Wednesday, 22 December 2010

Dispersed Benefits, Concentrated Costs.

In November, I went to see P. J. O'Rourke give a talk. In which he described the government as a "very powerful tool", the temptation of which is to use it inappropriately. This was brought to my mind by the conversation I had with a young labour activist on twitter today (slow work day...), who was convinced that "fighting for workers' rights" is exactly what a governing party should be doing. And then I thought about the depressing graph about "Liberty" verses "Equality" and "Diversity"

Of course, since 1800, the rise of democracy has seen the fear of Tyranny recede, and the fact that the benefits of liberty are dispersed, the benefits of socialism are obvious and its costs are dispersed has seen people, voters, broadly ask this enormously powerful tool which democracy nominally puts at their disposal, to fix ever more problems for them. This, of course, costs - taxes, regulation and such like. But everyone's paying and some people are getting something "for free" back. Is liberty going to die under the weight of an ever-more activist state? The price of freedom is vigilance, and I fear that a state which even thinks about ending Trial by Jury, Habeas Corpus and freedom of speech, whilst prosecuting people for inane jokes on Twitter and spending 50% of the national pie (which for 40% of the population who say they'll be voting Labour STILL isn't enough) is so far removed from any concept of liberty as to be lost.

Or has the activist state finally been shown the limits of the approach by the massive deficits and debts built up by democratic Governments? Are the cuts going to usher in an optimistic, entrepreneurial country which suddenly rediscovers its self-reliance and throws off the burden of state spending along with the benefits which go with it?

Back to my Labour activist on Twitter, who was convinced that minimum wages and "living wage" legislation as well as ever more onerous workers' rights is absolutely a good thing. Trying to explain to an 18year-old that a minimum wage prices the low-skilled out of the jobs market, and that protecting a job, by making it expensive to fire a worker means that fewer workers are hired in the first place. No amount of education could replace the experience of an actual JOB leading to a vicious circle where the poor cannot get the starter job and end up in despair and on benefits. Policies designed to protect jobs are GREAT for those with those jobs. They're safe. But for those looking for work, it makes it harder to find work.

Of course, the people with low-paid jobs and those just above them LOVE the Minimum Wage too. They will go out and tell everyone that the minimum wage changed their life. They now have more money at the end of the week. The non-working poor doesn't put their joblessness down to the minimum wage, job protection legislation or their own lack of skills, instead probably blames immigrants or fact that there are no jobs round here. So the dis benefits of a minimum wage policy or job protection policy can be ignored. Most people have jobs and will vote to keep them. The jobless don't as a rule vote. Nor do they understand why they're jobless, and expect the state to do something about their plight.

And every policy cut, every social service no longer provided has two constituencies loudly shouting "I No LONGER HAVE A JOB" and "I NO LONGER GET MY SERVICE" whereas the benefit is spread amongst 40m taxpayers, some time in the future. Explaining the method by which those same services are delivered, usually more efficiently and cheaper if chaotically (look up the actual rather than idiomatic meaning of 'chaos' before commenting) by someone other than government, is excruciatingly difficult.

Politicians who would in fact do best cutting taxes, reducing red tape and getting out of the way instead get involved with trade policies, monetary policies and labour market interventions to solve the problem, because it is easier to be seen to be doing something than explaining why Government is the wrong tool for the job. All these social policies and redistribution costs in money, people's time and lost opportunity and eventually the costs mount up to overwhelm the country's economy. Fortunately, we are not there yet. The country can go on getting ever more statist for some time yet and this will meet the support of people like UK Uncut. Eventually, however the burden of regulation and tax becomes too great. The coalition has an opportunity to to remove the burden on the hard-pressed tax-payer, and change the narrative. But the success of the policy MUST be seen within this parliament or eventually the problem of people demanding people use the powerful tool for their benefit at the highly dispersed cost to others rears its head.

Just because statists and socialists pretend their market interventions are without cost, Libertarians shouldn't pretend their policies aren't without losers. We do have the truth on our side. Every libertarian policy comes up against the concentrated harm, dispersed benefits problem. Socialism or State-activism can point to the people who lose out, and the Libertarian cannot point to anyone who gains much, but overall, everyone is much richer. Making these argument to the electorate is very similar to making the point on Twitter - if you can't say it in 140 characters, you might as well not be saying it. Your argument is doomed if you can't tweet it!

So a Christmas problem for my readers: Come up with a 140-character slogan to overcome the dispersed benefit concentrated cost problem for deployment against lefties on Twitter and eventually the electorate. We can't get them reading books about liberty, so we need to be as good at sloganeering as the statist left.


Nick said...

I find it's usually best to beat them at their own game. Lefties claim to speak for the poor and working class: "Tuition fee support is taking money from the working man to put the middle classes through university" That's the best I could come up with.

Peter said...

Collectively we cannot consume more than we produce. If someone does, they alone benefit at the expense of everyone else. Is this democracy?

TM Lutas said...

I would lay out the principle in 5 tweets, all making specific, related points.

1. In 3 card monte, the cost is general and the benefit specific.

2. When you arrest the street hustler for 3 card monte, the cost is specific and the benefit general.

3. In socialized programs, the cost is general and the benefit specific.

4. In government liberalization, the cost is specific and the benefit general.

5. Why do you want to protect our government 3 card monte con men?

Big operators pass rules to crush smaller firms & call it social justice, health & safety, or basic fairness.

Tax 100 a little to spend half of the revenue on 10 makes everybody poorer and buys politicians more votes than are lost.

Specific US govt program tweets: Agriculture support is about making farming safe for ADM to crush small operators.

Govt support for public broadcasting is about subsidizing bad programs. The good stuff could make it in the private market.

Steve Cooke said...

Dispersed benefits, concentrated costs in < 140 chars: It's like taking a packet of (state provided) tasty nuts off a kid to grow trees that all can harvest. You still have a crying kid though.

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