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Free market arguments against public pensions and disability allowance? watch

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    What are the free market objections to these public welfare plans specifically? I think we all see where people are coming from when they criticise many other forms of welfare, but it seems to me that these specific welfare programs are quite well justified. After all, it seems to me that any civilised society must ensure that the disabled and those who cannot help themselves are looked after. Also, I can imagine cases where old people, who may have worked their whole lives, might still find themselves struggling to survive.

    What are the arguments against them?
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    There are two arguments:

    a) it violates self-ownership. This is the standard deontological libertarian objection to taxation. So it's not an argument against public pensions and disability allowance per se.

    b) the market could do it better. This is a poor argument, because some people don't have the endowment to afford the relevent pension contributions/insurance etc.
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    Competition is not necessarily tied with the free market,look at school vouchers for example.
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    I don't see how disability/incapacity benefits could be provided in any other way.
    If you're a (non-criminal) Schizophrenic who hass been in mental institutions and no one wants to hire for any kind of work, for example.. then what can you do? How can a private company cater for you?
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    (Original post by HappinessHappening)
    What are the free market objections to [ pensions and disability allowance ] specifically?
    (Original post by Ribbits)
    If you're a (non-criminal) Schizophrenic who hass been in mental institutions and no one wants to hire for any kind of work, for example.. then what can you do?
    Disability Allowance
    Well the easiest free market objection is not to the idea of a disability allowance, but to the current system. There are very few people who are so tragically disabled that they cannot work in any capacity. When we suggest that we should subsidise the incomes of those who by freak of nature have their employability impaired, we find ourselves having to make value judgements about what disabilities are "worse" than others -- indeed, what counts as a disability? Clearly having one hand impairs your employability, but does having poor hand-eye co-ordination? Clearly having schizophrenia impairs your employability, but does ADHD?

    When we start to think about questions like these -- what impairs someone's employability, and to what extent -- it becomes clear that any just disability allowance is a general income support, and the best way to work out what extent someone's employability is impaired is to send them out to get a job, and then proportionally raise their income through redistributive taxation -- negative income tax for instance, or CBI.

    RawJoh is absolutely right in that the free market objection to disability allowance in its entirety is a deontological one -- you could argue that, whilst supporting the tragically disabled is a social good, the state ought not force people to be charitable on pain of imprisonment. Furthermore that any redistribution by the state is bureaucratically wasteful, and local charitable organisations (including, but not limited to, the families and friends of the disabled person themselves) are far more well placed to establish the specific needs of the disabled individual and see that those needs are met. Unfortunately, this relies on trusting people to be basically good, and to care about their friends, family and neighbours, something that manifestly isn't true .

    Public pensions
    This is an interesting one, as there are two systems of public pension currently in place in the world, and the objection to each is different. In the British system, the taxes of those currently working are redistributed to the elderly. In a system like Singapore, the taxes of those currently working are put either into some form of savings, and then given back as a pension when those people retire.

    The clear problem with the first one is demographic change -- as the population ages, or the working population depletes through migration or war, the remaining workers must be squeezed ever harder to pay for their parents' and grandparents' pensions.

    If you're going to have a state pension then, the second one is the way to do it -- that way the amount in the pot is proportional to the needs of those who will claim it.

    The objections to a state pension at all are three-fold. The first is a deontological one again -- whilst ensuring that everyone in society has a pension is a social good, it is not legitimate for the state to force people on pain of imprisonment to pay for the elderly.

    The second is a pragmatic one: placing such large sums of money in the care of the government is not a good idea, as through malice or incompetence it may not go to those who need it.

    The third is an economic one. If the state will give people free money when they retire, there's no incentive to save for one's retirement. If the state did not give people free money when they retired, most people would save for their retirement. That some do not save is not a good reason to sieze money from the many on pain of imprisonment to redistribute it to the few; it is not legitimate for the state to steal from the industrious to give to the feckless.

    That some people's retirement fund will be bigger than others is not -- in and of itself -- an argument for state intervention. If we are comfortable with some people receiving higher wages during their working life than others, then why should it be an issue in retirement.

    Erm. I hope I covered everything. For the record, I'm still not sure where I personally stand on these issues, but I've tried to cover the most convincing arguments I've heard.
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    (Original post by RawJoh1)
    There are two arguments:

    b) the market could do it better. This is a poor argument, because some people don't have the endowment to afford the relevent pension contributions/insurance etc.
    It's only a poor argument if you subscribe to a question begging notion of 'better,' namely, if you assume that a system of disability allowance/pension provision which is insensitive to endowments is somehow better than one which is not. And needless to say, this is a key point of dispute here.
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    (Original post by HappinessHappening)
    What are the free market objections to these public welfare plans specifically? I think we all see where people are coming from when they criticise many other forms of welfare, but it seems to me that these specific welfare programs are quite well justified.
    Personally, I am not sure where you see the distinction between these programs and the other welfare programs lying. It seems to me that they are all reasonably similar, so I'd be interested to hear your thoughts.

