A Case for Near-Libertarian Government

My previous post made a case for redistributive "justice." Here I argue that, beyond a small amount, the liabilities of redistributing money from society's "haves" to its have-nots far outweigh its benefits. It:

• Encourages sloth. Every time unemployment payments are extended, most of my unemployed clients say something like, "Good. Now I don't have to look for work for another 13 weeks." Conversely, when President Clinton set a time limit for welfare recipients, when their welfare checks were about to run out, most of the seemingly unemployable people managed to find a job.

And of course, there's the example of the Soviet Union. Guaranteed jobs, equal pay, and full benefits resulted in legendarily poor quality (Remember the Russian cars: the Lada, Moscvich, and Volga?). It also resulted in legendarily poor quantity: long, long food lines and rationing. The average U.S.S.R. woman spent two hours a day, seven days a week in food lines.) The photo above is a U.S.S.R food ration coupon, sometimes required even for basics like sugar.

• Imposes high opportunity costs. Redistributive "justice" transfers wealth from the people and businesses with the greatest likelihood of creating jobs and life-enhancing innovations to the people with the lowest probability of doing so. Yes, in the short run, that results in more cash pumped into the economy--the poor spend a higher percentage of their money while the rich save more. But long-term, that's a negative: less saving means less money for banks to lend to businesses, which would create jobs and innovation.

Then there are the opportunity costs of the government's redistributive programs: an enormous amount of taxpayer money spent on programs already proven to be cost-ineffective programs from Head Start to job retraining; often $25,000 per job obtained and often the person doesn't hold the job for more than a few weeks. The total amount of waste, fraud, and abuse in government redistributive programs is, as reported in the Washington Post, incomprehensibly large.

That money would likely more wisely be left in taxpayers' pockets, thereby rewarding them for their productivity and allowing them to pump their money into more beneficial parts of the economy (the goods, services, and charities selected by the taxpayers) rather than the aforementioned money-down-the-drain programs.

• Sends a destructive societal message. It's Psychology 101: you get more of what you reward, less of what you punish. Redistributive "justice" is an appealing-sounding term concocted by its advocates, but it in fact means that society's productive members have their money wrested from them and given to those who are less productive. What sort of message does that send to all of us? To our children?

Note: Of course, some people are productive but don't earn money--for example, volunteers--but, on average, the pool of payers for redistributive justice are more productive, even if non-remunerative productivity is included.

Many people thus believe it's foolish to work hard--After all, if you don't work much, the government will take care of you: The National Review reports a study that found that an American family of three has to earn $60,000 a year to net the same income as someone who makes just $14,000 a year and thus qualifies for all sorts of government handouts. Can you not see why the millions of people who are not intrinsically motivated make the choice to sit on their butt? "Why work at some dumb-ass job when you can get the same money for hanging out?"

I suspect that if there were no safety net for the poor, many such people would become more self-reliant and those who didn't probably would be sufficiently helped by private charity. But candidly, I'm not very confident in the previous assertion.

That's why my current thinking is that the best political/economic system is a near-libertarian government: a modest military, modest regulation, and a humane safety net for the truly needy, with those programs provided not by the wildly and unavoidably inefficient, fraud- and waste-filled government, but by the private sector.

Perhaps the wisest approach to that is, a la Milton Friedman, to spend the money saved in cutting those cost-ineffective government programs on a negative income tax--cash to the poor--so the poor could spend the money on the services and products they deemed most cost-beneficial.

Dear readers, what do you think?