Clearing out my voluminous library of papers (I like to think of it as my 2013 Spring cleaning, done on the same, “well-in-advance” lines as Julia Gillard’s election announcement!), I came across an interesting piece written by Wolfgang Kasper, published in the CIS Policy journal back in 1999, which translated an earlier piece written by libertarian philosopher Gerard Radnitzky. The key messages of the piece are as follows:
If one applies the institutions of the democratic game to social policy and assumes that individuals, interest groups, politicians and the electorate behave rationally, one can formulate a list of rules of rational political conduct:
1. Compete above all for the undecided median voter, i.e. ‘redistribute’ to them although they are not in need.
2. Redistribute in favour of well organised voters, because these can lend you electoral support or become dangerous to you through strikes, blockades or even the threat of violence – and you can count on a publicity multiplier through the tax-subsidised media. The preferable mode of redistribution depends on what interests are involved: discriminatory taxes or transfers, provision of public goods or administrative interventions.
3. Redistribute also within the majority on which you and your party count for support, and do so to ensure that transfers are handed out to small groups of marginal voters and that the costs are spread amongst as many citizens as possible because ordinary citizens are ‘rationally ignorant.’
4. Make the redistribution system – which is the essence of the welfare state – as untransparent as possible. In practice, this means that one has to intervene in many technically complex and untransparent ways, so that the citizen-taxpayers can marshall neither the time nor the resources to keep themselves informed about the plethora of interventions.
5. Time your redistributional hand-outs so that they occur shortly before elections and then target them. If the expenditure is made shortly before an election, there is a good chance that the financing problem will be devolved onto the next legislature.
It is clear that the Gillard government is desperately attempting to shore up its somewhat emaciated electoral base, in accordance with the afore-mentioned precepts of Machiavellian redistributionist politics, through various manifestations of largesse ranging from the school kids’ bonus right through to the NDIS (by the way, yes, I do oppose the NDIS as explained here). As for the Coalition, one of their main expenditure-growth ticket items is a lavish parental leave scheme which crowds out voluntaristic efforts by firms to provide their own leave arrangements to attract workers and which adds a semblance of fiscal discrimination within the corporate income tax regime.
For anyone concerned about protecting what economic freedoms we have left, the fear is that electoral promises to extend the welfare state doesn’t end with what has already been announced. Over the next several months, expect to see more promises that force more from the private incomes of person or group A to dole out to person or group B.
So, how should a classical liberal respond to the expected next tidal-waves of redistributional spending eroding the shores of freedom?
First, point out that seemingly altruistic promises to give person or group B a “helping hand” is nothing more than cynical base politics to shore up votes. The political identification of beneficiary person or group B is also typically made on an arbitrary basis, with little reference to the authenticity of perceived “need.” Second, ingeniously apply the principle stated by Frederic Bastiat that “taking away five, and giving back four, is not giving” to the contemporary redistributionist policy proposals raised. This would not only include reference to the adverse impact of redistribution upon taxpaying person or group A, but remind all and sundry that proposals for redistribution primarily benefit well-to-do welfare bureaucrats who automatically receive their cut from the extended welfare state. One could also mention the potential complexities of proposals, including with regard to how they may interact with the existing redistributionist machinery, as providing another political rationale for keeping the prevailing army of welfare bureaucrats intact.
I suspect that classical liberals will have a lot to say along these lines over the next few months!