Current Events

An argument about regulation

A lot of people a lot of the time underestimate how burdensome, onerous, and intrusive complicated bureaucratic rules and regulations are. They casually treat the only cost of a rule as the cost to bad people of not doing whatever the rule prohibits, which isn’t a cost at all. But in order to have effect, rules have to be enforced; efforts have to be made to detect violations and monitor performance on an ongoing basis. This is a burden on the whole class subject to the rule, not only those who were going to break it. They have to devote themselves, at some margin, not to the thing they’re actually trying to do, but to proving that they’re not doing it in the prohibited way. They have to prove it through paperwork, which either they’re inexpert in compared to the official reviewing it or they have to (expensively) hire professionals to handle; and even people who had no intention of violating the underlying rule are put in perpetual jeopardy of wrongdoing-by-paperwork-mistake. They have to prove it in person to the various spot inspectors, administrative auditors, and other bureaucrats put in charge of monitoring and detection; and even people who had no intention of violating the underlying rule are made to feel like perpetual suspects or distrusted children instead of honest trustworthy adults.

I think that everyone recognizes this about themselves and groups to which they’re sympathetic. Politically we associate this kind of talk with business owners and managers complaining about government regulation, and that’s not a class to which academics are (as an overall pattern) especially warmly inclined– but goodness knows that academics understand these dynamics when it comes to the administrative micromanagement of our own professional lives. Time that we should be spending researching or teaching is instead spent asking for permission to do so, by humbly seeking to prove ourselves innocent of all sorts of potential malfeasance. No, I didn’t buy a glass of wine with that grant money. No, I haven’t given an in-class exam during the two weeks before finals. No, my study of Plato does not involve potential harm to human subjects or laboratory animals. No, I haven’t made up publications to include on my CV for my performance review. Yes, here’s the proof in triplicate.

I think this is a case in which our biases between groups we like and groups we don’t is especially strong. We are mainly honest competent adults trying our best to do what we’re supposed to do, and they keep getting in our way with these insulting burdensome rules; they don’t take seriously the cost to our time and energy of having to prove compliance constantly, both by paperwork and by subordination to the administrative officials who monitor all of us in order to detect wrongdoing by a tiny few. You are basically suspect characters to begin with, and if we let you get away with it you’d all be running wild, and the other ways you were going to spend your time we don’t really like anyways, and we’re dubious enough about you that monitoring you closely is a good idea anyway even if some of you aren’t technically violating the rules, and the moral cost of even one of you getting away with this terrible thing is so great that we simply have to prevent it, and anyway what are you complaining about, if you obey the rules like you supposed to, there’s no harm to you.

The point being, the new farm bill:

USDA will need to ensure that illegal immigrants, lottery winners, college students and the dead cannot receive food stamps and that people cannot collect benefits in multiple states.

Let’s start with the easy case: lottery winners. Let’s be wildly implausibly generous and say that there are five big-money winners per state per week. (Not all states offer lotteries, some lotteries are combined across states, some states offer multiple games, and not all lotteries pay out every week; but only “big money,” since presumably no one thinks that the $10 or $100 payout should affect eligibility.) 250 per week; about 12,000 per year. Say that half of those people were on food stamps to begin with (lottery players are disproportionately poor). Say that a third of those winners were inclined to cheat and keep drawing food stamps for which they’re no longer income-eligible, and to keep doing so for the whole year until their income is assessed again; 2000 would-be cheaters. Food stamps for a family of four max out at about $600 per month. So we’re looking at something like $14 million per year total in fraud prevented, if we can manage to detect 2000 would-be cheaters from a population of 47 million food stamp recipients.

Even the financial costs of any detection and enforcement mechanism serious enough to even try to get these false negatives (people who aren’t caught and thrown out of SNAP) down to 0 will be high; it wouldn’t surprise me for those costs alone to exceed $14 million (and I don’t for a second believe there will be $14 million in savings). As conservatives know when it comes to business, environmental, and health regulation, trying to turn one-in-20,000 events to 0-in-20,000 events is hard and expensive and complicated. Moreover (and as they also know) it generates errors in the other direction. “Zero-tolerance” policies are a plague on the American political and legal climate right now. The effort to make sure that no American child ever brings a narcotic or firearm to school is doomed to fail to begin with, and also results in stupid expulsions of children carrying aspirin or squirt guns. What we have here isn’t a new substantive rule (big-money lottery winners are already income-inelgiible for SNAP) but a zero-tolerance mindset applied to the existing rule, an effort to move from trivially-few to zero offenses; and innocent people will get caught in the net. (Something everyone could stand to remember: the lower frequency an offense is, the worse the ratio is likely to be between the false negatives you’re trying to prevent and the false positives you’re going to create.)

On top of all that: the process of proving one’s innocence all the time is a demoralizing, degrading one that subjects you to inspection, supervision, paperwork, and the will and whim of the enforcers. How can states ensure that no one is collecting food stamps for a dead household member? The answer has to involve paperwork and bureaucratic supervision or in-person monitoring by social workers or, in all likelihood, both. Illegal immigrants? Well, by definition they already lead a life of evading some kinds of bureaucratic surveillance. There’s no way to squeeze them our of the system harder without squeezing everyone else, too. (In a related vein, think of the proposals for drug testing as a condition of receiving welfare. That’s a lot of degradation to put a lot of non-drug-using people through for the sake, not of saving money (the cost of enforcement in this case is clearly higher than the money saved), but for the sake of a zero-tolerance regulatory insistence about welfare recipients not using drugs.)

