Libertarianism and Beneficiary-Bashing

There has been much chatter in the New Zealand blogosphere about “beneficiary bashing” after the Minster of Social Development Paula Bennett released details on how much two solo mothers who complained about some of their benefits being reduced were still receiving from the state.

I don’t find the privacy issues particularly interesting, but the issue of whether those on welfare are receiving too much is important. As a libertarian, my first-best set of policies would not include welfare payments (in fact, it would not include government). This is not because I hate the poor and want to see them starve, or becuase I assume that they would all be able to look after themselves in the market. I think many people do need assistance and should receive it, but I am not willing to forcibly take from the rich to give to the poor. I think voluntary charity in a free society would be entirely adequate to address genuine cases of poverty.

Even so, I do not advocate a general reduction in benefits given the current set of policies. I certainly think there are better ways to provide welfare, but I don’t think it’s fair or helpful to complain about dole-bludgers and insist they just need to get a job. I think there is a very strong moral second-best argument for significant rich-to-poor redistribution in the presence of significant (stupid) government intervention. To my mind, the most just system would be a completely free market; but removing some types of government intervention can make the system less just.

Much government policy today disproportionately harms the poor. Mandated minimum levels of safety and quality on housing and other goods outlaws the products many poor people would choose to consume, and barriers to starting a business (such as licensure) or employing low-skilled workers (such as the minimum wage) reduce the opportunities for gainful employment. For the most vulnerable, this increases costs and decreases income. Given that this is happening, I’m glad that there’s a little more coercive taxation going on in order to stop the poor from starving.

If we were to remove all welfare benefits today, we would move from a system which forces people into welfare dependency (which is very bad) to a system in which takes away their options and doesn’t offer them any assistance (which is downright horrible). A system which effectively prohibits certain people from making a living and doesn’t offer them any compensation seems like the worst of all possible worlds to me.

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2 Responses

  1. If we were to remove all welfare benefits today, we would move from a system which forces people into welfare dependency (which is very bad) to a system in which takes away their options and doesn’t offer them any assistance (which is downright horrible).

    Brad, why assume private charity would not step in to fill the (massive) breach left by the elimination of welfare? I don’t think it is even controversial to say public charity crowds out private.

    • You’re right that eliminating welfare and leaving current regulation as it is would increase private charity, but I’m not sure whether it would go far enough. (I’m actually not sure – you may be right.)

      Regulation increases the amount of charity needed for the poor to live a decent life. My suspicion is, in the short term holding economic growth constant, coercive welfare produces more rich-poor redistribution than would charity.

      Also, I’d worry that voting for/advocating minimum wage laws and other ways of “helping the poor” would substitute for charitable giving. Pointless warm fuzzies crowd out those with positive externalities. “We’re already helping the poor by making employers provide healthcare!”

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