A Wide Place

I mentioned the postal service in my previous post.  Here’s a great Michael Ramirez cartoon that vividly captures the thrust of my point!

I mentioned the postal service in my previous post.  Here’s a great Michael Ramirez cartoon that vividly captures the thrust of my point!

Justice and Income Inequality

Squashed,

A very happy new year to you.  Forgive the delay in response, as holiday obligations have kept me offline.  Here are a few thoughts for you in response to your previous post in our discussion.

You say:

Roads, Medicare, Social Security, garbage collection, recycling, regulation of the power grid, a post office that can send letters across the country in a day or two for 44 cents, the EITC, FHA mortgages, the census, sidewalks, bike paths, loan guarantees, national parks, elections, state universities. Obviously, I could go on.  The government does a lot of things. Many of them are fantastically difficult and complex. Yes, there are occasional failures—but the government doesn’t have a monopoly on occasional failures. Yes, there are sometimes inefficiencies—though the government doesn’t have a monopoly on that either. Sometimes there are even problems that turn out to be extraordinarily difficult to solve. If you want to cherrypick government failures or private successes, you can do that—but you’re not doing a rigorous analysis of who has done what competently. The myth of government incompetence is simply a myth. Nobody does anything perfectly, but if the standard is “even remotely well,” the government hits it 99 times out of 100….  Most of this stuff the private sector isn’t doing. At least, it isn’t doing it enough to meet important societal ends. The private sector is not offering a free education to everybody. The private sector is not trying to systemically alleviate poverty.

From this it’s clear that we simply disagree completely on the efficacy of government.  What wonderful benefits has the government ever given you to make you so favorably disposed toward it?   The list you provided is in my view very dubious. 

For instance, whatever its benefits, and however many Americans may be dependent on it, Social Security is bankrupt and untenable.  Actuarial/demographic data support this.  It’s undeniable.  And it’s destroying this country’s financial backbone.  We’re still using a lumbering, antiquated pension system based on 1930’s statistics and actuarial data.  Where the private sector has advanced and made changes, Social Security still depends on a Depression-era model, which no longer holds.  Here’s what I mean: in 1940, there were 42 workers per retiree.  Only 10 years later (for various reasons) there were 16. Today, there are 3.3 workers per retiree.  In forty years, maybe sooner, it will in all likelihood be down to 2.  And life expectancies are way above what they were in the 1930’s - obviously - because of medical advancements, making the system far more expensive as seniors draw more and more money over their lives.  Whether or not SS was ever a good idea is debatable (I think it wasn’t) - but whether it’s fiscally responsible now is not even up for discussion. 

And the US Postal Service?  Providing mail services for 44 cents?  That’s not exactly the whole story, is it?  The post office is in the red $20B in four years.  That’s taxpayer money, money gained by coercion that you and I have to pay whether we like it or not, whether we use the USPS or not, that is simply lost in the black hole of government waste forever.  Compare that to FedEx, which is privately run, which has never taken a dime from me that I didn’t choose to give it, and is thriving financially.  The USPS is not sustainable or fiscally responsible.  In my view, virtually nothing the government does is.   I don’t think inefficiencies occur “sometimes.”  I don’t think government failures are “occasional.”  I think they’re everywhere you look, if you’re willing to make an honest comparison to the private sector.

As for education, there is no such thing as “free education!”  To say the government gives free education is - as you know - untrue and disingenuous.  United States taxpayers - you and I, in other words - spend nearly a trillion dollars a year on public education.  That’s not free!  I think if that many dollars were allocated to the private sector it would do a better job providing better services, because of competition from other schools, the threat of going out of business, the need to make responsible and sustainable budgets, etc. 

Next, the private sector IS trying to alleviate poverty.  It just recognizes that reflexively writing endless checks to people week in and week out, year in and year out, generation after generation is wasteful, erodes self-reliance, atrophies character, destroys liberty, and creates unhealthy dependence on nameless, faceless institutional benefactors.  I’ve worked in inner cities and have witnessed this vicious cycle first hand.  By contrast, the private sector tends to give strategically to organizations and causes that might actually have a chance of alleviating poverty, rather than sustaining it by paying for non-productivity, the breakup of the family, etc.  But the private sector doesn’t have the luxury of making revenues come in via fiat, or borrowing endlessly, or printing its own money.  So obviously total expenditures will not be as high as the government’s.  But total output, efficiency, and efficacy are all, in my opinion, vastly greater than the government’s “charitable” apparatus. 

