Reflections on the Caplan-Bruenig Poverty Debate

Last month, Econoboi hosted a debate on poverty between myself and Matt Bruenig. Here are my reflections on that debate.

1. I was pleasantly surprised by Bruenig’s openness to most of my proposed supply-side reforms. He wasn’t just pro-immigration, but also pro-deregulation of housing and pro-nuclear. He was happy to admit that these policies aren’t just good overall, but especially good for the poor.

2. Indeed, almost all of his objections to my supply-side policies were purely semantic. Perhaps because he identifies as a socialist, he didn’t want to call my favorite free-market policies reforms “free-market policy reforms.”

3. Indeed, I struggled to get Bruenig to admit that sufficiently strict regulation is equivalent to explicit government ownership. If government won’t let you build anything on your land, for example, I say that government effectively owns the land already. If the government only allows you to build 10% as many houses as you want, the government effectively owns 90% of your land. Etc.

4. At one point in the debate, Bruenig grants that socialism is a continuum. Which allows me to ask, “If full socialism is at one end of the continuum, what’s at the other end?” The obvious answer is something like “laissez-faire capitalism,” but after pushing Bruenig very hard, I don’t feel like I got an answer.

5. Bruenig’s strongest challenge to me: Why not do my favorite supply-side reforms AND support a large welfare state? My response was poorly organized, so let me try again here.

   1. Supply-side reforms don’t just alleviate poverty; they clearly have fantastic overall benefits, enriching humanity by trillions of dollars. So it makes sense to prioritize them, both rhetorically and practically. When there are incredible opportunities to unleash production, redistribution is a distraction.

   2. Distraction aside, actual redistribution is extremely wasteful. Why? Because so much of it is universal — “taxing everyone to help everyone.” At best, universal programs help the poor at very high cost.

   3. I’m happy to admit that means-tested programs are much less wasteful than universal programs. And short-run estimates of the disincentive effects of means-tested programs are usually modest. So if “helping the domestic poor” is your overriding priority, Bruenig’s support for more redistribution is at least defensible.

   4. I suspect that disincentives are much larger in the long-run. Social scientists lack good ways to measure long-run effects, but the correct reaction is to rely on common sense, not say “I assume these effects are zero until social science proves they’re real.” And common sense says that long-run effects of redistribution are large. Furthermore, per my infamous article with Scott Beaulier, it’s plausible that these long-run effects ultimately make the welfare state bad even for the domestic poor.

   5. But why are we focusing on the domestic poor anyway? Fact: Allowing low-skilled immigration is by far the most cost-effective way to alleviate poverty —and all of the countries most open to low-skilled immigration (the Gulf monarchies plus Singapore) heavily restrict access to the welfare state. Part of the reason, of course, is that people don’t like helping outgroups. But the main reason is that even the richest countries in the world literally can’t afford to give First World benefits to all the people likely to migrate.

   6. Upshot: Since First World countries don’t heavily restrict immigrants’ access to the welfare state, the welfare state really is bad for the poor on balance. Without the welfare state, resistance to immigration would be markedly lower, so immigration would be markedly higher. The most defensible position for Bruenig would be to advocate higher benefits for natives combined with reduced eligibility for the foreign-born. Awkward, but defensible.

6. Our most time-consuming disagreement was on the morality of property itself. I hold to the common-sense view that the welfare state is forced charity. Bruenig, in contrast, denies that anyone is morally entitled to earnings based on what he calls “factor payments.” So while it might appear that the government is forcing me to help total strangers, the moral reality is that the taxes I pay were never really mine to begin with.

7. Why does Bruenig think this? To start, he’s a vocal fan of John Rawls, and this is textbook Rawls.

   It seems to be one of the fixed-point of our considered judgments that no one deserves his place in the distribution of native endowments, any more than one deserves one’s initial starting place in society. The assertion that a man deserves the superior character that enables him to make the effort to cultivate his abilities is equally problematic; for his character depends in large part upon fortunate family and social circumstances for which he can claim no credit. The notion of desert seems not to apply to these cases. Thus the more advantaged representative man cannot say that he deserves and therefore has a right to a scheme of cooperation in which he is permitted to acquire benefits in ways that do not contribute to the welfare of others. (John Rawls, A Theory of Justice)

8. But Bruenig also gave two more specific arguments against the justice of private property.

   1. To justly own something, you’d have to create whatever raw materials you used. But no one can create raw materials, so no one justly owns anything.

   2. To justly own something, its value would have to be independent of the rest of society. But nothing’s value is independent of the rest of society, so no one justly owns anything.

9. I objected that these are unreasonably high standards. Suppose I land on a desert island, find some raw materials, and build a house. Why isn’t that sufficient for me to claim just ownership of the house? Similarly, suppose some new people arrive on the island, and they’re willing to pay a high price to rent my house. Why does the fact that I greatly benefit from their arrival morally undermine my ownership of my house?

10. Rawls would not morally distinguish between ownership of your person and ownership of other property. But Bruenig sometimes seemed to accept the Georgist idea that your human capital is morally very different from other possessions.

11. However, both of Bruenig’s objections to ownership apply equally well to human capital. You didn’t create your own body, did you? And the value of your labor is hardly independent of the rest of society, is it? Yes, you can accept the legitimacy of self-ownership but not other property. But if you reject the ownership of other property on the basis of Bruenig’s arguments, you also have to reject self-ownership as well. Which does indeed imply, for example, that the common-sense view of murder and rape is incorrect. If society needs your body, you can’t legitimately say, “It’s my body,” because you were never morally entitled to your body in the first place.

12. Even though Bruenig had a lot of common ground, the debate confirmed my pessimism about practical cooperation between libertarians and the left. On a core emotional level, the left is anti-market. Even when they admit that some kinds of deregulation or privatization would have great virtues, they’re not excited by these virtues. What excites them, sadly, is demonizing business and the rich — then making them suffer for their supposed sins.

13. At the end of the debate, I forgot to recommend Mike Huemer’s The Problem of Political Authority. I should have!