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New Libertarians: New Promoters of a Welfare State

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A new libertarianism is coming. It is more accommodating, less strident, more pragmatic, less hard core, more moderate. It is more in line with mainstream American values and less opposed to core elements of a mixed economy and the modern welfare state. It is being developed in libertarian think tanks, political science departments, and campaign headquarters across the country. If the new doctrine keeps spreading and makes its way into political platforms and public policy, the last major American political doctrine even nominally defending individual rights will be gone.

Let’s call the new doctrine simply New Libertarianism. And let’s look at where it came from, why it is importantly different, and why it is generating both excitement and contention. To do that, we need to understand where the current libertarianism came from. And to do that, we need to review some history.

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The claims made in the article are a surprise to me. I suppose I've always assumed that the professional intellectuals among libertarians would stay away from Adam Smith style utilitarian arguments. 

 

In fact there's really only three main flavours. Those who support the non-aggression principle exclusively (Walter Block), those who support the utilitarian/economic arguments exclusively (David D. Friedman), and those who support both (Rothbard).

 

I've been saying for some time justifying everything because it helps the poor just doesn't cut it.

https://www.youtube.com/watch?v=lZlw5IkVhqk

Edited by Peter Morris
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I was surprised at the author's view of the 'genesis' of property rights , along with rights in general. In another blog post he discusses various contexts in which rights should be viewed the most fundamental being 'inborn rights'. The comment section of that blog post is worth the read.

 

I am somewhat confused as there seems to be no difference between the Libertarian Party and the libertarian school of thought  or movement at least in the article. Do people who identify as libertarian mean both always?

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Tad Jones, the difference, if any, with any political party and the voters who support it is that voters are not allowed in the closed rooms, the committees, and do not have to run for elections or re-elections. While I'm not sure this addresses your question, the libertarian movement has been one of shared hope, rather than success at the polls.

 

Politics makes strange bedfellows, and the Libertarian Party has never had much success, and I can guess this has been largely due to the fact that its candidates don't go to bed with the right strangers. Or perhaps they're not that good in bed with the right strangers. Either way, the lack of popularity for Libertarians has less to do with lack of good ideas, and more to do with media apathy. After finishing the article by John McCaskey, I am concerned about the only political party in the United States that champions laissez-faire capitalism. The article offers no indication of changing their position toward capitalism, only their degree of tolerance toward state controls and transfer programs. While this is no small matter, I did think McCaskey's inclusion of Ayn Rand as a libertarian was inaccurate to say the least. She often chastised libertarians for their lack of a definitive convictions. If it is true, that the Libertarian Party is adapting the notion that capitalism is necessary for the purpose of providing the means for the social safety-net, then perhaps there is cause for re-thinking within the party, or without. Rational arguments alone are not enough to win elections. Now, it may be that rational arguments may have to be found from some other source. If Libertarian leaders are certain that this "welfare friendly" approach will engender broader support, I would argue that it might not be the end of my support for their candidates. It is better to abandon corporate welfare before abandoning social welfare. Both are evil. But the greater evil is transferring huge amounts of tax moneys to "losing" corporations at the expense of successful corporations and people. And it would be unrealistic to arbitrarily end all social welfare programs, such as SSI. A program for phasing out such programs would need careful planning, gradually executed over generations.

 

While politics in general is a dirty affair, this nation, the United States, could benefit from rational explanations to complex economic matters. Any political party is mistrusted, especially after they've become funded to the levels the two primary parties are. I hold out hope for a spokes-person that holds Objectivist principles, and possesses the talent required to deliver those principles to the masses, to take on all challengers in the arena of entertainment, that is, television and all of the new technologies of mass communication. The real challenge is to sell the idea of "liberty" to the American public.

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What percentage of total tax revenue would you estimate is transferred to corporations?

 

http://object.cato.org/sites/cato.org/files/pubs/pdf/pa592.pdf

 

That's a 2007 Cato study which puts the number at $92 billion, out of $2.7 trillion revenue, or 3.6%.

 

I agree with the study's methodology and definition of "corporate welfare" with the exception of the inclusion of government contracting. But contracting looks like a pretty small portion of the total. I like that it does not count tax breaks as corporate welfare.

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I agree with the study's methodology and definition of "corporate welfare" with the exception of the inclusion of government contracting.

Since owners of corporations are subject to double-taxation -- once when their corp makes a profit, and once when they cash out by selling or by receiving dividends -- shouldn't the entire corporate tax be subtracted from this $92 billion?

The total federal spending is over $3,000 billion. Even if one takes out social-security and medicare, it is still over a trillion. Food stamps alone cost about $76 billion.

On balance, so called corporate subsidies are small. I suspect places like CATO like to go after them because it is good political sell for the small guy to be going after the big guy. Doesn't look half as good when they say: cut food stamps by 5% and all hell breaks loose!

"Corporate subsidy" and "crony capitalism" are just ways in which libertarians misdirect their focus to the wrong issue, and help the "occupy Wall St." types.

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Repairman

Would you call yourself a Libertarian or libertarian ?

Do you recognize an integrated libertarian school of thought (philosophy)?