I think this is most people’s gut inclination as well.  As John Fund of the WSJ very effectively asks, “If you had a financial windfall and wanted to help the poor, would you even think about giving time or a check to the government?”  I don’t know anyone who would answer this question in the affirmative.  Would you, Squashed?  Most people intuitively know that the private sector and the non-profit sector are far more likely to give us the results we with from the precious, hard-earned resources that we wish to devote to charity than is the government (just check out these five creative, charitable entrepreneurs).

Next you write, “I would much rather see a just or reasonable allocation of goods than an ‘efficient’ one.”
This is perhaps the key to our disagreement.  In my opinion, beyond a certain point of inefficiency, a just and/or reasonable allocation of goods is impossible.  Inefficiency itself impedes the progress of justice.  If enough inefficiency persists in an organization, its desired outcomes are no longer possible to achieve.  If - for the sake of argument - the government crossed a certain threshold of ineptitude and wastefulness (for example, by squandering money on out of date programs, giving to those without need, not actually helping those with need to escape their poverty, lacking safeguards against fraud, etc. etc.), then you’d have to grant that achieving just ends would no longer be possible.  In my view this is the reality of the situation.  The government long ago crossed a threshold of inefficiency that cripples its ability to act justly toward the poor, and so it ends up doing more harm than good.

I am indeed a Christian and I believe the biblical calls to help the poor are numerous and incontrovertible.  But it does not follow from this that a gargantuan governmental welfare state is the solution.  In fact, it seems to me, and many people who are deeply concerned with the miserable plight of the poor - that the government is if not the, then certainly a principal cause of systemic poverty in this country.  Put starkly, if one were trying to design a system that would keep people in poverty, one could hardly do better than the modern welfare state.  Welfare literally pays people not to have jobs, not work, makes it financially advantageous for mothers to have children out of wedlock, for fathers to leave families, etc. etc.  If the incentives are there, the behavior will follow.  This is why there’s been no progress in inner cities in decades despite trillions in expenditures poured into them.

Simply put, for so many supporters of the welfare state in this country, the logic seems to go like this: 1) we need to help poor people (a proposition with which I wholeheartedly agree).  Ergo, 2) the government needs to be the overwhelming source of such charity. 
To me, #2 does not follow from #1.  Not at all.  Especially when one looks at the results, not simply the intentions, of a public policy.  While the intentions may be noble, the results have been nothing short of disastrous.

Thanks again!

(Source: wideplace)

This is an old video, but the principles involved haven’t changed a bit.  The topic is welfare and why it intrinsically will not work to accomplish the admittedly noble goals of those who support it.  Here, beginning at 7:30, the incomparable Milton Friedman says:

"It is very hard to achieve good objectives through bad means.  All [welfare] programs involve some people spending other people’s money for objectives that are determined by still a third group of people.  Nobody spends somebody else’s money as carefully as he spends his own.  Nobody has the same dedication to achieving somebody else’s objectives [as] he displays when he pursues his own.

Beyond this, the programs have an insidious effect on the moral fiber of both the people who administer the programs and the people who are supposedly benefiting from it.  For the people who administer it, it instills in them a feeling of almost godlike power.  For the people who are supposedly benefiting, it instills a feeling of childlike dependence.  Their capacity for personal decision-making atrophies. 

The result is that the programs involve a misuse of money.  They do not achieve the objectives which it was their intention to achieve.  But far more than this, they tend to rot away the very fabric that holds a decent society together.”

Incarnation

God stands in contrast to man as the impossible in contrast to the possible, as death in contrast to life, as eternity in contrast to time. The solution of the riddle, the answer to the question, the satisfaction of our need is the absolutely new event whereby the impossible becomes possible, death becomes life, eternity time, and God man.

-Karl Barth

The Incarnation

'Twas much, that man was made like God before,

But, that God should be made like man, much more. 

-John Donne, Sonnet XV

Christmas

In speaking of the appearance of the Savior amongst us, we must needs speak also of the origin of men, that you may know that the reason of His coming down was because of us, and that our transgression called forth the loving-kindness of the Word, that the Lord should both make haste to help us and appear among men.  For of His becoming Incarnate we were the object, and for our salvation He dealt so lovingly as to appear and be born even in a human body.  