    After all, it seems to me that any civilised society must ensure that the disabled and those who cannot help themselves are looked after. Also, I can imagine cases where old people, who may have worked their whole lives, might still find themselves struggling to survive.

    What are the arguments against them?
    Well, for a start, I think the way you have framed the issue is somewhat misleading. You say "any civilized society must ensure that the disabled and those who cannot help themselves are looked after," and to some extent I would agree with this. But it is a massive non-sequitur to think that this necessarily means that any civilized society must have state provided disability allowances. Why are you so sure that the individuals who make up this society will not themselves find ways - voluntary, and consensual ways - to ensure that the disabled are looked after? Why are you so sure that they must be coerced, and the fruits of their labour expropriated, in order to do this?
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    (Original post by DrunkHamster)
    It's only a poor argument if you subscribe to a question begging notion of 'better,' namely, if you assume that a system of disability allowance/pension provision which is insensitive to endowments is somehow better than one which is not. And needless to say, this is a key point of dispute here.
    No, the libertarian argument goes "you Statists, the sort of welfare provision you want (ie. universal etc) can be provided by the market". It's that that frames the issue.

    Saying that you're not arsed about endowment insensitivity etc is fine, but it's just the deontic objection really.
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    (Original post by RawJoh1)
    No, the libertarian argument goes "you Statists, the sort of welfare provision you want (ie. universal etc) can be provided by the market". It's that that frames the issue.
    This is rubbish, I'm afraid. Can you find me one libertarian who is on record as saying that welfare provision on the market will satisfy every criterion (including universality, equality, endowment insensitivity, etc) ever put forward by any statist as desirable? I don't think you can, so you ought to be a bit more careful about how you portray 'the libertarian argument' (as you call it).
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    (Original post by sconzey)
    There are very few people who are so tragically disabled that they cannot work in any capacity [...] Clearly having schizophrenia impairs your employability
    .
    Schizophrenia affects 1% of the human population - that's over half a million in this country alone. That's more than 'very few'.
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    (Original post by Captain Crash)
    Schizophrenia affects 1% of the human population - that's over half a million in this country alone. That's more than 'very few'.
    Doesn't John Nash suffer from Schizophrenia? Kerouac did too?

    Maybe not all schizophrenics need special help or protection or whatever. And as with every illness, there are mild cases which won't really affect your employability.
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    (Original post by Captain Crash)
    Schizophrenia affects 1% of the human population - that's over half a million in this country alone. That's more than 'very few'.
    Yes, it is, but schizophrenia doesn't make someone completely unemployable.
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    (Original post by DrunkHamster)
    This is rubbish, I'm afraid. Can you find me one libertarian who is on record as saying that welfare provision on the market will satisfy every criterion (including universality, equality, endowment insensitivity, etc) ever put forward by any statist as desirable? I don't think you can, so you ought to be a bit more careful about how you portray 'the libertarian argument' (as you call it).
    Not every criterion, but the one's that are (typically) thought of as most important eg. universality.

    But fine, I guess there's only one argument (the deontological one).
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    (Original post by sconzey)
    Yes, it is, but schizophrenia doesn't make someone completely unemployable.
    Why is "completely unemployable" the relevent baseline (as if a political system is OK just so long as nobody starves to death)? Under libertarianism, the severely disabled would be wholly at the mercy of market, and hence would enjoy worse life chances than they would under other, more Statist systems.

    EDIT: I don't mean to imply that the current system is some sort of utopia for disabled people. It ain't. Far from it. But the removal of another safety net wouldn't be a good thing.

    EDIT2: And regardless, for the deontic libertarian it's conceptually possible to have a situation which is both just (because the history leading to current holdings is OK from the libertarian perspective) and has many disabled people starve to death . When your system admits that possibility, that's a good indication your system is loopy.
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    (Original post by RawJoh1)
    Why is "completely unemployable" the relevent baseline (as if a political system is OK just so long as nobody starves to death)? Under libertarianism, the severely disabled would be wholly at the mercy of market, and hence would enjoy worse life chances than they would under other, more Statist systems.
    In my previous post I explain how -- once you've set as your goal the financial subsidy of those who through genetic misfortune or otherwise have their employability impaired -- difficulties comparing different disabilites and calculating the extent to which they impair one's employability mean that any just disability allowance would actually be a general income support -- like CBI or negative income tax.
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    (Original post by RawJoh1)
    Not every criterion, but the one's that are (typically) thought of as most important eg. universality.

    But fine, I guess there's only one argument (the deontological one).
    Well, if you're not even going to bother to engage with the consequentialist libertarian arguments (made by serious people like Friedman and Hayek), this discussion doesn't seem to be particularly worthwhile.
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    (Original post by RawJoh1)
    Why is "completely unemployable" the relevent baseline (as if a political system is OK just so long as nobody starves to death)? Under libertarianism, the severely disabled would be wholly at the mercy of market, and hence would enjoy worse life chances than they would under other, more Statist systems.

