Two of the great and correct insights of libertarianism are that the state has very limited knowledge, and that its interventions often lead to people gaming the system. This is true of welfare spending as of anything else. The government doesn't have the knowhow to distinguish well between the deserving and undeserving poor. And its efforts to do so are not only expensive - in terms of paying bureaucrats and corporate scroungers and fraudsters - but also bear heavily upon the honest and naive deserving poor whilst the undeserving, who know how to game the system, get off.
2. There's another way in which trying to distinguish between deserving and undeserving poor can be expensive. What looks like a reluctance to work might instead be practicing one's skills in preparation for high earnings later. If the state had forced benefit claimants to work in the early 90s, we might not have had Oasis or the Harry Potter novels, and the tax revenue they generated.It doesn't take many multi-million pound earners to pay for a lot of the £3692 annual Jobseekers' Allowance paid to "scroungers".
3.The lazy are a minority of the unemployed. The ONS says (Excel file) that only 16.3% of the unemployed have high life satisfaction (9-10 on a 0-10 scale) whilst 45% have low satisfaction (0-6). The equivalent figures for the employed are 24.4% and 20% respectively. With the lazy in a minority, it's harder, and so more expensive, for the state to identify them.
4. What looks like laziness might be an endogenous (pdf) preference. If someone has looked for work and not found it, they might eventually, sour-grapes style, decide not to try. Why should people be punished for reconciling themselves to their situation?
5. If you want to help the deserving poor, subsidizing the lazy to stay on the dole might be a good way to do so. For one thing, it reduces competition for jobs and so gives the deserving a greater chance of getting work. And for another thing, if you deprive the "irresponsible" of an income you don't just increase their incentive to find useful work. You also increase their incentives to commit crime. The deserving poor might thus find themselves the victims of more mugging and burglary.
Friday, March 15, 2013
Publicada por Miguel Madeira em 16:12