-Athanasius, On The Incarnation

If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I would run for my life.

-Henry David Thoreau

Indeed.

Justice and Income Inequality

Dear Squashed,

Thanks so much for a thoughtful and civil discussion.  This is a lot of fun, and I’m grateful for your intelligent comments and your irenic tone.  I have a few responses, each beginning with a brief quotation of yours.  Forgive the delay in my reply - several other obligations have occupied my time in the last week or so.  A few thoughts nonetheless, if I may:

1) You write: “Their protest explicitly targets the top 1% who recieve, at a minimum, over twenty-five times the median household income. When you consider anybody the top .01% by income, that multiplier jumps over 600.”  I just don’t understand how making 600, (or 6,000, or 60,000) times more than an average worker is unjust. For two reasons:

a) I don’t see a victim of the injustice.  If a CEO is paid even a billion dollars a year by a very prosperous company, how is that private transaction unjust?  And to whom?  To the company’s customers?  They can choose never to do business with this company.  To shareholders?  They are not obligated to hold stock.  To lower-paid employees?  They can choose to work elsewhere.  To those in society who have less but who are not party to company’s transactions?  I fail to see the causal connection.  If I can’t identify an immediate victim of an injustice, then I can’t go on calling it injustice.

b) The average American has access to goods and services that until the last several decades were utterly unimaginable.  In absolute terms, the average American is wealthier than the average person at any time or place in the history of the world, and in some ways has a higher quality of life even than kings and nobles not too long ago.  What more - again in absolute, rather than comparative terms - does the average American “need” for his/her lot to qualify as just?  

Megan McArdle makes a similar point about a comparative versus absolute evaluation in the first sentences of a recent blog post: “I don’t care about income inequality.  I care about the absolute condition of the poor—whether they are hungry, cold, and sick.”  I agree completely.

A serious question for Squashed: how do you distinguish between justice and envy?  If justice is defined in comparative, rather than absolute, terms - that is, it can/must be measured in relation to those who have more - then 1) how is justice ever decided/agreed upon as a goal (is it absolute equality where everyone has exactly the same goods?  You seemed to suggest this was not your position, and I might ask you why not.  Is it where no one makes more than 10 times more than anyone else?  20 times?  Where do you draw the line, and more importantly on what basis?) and 2) how is justice ever achieved?  By making laws that put floors/ceilings on earnings?  Who would get to decide what the floors and ceilings are, and how do we know they would do so in accordance with “justice”?  How would this actually work in a flourishing society? 

2) “Our government does a lot of important things. That costs money. Let’s figure out who can most afford to pay it.”

With the exception of defense and legal infrastructure (and even these, I know, are contested by some libertarians), what does the government do even remotely well?  What does it do better than the private sector?  What exactly are these important things that the government does that merit the ever-increasing mandatory financial support of taxpayers?  Both in theoretical terms and in actual real-world practice I don’t see the public sector outperforming the private sector or being an efficient allocator of goods.

And that includes charity.  Having worked for a long time in the non-profit world, sometimes directly with the very poor in inner city squalor, and seen the ill effects of knee-jerk governmental welfare “benefits” on the urban poor, I’ve come to the conclusion that the difference between the efficiency and effects of welfare and those of private charity is night and day.  The government “assistance” was doing more harm than good, while the private charity was truly helping people, and often in spite of the welfare payments coming in.

3) “Above [Steve Jobs] on the list [of richest people] are a lot of people who inherited their wealth, a lot of people who were in the right place at the right time to ride a bubble to the top, a lot of savvy investors, and a lot of oil money. I’m sure all of these people are contributing a lot of useful labor to society—but I’m not sure they are thousands of times more significant than the average person.”

First, what’s wrong with inheriting wealth?  Or being savvy, or being in oil, or being in the right place at the right time?  Are you saying the government should intervene to correct for these somehow less commendable or legitimate means of holding wealth?  