And so poor people will be subjected to another set of forms, another set of inspections, another set of surveillance and monitoring, another set of insults, another risk of false findings of guilt, for trivial financial savings. Someone gets to posture as having zero tolerance for some unacceptable outcome; that’s what the zero tolerance policies are for. And life for a sixth of the country’s population gets worse, more unfree, more subject to the burdens and intrusions of micromanaging regulation.

This kind of thing is, famously, among Milton Friedman’s reasons for advocating a negative income tax in place of the complex array of partial-coverage welfare policies in America. (It’s also among the reasons called upon today by supporters of basic income guarantees.) I think Friedman understood, not only that regulations are administratively expensive to enforce, but that they’re also sources of unfreedom for the many people who don’t violate them. And the effort to make sure that income support only ever goes to the deserving poor however conceived, to regulate their behavior to stop them from doing whatever it is the undeserving do, is regulation, and requires the same costs, sacrifices, and burdens regulation always requires. The bureaucratic state that governs poor people (or would-be immigrants) is the same bureaucratic state that governs taxpayers and businesses and people holding bank accounts and people travelling in airplanes and so on. The arguments about regulation’s costs for the latter groups are good arguments! But they’re arguments that it’s wicked to selectively forget when it comes to regulating the former groups.

A few of our readers here will say: well, food stamps are already theft, so the people receiving them are already not innocent, so they have nothing to complain about. I’m not here defending the existence of food stamps (though neither are the Republicans making the principled argument against them.) For reasons I discussed here, I think that once states exist they just do act redistributively and that there’s sound responsible reason for them to do so in a way that staves off disastrous material deprivation (e.g. hunger). The new food stamp regulations tilt me some little bit closer toward the negative income tax/ basic income guarantee strategies for how that should be organized. For those who don’t share my views about this, I’ll say: you probably also oppose the existence of public schools. I’ll bet that you additionally recognize the stupidity, indignity, costliness, and loss of freedom involved in the wave of zero-tolerance regulations within them. If so, extend the thought here: as long as the state is doing this thing, it ought to do so in a way that is more rather than less compatible with Hayek’s rule of law, with freedom from supervision and surveillance by the bureaucracy, with the ability to get on with living their lives rather than having to waste them proving their innocence.

Since a couple of people have pointed this out in this context, I’ll link it here: Milton Friedman argues with William F. Buckley on these questions.

And one more:
This is neither an argument against regulation as such, nor limited to cases of state regulation. Bureaucratization is part of the iron cage and we’re stuck with it, across a variety of institutional settings. But there are very important questions of degree when it comes to monitoring, compliance, and enforcement, and costs associated with the whole enterprise that don’t go away when shifting from a regulated class one likes to a regulated class one doesn’t…

  • CouncilofElrond

    “A few of our readers here will say: well, food stamps are already theft, so the people receiving them are already not innocent, so they have nothing to complain about. I’m not here defending the existence of food stamps (though neither are the Republicans making the principled argument against them.)”

    Sounds like what Richard Epstein was getting at with “hard-lined libertarians.”

  • Josh McCabe

    Nice post. Just to throw some numbers out there, the administrative cost of SNAP is something like 20% of total program expenditures compared to 10% for TANF and 0.5% for the EITC.

    • brianS

      Where does your “something like 20%” figure come from? My understanding is that administrative costs are more like 12.5 pct, very generously estimated. (USDA reports that 4.5 pct of federal spending on SNAP in FY 2012 was for the feds’ half of state administrative costs, 0.2 pct was for “other administrative costs,” and another 2.9 pct went for other programs, such as food distribution on Indian reservations, support of food banks, and nutrition assistance in territories).

      • brianS

        The FNS publishes a “SNAP Annual Summary” series here:
        The “All Other Costs” column is all federal expenditures other than direct benefits to SNAP beneficiaries. In 2013, that was $3.575B out of $79.642B total expenditure. (Again, the feds cover half of state administrative costs in SNAP; even doubling this figure still leaves you at less than 10 percent of total program expenditures)

        So, unless the figures are systematically VERY biased….

        Now back to our regularly scheduled programming. This WAS a good piece by Jacob.

      • Josh McCabe

        I got the estimate from Zelenak (2005) “Tax or Welfare?”. I think it’s very back-of-the-envelope so it could be off a bit.

    • JohnThackr

      OTOH, the EITC is about 20-25% fraud (and 20-25% people eligible who don’t claim.)– (The percentage of people eligible who don’t claim is even higher for TANF and SNAP.)

      There’s clearly a tradeoff between administrative cost and preventing fraud. (Medicare’s low administrative cost and high fraud rate is related here too– though Medicare and Medicaid fraud are often tolerated with a “look, by charging for something extra I’m only getting my bill up to what it should be and would be if not for these government price controls, do you want me to take Medicaid patients or not, the honest guys can’t afford to take them.”)

      Depending on the situation, accepting some fraud can be worth it if the compliance costs are too high. (And the USDA may well choose that here.) Of course, it helps if the population is basically honest enough to keep fraud low, but forcing that is complicated.

  • stevenjohnson2

    “There’s no way to squeeze them [illegal immigrants, etc.] our of the system harder without squeezing everyone else, too.”

    But that’s one of the purposes of such clauses. Skipping over why malnourished illegal immigrant children are a desirable outcome, damaging the efficiency of government services is a time-honored strategy in making sure democracy is pointless. This is the libertarian program at work in practical ways. Much of the excess administrative costs will be recovered by the private sector in the form of contracts for things wise and useful. But even if a bureaucrat wastes money redecorating the office, some businesses can share in the swag. Unhappily regular people like office clerks also get money. Public employment might even threaten to raise employment to unhealthy levels. But it is never expedient to tackle every problem at once. The crime of tax money going to regular people can be tackled later. Meanwhile, you can attack government employees as parasites and that can be very useful in politics.

