In my prior posts, I explained how I have always been a Bleeding Heart Libertarian who is concerned about the effects of liberty on the poor and how I now base my political views on a utilitarian approach. Under that approach, the diminishing marginal utility of money is one strong reason for considering social programs for the poor but there are a variety of other reasons, such as incentive effects, the crowding out of charity, and public choice failures, for rejecting such programs. In my last post, I want to consider in more concrete terms where I think these principles lead me concerning a country like the United States.
First, the easiest way to pursue a Bleeding Heart Libertarian approach is to identify and seek to eliminate interferences in the market that operate to harm the poor. There are many regulations that prevent the provision of services that would benefit the poor as well as other regulations that prevent the poor from being employed. Many regulations do great harm to the poor by raising prices for goods and services that they could otherwise purchase at cheaper prices, such as regulations involving health care, health insurance, the environment, and zoning, to name just a few. Other regulations also harm the poor by making it more difficult for them to enter a large number of trades from hair styling to driving taxis. In addition, there are ineffective public schools in poor neighborhoods that the poor are largely forced to attend, which could otherwise be avoided through the use of vouchers.
Second, there are serious problems created by the social insurance programs that justify their elimination. These programs, from retirement pensions, to medical care, to unemployment insurance, operate in the main not to benefit the poor, but to transfer funds to the politically powerful, such as the elderly or organized labor. When one considers just how much is paid by lower income people in payroll taxes for these programs the harm is quite significant.
Eliminating these regulations and social insurance programs would do enormous amounts to help the poor and would be entirely consistent with libertarian principles. This leaves the most difficult issue: whether it makes sense to have programs that are focused on benefiting the poor, such as medicaid or welfare. Here, I think the arguments are close and it turns on how they are structured. It is easy to imagine these programs creating problems, such as promoting out of wedlock births or disincentivising work, but one can also imagine such programs leading to net benefits. In the end, then, I am largely agnostic about these programs, viewing them as potentially beneficial if well designed and not overly generous. But I don’t think the case is obvious and its quite possible that the nation and the poor would be better off without any such programs.
In the end, then, a utilitarian approach, based on a correct understanding of how institutions actually operate, can be a pretty libertarian one, while still giving serious consideration to the interests of the poor.