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Tuesday, November 15, 2016

Egalitarianism and the Budget Crisis

As we draw closer to the 2017 legislative session, the pile of questions for our legislators keeps growing higher, especially regarding the state's budget crisis. So far, the conversation about the deficit and possible remedies has been limited to the governor's discretionary reductions, by means of which Governor Mead seems to believe that the state can white-knuckle it through a temporary reduction in revenue.

Recently, the governor has demonstrated insight into the permanent nature of our budget crisis, but thus far it has been limited to measures for the promotion of industrial diversification. Those are good, long-term ambitions, and limited as they are he nevertheless deserves recognition for them. However, it will be years before those measures can deliver anything close to tangible budgetary results for the state.

What our state needs is a coherent, coordinated and principled strategy both for the short term and for the long haul. 

In order to lay out such a comprehensive strategy, our legislators need to ask themselves one basic question:

What is the proper role of government in our state's economy?

There are, fundamentally, only two answers to this question, both of which have deep historical roots with modern iterations in political philosophy. 

Yes, philosophy. Not economics. Not at this stage of discussion. Economics is a good tool for transforming philosophical ideals into legislative reality. However, in order to know what ideas to transform, we need to start in political philosophy. Therefore, it would be prudent of the state legislature to begin its quest for long-term solutions to our budget crisis with a thorough discussion about what political philosophy should guide their policy decisions from hereon.

Natural rights and the Declaration of Independence

The first of the two political philosophies to consider is, not surprisingly, the Lockean theory of natural rights. The concept of "natural rights" has been distorted throughout history; if we trace its origin back to John Locke, it is directly related to our constitution as human beings in God's image. Because we are individuals, Locke says, we are endowed with certain inalienable rights. He then develops an outstanding argument for the inviolable individual and, even more importantly, how that inviolability relates to his property. 

Without delving too deeply into the intricacies of Locke's argument, here is how he defines an inviolable property right:

1. Each and every individual is created equal;
2. As such, we have an inherent right to our life and thereby our physical person;
3. Work is an extension of our physical person - therefore each and everyone of us has the right to the proceeds of our work.

The right to the proceeds of one's work is the transition point from Locke's political philosophy into the practical world of politics and legislation. Since the right to one's proceeds of work is inalienable, it extends fully to all the proceeds of our work and voluntary contracting with others. Nobody can forcefully claim any part of what we earn using our rightfully acquired property. 

In other words: there can be no taxes. But it also means that there can be no redistribution of income and wealth among citizens. While everyone of us has the inviolable right to the full proceeds of our work, in voluntary cooperation with others, nobody has the right to the proceeds of anyone else's work. (Robert Nozick developed this argument in great detail in his book Anarchy, State and Utopia.)

The direct consequence of the Lockean property-rights argument is that there is no such thing as unjust, or unequal, distribution of income or wealth among citizens. By definition, any government program that is funded by taxes (or other forcefully collected revenue) and hands out cash or in-kind benefits a defined group of eligible citizens, is immoral and should be immediately terminated. 

It is worth noting that the Lockean idea of rights given to us by our very nature as human beings - and the (imperfect) image of God - is in principle the same as is spelled out in the Declaration of Independence:
When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation. We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed
In other words, the Declaration of Independence implies, but does not explicitly say, that any welfare-state measures that forcefully take property from one citizen to give to another, is unjust. 

Egalitarianism and the Welfare State

Advocates of the welfare state would disagree. They would claim that "consent of the governed" means that if the majority votes to tax one group of citizens and give the money to another group, then government has the consent of the governed and should go ahead with constructing the welfare state. 

The idea of the welfare state is traceable back to the political philosophy known as egalitarianism. Its roots go all the way back to the early 19th century, but it did not take its modern political form until a small group of Swedish radicals in the 1930s decided to create the Scandinavian welfare-state model. What they came up with is, simply, the farthest-reaching egalitarian experiment this side of the Berlin Wall.

Egalitarianism is founded on the very idea that economic differences between individuals are inherently unjust. A person's economic status is not considered from the viewpoint of his efforts at building that status, but from the viewpoint of how it compares to the status of others. 

Where the Lockean philosophy states that no two men are unequal in their right to the proceeds of their work, egalitarianism says that no two men ought to differ in economic outcomes. If they do, says the egalitarian, the one who is better off is morally obliged to give up enough of his property to even out the difference between him and the other person. If he does not do so voluntarily, the egalitarian philosophy mandates a government program for income redistribution.

The principles of the Swedish welfare state were laid out in the 1930s; as recently as in 1971 egalitarianism was reinforced by political philosopher John Rawls in his Theory of Justice. Strictly speaking, he does not argue for the complete elimination of economic differences, as do the architects of the Swedish welfare state; the Rawlsian argument is instead that it is morally just to redistribute income and wealth in order to maximize the standard of living of the worst off in society. However, the difference between his "maximin" principle and Swedish absolute egalitarianism is a matter of philosophical fine print. The practical conclusion remains: economic redistribution is a moral duty - and government is a moral necessity.

Egalitarianism is the philosophical base for the Scandinavian welfare state. Originally, the American welfare state was not built on egalitarian principles, but was more in line with the British welfare state that began in the 1910s. Its purpose was to alleviate poverty, not to explicitly redistribute income. Over time, though, both the American and the British welfare states have lost their original purposes and morphed into income-redistributing, egalitarian, Scandinavian welfare states.

Egalitarianism in the Wyoming State Budget

All of this political philosophy can appear to be abstract and unrelated to the Wyoming state budget. It is not, though:  on the contrary, we have a long list of spending programs that are redistributive in the true egalitarian sense, programs that hand out cash or provide in-kind services to a select group of entitled citizens, demanding that others provide the funding. 

We often hear that Wyoming is a limited-government state where liberty runs free like a bison on the great, open pastures. But how do we define that liberty? Certainly, it does not fall in line with the principles of liberty defined by Locke and spelled out in our Declaration of Independence. If that were the case, we would not force one group of citizens in the state to provide for another group of citizens by means of economic redistribution. 

It is important to keep in mind that any service provided by government that is limited in access by eligibility criteria is an entitlement program and part of a system for economic redistribution. This puts the economic value of economic redistribution in our state well north of a billion dollars a year. 

Effectively, entitlement programs drive government spending, in Wyoming as well as every other state (and the federal government). In a budget crisis such as the one we have now, it is impossible to close the deficit gap without re-evaluating the role of entitlements in the state budget. It is time for our state legislature to have a principled discussion about whether or not it should be responsible for economic redistribution in the first place - and if it decides that it should, then ask whether or not there is a limit to that responsibility. 

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