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Monday, March 7, 2016

12 Reasons to Oppose the Welfare State

Strong Reasons to Be Skeptical of Welfare

I’m a hard-core libertarian who defines libertarianism broadly. If you think voluntarism is seriously underrated and government is seriously overrated, you’re a libertarian in my book. I also strive to treat others with common decency regardless of their political views. That includes libertarian apostates. People sometimes cease to be libertarians even on my broad definition — and when that happens, the proper reaction is not anger and ostracism, but friendliness and curiosity.

In recent years, I’ve heard many libertarians expressing new-found appreciation for the welfare state. This is most pronounced at the Niskanen Center, but that’s only part of a broader trend. If the revisionist position were a clear-cut, “Sure, most of the welfare state is terrible, but the rest of okay. We should cut social spending by 80%, not 100%,” their libertarian credentials would not be at issue.

When libertarians start describing Danish “flexicurity” with deep admiration, however, I don’t just doubt their libertarian commitment. More importantly, I wonder why they changed their minds. And to be honest, the more I listen to them, the more I wonder. The most enlightening path, I think, is to restate what I see as the standard libertarian case against the welfare state, and find out exactly where they demur. Here goes.

Soft-Core Case

  1. Universal social programs that “help everyone” are folly. Regardless of your political philosophy, taxing everyone to help everyone makes no sense.
  2. In the U.S. (along with virtually every other country), most government social spending is devoted to these indefensible universal programs – Social Security, Medicare, and K-12 public education for starters.
  3. Social programs – universal or means-tested – give people perverse incentives, discouraging work, planning, and self-insurance. The programs give recipients very bad incentives; the taxes required to fund the programs give everyone moderately bad incentives. The more “generous” the programs, the worse the collateral damage. As a result, even programs carefully targeted to help the truly poor often fail a cost-benefit test. And while libertarians need not favor every government act that passes the cost-benefit test, they should at least oppose every government act that fails it.
  4. “Helping people” sounds good; complaining about “perverse incentives” sounds bad. Since humans focus on how policies sound, rather than what they actually achieve, governments have a built-in tendency to adopt and preserve social programs that fail a cost-benefit test. Upshot: We should view even seemingly promising social programs with a skeptical eye. 

Medium-Core Case

  1. There is a plausible moral case for social programs that help people who are absolutely poor through no fault of their own. Otherwise, the case falters.
  2. “Absolutely poor.” When Jean Valjean steals a loaf of bread to save his sister’s son, he has a credible excuse. By extension, so does a government program to tax strangers to feed Valjean’s nephew. If Valjean steals a smartphone to amuse his sister’s son, though, his excuse falls flat — and so does a government program designed to do the same.
  3. “No fault of their own.” Why you’re poor matters. Starving because you’re born blind is morally problematic. Starving because you drink yourself into a stupor every day is far less so. Indeed, you might call it just desserts. 
  4. Existing means-tested programs generally run afoul of one or both conditions. Even if the welfare state did not exist, few people in First World countries would be absolutely poor. And most poor people engage in a lot of irresponsible behavior. Check out any ethnography of poverty.
  5. First World welfare states provide a popular rationale for restricting immigration from countries where absolute poverty is rampant: “They’re just coming to sponge off of us.” Given the rarity of absolute poverty in the First World and the massive labor market benefits of migration from the Third World to the First, it is therefore likely that existing welfare states make global absolute poverty worse.

Hard-Core Case

  1. Ambiguity about what constitutes “absolute poverty” and “irresponsible behavior” should be resolved in favor of taxpayers, not recipients. Coercion is not acceptable when justification is debatable.
  2. If private charity can provide for people in absolute poverty through no fault of their own, there is no good reason for government to use tax dollars to do so. The best way to measure the adequacy of private charity is to put it to the test by abolishing existing social programs.
  3. Consider the best-case scenario for forced charity. Someone is absolutely poor through no fault of his own, and there are no disincentive effects of transfers or taxes. Even here, the moral case for forced charity is much less plausible than it looks. Think of the Good Samaritan. Did he do a noble deed — or merely fulfill his minimal obligation? Patriotic brainwashing notwithstanding, our “fellow citizens” are strangers— and the moral intuition that helping strangers is supererogatoryis hard to escape. And even if you think the opposite, can you honestly deny that it’s debatable? If so, how can you in good conscience coerce dissenters?

Personally, I embrace all twelve theses. But even the Soft-Core Case implies radical opposition to the welfare state as it currently exists. My questions for lapsed critics of the welfare state: Precisely which theses do you reject — and what’s the largest welfare state consistent with the theses you accept?

This post first appeared at Econlog.

  • Bryan Caplan is a professor of economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute, and blogger for EconLog. He is a member of the FEE Faculty Network.