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Odd thoughts from an odd guy
Charles Murray's IN OUR HANDS: A Plan to Replace the Welfare State (American Enterprise Institute) presents a plan to scrap all existing welfare and income transfer programs - Social Security, Medicare, and all forms of welfare - and replace them with a single program to pay every American citizen age 21 and older $10,000 a year for life.As a long-time libertarian, I've seen a lot of proposals like this. I did a little poking around online to see what other people were saying about this book and sent Jerry the following reply:
I've thought about this approach for years. If it applies to "every" citizen as you say, it's far too expensive-- about $1.7 trillion per year!-- and amounts to a fairly pure form of socialism. From poking around online, I gather Murray is basically just stipulating that we're spending that much on social programs anyway, so why not eliminate the bureaucracy and make everything cash-based?Responding to a further comment from Jerry's column, this message concluded:
Unfortunately, I can't figure out enough of the details to see how Murray deals with the many obvious problems with this idea.
If Murray is offering to guarantee that every citizen makes at least $10,000 per year, that reduces the net outlay a little, but effectively raises the standard deduction for income tax to $10,000 for single taxpayers and $20,000 for married taxpayers filing jointly. That greatly decreases the net income-tax revenue.
Worse, guaranteeing a minimum income instantly reduces the desirability of low-paying jobs. Given the value people place on their free time, any job that pays less than about $10 per hour would become essentially impossible to fill with a US citizen. That's a huge problem. Insurmountable, really.
I also don't understand from this capsule description how Murray deals with children; if he recommends additional payments for parents, the costs of the program could escalate dramatically.
My preferred solution is to provide the same sort of safety net by giving every person the right to request government support, but as an all-or-nothing decision. Support would come with a requirement that recipients work as directed by the government (within the limits of their abilities) and would involve little or no cash, just vouchers for food, rent, medical care, and so on. The amount of the vouchers would effectively require that the recipient find low-cost food and housing-- for example, by living with relatives or moving to where the net cost of living is low enough.
The effect of this approach would be to ensure that no person receives less than required for a reasonable (if low) standard of living, protects the ability of employers to pay a reasonable price for low-value labor, and eliminates the incentive to remain unemployed, which is absolutely critical. It also prevents or discourages most forms of fraud that apply to any cash-based system, and can be implemented almost entirely by competitive private industries.
Since I haven't read his book, I don't know if Murray has anticipated all of these concerns. For all I know, he may have perfectly good answers, so don't interpret this as disagreement with his position, just with the short description you provided. I read _The Bell Curve_ long ago and thought it fairly good, but I haven't kept up with his later work.
> Our present welfare system cannot possibly go on forever.Jerry wrote back, and I replied:
Why not? It's painfully expensive and terribly wasteful, but we can clearly afford it as-is. After all, the economy continues to see a few percent of net growth every year. I don't think the welfare system relies on economic growth in the gross-income sense, though growth makes it easier to tolerate.
> You'd have to read the book. He addresses every one of your points.The next day, I ordered the book from Amazon. I read it carefully, taking several pages of notes, and on May 12 I sent the following more detailed analysis to Jerry:
> Whether you agree or not, it's needless for me to repeat his
> arguments.
Understood. I'll get the book.
But because I just can't stop myself from replying anyway...
> He deals with children the simple way: the mother gets 10 grand
> (7 after medical insurance). If there's a father in the picture,
> the two are above the poverty line.
$20K is enough for a healthy family in a low-cost town, especially if it has the support system Murray mentions in the form of nearby relatives and cooperative charities. But $20K won't be enough for all families under all circumstances. No one-size-fits-all strategy is going to solve the problem. It'll pay too much to some people, and not enough to others.
And I still expect that this scheme would just redefine the poverty line by greatly increasing the cost of many goods and services, especially those typically provided by the poor to the poor.
But it does eliminate most of the bureaucracy, and I suspect that overhead represents a very high percentage of the total cost of current social programs. I'd certainly rather give the money to the people who need it than the otherwise useless paper-pushers.
But if I have to choose between three groups-- people who need help, people who would rather accept handouts than work, and the paper-pushers-- I'd have to pick the bureaucrats over the bums.
As for the trends in the current welfare state, many of them relate to issues Murray isn't trying to solve-- especially the increasing per-capita expenditures for medical care and the need for politicians to give away more and more money each year to get re-elected.
From what I can see, we seem to be dealing with these issues in a sustainable way, but if you feel we're not, I don't see how Murray's approach can do any better. His system would also have to increase its annual payment to deal with these issues, which suggests it isn't a long-term solution either.
