Attentive libertarians know, of course, that statists routinely lie in the pursuit of their objectives. A couple of revealing posts show how they lie about economic reality in pursuit of a multitude of policies that boil down to the state taking your stuff and giving it to others via various redistribution schemes, just as the need for redistribution is left on the dust-heap of history.
First, Mickey Kaus takes long-time lefty and temporary NYT columnist Barbara Ehrenreich to task for falsely claiming that it is impossible for a single mom to escape poverty by marrying a productive blue collar worker (implying that we therefor need greater transfers of your wealth to single moms and blue collar workers). The annoying facts:
Even at the current minimum wage, a full-time worker earns $10,700 a year and an Earned Income Tax Credit of $2,500 (three person family) to $4,200 (four person family). Add in $4000-5,000 of food stamps and subsidized Medicaid or CHIP health care for the children, and you’re well above the poverty line even with a single breadwinner and a stay-at-home mom.
Next, Arnold Kling posts more annoying facts to rebut the commonly heard mantra from the redistributionists that wage earners have lost ground since the ’70s. This is, of course, obviously and intuitively absurd, but its nice to have some numbers. While most of the essay defies excerpt, one of the long-term trends is particularly striking:
One of the most important trends of the past century is the reduction in the average work week. Contrary to another popular myth, Americans are working much less than they used to. Fogel writes:
“in 1890, retirement was a rare phenomenon. Virtually all workers died while still in the labor force. Today, half of those in the labor force, supported by generous pensions, retire in their fifties.”
Furthermore, Americans work many fewer days than they did a century ago. Using as a benchmark a 365 day work-year, Fogel calculates that in 1880 on average male household head worked 8.5 hours per day, but only 4.7 hours per day in 1995. With less time spent working and somewhat better health, total leisure available has more than tripled, from 1.8 hours per day to 5.8 hours per day.
The policy implications should be obvious: Wealth frees a society from any need for the state to mandate minimally acceptable outcomes (to insure that no one starves or freezes), and so a wealthy society should be able to dispense with the redistributionist state.
However, the incredible wealth generated by the American economy has had the opposite effect, because people with more disposable income are not nearly as sensitive to taxation. One of the many things they can afford more of, in short, is taxes. With no shortage of people willing to take your money and spend it as they see fit, taxes and redistribution have increased just as any arguable need for them has all but disappeared. In the final irony, the most enormous wealth transfer scheme of all (Social Security and Medicare) transfer money from the poorest segment of society (wage earners) to the wealthiest (the elderly).
However, the incredible wealth generated by the American economy has had the opposite effect, because people with more disposable income are not nearly as sensitive to taxation.
This is 100% correct, and is why even though the amount of taxes that are stolen from us is historically massive, there is no revolution or tarring and feathering.
Robert:
I realize this doesn’t undermine your basic point, with which I agree, but there is a circularity in your post: Kaus’s argument, while successfully deflating Ehrenreich’s contention, depends itself on multiple redistribution schemes (the Earned Income Tax Credit, food stamps, and subsidized Medicaid or CHIP health care for the children).
As libertarians, I think we need to be careful not to become too dogmatic about wealth redistribution. The libertarian issue is forced wealth redistribution. Anglo-American society has a long history of voluntary wealth redistribution, from church collections to barristers giving the extra shilling from their guineas to their clerks. I don’t know how important these things have been in our overall economic history, but they’ve no doubt been important to the individual recipients.
Rightly or wrongly, it seems that most people in western countries believe that some degree of wealth redistribution (at least to the truly disadvantaged) is morally required, and perhaps even economically advantageous. Libertarians need to show how libertarian ideals are not necessarily inconsistent with those beliefs.
Tedd – point taken about redistribution – I hope the references to the redistibutionist state made clear that I was talking about forced redistribution.
I know Kaus points to existing state redistribution schemes, but their existence doesn’t rebut Ehrenreich’s essential dishonesty. The other article I link to gives some indication of how necessary even the existing schemes are – the poor of today have a standard of living equal to the middle class of 30 or 40 years ago.
Barbara Ehrenreich is, quite frankly, a fool. I read the intorduction to “Nickel and Dimed” and concluded she has no earthly idea what she is talking about.
“Dishonesty” is also inherent in the facts that the poverty level rate is kept artificially low, and that anyone who starts to increase his earnings even slightly above it becomes ineligible for assistance, particularly child care subsidies and health benefits – exactly the things that people with young children need most. The problem isn’t so much with the welfare rolls as with the number of “working poor”, who don’t earn enough money to do any more than survive, yet too much to qualify for any government help.
Parents of 30 to 40 years ago weren’t contending with $50 video games and the need for a personal computer for schoolwork, either.
“Parents of 30 to 40 years ago weren’t contending with $50 video games and the need for a personal computer for schoolwork, either.”
The word “no” often comes in handy here.