    Spending on the military or intelligence agencies is not constrained by the same kinds of costly regulation. In addition, the post somehow disappears the costs of not regulating certain activities. I’m afraid it appears that the real point is to try to pretend that libertarians have benign motives in railing against regulation. In this case, it slyly assumes that “we” want SNAP to be efficiently and justly administered.

    I don’t think you could assume that this is what libertarians want at all. Remember, libertarians have improved on the American Revolution, inscribing the banners of freedom with the new, improved slogan, “No taxation with representation!”

    • jtlevy

      “I’m afraid it appears that the real point is to try to pretend that libertarians have benign motives in railing against regulation. In this case, it slyly assumes that “we” want SNAP to be efficiently and justly administered.”

      That’s one way to read it, I guess. Another would be that I’m trying to persuade people who already rail against regulation that they ought not to support these obnoxious new SNAP rules.

      • stevenjohnson2

        Thank you for the clarification. I’m sorry if I was uncharitable towards you personally But I’m afraid that your argument is doomed to fail with those people who do want to sabotage SNAP.

        But, why do you think you need to persuade people who are alreay against regulation to be against more regulations? I think that on some level you know that anti-regulation sentiment, like small government sentiment in general, is always selective. It is hard to accept ignoble motives and/or political duplicity in the ideals professed by friends.

        And in a larger sense, emphasizing the intrusion into personal space of regulators is misleading. A SNAP administrator hounding out lottery winners just is not the same as an SEC administrator hounding out stock fraud.

        • Sean II

          Its super cute that you still think what SEC investigators do amounts to “hounding out stock fraud”.

          • stevenjohnson2

            As ever, the libertarian commitment to honest debate is marvelous to behold. As you know, the point of the last sentence is precisely that the SEC’s alleged hounding is “just not the same.”

          • Libertymike

            Yeah, behold the joys of statist honesty.

        • Les Kyle Nearhood

          Is it honest debate to contend that all libertarians are selective and self serving when we say we oppose excessive government regulation? I don’t think so.

    • JohnThackr

      So the decades long bipartisan experiment with shifting from the minimum wage to the EITC as an anti-poverty tool has *no* good motives on one side of the aisle?

      • stevenjohnson2

        People are weird and wonderful, and quite adept at convincing themselves that what is convenient is right. Self-deception is the sale price of sincerity. which makes it the cheapest virtue of all. Not being a mind reader, I can’t speak about individuals.

        But yes, the crazed insistence that taxes are the cause of poverty, rather than unemployment and low wages, is meant to protect the interests of the wealthy, by a minimal concession designed to be less effective.

        But, “one side of the aisle?” You’re trying to manufacture a partisan question where none exists. As you know, it’s both sides of the aisle. Both are guilty.

        • Les Kyle Nearhood

          I don’t know what to say except that if you believe that high taxes and regulations do not contribute to unemployment and low wages then you are simply and economic illiterate.

          • Egyptsteve

            True, but zero taxes, zero regulation and complete freedom to bear arms is also not conducive to a modern, civilized state. In the contest between Sweden and Somalia, I choose Sweden. I suspect you would, too.

          • jmoser

            Really? You’re trotting out the Somalia chestnut?

  • Jod

    Great post: the clearest example of why this blog’s title is not an oxymoron.

    • Sean II

      Yep…a fine example of this blog at its best.

  • Damien S.

    ‘Not all states offer lotteries, some lotteries are combined across
    states, some states offer multiple games, and not all lotteries pay out
    every week; but only “big money,” since presumably no one thinks that
    the $10 or $100 payout should affect eligibility.’

    I dunno; the intention might be to punish people for playing the lottery at all, but since you can buy tickets with cash, they settle for punishing winners, even modest ones, as the ones they can identify. Need more detail.

  • mikewaz

    This is one major reason to support a basic income guarantee at least as the worst bad way for a government to directly help out the indigent.

    • Tedd

      Did you mean least-bad way?

      • mikewaz

        G-d it. Yes, that’s what I meant. I’ll edit the post.

  • Mark Rothschild

    While your criticisms of puritan/bureaucratic welfare systems are valid, the correct policy is not more humane welfare, but rather no welfare.

    As you anticipate, the arguments of those in favor of no welfare are not really interested in reforming the welfare state.

    Now, as a policy matter, I object to your policy of non-bureaucratic welfare for the following reason. Your reform makes welfare less morally objectionable and hence more palatable to normal people. By doing so, you are validating the concept and prolonging the life of a rotten system.

    Just like the Warfare State needs concepts like humanitarian intervention and R2P (the responsibility to protect), the Welfare State needs humanitarian reform.

    • j r

      As you anticipate, those in favor of no welfare are not really interested in reforming the welfare state.

      And that is exactly the problem. It is utopian thinking.

      • Mark Rothschild

        Our institutions rest on a superstructure consisting of moral
        capital and social cohesion. As moral capital diminishes and social cohesion erodes, the social consensus that defends current institutions can only deteriorate.

        What could be more utopian than thinking that the current system can endure?

        • j r

          The thing that marks you as utopian is your inability to see more than two choices.

          • martinbrock

            The libertarian society is a utopia of countless choices.

    • good_in_theory

      Heighten the contradictions! Good old Leninist libertarianism.

      • Mark Rothschild

        The essence of Leninism is what Marxists call democratic
        centralism, which is an organizational principle of a conspiratorial revolutionary party. Since libertarianism is not conspiratorial,
        not revolutionary, and not a party, how can it be Leninist in any sense?