I read Charles Murray's _In Our Hands_ as promised. It has all the problems I expected it would, and none of the answers I hoped for.Jerry offered to send my comments to Dr. Murray, whom he knows personally, but this didn't happen immediately. Some weeks later, Jerry mentioned In Our Hands on his website at jerrypournelle.com, and I sent him a short reminder of our previous discussion. He forwarded that note to Dr. Murray, and I followed it up by sending Dr. Murray the full analysis quoted above, copying Jerry on the message. I ended the message with this:
"From each according to his abilities, to each according to his needs."
Murray brings up this slogan on page 90 as an example of a policy that might sound good to some people, but is impractical in the real world because people wouldn't behave that way. As Murray says, "Socialism not only promised a 'new man,' it required a new man." (Emphasis in the original.)
But what I see in this book is the same policy and the same requirement.
Literally, Murray's Plan is the latest refinement of this Marxist policy. Murray doesn't think of it that way, but that's exactly what he's trying to achieve. He wants to create a society in which we are encouraged to contribute to the economy to the extent of our abilities, and he wants to ensure that our needs are met. He asserts that our needs are all equal, so he intends to provide an even distribution of social support payments.
All the critical content in this book consists of assertions:Murray provides some support for the numeric elements of these assertions, but much of the support is weak. Sometimes he changes his assumptions in exactly the ways needed to support his arguments, as when he compares the benefits of the Plan to the benefits received by the poor today. In this section, he uses the $10K/year figure as a summary of Plan benefits because otherwise the Plan wouldn't look so good against current poverty programs. But for comparisons elsewhere, he uses the more accurate $5K/year figure that represents the immediate value of the Plan to recipients after deducting the costs of health care and retirement benefits. This selective use of numbers is pervasive in the book.
- The cost of our current social programs will increase rapidly
- The value of our combined labor will increase more slowly
- The cost of living will increase even more slowly
- Health care, in fact, "should" be getting cheaper (his word)
- It's politically practical to limit the growth of social spending to match the growth in cost of living
- People will choose to spend less today in order to have more money when they retire
- But people will choose to spend more money today rather than save enough money for end-of-life care
- If the Plan was implemented, the electorate would tolerate it
- Men, women, adults, teenagers, criminals, alcoholics, and everyone else in the country will behave consistently and sensibly under his Plan.
Murray is also selective in his application of basic human psychology. In chapter 7, he comes right out and says "Make it easier not to work, and people work less." His Plan makes it as easy not to work as it can possibly be, yet he claims everywhere else that the workforce will not be compromised by the Plan. Indeed, the financial model for his Plan requires that essentially everyone working today continues to work.
But of course a lot of people won't work under the Plan. The Plan makes it entirely practical to live a full life on the dole. It creates a powerful disincentive to working low-end jobs. Millions of 21-year-olds would face a choice between a life of relaxation (albeit without much money), or a life of hard work and little free time (plus some more money).
Murray asserts that essentially everyone will learn to value the satisfaction that comes from leading a productive life, but that's just idealism speaking. We know from many societies, and some of the very same social experiments in the US that Murray describes in this book, that many people do not share that value system.
Murray's Plan will inevitably expand the underclass in the US. It's worse than just a matter of some people withdrawing from the workforce. Most of the goods and services consumed by the poorer members of our society are provided by the poor. Remove some of the poor from the workforce, and the rest of the poor-- the ones we really care about, who are willing to work to give their families a better life-- will have to work harder. Their costs of living will go up, so they'll have to work harder to achieve their goals. The lazy get the life they want without working.
Generally, this Plan simply isn't structured to ensure that the trillions it will cost will keep coming in so it can be given away. Murray provides essentially no support for the tax-collection side of the equation. Ultimately, all we have is Murray's unsupported assertions that it'll all work out. It doesn't seem that way to me.
Murray's book begs some practical questions. Would a person be allowed to sign away the annuity for a lump sum today? Murray advocates exactly this method for funding college educations. But if we allow that, we'll end up with people who are broke and don't get their monthly payment, and there will be no government programs available to help them. I don't see a moral problem here myself, but I do see a political problem. Murray doesn't.
The same argument applies to other problems. Murray admits some people will drink or gamble away their Plan money, but he would provide no programs to help them. This, too, could be an insurmountable obstacle to public tolerance of the Plan.
Murray advocates single-pool mandatory health insurance-- one monthly payment for everyone regardless of health status or personal habits. He ought to realize that this is not "insurance" at all. It's just socialized medicine, and it'll work out the same way under his Plan that it has worked out everywhere else. Medical care must be drastically curtailed for all so that it cannot be exploited without limit by some.
Murray is reasonable in suggesting that we consider the merits of the Plan before we try to figure out how to implement it. He admits that it would be difficult to shift public opinion in this direction. My take is different-- it would be impossible. Although Murray asserts that the Plan would be in the interest of most voters, I don't think most voters will see it that way.
