The bleeding heart's dilemma

In a recent "Intelligence Squared" debate, Bryan Caplan gave his classic argument in defense of the statement, "Let anyone take a job anywhere." You can read his opening statement here. If you know Caplan, you know the moral force his argument has: immigration restrictions are violent means by which people in rich countries prevent people in poor countries from reaching their potential and bettering their own existence. If you believe that all the people of the world have equal moral value, then there simply is no moral defense of this practice.

Where, then, is the conflict, particularly from someone on the left? Someone on the right, after all, can claim unapologetically to be a nationalist, to think that by virtue of where he is born he is indeed entitled to certain priviliges, and perhaps even to think that his culture is inherently superior to and must be protected from others. People on the left would (rightly) think this view is awful. None of these things can justify immigration restrictions for a liberal.

There are two things that I noted in the arguments of the opposition, particularly coming from Kathleen Newland, as well as from the audience's questions. One is a subtle tribalism, which creeps in without ever being named. Whereas some might be openly nationalist, there is a different form of tribalism which protests, "We haven't done enough to take care of our own, how can we possibly take in others?" The underlying assumption is that merely coming to work in the U.S. would be impossible; you must also join our system, depend on our government benefits, receive our public education, and so on.

The second is a not so subtle nationalism. Newland is so frank as to say that part of a government's job is to be biased in favor of its own people. In other words, egalitarianism be damned--nation states are more important than human rights. I could be wrong, but I rather thought Newland was coming from a point of view typical on the left, namely that the role of the state is to embody the will of the people. And therein lies the dilemma--the will of the people is really quite often in conflict with the idea of human equality.

Caplan calls his position basic human decency. I think that's unfair, but only because our instincts are so biased against decency. His "basic human decency" is actually a moral tradition built up over thousands of years of civilization--but that's competing against hundreds of thousands of years of tribal existence, in which loyalty to the tribe was essential for survival. The concept that everyone within the tribe is equal may come naturally to a lot of us, but the concept that all humans are equal is still as radical an idea today as it ever was.

But the left claims to champion this idea. The only problem is that it can't champion the equality of all human beings and the sacredness of nation states at the same time. Either anyone should be allowed to take a job anywhere, or not. Let's just be honest about why the left could not bear to allow this: then they would actually have to see the poor. And it would be the truly poor, not just the statistical bottom 10% in a wealthy, developed nation. It would be the truly poor from all over the world coming into this rich, blessed nation with the hope of making a better a life for themselves. The sight of them all would simply be too unbearable. It is better to force them to suffer at home than to come here and make us feel guilty for not having the resources to take care of them all.

In other words, it's paternalism or bust. The best we can do for the rest of the world is develop those other nation states (whose very existence was in many cases forced by the West) so that they can support the population living there with services which meet Western standards. If those nation states won't listen and won't reform, then shame on them. And too bad for the poor, who continue to toil for $1 a day.

The fact is, Caplan is really asking us to stretch our morals to their limits. The prospect of witnessing a flood of foreigners is instinctively horrifying, not always because of the fear of what is different, but rather because of the sorrow of seeing others who are so much less well off. Do we really want to live in a country with millions and millions of the world's poor, working on wages we find obscenely low, even if it means they have a chance of earning more than they could ever dream in their homeland? It is, after all, our own country.

My contention is that the left ought to give up this "paternalism or bust" attitude. It is far too convenient to insist that others ought to change their government, and then everyone would be fine. The truth is, we have no moral reason to keep people out, only excuses which come from our instincts. If we really believe in human rights, we should also accept the right of people to start from much less than what we have and work their way up--even if that means doing so in our own neighborhood. And that might mean a lot of sad things. It might mean watching people stumble and fall. It might mean watching people live without all thoese benefits we take for granted. It might mean watching people struggle with basic things like language and literacy. And it would all be right there for us to see with our own eyes.

Of course, poverty exists already in the U.S., as it does in all countries. The reaction that the left expressly desires to cultivate against poverty is one of anger and revulsion. We should not tolerate poverty. I find it bizarrely sickening to think that this revulsion at the sight of poverty could be a reason to lock more people in it.

I'm picking on the left wing here because of their tendency to think of themselves as moral guides on this issue. They're for immigration reform, certainly. They believe we should naturalize all the undocumented Americans who have been in the country living as productive members of society for years. They believe they are being sensible in all of that. But they are unwilling to accept the ultimate conclusion of their humanist principles, which is that there is simply no excuse for any restrictions on who can immigrate to the U.S. in the first place.

In praise of the Living Wage campaign at UVA

You might be wondering what a guy with libertarian leanings, who has actually defended the abolition of minimum wage laws, is doing praising the "Living Wage" campaign at the University of Virginia. That might be because you, like me, initially assumed upon reading the words "living wage" that the activist organization demanding better pay for UVA employees is another political action team wanting to get legislation passed to achieve their objectives. Or it might be because you, like so many of us in this world, have been fooled by stereotypes, having been taught through a steady diet of mainstream media that libertarians are greedy, selfish jerks who think everyone should have to fend for himself. Whatever the reason you're surprised, if indeed you are, I hope to explain clearly and succinctly why you shouldn't be.

The Living Wage campaign exists for the purpose of demanding better pay for employees of the University of Virginia. Its specific wage demands (which can be read here) are based on the Economic Policy Institute's estimation of what it costs to live in Charlottesville and raise a family of four. It further demands structural changes in the university that will make the improvement of wages an ongoing process. The rationale behind these demands is simple: we, as a university, ought to live up to our stated goal of being a "caring community."