        On the other hand, dialectical thinking, even dialectical materialism
        is not incompatible with libertarian thought.

        • good_in_theory

          It’s a joke. Look up the phrase “heighten the contradictions” if you don’t get it.

          • Mark Rothschild

            Could you explain the humor?
            In other words, why is this funny?

          • good_in_theory

            Lenin, (in The Heritage We Renounce) and Marxists of the Leninist variety, pioneered the notion of accelerating the contradictions of the present system in order to hurry that systems destabilization and consequent aufhebung into a superior stage. The tactic is, in “essence” Leninist. So a Libertarian using essentially Leninist rhetoric about making things worse so that they will get better is ironically humorous.

          • Mark Rothschild

            I objected to your use of the term Leninist because Leninism is the political program of proletarian revolutionary “democratic centralism”.

            Yes, dialectical materialism is part of the Leninist package, but the smaller part.

            I think that you are implying that applying dialectic to historical political processes is inherently (perhaps exclusively) Leninist. I don’t think that this makes sense since Leninism implies so much more than dialectical materialism.

            If we agree to not stand in the way of an ongoing political/historic process because we do not wish to impede that historical process, then we are not
            “hastening contradictions”, rather we are allowing history to unfold.

            Getting out of the way of history is not original with Lenin. I think we should be aware that history is a process in which we are participants as well as observers – and act accordingly.

            I think that what you may object to is that dialectical and
            historical materialism predicts catastrophic change when incremental changes become impossible. This is the normal point of view of reformers or conservatives.

            In some historical periods this is a justified point of
            view, because the period is not ripe for revolutionary change. Now, I am not proposing that we are very
            close to such change, but certain American institutions seem to me to be incapable of reform.

            I think that is not outlandish to think that institutions that function poorly and are incapable of reform will fail and be replaced. I am not speculating on the modalities of
            that “revolution” – only that it seems to me to be inevitable.

            But one thing seems to me to be certain. You cannot build libertarianism on the foundation of a society that is steeped in an ethos of altruism, egalitarianism, and nationalism. So, I believe that the collectivist welfare/warfare state must run its natural course to its logical conclusion.

          • good_in_theory

            The claim is that accelerating the contradictions is a genetically Leninist argument. Its genealogy traces to Leninism. Of course Leninist methods can be used for any number of non-Leninist ends. It will still be amusing when anti-Leninists take up a Leninist style.

    • Les Kyle Nearhood

      The problem with your thinking is that it really does not matter how long we prop up a rotten welfare system. There will never ever be a modern prosperous democratic nation without one. That is because we can observe that every democratic nation has voted themselves one. Every damn one! The masses will never be convinced that there should not be some state run program for the simple fact that it absolves them of any guilt they may feel for the poor. That absolution is worth any number of rotten systems.

      • Mark Rothschild

        Yes, it is true that all developed countries today are welfare
        states, rationalized by collectivism and altruism. But times are changing.

        The world of the 1930s was a world where altruism and collectivism looked to be the future (even in the USA). Now, we know that there is no future for socialism anywhere. And this is because socialist economies/societies failed unambiguously,
        and no one will adopt a failed model.

        For the same reasons collectivist democracies may also fail. So, my point is that nothing last forever, including ideas that don’t really work.

        • Damien S.

          Welfare isn’t some modern invention of rich countries. It’s widespread in some form or another through history:

          Not mentioned in that list is democratic Athens, which supported the orphans of citizens (plus dowries for the girls) and pensions for the crippled.

          Lots of developing countries today also expand their systems as they get richer.

          “Now, we know that there is no future for socialism anywhere. And this is because socialist economies/societies failed unambiguously, and no one will adopt a failed model.”

          This is crap. The sort of “socalist economies” that “failed unambiguously were the Communist countries. This has no relevance to the “socialism” of the Bismarckian welfare state. Hard to call Germany a failed model.

          • Mark Rothschild

            Glad to see someone is still around defending Bismarck (just for old time’s sake). His 19th century “state” socialism system eventually transmogrified into the failed Wiemar republic that paved the way for the supercharged state socialism of you-know-who.

            You can read the Reader’s Digest version of this sad story here:

            Note the contributions made to Bismarckian social welfare as late as 1942.

            What I take away from this history is that Hitler’s state
            socialism and authoritarianism would have been unthinkable without the preceding socialist experiments.

          • stevenjohnson2

            If you view economic systems as human arrangements meant for the general welfare, it is by no means clear that socialism failed. Capitalism’s outcomes included not just the US and western Europe but almost all of Latin America and maybe half of Asia and all of Africa.

            In libertarian terms, nineteenth century England was possibly the greatest achievement of humanity. Yet even there the capitalist economic system failed to provide sufficient nutrition to large portions of the population.

            And, surely we should remember the issues of war and empire in the anniversary year 2014! World War I showed us capitalism’s path. You say no one will adopt a failed system? But they are once again pursuing the path to world war.

  • martinbrock

    I resist his paternalistic arguments, but I come down on Buckley’s side to some extent. I also agree with Friedman that the welfare state’s administrative bureaucracy is both wasteful and ineffective, even counterproductive, so where does that leave us?

    I’m reposting a proposal from an earlier thread to emphasize the distinction between a centralized approach to this administration and a decentralized approach. Emerging information technology makes the decentralized approach far more practical.

    First, I don’t at all believe that “laziness” (Buckley’s “disorganized indolence”) is the principal problem with a simple cash grant.