Second, no one is saying the workers themselves are more significant - intrinsically or ontologically - than an average person, as you suggest.  This is not a question of valuing the significance of the person, but rather, of the labor he/she provides.  The market (in other words, consumers, i.e., people) value certain labor more than other labor.  Since managing a company is a more complicated, demanding, and financially fraught activity than, say, pumping gas or even - yes - teaching schoolchildren, it makes sense that the person who does this for a living gets paid more.  Doesn’t it?  Why should governmental decisions made by legislative bodies in Washington or a state capital be able to trump the voice of the people - namely, the market - who vote with their feet as to what various products and labors are worth?  How would a governmental body make a better decision about these things than the very consumers of the product?  And on what basis?  

But regardless, it’s not a question of valuing people more or less, but rather the services those people provide - I think that’s a critical distinction.

4) “I’ll trade that pension [for a legislator] for the $11.4 million in average total compensation recieved by the CEOs of the largest companies last year.”

When government sets its workers’ salaries, taxpayers’ only alternative is moving to another state or country in protest if they wish to avoid payment.  But if I think a CEO of a company is making too much money, I can choose never to do business with the company, and my life is - most likely - only minimally affected.  And if everyone made that choice, the company would go out of business.  Not so the government - we’re never allowed to opt out, even as the government expands more and more into our lives.  Consumer choice favors the private sector over the public by an enormous margin.  So why would I be upset if the CEO of JP Morgan or WalMart makes what I think is too much money?  If I want, I can do my banking with a small community bank and my shopping at a local corner store.  I honestly don’t see what the problem is or how - again aside from envy - people can be upset that leaders of top companies make a lot of money.  

5) “Instead of paying public school teachers less, why not ensure that their private sector counter-parts are paid a decent wage in comparison to the work they do?”
Who determines what a “decent” wage is?  Who does this “ensuring” that you mention? Legislators sitting in a hall in Washington or a state capital?  Are they going to set the price for the teachers’ labor?  And if they decide that private school teachers’ salaries need to rise, where’s that money going to come from?  From taxpayers, funding private schools?  How would that work??  From forcing private schools to raise tuition, or to cut the services of the school?  That would - of course - have adverse consequences.

While “ensuring” a “decent” wage sounds noble, commendable, and compassionate in theory, and it’s a goal you and I, and I imagine most people, share, in practice it cannot be meaningfully and sustainably accomplished except by market forces.

6) “If you don’t think anybody in politics is watching out for the taxpayers, you haven’t been following politics. That’s all we talk about these days.”

I simply disagree. 

No one would run the finances of a private company the way the federal government is run.  No one.  We’re borrowing trillions of dollars every year.  It’s just unsustainable and silly - outrageous when you think about it - and neither political party is proposing any serious solutions.  Other than Paul Ryan and Ron Paul, I don’t know anyone who’s actually proposing a solution to the unsustainable spending in this country.  Do you?  Shaving a few billion here or there doesn’t count - it’s just a rounding error.

7) “There’s no envy of the 1%.” 

None?  Of course there is.

8)  “There’s just a sense that everybody else is getting screwed—and that policies concentrating wealth at the top are to blame.”  If it’s really as you say, that the policies  are to blame, why protest Wall St.?  Why not protest the government, which actually makes policies, and has enabled cronyism, corporatism, bailouts, regulations that do more harm than good, lobbyists who tilt the playing field in favor of the huge companies that can afford them, and unending, misinformed interventions in the free market on questions it is not competent to adjudicate?  

9) “Before we start talking about constitutional law, I’ll give you an opportunity to explain why anybody should care more about a fringe interpretation of the literal language of a deliberately ambiguous document than they should about basic principles of justice. It’s a tough sell.”
a) Limited government is a “fringe” interpretation of the Constitution?  Really???  Do you think the Framers would approve of the massive governmental expansion into every area of life that has occurred since this country’s founding?  And also, you use the word “literal” like a weapon, as if a literal reading were somehow a bad thing.  Literal just means ‘to the letter.’  It means a close, careful reading.  What’s wrong with that?
b) Again, whose “basic principles of justice?”  Yours?  I don’t think it’s unjust for a CEO - of a non-coercive company offering services that clients voluntarily pay for - to make 10 million dollars a year.  You do.  I am curious why, and on what basis, you make this decision.  Would you advocate something like Aquinas’s just price, which is just a religiously-infused (and all the less helpful because of it) form of fiat or command economy?  And if everyone doesn’t agree about these basic principles, how basic can they be?

Thanks for reading, again! 

(Source: wideplace, via squashed)