why don’t do we do it directly, with promises that are easily achievable, as well as tangible to the voters?
8. It’s not based on partisan party politics.  We disagree strongly with both the ANC and DA on their policies, but are welcoming to anyone who comes on board or promotes the idea (including leftist NGOs).  We don't waste time on petty squabbles and criticizing the 'other side' at every point and turn.
9. We can’t be accused of being right-wing capitalist whites – BIG is clearly the purest form of redistribution, and is the most respectful of the poor.
10. As libertarians, we know that poor consumers are best suited to spend money that is directed to benefit them.
11. As libertarians, we know the extraordinary potential that can be unleashed by competitive markets in education, medical, security and housing services.
12. Because our message and policies are so short and simple, we can compete with the big parties that generate reams of policy papers and speeches.
13. As the private provision of ‘public’ services grows (along with the inevitable growth in the economy), the taxation to pay for the grant (which perhaps will only increase according to inflation) can be slowly scaled back.  Even security, policing and judicial services can be slowly transferred to the communities at suburb level.  The free market slowly takes over the functions of the centralized state, and we end up with our anarcho-capitalist utopia!

[Erik Peers]

Wow Julian, that is the best election manifesto I have ever seen.
"Vote for us and we will pay you R2200 per month for the rest of your life."

The BIG has the advantage over a child grant in that it will not encourage irresponsible breeding, as 16years is too long to wait. It will not encourage unemployment as the dole does.

On a minor technical point: I don't agree with disqualifying those with a criminal record. It is the unconditionality of the grant that makes it work. One of the causes of repeat offenders is that they have no money when coming out of jail. But there is still a sting. Criminals will be charged R 2200 for their incarceration, automatically making prisons self funding. That will be a deterrent, and enable the privatisation of prisons.

On 11 Dec 2012 2:37 PM, "Julian le Roux" <leroux...@gmail.com> wrote:
I agree with you Garth - IF people insist on taxation (to right the wrongs of past government systems, for example), then all the government spending (including for courts, national defense etc.) should go to an unconditional adult BIG (i.e. you only receive the grant when you reach around 16-18).  The fact that a BIG welfare program is virtually non-existent (and is usually only promoted by libertarians) tells you all you need to know about the true opinions and intentions of progressives / welfare statists.

I think it would be an interesting political experiment if someone started a Basic Income Grant party, especially in South Africa.  I'm not saying I would agree with it, or that it would find any traction, just that it would be interesting.  A few months back I put together some thoughts in this regard (forgive the outdated calculations):

++++

This party would be focused on diverting almost all the budget to a monthly BIG for every citizen over 16 (no means test, no racial discrimination).  By my crude calculations, where everything in the current budget except safety and defence is directed to BIG, that equals about R2200 per month per adult (R920 billion / 12 / 35 million).  All the hospitals, schools, roads, parastatals and housing provision would be privatized (either sold to pay for BIG, or ownership transferred to the respective community).  Of course, all this would be done gradually over 10 or so years.

The benefits of this concept that come to mind:

1. It has populist appeal while holding onto almost all libertarian principles.  We can even try to justify the taxation in liberty terms, based on the idea that those companies / individuals with high incomes have benefited from the monopolies and favours of past governments, at the expense of the poorest.  We can easily argue for all the laissez faire policies, because bigger economy =more tax revenue = bigger BIG
2. A BIG is clearly the best type of BBBEE possible.  What's more empowering than spending power?
3. It sends a strong message of respect to poor people (that they are trusted to be able to spend the money wisely), and builds their self-esteem.  Their sense of responsibility and self-respect been devastated by decades of a nanny state that treats them like children who need to controlled.
4. If we make the BIG conditional on not having a criminal record, we increase the marginal cost of committing crime dramatically...which should reduce the crime rate substantially.
5. It’s a simple idea that’s easily communicated to even the most apathetic / uneducated.
6. It pacifies the poor unemployed youth, whose anger and idleness is the greatest threat to the stability of SA society.  They will then have a stake in the success of the economy.  They can then use that money to start small businesses or get training, or provide financial guarantees to potential employers who need compensation for the risk of employing them in first-time jobs.  The huge injection of cash and buying power into the townships will support a flourishing informal economy.
7. It uses the incentives of democracy to our advantage.  Democracy is just about bribing the electorate with other people’s money.  So why don’t do we do it directly, with promises that are easily achievable, as well as tangible to the voters?
8. It’s not based on partisan party politics.  We disagree strongly with both the ANC and DA on their policies, but are welcoming to anyone who comes on board or promotes the idea (including leftist NGOs).  We don't waste time on petty squabbles and criticizing the 'other side' at every point and turn.
9. We can’t be accused of being right-wing capitalist whites – BIG is clearly the purest form of redistribution, and is the most respectful of the poor.
10. As libertarians, we know that poor consumers are best suited to spend money that is directed to benefit them.
11. As libertarians, we know the extraordinary potential that can be unleashed by competitive markets in education, medical, security and housing services.
12. Because our message and policies are so short and simple, we can compete with the big parties that generate reams of policy papers and speeches.
13. As the private provision of ‘public’ services grows (along with the inevitable growth in the economy), the taxation to pay for the grant (which perhaps will only increase according to inflation) can be slowly scaled back.  Even security, policing and judicial services can be slowly transferred to the communities at suburb level.  The free market slowly takes over the functions of the centralized state, and we end up with our anarcho-capitalist utopia!

On Tue, Dec 11, 2012 at 12:34 PM, Erik Peers <erik...@gmail.com> wrote:
>

> That works out a...

[Garth Zietsman]

Well Julian you've clearly been spending more time thinking about this than I have.  Needless to say I agree with pretty much all the advantages you suggest.

I want to add another argument for a basic income grant from none other than the anti-Christ Paul Krugman.  (Read the full argument here.)  Where I find him most convincing is where he says that the modern economy has become far less secure in terms of employment and skill set as it has become more dynamic and riskier, and that is exactly the sort of economy that should have a welfare state, not because a safety net is kind to the down and out, but because it would encourage dynamism and entrepreneurial risk by reducing the fear factor.

To the political platform you propose I would add the FMF's idea of giving away state owned land to "the people".  Apparently there is quite a lot of it.

Charles Murray said that liberals (US style) are very conflicted by his proposal.  It would be much more generous than current welfare levels but would take away all their power to act as a nanny.

Garth

[Jaco Strauss]

Thanks Julian, I like this very much as a practical way of getting to a better system than the current unsustainable one.

One thing I would like to add though is that when EVERYBODY "gets" this Grant, I believe EVERYBODY should also be made to feel the pain of the taxation underpinning it. With a flat rate income tax of (say) just under 10%, the BIG could then be R2,200 minus R200 tax, leaving R2,000 for everybody. Any additional wasting of taxpayer's money would then also start to irritate the lower end of the economic scale!

Another reason why I like this, is that the grant would no longer serve as a deterrent to try and get work as is the case with a system where employment means a loss of so-called 'benefits'. An unemployed person would now 'only' get R2,000 while his employed neighbour working for Rx would have R2,000 + Rx. All of a sudden the R70 minimum wage is looking a lot better too at R2,000 + R1,500 to come in at around R3,500.   

Every adult (except those in jail) would now have some disposable income and the incentive would be to do better family planning, not the current opposite, where irresponsibility leads to ever bigger handouts. It implicitly supports the notion that all ought to be equal before the law.

Such a system would definitely be a great improvement and with one swoop ALL the unemployed and unemployable would be 'earning' at levels above the current "minimum wage", available to only a lucky few...

Thanks for these insights 

Jaco

2012/12/11 Julian le Roux <leroux...@gmail.com>

--
Jaco Strauss
Cape Town

[Trevor Watkins]

In my opinion, libertarians should be very careful when discussing taxation and majoritarianism, for then we are quickly seen to be in support of these things. Libertarians regard coerced  taxation as theft in principle. Nothing changes that. Giving the proceeds of crime to the poor does not diminish the crime. Robin Hood was a thief first, and a benefactor 2nd.