Or do you agree with certain planks in their political platform, and therefore see their candidates as worthy of support?

Edited by tadmjones
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Since owners of corporations are subject to double-taxation -- once when their corp makes a profit, and once when they cash out by selling or by receiving dividends -- shouldn't the entire corporate tax be subtracted from this $92 billion?

I suppose the subtraction should be done for each corporation individually, and if corporation A received more than it paid in through the years, then that difference should be counted as corporate welfare. I imagine that way the end result would be a very small number. Basically, the only companies that would end up as net recipients of tax money are the various green startups.
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Since owners of corporations are subject to double-taxation -- once when their corp makes a profit, and once when they cash out by selling or by receiving dividends -- shouldn't the entire corporate tax be subtracted from this $92 billion?

The total federal spending is over $3,000 billion. Even if one takes out social-security and medicare, it is still over a trillion. Food stamps alone cost about $76 billion.

On balance, so called corporate subsidies are small. I suspect places like CATO like to go after them because it is good political sell for the small guy to be going after the big guy. Doesn't look half as good when they say: cut food stamps by 5% and all hell breaks loose!

"Corporate subsidy" and "crony capitalism" are just ways in which libertarians misdirect their focus to the wrong issue, and help the "occupy Wall St." types.

 

To be fair, corporate subsidies and tax breaks pose a significant threat because of the market distortions they create. Even if corporate taxes are immoral and counterproductive, having some companies pay more than others as a percentage of profits creates many more ill effects. Same with the relatively paltry sum of subsidies. $92 billion isn't much for the US federal government, but it's a hell of a lot for any corporation.

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To be fair, corporate subsidies and tax breaks pose a significant threat because of the market distortions they create. Even if corporate taxes are immoral and counterproductive, having some companies pay more than others as a percentage of profits creates many more ill effects. Same with the relatively paltry sum of subsidies. $92 billion isn't much for the US federal government, but it's a hell of a lot for any corporation.

It is absurd to blame the recipients of tax breaks for the ill effects of government activity. If I get a tax break (through whatever means, bribes, political horse trading, whatever), I am simply fighting to exercise a right. If my competitor can't do that, then his higher taxes will cause him to fail.

But am I really causing my competitor to be deprived of his rights, by securing mine? Doesn't it seem absurd to blame me for that?

So, you have to ask yourself, who is causing my competitor to fail? The answer is, whoever saw fit to tax him. Whoever gave their vote to the politicians in charge, in exchange for the handouts that tax got them. And that whoever isn't other corporations.

P.S. In fact, it is absurd to blame the tax breaks themselves (and the politicians who pass those tax breaks) for those ill effects too. All else being equal, a tax break will always have a positive effect (no matter what the reason for it, bribery, political horse trading, whatever), because it allows someone who earned that money to keep it.

And, when all else is not equal, then you should probably look for those other things that aren't equal, to cast blame for the ill effects on. (those other things are, usually, tax hikes on others, caused by the demand for handouts - handouts not to corporations, but to the general population)

Edited by Nicky
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Nicky, I would hardly call a 'tax break' a 'right', regardless of how it was pulled. At best, this is a misuse of the concept "right". Certainly it is taking advantage of the legalese set up by the legislature, but still it is a departure from the moral principle which guides man in a social setting.

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I thought of an example, for the above point I made. Let's say a European country (where there's a 20% VAT), decides to exempt one supermarket chain from it (because the owner of that supermarket has some dirty pictures of the President's wife).

At this point, I assume you would say that would be horrible, the ill effects would be unbearable. But, would they? Let's see what would happen: This supermarket chain would drop its prices by 20%, buy out the competition, and the general population would end up paying 20% off on everything.

I'd say that's a huge plus. On the downside, this supermarket chain is now in a position to start being an asshole to its customers (raise prices, neglect stocking the shelves, etc.). But, just how much of an asshole? The answer is, whatever that 20% off buys them. No more than that. As soon as they they raise prices by 20%, the competition is back in business.

So where are the ill effects? Who's suffering, aside from the government bureaucracy, which is now deprived of a large chunk of its usual revenue?

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Nicky, I would hardly call a 'tax break' a 'right', regardless of how it was pulled. At best, this is a misuse of the concept "right". Certainly it is taking advantage of the legalese set up by the legislature, but still it is a departure from the moral principle which guides man in a social setting.

A business keeping its profits is a departure from the moral principle of individual rights?
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A business keeping its profits is a departure from the moral principle of individual rights?

A business keeping its profits is not a departure for the moral principle of individual rights. The method, by having to appeal to government largess to do so, is. 

 

Granted, when a government sets such guidelines up in order to do so encourages such practice, but this misdirects the focus away from the fundamental purpose of government.

 

Edited: previous

 

Granted, from the rest of your points brought forth in post 13 & post 15, we are both alluding to something similar, but the wording I took issue with, I believe, separates it from the overall context.

Edited by dream_weaver
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Repairman

Would you call yourself a Libertarian or libertarian ?

I would call myself an independent voter, one who prefers a minimalist government. By what ever a party calls itself is of little concern. I've read John Hosper's basic statement; it includes much of what Ayn Rand wrote regarding the proper role of government.