    With a simple cash grant, a person might very industriously write blog posts, for example, as we do in this forum, or create music videos for a youtube channel or write a series of great American novels or video games or space elevator designs, but none of that is actually work unless some is willing to pay for the products.

    Many of the starving artists who now eventually give up on their dream of making a living this way never would, and they wouldn’t wait tables to earn their living either. Some of these people would produce wonderful works of art, but that’s beside the point. Man cannot live by art alone, and we’d lose a lot of very industrious people to a basic income guarantee, not only the “lazy”.

    Everyone can’t be a professional novelist or actor or musician or astrophysicist in reality, but loads of people would spend their lives pretending to be these things if they could, and I must then wonder who would fix my plumbing, grow my food, write more prosaic software and do all of the other things that aren’t recreational for most people now.

    Rather than a negative income tax or cash grant providing every individual an income floor, every person could have an individual BEA (Basic Employment Assurance) account through which he monthly reports all income up to a threshold. All reported income is exempt from income taxes. People spend the income in their BEA account however they like. They need not report spending except as indicated below.

    Above the threshold, persons contribute a portion of income to a common BEA fund. Contributors receive an income tax credit, so an individual’s contribution to this fund is income tax that he doesn’t pay to the state.

    A person with income below the threshold in a given month may receive income from the fund in one of two ways. S/he may receive a payment directly from another person with income above the threshold. A person contributing to the fund may withdraw any part of the contribution to make these payments. If no one offers a person income in this way, s/he may borrow from the fund to reach the threshold.

    A person receiving more than the threshold income in a BEA account in a given month repays any loans from the common fund before contributing to the fund. Everyone’s balance with the common fund is a matter of public record, but every few years, loans from the fund are forgiven. Funds remaining at the end of each year are returned to the contributors in proportion to their contributions (contributions before direct payments).

    All income received in a person’s BEA account from the common fund is identified as such in the recipient’s public record. Anyone may see this record at any time. The recipient knows the source of direct payments, and the source may comment on a payment, like “I paid Martin to mow my lawn, and I was very happy with the outcome,” or “I asked Martin to mow my lawn, but though he seems able, he never showed up.” A comment might explain a payment otherwise, like “Martin is my son,” or “Martin is blind and attends my church.” A comment may identify the source or not.

    A person taking a loan from the fund also comments on the use of the loan, like “I’m buying a lawn mower” or “I have no other offers this month and need to pay my rent”, and anyone contributing to the common fund may comment on the recipient’s use of a loan as well, like “Martin volunteers many hours at our hospice each week” or “I’m Martin’s brother, and he’s always on the sofa with a beer in his hand watching ESPN.”

    • good_in_theory

      “Everyone can’t be a professional novelist or actor or musician or astrophysicist in reality, but loads of people would spend their lives pretending to be these things if they could, and I must then wonder who would fix my plumbing, grow my food, write more prosaic software and do all of the other things that aren’t recreational for most people now.”

      The price for drudge work would simply increase, and you’d have no problem finding people to do it.

      • martinbrock

        Demand for drudge work falls, because remaining producers can’t afford as much of it. I can always find as much as I want of stuff I can’t afford, but that’s no comfort.

        • good_in_theory

          Having to do things you’d prefer not to do because you have few options isn’t much comfort either.

          • martinbrock

            That’s why they call it “work”.

          • good_in_theory

            Some work is more playful than other work, and some play commands more money than many forms of work.

          • martinbrock

            So if you want to play for a living, find someone willing to exchange his work for your play. Then your play is work. At least, it’s as valuable to the worker as his work. I have no problem with that, but I have a problem with taxing people doing drudge work so that you need not do it. You might as well order people at gunpoint to wipe your ass. Someone’s gotta wipe your ass. Why not you?

          • good_in_theory

            No one gets ordered to do drudge work in this scenario. People volunteer to do drudge work – they just face different opportunity costs when making the decision of whether or not they volunteer to do so.

          • martinbrock

            You’re taxing someone to provide these grants. Is there a tax exemption for drudge workers? If I’m using my grant to pursue my blog commenting career full time, while paying you to do my drudge work (because you support three children and can’t afford the leisure time), am I not ordering you to do drudge work without an exchange?

          • good_in_theory

            No, you’re not ordering anyone to do drudge work without an exchange. You give them money, they give you work. The taxation issue is irrelevant.

          • martinbrock

            But I produce nothing of value for the money, so by your own reckoning, your prices rise. My consumption of your drudge work is costly to you, and someone is ordering you to do it for me without an exchange.

          • good_in_theory

            The source of your money doesn’t affect my prices. I don’t know how you got your money, and I don’t care, and it’s irrelevant to whether or not I accept your offer. Of course your consumption of my work is costly to me, but everything I do is costly to me. There are always opportunity costs and energy costs. No one is ordering me to do it without an exchange though. You give me money for the work, and I do it.

          • martinbrock

            That I receive money without an obligation to bargain in the market for it raises your prices. You say as much yourself above. If I must bargain with my own work, drudgery or otherwise, then your prices are lower. This is your point above, not mine.

          • good_in_theory

            My receiving money without bargaining for it raises my prices, not yours. When Paris Hilton is given her inheritance, this directly affects the prices she demands for her own labor. This might have some sort of effect on the price I demand for my labor, but if it does that effect is incredibly attenuated.

          • martinbrock

            People receiving money without an obligation to produce in exchange raises the price of everything these people consume, including the price of anything you also consume. Paris Hilton receiving monopoly rents is no exception.

          • Theresa Klein

            But the people doing the high-paying drudge work are presumably being taxed to pay for the B.I.G.s of the people who prefer to play at being actors and novelists and musicans. You’re basically saying that people who want to play should be institutionally favored over those doing the drudge work. By transferring wealth from the drudge workers to the pretend novelists.