Sure, in the real world we have taxation, democracy and redistribution, and we might as well discuss better ways of mitigating this bad situation, but never fail to stress that taxation is pure and simple theft.

Trevor Watkins 

[Frances Kendall]

Is it theft if you vote for a candidate with a pro-tax platform and agree to pay tax willingly?

[Trevor Watkins]

As I carefully said, "coerced taxation".

Trevor Watkins - Base Software
bas...@gmail.com 083 44 11 721 - 042 293 1405 - (fax)0866 532 363
PO Box 3302, Jeffreys Bay, 6330

[Colin Phillips]

On Wed, Dec 12, 2012 at 9:03 AM, Trevor Watkins <bas...@gmail.com> wrote:

 Robin Hood was a thief first, and a benefactor 2nd.

I've always thought the Sheriff of Nottingham was the thief first :-)

In theory, the Sheriff of Nottingham was collecting taxes form the peasantry for the good of the kingdom, as measured and implemented by Prince John in the absence of King Richard the Lionheart.

It seems to me that Julian's proposal is much like Robin Hood's tax reform proposal (i.e. share the tax income amongst the citizenry, rather than allocate it to specific big government programs such as the crusades) - both assume that the taxes must be collected, or at least, will be collected regardless of the morality of the situation, and both try to make the best of that bad situation.  Neither Robin Hood nor Julian le Roux are actually advocating for tax collection.  The difference in proposals is only that Robin Hood's advocacy relies on the use of arrows, while Julian's relies on the exploitation of Arrow's Theorem (by which I mean, using the inherent unfairness of a voting system to bias policy towards nudging people to voluntarily choosing a more fair system eventually - whew!)

Colin

.c.

[Trevor Watkins]

As I understood one of my favourite childhood stories, Robin Hood stole from passing rich nobles (government agents) and merchants, and was chased for these acts by the sheriff, as part of his job. Of course, the only way to get and stay rich in those days was to be in the pocket of King John. 

Libertarians are often accused of being in favour of anarchy and lawlessness. In fact, we place huge emphasis on the consistent application of specific laws, regardless of circumstances. If you take something which is the lawfully acquired property of someone else, then that is theft, no matter how good your intentions. If you are reclaiming your own property, previously stolen (through taxation, say) then that is a different and more complex issue, probably requiring a trial and a jury.

You must always ask yourself how did Robin Hood differ from King John? He took property not his own and distributed it  to others at his whim. Rather, just leave the damn property in the hands of its owner, peasant or lord, and go hunt stag or something.

Trevor Watkins

-

[Colin Phillips]

I agree completely with the two cases you presented (taking someone else's property, and reacquiring your own property), but there is a third case: reacquiring stolen property on behalf of those from whom it was stolen.  This is essentially the business model of Tracker, the vehicle recovery GPS service.  True, Tracker promises to get you back your own car, whereas Robin Hood informally returned to you approximately the amount which he estimated had been stolen from you.  This was in the days before taxpayers gave receipts. 

There are many versions of the story - in some  of them, Julian Hood robs "the rich" to give to "the poor", irrespective of the manner in which those people became rich or poor. In others, Robin le Roux robs "the nobles" (which I take to mean those people with state privileges i.e. net parasites) and gives to "the villagers" (the taxpayers).  This is perhaps the biggest drawback of Julian's plan as well - as you said, libertarians supporting such a tax reform can be easily misunderstood to be supporting taxation in principle.  Communication of complex ideas is itself complex.  For exactly this reason I am against government-administered BIG's.