    EDIT: I don't mean to imply that the current system is some sort of utopia for disabled people. It ain't. Far from it. But the removal of another safety net wouldn't be a good thing.

    EDIT2: And regardless, for the deontic libertarian it's conceptually possible to have a situation which is both just (because the history leading to current holdings is OK from the libertarian perspective) and has many disabled people starve to death . When your system admits that possibility, that's a good indication your system is loopy.
    The relevant baseline is 'completely unemployable' because the issues that were raised in the original post were concerning those people who are absolutely incapable of helping themselves.

    As for "Under libertarianism, the severely disabled would be wholly at the mercy of market, and hence would enjoy worse life chances than they would under other, more Statist systems," there is quite a lot to say.

    Like society, there is no such thing as the market - it is merely the network of voluntary exchanges made by individuals. It's often an illuminating exercise to see how the arguments of those who criticize the market hold up when "the market" is replaced by this definition.

    Under statism, the severely disabled would be wholly at the mercy of the state. Why is this any more reassuring than their being wholly at the mercy of 'the market?' The point is that there are many, voluntary, alternatives to coercive provision of disability benefits - people could purchase disability insurance which they could receive in the event that they can no longer work as before. The small minority of those who are completely unable to work could be covered by charity - it's funny how those who quickly dismiss the workability of this are those who talk the loudest about it being morally imperative to help the poor.

    Your edit 2 is also, to my mind, hilarious. Rawls himself proposes a system in which the principles of justice simply do not apply to the disabled. The severely disabled are precisely those unable to participate in a fair scheme of cooperation, and are therefore excluded from the benefits the difference principle may otherwise bring them. So you'd agree, then, that for allowing the possibility of the disabled starving, Rawlsianism is also loopy?
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    Could someone elaborate on a common objection to libertarianism for me? One of the most commonly heard objections is - well people are selfish so nobody would help the poor/disabled/elderly/orphaned etc.

    In modern democratic states the government is supposed to reflect the will of the majority. If this is true then people WOULD take care of the poor since the majority currently want the poor to be taken care of. The use of force to take care of them is not necessary to achieve this since people want to do it anyway. It would occur voluntarily. If you are arguing that the poor would not be taken care of, then you are suggesting that our current political system does NOT reflect the will of the majority, and is instead the opinion of a minority FORCED onto the majority of the population.

    This either undermines the argument that the poor would not be taken care of without a coercive welfare system or it undermines the whole premise and moral legitimacy of modern democratic states.

    How would you reconcile this (what I perceive as a) contradiction?
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    (Original post by DrunkHamster)
    Your edit 2 is also, to my mind, hilarious. Rawls himself proposes a system in which the principles of justice simply do not apply to the disabled. The severely disabled are precisely those unable to participate in a fair scheme of cooperation, and are therefore excluded from the benefits the difference principle may otherwise bring them. So you'd agree, then, that for allowing the possibility of the disabled starving, Rawlsianism is also loopy?
    Erm ... Rawls does not say that it's conceptually possible to have a just system in which many disabled starve to death. Yes, the disabled aren't covered by Justice as Fairness, but then JaF isn't a complete system. It has to be supplemented (eg. to cover the disabled). Any sensible supplementation isn't going to let the severely disabled die in a gutter, Yes, this "tacking on" is potentially problematic (Martha Nussbaum has been critical in particular), but it's totally different from the libertarian position, which is complete and admits the possibility I mentioned.
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    I think it's often forgotten that state pensions and disability insurance did not really achieve or set out to achieve anything new for the vast majority of people, it merely nationalised existing pension, disability and injury insurance provided by trade unions and friendly societies. Once such things are reinstated, I do not believe that providing levels of care comparable to today's state to those left out would be by any means beyond the reach of already observed charitable giving in free market societies (I don't have a source to hand, but I've seen studies indicating 10-15% of household income in Britain at the end of the Victorian era).

    I further think that voluntarist provision has very significant advantages which I will state briefly:

    1. I believe it's wrong to take other peoples' property by force, regardless of what you intend to do with it. If you disagree with this on principle then I probably won't persuade you in an internet debate, but it warrants being said.

    2. Charitable provision is better able and far more strongly incentivised to direct provision at those in most genuine need, being able to use far greater local discretion. This would act both to make it harder to abuse the system, and also easier for people with abnormally large requirements to obtain relief.

    3. As charities do not possess political power, there is no incentive to use provision as a means of vote buying and other political manipulation.

    4. Pensions and insurance schemes will actually be built on accumulated savings as opposed to the "National Insurance" ponzi scheme scam which is funded by debt, and so will necessarily implode long before anyone here is able to retire.

    5. I think that a society in which people view caring for the poor and unfortunate as a duty incumbent on them personally, rather than discharged through an involuntary wealth siezure, will have a better sense of community, respond better and more actively to such problems, and be a nicer place generally.
 
 
 
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