          • good_in_theory

            Yes, this institutionally favors leisure and non monetized labor to consumption and accumulation to some degree. Being empowered to exercise more discretion in one’s labor choices does that. But it doesn’t compel anyone to work, any more than increased labor competition or decreased product competition or anything else which diminishes the mrp of one’s work.

    • Tedd

      It’s not clear to me how this BEA differs from negative income tax. Or are you simply proposing a mechanism by which the NIT concept could be implemented?

      • martinbrock

        Here are a few differences:

        1) If you take the income supplement (a loan from the common fund), the income floor becomes an income cap until you repay the supplement you’ve received. You can escape this indebtedness periodically, so no one becomes hopelessly indebted, but you have an incentive to seek employment to avoid becoming stuck at the income floor.

        2) If someone offers you employment (or a gift), you must accept the offer before receiving a supplement without such an offer. You need not perform the work satisfactorily or at all, but your service or lack thereof is matter of a public record.

        3) If you offer someone employment or a gift, so the person can avoid repaying the supplement, then you get the value of whatever service the person provides, tax free, and you also get the same share of your contributions to the common fund (unclaimed contributions returned to contributors) that you’d receive otherwise.

        You (and everyone with income above the threshold) thus have an incentive to seek out people needing employment. If you don’t play this role, your money flows into the system without benefiting you personally. If you do play it, you employ people with the same money, so you have a strong incentive to find ways to employ people.

  • DavidCheatham

    I think this is a case in which our biases between groups we like and groups we don’t is especially strong.

    I think it’s easy to *think* that, but that’s really just because the right abuses regulations.

    Regulations from the left are almost always in response to some actual problem the regulation is designed to fix. Now, I do have the caveat ‘almost’ in there…there are some things, like GMO labeling, or that proposed law attempting to raise min wage only for big box stores, that clearly are just an attack. (And those things, it must be noted, don’t often pass.) But the vast majority of regulations are because people got *hurt*.

    Or, to put it another way, regulations the left comes up with tend to apply to *everyone*. Logically, the left would be anti-large business, but then they tend to come up with regulations that hurt small businesses and leave large ones alone.

    There have been plenty of cases where the left proposed some product regulation, like requiring excessive testing, that then proceeded to exactly hurt the ‘artisan left’!

    And let’s not forget that laws about, for example, pasteurized milk are due to the left, who are *exactly* the same people attempting to flout those laws to buy ‘natural’ milk.

    So while the left might sometimes propose stupid regulation (That’s another discussion.) the left tends to be, at least, an *honest dealer*. They aren’t proposing regulation to just hurt other people, and often end up hurting *themselves* with it. They propose regulations because *like* regulation, and propose them in an honest attempt to solve a problem.

    Whereas regulations from the right often just seem to be malicious. For example, what problem, exactly, is being fixed by denying poor drug addicts welfare? How can that logically make society a better place? At best, it was *intended* to make drug addicts poorer, which, uh, is a pretty stupid social policy when you think about it! And all it has actually done is humiliate poor people by making them pee in a cup, while costing huge amounts of money.

    Likewise, as you point out, if checking the ‘lottery winner’ status of people who get food stamps costs *anything* per person, it cannot possibly save money, because lottery winners are so rare. And let’s not even get into things like TRAP laws.

    And, this is the same right that supposedly does not like regulation and *according to them* it’s often a large burden on the regulated people. So the reason they’re proposing it is…? Yes, to create a large burden. Likewise, they complain about the cost of government…while making it more expensive.

    And while libertarians usually aren’t *proposing* any regulation at all, it does indeed makes libertarians look dishonest when they whine about liberal regulation making sure we don’t give lead-paint toys to children, but don’t seem to care about urine testing poor people. (I’m not talking specifically about you guys, because you seem to get that. Hence this very article.)

    • martinbrock

      And let’s not forget that laws about, for example, pasteurized milk are due to the left, who are *exactly* the same people attempting to flout those laws to buy ‘natural’ milk.

      This is the problem with vague categories like “the left”. People who want compulsory milk pasteurization clearly are not the same people who do not want compulsory milk pasteurization, even if you assign both classes of people to a single class in your head.

      You may assign both classes to a single class if you like, of course, but your larger class clearly does not distinguish the former from the latter, and I strongly doubt that most people who don’t want compulsory milk pasteurization place themselves on “the left”.

      • DavidCheatham

        People who want compulsory milk pasteurization clearly are not the same people who do not want compulsory milk pasteurization, even if you assign both classes of people to a single class in your head.

        Yes, I said that entirely wrong, sorry. I meant that the left is the exact same group of people, not the actual same people.

        I’m not sure what it does distinguish, and I strongly doubt that all people, or even most people, who don’t want compulsory milk pasteurization place themselves on “the left”.

        …really? Why do you doubt that?

        The non-pasteurization people, as far as I can tell, are in a group that could be referred to as the ‘far-natural food’ group. They’re probably anti-artificial colors, shop at farmer’s markets, etc. Might even be anti-corn-syrup and demand locally-sourced meat.

        Does that seem reasonable? Yes, not *all* non-pasteurization people think all those things, and there are a few completely outside the group (Like someone who just grew up on a farm and likes it better.) but that is a social group, as social groups vaguely are defined.

        This group is, indeed, not *entirely* on the left. It’s not a political philosophy.

        However, I feel secure saying that that those people mostly are on the left. It’s talked about in magazines like Mother Jones. It’s surfacing in places like San Francisco.