The problem comes in when we try to apply your rule to resolve the morality of the actions (trial with a jury) - in this particular case, the state has an enforced monopoly privilege on the arbitration of such disputes (and the enforcement), and, unsurprisingly, the state tends to win most of the disputes it arbitrates (especially if the state picks the jury from.  And the secondary solution (if you don't know what the right thing to do is, walk away and go hunt stag) doesn't work either - all the stag in the kingdom are, by unilateral decree of the state, the property of the state (as are the peasants).

I don't think we disagree on how we would judge cases - consistency is key.  Problematically, however, the facts of this particular case are in dispute :-)

--

[Garth Zietsman]

In Robin Hood's time one didn't become wealthy by legitimate means - you exploited extractive institutions.  His response was utterly justified.  So too is that of South and Central American revolutionaries, because institutions there are strongly extractive.  (Unfortunately the system they want to replace things with is also extractive.)

Tax is theft for radical libertarians today but doesn't seem to have been so for the old classical liberals.  Both Hayek and Popper saw a definite role for a state and a welfare state at that - involving some kind of transfer - to maximize freedom.  What they saw as the threat to liberty was social engineering - especially when it reached grand levels.  My guess is that while they saw liberty as their primary value and private property as a very valuable and positive institution they didn't absolutise them, they recognized the claim of other values too.

Insofar as the state does enable more freedom and a better life than would otherwise occur, some kind of service fee is justified i.e. tax is then not theft but payment owed.  Also insofar as the states role has enabled you to do better than others the fee you owe is more than that of others.  Finally insofar as your relative wealth and property holdings is a matter of luck (perhaps enabled to some extent by the state) some redistribution is justified.  Please note my use of the term insofar.  I am not claiming that these conditions are clearly established (although I think they probably are) - my point is to show that a moral case (by those who care about liberty) for a progressive tax and redistribution is not necessarily absurd, even for those whose primary concern is liberty.

Be that as it may we are basically taking conditions as they are and thinking about what a more libertarian and politically feasible approach would be.

My wife thinks a basic income grant is a bad idea.  She is convinced that a great many of the people she serves as a doctor will not spend it on education, roads, health etc but will instead blow it on booze and tik.  I guess the libertarian notion that each person knows what is best for them and that they will act to achieve it if not hindered is not a widely shared view.

Garth

[Jaco Strauss]

One can be ideologically pure and still not be blind to reality. 

Taxation is obviously theft, but even though nobody likes paying it (and everybody agrees it is too high) a very small minority really believe there should be absolutely NO tax at all. Probably not even a majority on this very list?

So if the "biggest drawback" of Julian's plan would be for libertarians to be misunderstood as "supporting taxation in principle" it is not really an insurmountable problem. The communists have been far more successful in getting their ideas across and have no qualms in being an alliance partner of the ANC in government. I don't think Jeremy Cronin is having sleepless nights because some folk might misunderstand that alliance as implying principled communist support for the private ownership of the means of production. 

Whether taxation is theft of not, the reality is that we are all going to be paying it until the day we die (and even afterwards through estate taxes). So if a populist Robin Hood party could get the tax revenue better distributed, it would benefit everybody and nothing would prevent the purists of a SA Libertarian Party (if one even exists) to become an alliance partner of such a populist party. A much more sensible "tripartite" alliance could even include organised business in the place of organised labour that would have been dealt a heavy blow by such a BIG system. 

In any case, it would be a much better system than what we currently have; or even might have in future under a DA government.

J 

2012/12/12 Colin Phillips <noid...@gmail.com>

[Frances Kendall]

.  I guess the libertarian notion that each person knows what is best for them and that they will act to achieve it if not hindered is not a widely shared view.

Kahneman explains in "thinking fast and slow" (as you know Garth) why people generally do not know what is best for them. It's is why he espouses libertarian paternalism which attempts to steer people in the direction of good choices whilst preserving  their freedom.

Sent from my iPad

--

[Trevor Watkins]

As I feared, when you even slightly compromise the position that taxation is theft, people start talking about ways of minimising the pain of being robbed instead of stopping the robber. Why bother having principles if you only compromise them?

