Author: John Quiggin

Not going Galt — Crooked Timber

John Quiggin39 Comments

Henry’s post linking to Charlie Stross reminded me of one I was planning to do on the question – why has there never been a serious attempt at a real libertarian utopia? Most other utopian ideologies have inspired at least someone to attempt a practical implementation. On the face of it, libertarianism seems ideally suited to the belief in a fresh start, with no messy pre-existing claims. All sorts of ideas have been floated – island buyouts, sea-steading, co-ordinated moves to New Hampshire and so on, but none has gone anywhere. The only explanation I’ve seen, that libertarians are too independent and ornery to organise a utopia doesn’t convince me.

Thinking about the discussion we had though, it strikes me that there is a simple explanation: Actually Existing Libertarianism (see below) offers a better economic deal for nearly all libertarians than any feasible version of Galt’s Gulch. Once you do the math on going Galt, it’s not hard to see why no self-respecting libertarian would actually do it.

Let’s start with our oppressed libertarian, paying a 50 per cent tax rate, and waiting every year for Tax Freedom Day (July 1). Say that half this money is spent (highly inefficiently) on public services and the rest is given to the undeserving poor, bureaucrats and so on. I’ll make him (gender assumed advisedly) a computer programmer, so he can continue to earn his living from the comfort of his cruise ship, island or whatever. So, immediately he makes the break for Libertopia (island, ship or whatever), his disposable income doubles.

But then the problems start. The state may not do a great job providing services of all kinds, but those services have to be replaced. Libertopia doesn’t sound like a very appealing place for schoolteachers, nurses, and so on, so most public services would probably have to be supplied by external contractor. The cost of that would wipe out any savings from eliminating government inefficiency. So, the net gain in disposable income falls to 50 per cent.

More generally, you have the Stross problem. Suppose a starting population of 10 000. That’s too small to provide more than basic goods and services, so everything else would have to be imported in small quantities. As everyone who has spent time on an island (even one close to the mainland), or a small remote community, knows, that means everything costs more (often double) and most things aren’t available at all. Even if all the registered Libertarians in the US (about 250 000) moved en masse they would still be heavily dependent on high-cost imports. Almost certainly, that would more than wipe out the gain from tax freedom.

Finally, while our hero would never become disabled or unemployed, it’s bound to happen to some people. That means either budgeting for organised charity or putting up with lots of beggars. Randians might appreciate this daily testimony to their own superiority, but I suspect others would prefer that these losers move elsewhere.

All things considered, it seems pretty clear that Libertopia would yield its residents a greatly reduced standard of living, compared to what they could get from a government. Of course, the ideal would be a nearby government jurisdiction that would provide the large-scale industry needed for a ready source of consumer goods, a home for contracted-in service providers, support for losers and so on, but would not be able to tax the Libertopians.

But once you think that you realise that a partial approach to this outcome already exists, and has millions of inhabitants across the US. They’re called suburban Republicans. The suburbs benefit from urban centers, but resist paying for them, mostly successfully. It’s not exactly Libertopia, but it’s obviously close enough to be more appealing than going Galt.

via crookedtimber.org

Doing the math on Libertopia

Posted via email from John’s posterous

Abbott adrift

John Quiggin85 Comments

Tony Abbott got away with his howler on the effects of carbon taxes on electricity prices. But, in a piece of poetic justice, he’s now been tripped up by his ignorance of the technical issues underlying his broadband policy, not nearly as bad a piece of intellectual laziness, in my view, but enough to cement the (correct) impression that he is not across the details of key policy issues. To be fair, he doesn’t pretend to be: he offers simplistic slogans to the voters because that’s all he is capable of understanding. In the US, such self-confessed ignorance is a pre-requisite for political success, at least on the right. It seems we are heading the same way.

Effective advertising

John Quiggin41 Comments

It’s often debated whether advertising in general, and political advertising in particular, is effective. I can say that the Liberal Party’s TV ads have been effective in ensuring that Liberal candidates will receive my coveted last preference. Of course, the ads aren’t aimed at me, so I just have to hope that the average Australian is not the bigoted fool the Liberal campaign supposes. And, of course, things would be a lot easier if Labor were aiming for something more than my second-last preference.

Population: Numbers and faces

John Quiggin79 Comments

The question of Australia’s population is finally a matter of serious debate, after years of being settled by default and deceit[1]. As this surprisingly reasonable piece from Chris Berg of the IPA points out, even the Greens, who have generally been willing to “present clear policy where Labor and the Coalition just waffle”, have found this difficult to handle. Berg observes that the Greens are torn between general sympathy for those wanting to migrate and environmental concerns about the implications of population growth.

For Berg, a Big Australia advocate, the issue is simple. Environmental issues can always be fixed by economic growth and “high immigration … has been the fuel of the Australian economy for two centuries.” Implicitly, Berg asserts that more immigration will make current Australian residents better off. The problem, as Ross Gittins points out is that this generally isn’t true. Increased immigration doesn’t raise average income for those already here, and the need for lots of new infrastructure creates all kinds of economic and social stresses. Of course, the costs are even greater in the case of natural increase – Peter Costello’s fatuous suggestion that couples should have an extra child for the sake of the country was a prime illustration of his lack of any economic understanding, despite a dozen years as Treasurer.

So, there is no getting around the dilemma described by Berg. Considered in terms of aggregate numbers, we would be better off, economically, socially and environmentally, with a slower rate of population growth. But potential immigrants aren’t just numbers. They are people with a variety of good reasons for wanting to come here (to reunite with family members, or to take up a job to escape from persecution or just to get a better life). Refusing them admission hurts them as well as those in Australia (relatives, potential colleagues and employers, those who feel a moral obligation to help refugees) who want to welcome them here. There is no easy answer to this question, and the wishful thinking displayed by advocates of a Big Australia does not help to resolve it.

fn1. The most prominent example being the Howard government’s policy of ramping up immigration while playing on racist fears in relation to boat people. Under Abbott, the conservatives are at least consistently anti-immigrant. That makes them less dishonest, if no less ugly.