The Social Safety Net

[billroper]

bedlamhouse posted here a link to an article by a liberal who is working hard to characterize the differences between liberals and conservatives in some way other than "What in the world are they thinking?" (And a hat tip to pbristow who was the one who found the article in the first place.)

I think that one of the places he gets into trouble is when he starts discussing the "social safety net", which he thinks that liberals see as a good thing and conservatives see as a bad thing. In my usual way, I'm not sure it's not both.

Let's pick an example. Some time ago, I was having a conversation with my friend, Sally, who has actually spent time working with unemployed single mothers on welfare. And she made the point that it's not an easy life. I had to agree with her. And simultaneously I was saying, "But I'm not sure that, despite that, it isn't too easy."

Now I don't think that the vast majority of unemployed single mothers on welfare say to themselves, "I'm going to become a single mother and collect some of that easy money." I think they mostly find themselves in that position by accident. But I also believe that the existence of the social safety net makes people more willing to make bad choices, because the consequences of the bad choices aren't as negative as they would be in the absence of the safety net. When you start playing the game of "What's the worst that can happen?" and the worst is, well, tolerable, then you're more likely to make the decision that produces immediate gratification in the hope that the worst won't arrive and the knowledge that the situation will be tolerable if it does.

Endpoint games are interesting. Let's go to economics and look at the Laffer Curve, which attempts to determine the tax rate that would maximize tax revenue to the government. If your tax rate is 0%, you collect no money. If your tax rate is 100%, you also collect no money, because no sane person would work under those circumstances. (Well, they might work, but I might be in my recording studio instead of producing computer software and you might...) What's hard to determine is what the shape of that curve is in the middle. But -- mathematically -- there's got to be one or more points along the curve of taxation where you maximize your revenue. (And please note that I'm not arguing here that taxes are too high or too low, just that local optima exist.)

So what are the endpoint games for our social safety net? If there's no safety net (and assume no private charity for the purpose of this discussion), then you'll do anything that you can in order to survive, which might include work or might include a life of crime. The latter, of course, is hard to figure as a benefit to society. And there are some people who will not survive in such a situation, which I believe is also a bad thing.

But what if the social safety net is really, really good? What if life on the dole was so comfortable that there was no real incentive to work? There'd be some people who would work, just because they love what they do. But how many folks out there really do love what they do? And how many people who do love what they do would love doing something else even more, except for the fact that they actually like eating regularly?

Now, how good does the social safety net have to be before it's better than a bad job? And what happens if you have multiple generations of a family that have become dependent on the social safety net, because it is better than the bad jobs that are available to them? Nothing good, I suspect.

I don't claim that there are easy answers here. If easy answers existed, we'd be able to solve all the problems of the world before lunch.

But I just don't think that it's as simple as "Our social safety net is a good thing" or "Our social safety net is a bad thing". It's a thing and it has both good and bad consequences.

I'd like it to work better.

Comments

[madfilkentist]

The distinction between a private safety net and a government-funded one, which you chose to skip over for the purpose of the discussion (and it is necessary to make some simplifications when writing less than a book) is an important one. Rather than one going to zero as the other does, one tends to increase as the other decreases, assuming generally constant economic conditions.

With a private safety net, no one's property is seized and no one sent to jail for choosing not to support it. This means that people can decide how much support to give and where to give it. The decision-making process is also less centralized, and thus generally makes better use of localized knowledge (e.g., is this person really unable to work or just faking it?).

Legally, the benefits of a governmental safety net are entitlements rather than gifts. This creates a mindset of not needing to get onto one's feet. It also creates a relationship of antagonism between the provider and the recipient, since it's a relationship based on compulsion and not choice.

[smallship1.livejournal.com]

This would be a private safety net like, for instance, all those corporate pension funds that somehow aren't there any more. The distinction between a private safety net and a government-funded one is that the government-funded one has to be there, and has to be there for everyone, whether the people running it like your face/skin colour/religion/politics or not...