Garth, your "insofars" are simply rubbish, in my opinion. Please substitute any or all of the following words in place of "State" in your expression:

the mafia, the church, Al Qaeda, Woolworths, Checkers, my nephew's lemonade stand

Insofar as the state does enable more freedom and a better life than would otherwise occur, some kind of service fee is justified i.e. tax is then not theft but payment owed.

The correct exposition of your statement is:

Insofar as anyone does offer a service I choose to buy, then payment is owed.

As regards your wife's opposition to BIG, (My wife thinks a basic income grant is a bad idea.  She is convinced that a great many of the people she serves as a doctor will not spend it on education, roads, health etc but will instead blow it on booze and tik.) what possible business is it of her's what other people spend their money on? The worst that could happen is that they become her patients. 

Trevor Watkins

[Garth Zietsman]

On Wed, Dec 12, 2012 at 2:09 PM, Trevor Watkins <bas...@gmail.com> wrote:

As I feared, when you even slightly compromise the position that taxation is theft, people start talking about ways of minimising the pain of being robbed instead of stopping the robber. Why bother having principles if you only compromise them?

Does this imply there is only one set of principles? 

Garth, your "insofars" are simply rubbish, in my opinion. Please substitute any or all of the following words in place of "State" in your expression:

the mafia, the church, Al Qaeda, Woolworths, Checkers, my nephew's lemonade stand

Well that's fair enough Trevor.  I used the word "insofar" because I know there are libertarians who won't accept those premises and of course you don't have to.  I should point out though that my first "insofar" is the standard minarchist position.  I also repeat that many libertarian "heroes" accepted it e.g. Hayek, Rand, Popper, JS Mill and many more.  Rand in particular would have regarded your denial of it as "simply rubbish". 

Finally there is much empirical evidence that certain kinds of centralized states do have the positive effect I suggested - see Pinker's Better Angels of our Nature and Acemoglu and Robinson's Why Nations Fail.  I also have a study of tribes that span national borders in Africa showing that those under a more hierarchical system with higher level central authorities do much better than those that don't and that this effect outweighs the effects of their cultural traditions.

Insofar as the state does enable more freedom and a better life than would otherwise occur, some kind of service fee is justified i.e. tax is then not theft but payment owed.

The correct exposition of your statement is:

Insofar as anyone does offer a service I choose to buy, then payment is owed.

I guess some would argue that if you don't move (to say Somalia) or you use any of the "services" e.g. appealed to them to uphold your property rights when they were violated, you are deemed to have accepted the service. 

As regards your wife's opposition to BIG, (My wife thinks a basic income grant is a bad idea.  She is convinced that a great many of the people she serves as a doctor will not spend it on education, roads, health etc but will instead blow it on booze and tik.) what possible business is it of her's what other people spend their money on? The worst that could happen is that they become her patients.

Fair enough, it isn't any of her business - except when they become paying patients.  The intention behind me mentioning my wife's opinion wasn't to persuade.  It was just illustrative of a widespread attitude out there - just an aside.  To be fair to her though she was reacting to a proposal to hand these people other people's money when they have done nothing to deserve it, and which will simply enable them to do harm to themselves, their families and their communities they weren't able to do before. When it's her money that's been transferred I'm not so sure it's right to say it's none of her business how it's spent.

The general problem for those who accept minarchism is that one can't treat the state in the same way as a company - it won't really be part of the market subject to a market based moral analysis.  Some other framework is needed.  The arguments and philosophy behind the framing of the US constitution may be worth looking at.

[Erik Peers]

There is more to forming an optimum society than simply creating optimum freedom and letting everyone do what they want. Values always become involved. Even if we design a system where ideally there is basically only the law of contract, we still need to protect citizens from violence, or if we choose not to, we need to have some sort of justice system which provides sanctions to discourage violence, excluding victimless crimes of course. But which crimes are victimless, and how much violence is acceptable? Ultimately values come into play. So, Trevor insofar as you imagine a valueless society (except for the value of freedom), the practicality of this is simply rubbish.