“I realize this doesn’t undermine your basic point, with which I agree, but there is a circularity in your post: Kaus’s argument, while successfully deflating Ehrenreich’s contention, depends itself on multiple redistribution schemes (the Earned Income Tax Credit, food stamps, and subsidized Medicaid or CHIP health care for the children).”
Well, it is certainly effective in pointing out the lack of need for further expansions of redistribution. If we can hold redistribution constant, and let our wealth grow, then that redistribution will become unnoticeable in the not-too-distant future.
If you want to go further, you can point out how various regulations give rise to the perceived need for the current levels of redistribution. The authorities often refuse to allow cheap housing to be built, and routinely refuse to protect cheap neighborhoods from crime; if not for that, you could earn minimum wage, live in a cheap house, and stand on your own two feet without welfare of any kind! And, if not for various medical regulations, you could get much better medical care, again without welfare. Just let the market forces that have been relentlessly driving down prices in every arena that they are allowed to operate freely work on these remaining necessities that remain unnecessarily expensive.
Ken – well, if you’re gonna use logic.
I’m intrigued by this amazing word “no” that seems to work so well with other people’s saintly children and especially well with the theoretical children of people who don’t yet have any.
Well yeah, the intro to Nickel and Dimed is a bit off the rails, but if you read the entire book it is actually a very accurate description of the lives of the working poor. It’s what to do about it that she gets wrong. She sees the solution as more welfare, while in this neck of the woods we see it as getting the govt. off of the backs of the poor.
And her depictions of her limousine liberal conceits getting peeled away a layer at a time are indeed priceless. Yes Virgina, you’re not in Kansas anymore, and people do live like that.
I’d actually recommend Nickel and Dimed as the most accurate portrayal of the issues faced by the lower class, just ignore it’s policy prescriptions. It could indeed be of great value for libertarians to read, as it does document many real difficulties that I’ve not seen addressed in libertarian circles, except in disconnected theory. There are some very pernicious bootstrapping issues involved in climbing up from the bottom, no matter how hard one works, and neither Rand nor Hayeck nor all the ubbermenschen in the world have offered good solutions.
Kaus’s argument is inconsistent.
He points out that most mothers ‘work anyway’ – well not welfare mothers, who by definition tend not to. As Ehrenreich’s point was about welfare mothers the above debunking somewhat misses the mark.
This blog seems dogmatically anti government (you say minarchist) so I wonder what you make of government initiatives aimed to facilitate welfare mothers into (vocational) education and work? These policies have been very successful in the UK, where unemployment has reduced by 1 million since Blair entered office.
This reduces welfare payments and allows people to get out of poverty and contribute to the economy.
You have to decide which you dislike most – people in poverty / on welfare or government intervention (you say interference).
Personally I think poverty is the greater evil. In fact this sort of government initiative is not an evil at all.
Question:
If the American left gave a damn about the working class, why don’t they call for the repeal of the payroll tax, which is the most regressive tax in America?
Poverty, everywhere and always is caused by restriction of the free market by government. Redistributionist policies simply add another layer of misguided, productivity sapping government intervention on top of it, making it even more difficult to fix the problem.
Look at the places where the poverty is the greatest on the planet: None of them posses the kind of unbridled laissez capitalism that socialists and statists think causes poverty. Despotic, corrupt and/or murderous regimes that redirect the resources of their countries for the enrichment of a few priviledged minions are the rule in these places, whether they have the appearance of democracy or not. Most of the industries (if any exist) are owned or controlled by the state, and the social structure is strictly upheald, diallowing any income or social mobility.
It is not all that long ago that the poor rightly recognized that government power was their biggest enemy and that government throughout history has been used almost exclusively by the aristocrats and nobility to keep the poor poor. Only since the mid-19th century have the lower classes lost this scepticism and hatred of concentrated power and looked to government to save them from the rich. They have done so at their own peril.
The Ukraine was an abundant agricultural region that had never had any trouble feeding all it’s people throughout history until Lenin and Stalin applied their programs and ended up starving 10 million people. This pattern has been repeated numerous times. If Bono, Sting and Bob Geldoff had raised money to buy every Ethiopian a gun (Or to fortify an army to overthrow it’s government) instead of bags of rice, those poor people wouldn’t have been through 20 years of famine. They’d probably be prosperous right now, and Bono could sleep at night without worrying about all those people who died anyway, despite his relieved conscience. Then they could go back to their limosine lifestyles without any guilt that their effort was pointless (other than making them look like they care, of course). Oh, wait a minute……that is what they did.
Didn’t the economist Schumpeter make the same basic point in his 1934(?) book “Capitalism, Socialism, and Democrarcy.”
He said, I believe, that capitalism would be so successful in generating prosperity that the only real threat to capitalism would be from the idle class of academics and “intellectuals” who would be funded by this same prosperity.