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.

Roger Douglas is a Left-Libertarian

Roger Douglas nicely lays out the principles of classical liberalism as they relate to the poor (hat tip: Anna):

Many think that ACT New Zealand is a party for big business. It is a real tragedy that ACT suffers from this stereotype. It is a tragedy because the profile is so out of whack with the reality.

I have spent most of my adult life in the Labour Party. For 21 years I represented one of the poorest electorates in New Zealand. (…)

The goals I have today are the same as those I had when I was in Labour. I am just as concerned today as I was then about poverty. I am just as concerned today as I was then about opportunity. I am just as concerned today as I was then about second class citizens.

But where I have changed is what I see as the cause of second class citizenship.

New Zealand has two classes of citizens. And we have two classes not because the Government isn’t doing enough for the poor, but because what the Government does for the poor denies them choices, destroys the incentives they have to get ahead, and subjects them to political abuse. (…)

I hold the same ideals I always have. In fact, every party in Parliament claims to share essentially the same goals when it comes to welfare. National, Labour, and the Greens are all wedded to the current system. Only ACT has an alternative to the failing status quo.

The problem with the status quo is that it all about power. Politicians control who gets an operation, where kids get educated, and how much superannuation you receive.

I can share the goal of equal opportunity for all, and have a different way of achieving it.


I’m not one for electoral politics, and would certainly never support the ACT party these days, but Roger Douglas is good people and the whole article is well worth reading. Surely he must realise, though, that stupid policy is what government always reverts to. We can’t just complain about policy without thinking about the underlying system which produces it. He has done more than any other politician to improve policy, only to see many of the changes reversed.

If Roger were to accept that coercive government is always going to produce policy which disproportionately harms the poor, his views would be nearly identical to many anarchist left-libertarians. This excellent Freeman article from Charles Johnson, aka Rad Geek, springs to mind (which Mike Gogulski recently read aloud as a podcast):

Artificially limiting the alternative options for housing ratchets up the fixed costs of living for the urban poor. Artificially limiting the alternative options for independent work ratchets down the opportunities for increasing income. And the squeeze makes poor people dependent on—and thus vulnerable to negligent or unscrupulous treatment from—both landlords and bosses by constraining their ability to find other, better homes, or other, better livelihoods. The same squeeze puts many more poor people into the position of living “one paycheck away” from homelessness and makes that position all the more precarious by harassing and coercing and imposing artificial destitution on those who do end up on the street.

I’d love to see Roger Douglas come out as an anarchist.