--

[Garth Zietsman]

I think Trevor would perhaps say that he doesn't deny other values at all but would deny our right to impose them on others.  Liberty has the advantage that imposing it on others is no problem in that they can always join a club that restricts their freedom and upholds other values.  I agree with that.

My argument is about liberty per se.  My minarchical position is that the overall level of liberty and freedom is optimum with a certain kind of restricted state.  I also tried to argue that a certain kind of welfare state is consistent with liberty concerns and may possibly even serve to expand freedom by taking away some of the insecurity in a modern capitalist economy.  I am much less sure of the latter two arguments than about minarchism but I don't think they are crazy.

Garth

[Trevor Watkins]

@Erik 

I don't imagine or advocate a valueless society. To read what I do advocate, go here http://libsa.wordpress.com/2010/10/22/the-consent-axiom/, or even better, read my book "Consent to LIFE" available here http://www.lulu.com/shop/trevor-watkins/consent-to-life/paperback/product-14622373.html;.

If you truly believe that a little bit of theft, a little bit of violence, is OK so long as your intentions are good, then say that unequivocally. As far as I can see, Garth has done just that.

Trevor Watkins - Base Software
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[Trevor Watkins]

Garth, you summarise my position well. 

You suggest that you can expand freedom by limiting insecurity. How's that working for you in the US, right now? I believe you are confusing liberty with happiness. Those are 2 independent constructs. 

Trevor Watkins

--

[Paul AH Hjul]

A Benjamin Franklin quote goes something along the lines of:
Those who are prepared to sacrifice freedom for security will find they have neither and deserve none.

[Hügo Krüger]

I am also still trying to reconcile a view on a similar line. That liberty can only function, given that a certain amount of liberty is restricted. There there might not be a linear relationship between liberty and propserity. That is why I also prefer minarchism over anarchism.

To view this discussion on the web visit https://groups.google.com/d/msg/libsa/-/_esV86FaN1oJ.

[Garth Zietsman]

I believe Ben Franklin was right.  I have always been opposed to the hysterical reaction to 9/11 and the giant leap backwards wrt liberty that reaction entailed.  I had many arguments with our dear friend Jim on that matter.

I am definitely not confusing liberty with happiness and the kind of limiting of insecurity I have in mind is not a sacrifice of liberty - it's just a giant insurance policy.  Handing over property protection and justice to a central authority (which is constrained and controlled in various ways) means that you are freed from the endless violent squabbles with you neighbor and are freed to take advantage of all sorts of other possibilities.  BIG would do something similar.  Whether this benefit would outweigh the confiscation aspect needs to be established, but I think it would.  One thing to bear in mind is that the idea is to keep BIG constant in real per capita terms and so it will shrink over time i.e. at 2% real growth it will half every 35 years.  So long as any increase is below the real growth level it will shrink.  In the meantime market solutions would be doing great things.

It would be especially important that the confiscation is done in a thoroughly impartial manner.  One of the main anti-liberty effects of current tax and transfer systems is that they aren't impartial - they pick on those with less political influence and benefit those with more influence.  Hayek kept making the point that it is this discretionary power of the state that is the real threat to liberty rather than tax per se.  From a liberty point of view BIG with a flat tax would be a major improvement over the current situation and it would also be less of a distortion on the market.

I think it's important to gain some perspective here.  We libertarians are inclined to use some kind of untested ideal as our baseline comparison but in reality none of the liberal democracies is a hellhole of unfreedom.  We should recognize that these systems are a major improvement on anything that went before, and any other system currently existing, and that life within one is not half bad.  That should be our starting point and we should ask "What can we do to move toward even greater liberty?"

Let my make a statement in case my motives are misunderstood.  I think liberty is a central and essential aspect, and requirement, of human thriving.  The more liberty the better.  I guess I am just arguing that minarchism will result in more actual (or net) liberty at the end of the day than anarchism would.

Garth