        Look, I do actually object when people say stuff like this is something ‘the left does’, and that’s not what I am saying here. The left, as a whole, is in favor of most food safety regulations, and has no problem with milk pasteurization.

        But of the much smaller number people who *don’t* like it, they are also mostly found on the left.

        This is, however, not a really good example of my main thesis anyway, because those food regulations are oldish, whereas the non-pasteurization people are newish, and I was attempting to list examples of the left regulating things that hurt people that are mainly on the left. So this example could be written off as ‘Well, the left didn’t object to that when they *passed* it.’
        So just forget I listed milk pasteurization.

        • martinbrock

          …really? Why do you doubt that?

          Because practically every “right libertarian” I know opposes compulsory milk pasteurization, and I have a hard time imagining any right libertarian favoring it.

          • DavidCheatham

            Your point is entirely correct about how libertarians view the issues, as far as I can tell.

            The problem is libertarians (At least actual libertarians, instead of conservatives who just call themselves that.) are a fairly small group, politically.

            100% of right-libertarians could be anti-mandatory pasteurization, and 100% of right-libertarians could be pro-mandatory pasteurization…and those numbers would be swamped if a mere 5% of the left was anti.

            Why are people on “the right” outside of the “far-natural food” group?

            I didn’t say they were ‘outside’ it. I said the natural food movement (By which I mean both the moderate and far examples of that, although I didn’t say that.) tends to be, well…hippies. They are an outgrowth of the left, of the environmental movement specifically.

            This is not to say they *all* are that. And it’s certainly not to say that libertarians can’t be that…there are plenty of ‘back to nature’ libertarians, from both left *and* right libertarianism.

            But the movement is still, somewhat, an aspect of the left. It has left-roots, the main movers and shakers are liberal, the right noise-machine still sneers at the left about it and claims the entire left wants everyone eating berries and nuts, etc…

            The Amish seem to be inside of this group. Are they on “the left”? The Amish number in the hundreds of thousands.

            Hundreds of thousands of people is not actually that many people in America. The Amish make up less than 0.1% of the population. (And even less of the voting population, because they tend to have a lot of children, so even more of them are under voting age. And have lower voter turnout than other groups.) The Amish are outnumbered 3:1 by first-generation *Ukrainian immigrants*, to pick a random group.

            Of course, we’ve rather lost the entire point of this which, as I mentioned, made this entire thing not very relevant…my point was attempting to be about how, with pasteurization, the left had made regulations which hurt itself…but that was completely wrong, considering how old the regulations are. (They predate the environmental movement and hippies completely.) All that proves is that left sometimes changes its mind, making regulations that later parts of it think are stupid.

            So it is completely irrelevant as to whether or not the natural foods movement is mainly an aspect of the left or not, it doesn’t prove my point either way.

          • martinbrock

            Have seen a poll on this point, like a survey of opinions of unpasteurized milk that asked respondents their political party affiliation? I’d wager that more Republicans than Democrats oppose mandatory pasteurization.

          • DavidCheatham

            Have you seen a poll on this point, like a survey of opinions of unpasteurized milk that asked respondents their political party affiliation? I’d wager that more Republicans than Democrats oppose mandatory pasteurization.

            And I’d wager exactly the opposite.

            And I have yet to find any polls at all about this, which is rather amazing.

            Fifteen Republicans and zero Democrats supported the bill. Maybe Democrats have their own bill to ban these raids?

            No, my point was that there were groups of people on the left who didn’t like the rules, while the party *itself* was still in favor of regulations. I.e., the party is going against (a small subset of) its own voters.

            Remember, my original point here was that regulations proposed by Democratic pols seem to be ‘fair’ regulations proposed on reasonable grounds (And, being fair, often end up hurting voters on the left as much as voters on the right.), whereas regulations proposed by Republican pols often just seem *malicious* and aimed straight at harming ‘the left’. Or ‘the poor’.

            So I tried to use pasteurization rules as an example of ‘fair’ regulation…except I forgot those mostly pre-date any natural food movement, on the left *or* the right. So that is not a good example at all. (OTOH, the fact the Democratic pols won’t *back off* the regulations now sorta supports my point. Unless you believe that it’s mostly right-voters who want this, and the Democrats are just trying harm them, which is a possibly belief, I guess.)

          • martinbrock

            The entire Democratic faction in the Senate is going against whatever subset of Democrats favors legal raw milk, while a substantial minority of Republican Senators go in favor of these Democrats and whatever Republicans also favor it. You know the constituencies of Republican Senators better than they do? If you’ve seen no poll, how do you know?

    • John

      Libertarians don’t “don’t care” about urine testing poor people. A whole lot of right wingers like the idea though.

      • DavidCheatham

        Libertarians don’t “don’t care” about urine testing poor people. A whole lot of right wingers like the idea though.
        Well, there’s two things there.

        First off is the fake libertarians who *want* to urine test poor people.

        But there’s another level of dishonest…libertarians who assert they dislike ‘regulation’, but the regulation they complain about always seems to be left-oriented regulation.

        I.e, they complain about a law that requires testing toys for lead contamination, but not about urine testing poor people for welfare.

        Some of them, of course, propose the solution is ‘no welfare’, but until then, it’s perfectly fine for people’s rights to be violated within a system, because that system itself shouldn’t exist.
        This is the same sort of libertarian that has the solution to gay marriage be ‘no government marriage’.

        But, again, strangely enough, those sorts of libertarians never say that about things the *right* wants. It’s never ‘We don’t care if they require more testing…the solution is to remove all testing, not to worry about how much of it. We won’t get bogged down in the details.’. Or ‘The level of income tax is not an issues because income taxes are inherently unfair and need to be abolished.’.

