A comment was made in another thread by a member who is advocating Laissez-faire, but still supports some “minimal” degree of welfare.
Here is the commment: “And some people believe that those who are unable to compete successfully in the market should receive some kind of aid in civilized societies, if (and only if) charities are unable to do so.”
I find this position to be very inconsistent for anyone advocating laissez-faire from both an ethical and an economic point of view, however, I am more curious about the economic inconsistencies that I see with this. Especially given the fact that the individual making the comment has shown in the past to be quite knowledgeable in Austrian economics.
Here are just a few among the many of the inconsistencies I can spot:
What makes the government all of a sudden more efficient then the market in alleviating the uneasiness of such a small minority of people who may be in desperate need?
How is this minimal welfare policy not self defeating like all other interventionist polices?
How and why can a small degree of welfare achieve its alleged goals, as oppose to a larger scale welfare scheme, which obviously does not and cannot?
My position is that the government should tax cigarettes, alcohol, and drugs by 10-20% ranging on the ability of charities to provide essential services to that portion of society which are excluded from remunerative economic employments. Some people are social outcasts, others have been abused or abuse drugs, and others yet have mental illnesses which prevent them from being productive members of society. These taxes will have the same effect as all taxes, namely it will disturb the market for drugs, alcohol and cigarettes. (No income taxes and no consumption taxes on anything but cigarettes, alcohol, and drugs).
This service may not be necessary whatsoever. If the market can deal with it, then the consumption tax will remain at 10% in order to finance state and local legal systems as well as a defense.
It isn’t in kind, but in degree. Also, it may not be necessary.
Degree matters, and other welfare schemes are not actual welfare schemes. The minimum wage, union protection, welfare, social security, or whatever is how the government buys votes and controls portions of society. This is aimed only at the most desperate (hopeless) members of society, and only if charities are not able to do so.
I see. It’s only a contingency plan. Do we need one such plan for healthcare as well? How about housing? I mean, just in case the market fails.
This doesn’t resolve the inconsistency in your economic thinking.
How so? Economics please. How does a small subsidy avoid the problems of a bigger subsidy? How do you avoid the first from becoming the latter?
But this comment reveals that you are not so familiar with Rothbard and perhaps not so much with what predates Rothbard. [Edited out “no it doesn’t” -that’s not what I intended to say]
then there is the little matter of enforcing these taxes, and why cigarettes, alcohol, and “drugs”? Which drugs? who decides? How do you determine who gets Welfare? Who gives it out? How do you make sure you are actually giving it to the right people?
Plus there is the matter of why wouldn’t people just resort to the black market?
No. I’m not talking about market failures, since those don’t exist. I’m talking about the failures of individuals who happen to be human–this would provide bare essentials. Do you believe that total economic freedom leads to utopia?
If you notice, I admit that this tax will necessarily cause disturbances in these industries/sectors. Now welfare today, as we now it, depends on massive taxes across the board on everything. This causes capital flight, massive inflation (taxes not enough to cover expenditures), and disturbs every single industry, as opposed to 3 specific industries (my proposal is targeted). Furthermore, the market disturbance depends on the level of taxation, which in my situation isn’t devastating (and in fact nonexistent for everything but cigarettes, alcohol, and drugs). This proposal does not require inflation whatsoever, and therefore will not cause business cycles It will simply take from those producing harmful products (let’s get real here) and give to the helpless–which exist whether you believe it or not. Or, again, this may not be necessary whatsoever. Degree matters, and this is a key point.
Yes it does.
First part first: I mentioned why cigarettes, alcohol and drugs (marijuana, cocaine, heroine, PCP, meth). The only people who will get the welfare are those who cannot find employments which can sustain their lives. They will be directed towards this government agency by charities who don’t have enough funds to support them. The funds are extremely limited, and must therefore be allocated to those who are seriously in need.
2: The black market is not a serious problem here. People will rather pay the 10-20% tax than face severe legal penalties. We don’t see steel, tomato (or whatever) black markets.
-How do you define cigarettes, alcohol and drugs? Do cigarettes include cigars and cigarillos? Does alcohol include beer and wine as well as hard liquor? Do you only mean “recreational” drugs, and not “helpful” medicinal drugs? Of course, I’m not asking you to flesh out your hypothetical tax code, but to consider the details that become hotly debated once politicized. You point out that welfare, union laws and other state protections are used to buy votes; couldn’t the same happen with defining what is a taxable drug or beverage?
-What happens if the sale of these goods plummet and tax revenues dry up?
-You’re clearly interested in taxing what we currently consider vices or harmful habits. What about other habits that might one day be treated with equal scorn by most people? This is to say, why don’t you tax unhealthy foods and drinks? Why not tax dangerous sports?
-You want to tax drug (ab)users in order to fund the helping of drug abusers?
-How are we to know that the state’s welfare spending is needed, when the very act of the state providing welfare crowds out private forms of welfare?
-And, of course, what’s to stop the state from deciding the market has failed other people in other areas, and thus start redistributing more money?
I’m an anarchist, but I would think a Georgist-style land tax would be less problematic and relatively more equitable than this hazy proposal.
When I said cigarettes I mean tobacco. Alcohol means, well, alcohol, and when I say drugs I mean non medicinal drugs.
This seems highly unlikely due to the addictive nature of such products. If it does happen, then oh well.
Those aren’t socially destructive. I mean, it just a fact, but I get the slippery slope argument.
Yes, I want them to stop using drugs, and taxes are one way to do this without creating black markets.