Why I support this. I have joined 2,255 other people in signing a petition that the university meet Living Wage standards. As a Christian, I believe all human beings have a responsibility to care for the poor among us, and we as Christians are particularly responsible for advocating for those less fortunate. I also believe it is our duty to take part in shaping the institutions of which we are part. Communities are shaped by powerful institutions, and we have a moral obligation to insist that those institutions adhere to good and just principles. Human beings cannot thrive without communities that look out for the common interest.

As a libertarian, I believe it is vital for individuals to be active on the ground in making the world a better place. Indeed, it is our general complacency about the needs of our own communities that invites greater and more intrusive intervention from the state. From my point of view, the point of libertarianism is not for us all to float around in an atomistic world of self-interested individuals with no ties to any institutions or communities. No, the point is for all of us individuals to be free to create, shape, and reform those institutions with which we are naturally affiliated. If the university of which I am a part does not reflect the morals which I hold dear, then I have a right and even a duty to make this known to the community.

Response to objections. So what about economics? What about the minimum wage? Doesn't that do more harm than good? (I've seen posters on campus suggesting exactly that.)

I think this is based on a misunderstanding of what is being demanded. The Living Wage campaign exists to change the values that govern UVA's policies, not to change laws. It is more than probable that many activists in the campaign would disagree with my political views very sharply. But as far as I can see, despite whatever traditional ties there may be between this kind of activism and leftist politics, the purpose of the campaign is not explicitly political. And anyway, I don't see why we libertarians can't take back some of that moral high ground that the leftists want to take from us.

(I was particularly agitated in my soul when I read this statement on the campaign web site, from an anonymous employee of the university: “The problem is that so many workers get locked into the low wage that stays there… you end up losing ground financially because of inflation and such… and so a lot of people are making less money then they were making years ago.” [Emphasis mine.] And people wonder why we Ron Paul fans keep going on about monetary policy...)

So in response to the economic argument, I would say it is not correct that a university policy of paying its employees well would do more harm than good. UVA must decide, as all firms must, how it will allocate its resources, based on its guiding principles. The Living Wage campaign simply pleads that one of those guiding principles be that we care for the needy in our community. That is a proper moral stance, and if "economics" is ever used as an argument against your morals, you must always side with your morals.

The reason minimum wage laws don't make sense (to me) is that the government can't possibly know all the legitimate exceptions to the rules they make up. What if a young teenager wants to try working on a farm one summer? What if young woman fresh out of college is willing to work a low-paying internship just to gain skills that will and her a fulfilling career? What if a young immigrant is willing to work for next to nothing because it's actually worth quite a bit in his home country? In all of these cases, it's none of the state's business if these individuals choose to take on a particular risk or hardship. Provided individuals are free to choose between competing firms, the government should have no say in their personal decisions.

But again, we have the right and the moral responsibility to help shape the values that guide our own institutions to which we belong. So long as the goal isn't the use of coercion, I have nothing but enthusiasm for a campaign to increase the welfare of the community.

I know of no other reasonable objections to the Living Wage campaign, but if there are any, I'd love to hear them. For now, at least, I'm a supporter, and I look forward to receiving campaign updates. I can only give my apologies to those (particularly of my friends) who have been active in campaigning, including the recent hunger strike, as I am a relative late-comer to this cause.

Consumption redistribution

Scott Sumner has a beautifully simple critique of "income redistribution" over at TheMoneyIllusion (a blog which is often technically out of my league). Excerpt:

You can redistribute consumption from the top 1% and give it to average Americans working in a car factory, or a Walmart. But it’s an illusion to think you can redistribute investment from the top 1%, so that average Americans can have a higher living standard. Where do people think the car factory comes from? Or the Walmart building? BTW, this has nothing to do with trickle-down economics, a theory I reject. This is simple accounting. Money put into investment projects isn’t available to boost living standards for the lower classes, unless you don’t do those investment projects.

So what’s available to be redistributed? Basically consumption (including a modest amount of vanity charity.) And that’s it. Now come back to me with the consumption distribution data, and let’s see what that looks like. I predict that consumption inequality is far lower than income inequality. And that consumption inequality is rising at a far slower rate than income inequality. I’m not saying there’s no problem, but it’s way smaller that the progressives imagine, as the data they use is pure nonsense. Consumption inequality is economic inequality. Income inequality is . . . well it’s meaningless gobbletygoop.

I think for a lot of us, it's hard to understand how important capital is to the economy. Most of us probably aren't ever going to own significant amounts of capital. That's probably why it's difficult for us to understand how "income" is any different from "wages." We are inclined to think of income as representing the merit of an employee working faithfully at a steady job. For owners of large amounts of capital, this is not what income is. Income is simply a measure of the productivity of that capital, and it is not meant for mere consumption, but largely for investment in better capital.

It's investment in capital that adds to the wealth of a country. Consumption does not. This is one of the most crucial points which I'm proud to say I actually got from reading Wealth of Nations. I'm not economist, but I know my Adam Smith.

You don't have to read Adam Smith to understand this: If you buy a meal and eat it, you're going to be hungry again; you haven't gained any wealth. If you buy a car, now you have a way of getting to work so you can make more money; you've actually made your life easier, therefore you have more wealth. We are all better off in the long run when people make good investments in capital, because it makes it easier to obtain the things we need to consume.

Once we make this distinction between investment and consumption, then a progressive policy of redistribution can be carried out in a reasonable way. Sumner recommends doing away with all income taxes, both personal and corporate, and moving entirely to a VAT and a progressive payroll tax. We could use that money to support things like school vouchers, catastrophic health insurance, subsidized health savings accounts, and wage subsidies (no minimum wage required, and get rid of occupational licensing!).

If we're going to care for the poor in this country, we need to redistribute some resources; this I take to be a basic moral principle. But this need not come at the cost of hampering long term economic growth, which is in fact essential to improving the circumstances of the poor.

Update: Sumner has a post rigorously explaining why income from capital should not be considered equal to income generally. The link is here.