        But point at a civil-rights issue the left has, and libertarians look at and are forced to agree with, and you’ll have a significant fraction of libertarians leap out of the woodwork and start claiming those civil right violation are not a libertarian issue because the government shouldn’t be doing that thing at all.

        • John

          Wait, how is someone’s “rights” being violated?!? If you want free stuff from someone, there might be strings and you are free to follow the rules or not. There is no coercion, no violation of rights. My child doesn’t get candy until I verify that she’s eaten her food. That’s not a rights violation.

          The problem IS the handout. It’s unconstitutional, and immoral because it is theft.

          A libertarian complains about bad law and regulation, the ACLU complains about the implementation. Please note the difference.

          • DavidCheatham

            Wow, I’m so good, I can find dishonest libertarians *by accident*.

            Actual libertarians here, please educate this fool. I could eventually do it, but I’m certainly not ideal, and would probably get very sarcastic.

            If you want free stuff from someone, there might be strings and you are free to follow the rules or not.


            Used any roads today? Had the police protect you from buglers last night? Have a military protecting this country from invasions?

            Peed in your cup yet?

            The problem IS the handout. It’s unconstitutional, and immoral because it is theft.
            Saying ‘taxes are unconstitutional and theft’ might be fine on the faux-libertarians sites you hang out at, but won’t work here as an argument, especially if you then follow it up with ‘So that means all government programs are unconstitutional and theft’.
            You see, that’s the *crazy* version of libertarianism you’re sprouting. The anarchy version.
            But the actual libertarians can explain this better. Guys?

          • John

            No, see, you’re unable to follow the logical train here. What makes it true theft is that you are taking from one person to give to another, rather than taking from a person to fund the parts of the state that they almost certainly will need or use. For instance, taxing me for a road through gasoline taxes that I choose to purchase or do not, is not theft because I have the option and only pay for the tax if I actually need that which the tax buys me.

            Secondly, it’s unconstitutional because there is no provision for it in the Constitution. Unlike roads which actually are right there in the Constitution. The military is right there in the Constitution. Also, the police are awful at protecting from burglars, as I know all too well. A gun or a dog is far more effective. Police are not unconstitutional except when they are the DEA, ATF and other federal organizations policing unconstitutional federal laws.

            So, yeah, you’d better call reinforcements, you’re going to need them.

          • John

            Also, nearly by definition, an-caps are the idealist libertarians and everything else backs off from pure libertarianism. I’m a libertarian, just not purist in how far I think it is feasible to go. But I’d be fine with anarchy if it happens to work. The problem is when libertarians rationalize redistribution or unconstitutional social schemes. That’s just something else entirely.

  • Austin Wildcatter

    Very interesting.

  • More hot air from the biggest, most overpaid/bloated/millionaire freeloaders on the planet. When the US starts drug testing the douchebaggery collectively known as Congress, and, if they fail then no pay, then we can start a national conversation about food stamp fraud.

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  • Theresa Klein

    This is, at least, a worthy attempt to get academic liberals to empathize with the point of view of business people when it comes to regulation. But I think the emphasis on food stamp recipients is misplaced. People who receive food stamps, are, after all, the beneficiaries of other people’s (forced) generosity. Since public assistance is mandatory and anonymous, this leaves little room for social norms to protect against abuse (unlike in a small community where public shaming can prevent people from collecting benefits they don’t need). Arguably, treating food stamp recipients as distrusted children is fair, since they have, obviously, proven themselves incapable of providing for their own needs.

    On the other hands, business people who are subjected to regulation havn’t actually done anything that renders them deserving of such treatment. They are just distusted because of a social and political prejudice against them as a class.

  • ogvor

    As a liberal with libertarian sympathies (or at least agreement) on a number of issues, I found this article a very good read and it makes me consider regulations in a different way. However, I don’t see in it an answer for regulations designed to protect the common good. For example, the FDA recently proposed regulations on antibiotics use for livestock to curtail their use, requiring prescriptions from a vet for their use. But because incentives for continuing to use antibiotics is strong (in addition to fighting disease they also promote growth) it wouldn’t be surprising if prescription-happy vets allow some farmers to continue using antibiotics unabated. Then suddenly if you’re one of the chumps whose abiding by the rules, not flouting them becomes a danger to your competitiveness. The problem is that the dangers of antibiotic resistance bacteria is hardly limited to the farmers who get around these rules, and it could be years, perhaps decades before it becomes a national or global catastrophe. I’m not sure how the government plans to enforce these regulations but checking that every prescription is legitimate would be ridiculously expensive so I doubt it will happen that way.

    I agree with the points in this article that most business owners are not bad people, that most would be upstanding citizens without many of the onerous regulations on their businesses. But when the profit incentive is so obvious and the dangers far off and nebulous (and potentially catastrophic) then what choice do we have?

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  • andrewp111

    Perhaps a mandate to ensure the dead don’t collect SNAP will have the result of making the recording of deaths more efficient than it is. Right now the whole system of death certificates is very inefficient. They are issued by local governments in a very decentralized manner. Death information is not centrally distributed to everyone that needs it. Instead, it is up to the executor to send a death certificate to interested parties. Eventually, the government cancels the SSN of someone who has died, but it takes a while.

    Matching up SNAP distributions in multiple states should be easy for the government to do on its own.

  • Consider how much burdensome regulations we could do away with by the simple expedient of refusing to make any more #LimitedLiability corporations, so that enterprise owners would not have a government-issued “get away from personal liability for harms to third parties free” card?

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