 

I am not an accountant, nor a federal policy wonk. I have enough trouble filing for my own tax refund every year. My basic argument is not about tax codes or transfers of wealth, but to the matter of informing a nation of the moral violations of the current policies of the welfare-state. I take for granted the two parties in power share credit and blame for circumstances that result in our taxation. If the current status of affairs in this country is satisfactory to you, keep your Republicans and Democrats.

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"Tax break" is a fuzzy term. I doubt it is possible to define it. 

For instance, when I file my personal income taxes, my wage income already excludes some $1,000 a year that I put into a "Health care Flex account". It excludes the amount I put into my company's 401-K savings plan. It excludes the money my company pays directly to a health-insurance company on my behalf. Already, on the first line of my tax form, I've got three tax breaks. 

When I come to interest earned, the amount I earn on municipal bonds is exempt from federal income tax. My dividends are taxed at a rate that is different from other income. My investment income is broken into two parts: short-term gains and long-term gains, and I get a break on the long-term gains. The interest I pay on my mortgage and on student loans, gets  me a deduction. The fact that I support a child gets me another deduction. My charitable donations earn me a deduction. By the time I'm done, I've already got about 10 tax-breaks.

"Tax breaks" are just part of the network of tax-rules. If the government says "if you have a kid you can pay $1000 less", it is no different from saying "if you do not have a kid, you have to pay $1000 extra tax". The baseline/benchmark is arbitrary to start with: tax-breaks are indistinguishable from tax-rules. 

When the government says "businesses that invest in solar will pay a lower rate on that income", it is no different from saying "people who earn on an investment held for more than a year, will pay a lower rate on that income".

 

BTW: The CATO study linked above does not include tax-breaks in its computations. In that study, the biggest category of corporate welfare is "farm subsidies" (I guess most farms are run as corporations).

Edited by softwareNerd
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Repairman

Cynical,or not I think the major parties and their politicians have figured out the best way to succeed at being in office is to ensure one or the other party is the problem and they are the solution and that works because the majority of the voting public decide on that premise.

They are not my Republicans or Democrats, the are our statists ,if only of varying degrees. I doubt political change will drive philosophic or cultural change. The culture will have to rediscover the ideas of individual rights and what recognition and protection of those rights entails.

Edited by tadmjones
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I am not an accountant, nor a federal policy wonk. I have enough trouble filing for my own tax refund every year. My basic argument is not about tax codes or transfers of wealth, but to the matter of informing a nation of the moral violations of the current policies of the welfare-state.

Just because you attempt to inform people of the moral aspects of government policy, doesn't mean you don't first have to KNOW HOW THE GOVERNMENT WORKS.

Otherwise, you end up saying things like "corporate welfare is the biggest evil", when it turns out it's only a tiny percentage of government spending.

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Nicky, the forcible transfers of wealth from one entity to another is evil. And I referred to it as "the greater evil," not the "biggest evil." We can both think of evils greater than theft. Is it more evil than upholding the terms of law, such as Social Security Insurance? The people have spoken on that, if that is the measure of morality, which I don't believe it is. Given this nation's current state of affairs, is this how you believe government ought to work?

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Nicky, the forcible transfers of wealth from one entity to another is evil. And I referred to it as "the greater evil," not the "biggest evil." We can both think of evils greater than theft. Is it more evil than upholding the terms of law, such as Social Security Insurance? The people have spoken on that, if that is the measure of morality, which I don't believe it is. Given this nation's current state of affairs, is this how you believe government ought to work?

I believe the people who try to improve the government should know the facts and evaluate them rationally. Otherwise, they're doing more harm than good.

Libertarians who place the blame for out of control government on corporate welfare or crony-ism don't, and as a result end up helping the cause of the Marxists who are creating the problem.

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Repairman

Cynical,or not I think the major parties and their politicians have figured out the best way to succeed at being in office is to ensure one or the other party is the problem and they are the solution and that works because the majority of the voting public decide on that premise.

They are not my Republicans or Democrats, the are our statists ,if only of varying degrees. I doubt political change will drive philosophic or cultural change. The culture will have to rediscover the ideas of individual rights and what recognition and protection of those rights entails.

Let me see if I have this straight: our elected officials are serving us best by "being in office, to ensure one or the other party is the problem." And then, "they are the solution and that works because the majority of the voting public decide on that premise." Based on what evidence do you contend that "that works"? What is it that works? Government? 

To be certain, politicians will not change our national cultural or philosophical norms. And if Libertarian leaders cannot stay true to a laissez-faire capitalist agenda, there is no reason to openly support them. I would defend their attempts to direct the national discourse toward a more capitalist system. But how can you defend the Republican or Democrats? Merely because they have "figured out the best way at being in office"?

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I believe the people who try to improve the government should know the facts and evaluate them rationally. Otherwise, they're doing more harm than good.

Libertarians who place the blame for out of control government on corporate welfare or crony-ism don't, and as a result end up helping the cause of the Marxists who are creating the problem.

Give me one example of when this actually happened?

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