Furthermore, I don't think most voters would continue to accept the Plan even if it were magically imposed on the country. One reason that special-interest groups are so influential in American politics is that most people have special interests. Murray would abolish government's power to favor special interests. So would I, but at least I understand that this is a critical element of the changes I would make. I know I'd have to get the public to agree that this ought to be done. Murray just ignores this issue.
So all we're left with in this book is one man's impossible fantasy for a nation composed of perfectly sensible people much like Charles Murray. In such a place, any plan will work, Marxism included.
If I were willing to accept the moral burden of confiscating wealth at gunpoint from some people in order to improve the lives of others, I might consider a cash-based scheme like Murray's. But I would at least tie the payment to work.
For example, we could say: If you work 120 hours in a month for a job that pays $5/hour or better, or you are medically unable to hold such a job, we will give you a matching payment of $600 in cash plus $250 toward the medical insurance plan of your choice.
But I'm not willing to accept that burden, and I don't think anyone has to. As Murray himself describes near the end of the book, the US had a variety of social support mechanisms in place before the welfare state was established. I would rather see the government encourage the re-establishment of these mechanisms and get out of the welfare business.
Murray actually underestimates the range and value of these private social support mechanisms. Personal service jobs (maids, cooks, etc.) and many professional positions (janitor, secretary, etc.) provided work for people who couldn't or wouldn't contribute more substantially to the economy.
As Murray says, the fact that these mechanisms weren't perfectly effective is not an argument against restoring them. Our country is much wealthier today than it was then. A smaller fraction of our population needs such help, and the rest of our people can better afford to provide it.
Murray also missed his chance to discuss the immense overhead costs in our current social programs, dismissing these administrative and other costs in a footnote at the very end of the final appendix. Since these costs amount to a large fraction of all the costs of the welfare state, he could have strengthened his arguments and made a more significant contribution to the public debate on this topic by researching and documenting them.
All in all, this was a very unsatisfying book. It's just a scholarly treatment of a bad idea.
I have long respected your work, but this is not up to your usual standards.Dr. Murray responded briefly:
As Jerry said in another message, you generally believe "people ought to be left alone," as do I, but this proposal is a sharp departure from that standard. It isn't the same kind of invasive social control we usually get from Marxists, but your proposal is no less collectivist and, I believe, maybe even more harmful. "A poisoned carrot is worse than a stick."
Jerry continues to maintain that our current welfare system is untenable, so we have to do something, and your plan is the best he's seen so far. But that's a moot point if your plan is politically impractical to implement (as you say) or wouldn't work anyway (as I say).
So that leaves open the question of what we should do instead. I've been thinking pretty carefully about this basic problem for around 25 years, and I still don't have a clear answer. I think the most practical possibility is to slowly back out all the incremental changes that created the welfare state, while incrementally enacting new, smaller programs to care for those who literally can't care for themselves. That isn't a very exciting proposal, but at least we know from experience that incremental progress can be made-- although it's all been in the wrong direction so far.
I think if you're going to make a useful contribution to this debate, you'll need a strategy that is both practical and effective. I'd be happy to discuss this with you in more detail if you like.
It is certainly gratifying to see someone paying so much attention to one's work--but the kind of attention that requires a lot of time to respond to. Lacking that time (I'd find the time if you publish it in the Wall Street Journal, but you can understand why I can't afford it for one-on-one dialogues), we'll just have to agree to disagree.Jerry replied to both of us:
Well, with permission from both of you, I do have 100,000 plus high tech geeky readers and I would love to publish that interchange.Dr. Murray replied, offering to respond to my comments when he returned from traveling. He asked me to send him a reminder email at that time. When I did, however, Jerry and I got this reply:
I don't normally pass along to authors comments on books I review, but Peter is a pretty typical mostly-liberatarian intelligent high-tech reader who happens to be an old friend as well, and I admit I was trying to solicit a response.
I should never have tried to get out of this by putting it off until after the Asia trip. I've been sitting on Peter's email since Thursday, every morning saying to myself that I've got to get to it. But I have to face it: I have no relish for restating my positions or taking on new arguments. Long ago, I did, after Losing Ground. But since then, I've hated it, and don't even have much interest in engaging in spirited dialogue about anything. My mode now is to make my case as well as I can make it, and if I don't persuade someone, that's the breaks. So I haven't persuaded Peter, and while I think that in fact the text of IOH already anticipated many of his objections and if he reread the text he might modify his views, at bottom I think that's his business, not mine. Sorry to be so disengaged, but that's the way it is.These comments suggest he didn't really pay attention to what I said, but I guess that's that. I'm disappointed, since this could have been an opportunity to make real progress on the question of government's legitimate role in the personal and economic lives of the people.