State welfare will be a response, at the request of private charities. That is, they will send them to us, and we will direct those who come to us towards the charities first.
Well, I have an intricate plan, but assume the government cannot stomp on this constitution (which bans all other forms of taxation). This debate is about principle. If you don’t mind this plan, but feel it’s entirely unrealistic, then I will open another thread about the system I would like to see.
They are a burden on society and cause all sorts of problems (murder, theft, manslaughter ect). I think this is better than (a) letting them die on the streets, (b) putting them to death, and (c) what we have now (promotes drug usage and homelessness as well as gang warfare, ect ect). I don’t want to ban drugs and alcohol, since I’m against banning things, and most people can control themselves (most being a key word).
Well you can’t stop the first and welfare programs are not going to solve the second.
Well paternalism is ok…for children but these are adults we are talking about right? Do we need to rehash why gangs are in the drug trade? Because it is illegal and high profit can be obtained by nefarious characters. And also, I don’t think homelessness causes drug usage. Perhaps there is a correlation but it is not causation.
Yeah, they can do drugs. Paternalism is just another bad word. I don’t think civilized societies should have people dying on the streets, and I think this would reduce crime and limit drug usage. It’s also a source of revenue for national defense.
This problem will no longer exist.
Neither do I. I think drug usage causes homelessness.
And in “civilized societies,” we should use implicit violence to deter people from making bad decisions?
Though I disagree with the idea of welfare, I understand its appeal. But there is no moral way to obtain funding for such unless it’s provided voluntarily (i.e., private charity). It reduces to “aggress against one group of people for the benefit of another group.”
As far as drugs go, what drugs? Are you talking about all drugs, even marijuana which has no negative effects, or LSD, cocaine, heroin, etc? I’ve seen/know productive people who use marijuana regularly, and cocaine occasionally. It’s hard to assume that only nonproductive people, and people who are mentally incapable of being self-reliant, would use drugs.
I’ve had some interest on tobacco taxes (probably because I’m a Virginian), and I find it somewhat ironic that one of the products that helped get this country moving economically is now seen as a vice entirely and must be taxed or outright banned.
Yet, there are things more “socially destructive” than drugs. I’ve seen/heard about their being a weight problem in this country and how it’s an epidemic of some sort. If that’s the case our diet is more harmful than our drugs.
Why not just deregulate a little at a time and see what happens? Obviously none of us are suggesting that the police force and military should go away right this second… the market wouldn’t have enough time to react.
By what right should the government do a damned thing? And how does someone’s need translate into the government being required to steal from others in order to help them?
You will never be able to justify your desire for theft-by-proxy. It’s not possible. So don’t even try.
You said: “This service may not be necessary whatsoever. If the market can deal with it,” This cannot mean anything else but implying that the government should act in the case of a market failure.
So do they [market failures] exist or not?
No, just that it is morally and economically superior.
And how can you possibly measure the value of this welfare against its costs, which you yourself are in no way trying to conceal, without economic calculation of profit and loss? How can you possibly measure your success?
And what happens when you run out of funds as surely the government always does when it begins to subsidize something?
You didn’t answer the question:
How does a small subsidy avoid the problems of a bigger subsidy? How do you avoid the first from becoming the latter?
lets get real here?
Why? because we don’t really mean Laissez-faire when we say it?
Again, I got it, only in the case of a market failure, which does not exist according to you.
Pure Laissez-faire doesn’t work. Some small degree of interventionism is required. perhaps to smooth out the edges. Did I get that right?
You are right. It does. Bad wording on my part. I meant, since when is being against all forms of welfare a Rothbardian position?
And I have absolutely no idea why you felt you had to resort to Rothbard, and so early in the thread??
Don’t get confused, now pay attention. When I said “the market,” I meant the economy as a whole, as opposed to actual markets (market for steel, apples, ect). Markets don’t fail in the sense that they’re the only rational way to allocate scarce goods though both time and space–but this doesn’t mean that economic liberalism leads to utopia. From this truism, we reach one of the government’s useful roles, if it’s necessary. There may not be a market for charity whatsoever, in fact, charity isn’t even an economic good, so using the word market seems inappropriate. Markets (a) can’t fail, (b) aren’t perfect, and (c) are best when left alone.
I’m sorry, but you seem quite confused. It’s simple, no need for socialist calculation debate (though it doesn’t apply at all). “Social welfare” can never be measured, by any system, and this is because it presupposes cardinal utility. I would have to measure the “utils” gained from the welfare services (would also include police, legal, and defense services) against the “utils” lost by those who purchase drugs–this is impossible. Economic calculation has nothing to do with social welfare, and the drug suppliers will be able to engage in calculation.
The products I wish to tax are harmful for the individual and have negative societal effects (do you doubt this?). The government needs revenue for military services, a court system, police, and possibly some sort of minimal welfare. But taxes hurt those industries which are taxed, and hurt the consumers who purchase those goods. Thus, taxing such products will provide the necessary fiscal revenue (as well as a 5% flat corporate tax due to its special legal privileges) and would disincentivize drug use. People are adults and if they want to use drugs, then they should be able to. (No corporate legal privileges would mean no corporate tax)
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I don’t think you know what laissez-faire is–it’s not anarchy. Here’s the definition: the theory or system of government that upholds the autonomous character of the economic order, believing that government should intervene as little as possible in the direction of economic affairs.
You have a big problem with language.
Because it’s clear that you’re entirely unfamiliar with anyone but Rothbard. You’re trapped in Rothbard’s box.