And as I said up there, if the only incentive to get on to one's feet is that one will starve if one doesn't, there is something terribly wrong with the society one is living in. But this is one of those things on which we're unlikely to agree, since I'm a Negotiated Commitment person, apparently...

[tigertoy.livejournal.com]

A private 'safety net' is by definition one that is free to decide whether it likes a prospective recipient of aid or not. Private safety nets will always tend to condition their aid on either already having innate factors they approve of (like having the right skin color or ancestry) or on behaving in ways they approve of (like being a member in good standing of the right church). If the government mandates they serve everyone equally, then it is no longer really private; I think even a libertarian such as yourself would prefer the government take the money in taxes rather than just mandate that the private sector do the government's bidding with its own money. (Or perhaps you see no difference at all.)

A private safety net is abhorrent both because it does not cover everyone and because it gives the private 'charity' enormous power over the people it 'helps'. A hungry person will do almost anything for the only person who will give him food. 'Almost anything' certainly includes surrendering his own moral and political judgment in favor of the agenda of the 'charity'. Next to that, taxes are a small price to pay.

But I'm not a libertarian.

[madfilkentist]

A private 'safety net' is by definition one that is free to decide whether it likes a prospective recipient of aid or not. Private safety nets will always tend to condition their aid on either already having innate factors they approve of (like having the right skin color or ancestry) or on behaving in ways they approve of (like being a member in good standing of the right church).

Your assumption is that people always (your word) act on the basis of innate factors. If that's true, why do you think it stops being true when they vote for political candidates to do the job for them? If it's not true of people when they elect their government, why does it suddenly become true when they can make their own choices?

If the government mandates they serve everyone equally, then it is no longer really private; I think even a libertarian such as yourself would prefer the government take the money in taxes rather than just mandate that the private sector do the government's bidding with its own money. (Or perhaps you see no difference at all.)

This carries further the assumption that people acting separately make irrational choices, and that these same people acting collectively will stop them from doing so, so it's irrelevant to figure out which of the two forms of compulsion is worse.

A private safety net is abhorrent both because it does not cover everyone and because it gives the private 'charity' enormous power over the people it 'helps'. A hungry person will do almost anything for the only person who will give him food. 'Almost anything' certainly includes surrendering his own moral and political judgment in favor of the agenda of the 'charity'.

What do you think is happening right now? Politicians transfer gigantic sums of money between groups of people. They explicitly campaign for office on promises to do this, and in Congress the stock-in-trade of stronger politicians is their ability to take money from other states and distribute it in their own state. The trade in votes and favors is a market in billions of dollars. No private charity, however rich and corrupt, could hold a candle to the power which Congress exercises over people's lives with its ability to give out money.

Next to that, taxes are a small price to pay.

That "small price" is close to half of my income, counting federal, state, local, and indirect taxes. Maybe you're luckier.

[tigertoy.livejournal.com]

It's precisely because people acting on their own sometimes make bad choices that we need a system that has multiple levels of protections. A Constitution that defines rights that must be honored even if a whole lot of people would rather not. Multiple levels of courts. Two chambers in the legislature and an executive with a veto. None of these mechanisms guarantee that mistakes won't be made, but the more levels where after one group decides something, another group has a chance to look at it and change it if it was wrong, the more of the mistakes we can catch.

I certainly agree that American democracy has never been perfect, and I think it's gotten a lot worse in the last few decades. I'd like to fix a lot of things, but I'm not ready to throw it all away.

[catsittingstill.livejournal.com]

The problem I see with a private safety net with local control is that it will tend to become a popularity contest. Pretty Polly gets benefits; Ugly Urma does not. Having been both popular and unpopular at different times in my life, and having no idea what made the difference, I strongly recommend against a "people giving aid to people they like" scenario.

The other problem I see (with local control) is that economically depressed areas will have more people who need aid and less aid to give.