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Charity or Theft

Consider two people, Alice and Bob, with similar incomes but different spending patterns. Let's assume Alice has a long commute to work and needs to spend $100/mo. on gasoline compared to Bob's $50/mo. For Bob, let's assume that he comes from a large family widely dispersed across the country, so to keep in touch with them he needs to spend $100/mo. on telephone services compared to Alice's $50/mo. Each person's combined spending for transportation and telecommunication is $150/mo.

Now let's consider socializing those two industries. The revenue side is simple: $150/mo. from each of Alice and Bob, or $300/mo. total. The distribution side is where things get interesting.

First imagine an egalitarian solution where both Alice and Bob get the same quantity of each good. If the government set its policy based on Alice's preferences, Alice would be happy but Bob would have too much gasoline and too little phone time. The opposite would happen if it used Bob's preferences. If the government tried to be "fair" by weighing everyone's preferences equally, it would supply $75/mo. worth of each good to both people — and neither would be happy! Alice wouldn't have enough gasoline and would have too much phone time, and Bob would have too much gasoline and too little phone time.

As long as people have different spending preferences, a purely egalitarian approach will not be satisfying.

Now let's imagine the government trying to adapt the quantity of goods according to individual preferences. Now we come up against the problem that peoples' desires are effectively infinite. Alice may wish to consume $100/mo. worth of telephone services, just like Bob, but also keep her job that requires her to consume $100/mo. worth of gasoline to commute. She wants to consume more than she contributed to the system.

The government only has $300/mo. to spend on Alice's and Bob's combined gasoline and communication. It can't fulfill Alice's wish (no matter how passionately argued) to have $100/mo. worth of gasoline and $100/mo. of telephone service while also providing Bob with $150/mo. worth of goods. It doesn't have $350 to spend, it only has $300. In order to give Alice more, the government must give Bob less.

This turns Alice and Bob into adversaries. Instead of having the right to spend what they've earned, now they are entitled to have whatever they need. And who's to say what they need? Not Alice or Bob: they can't be trusted to objectively assess each others' needs — they're adversaries in a zero-sum situation. The government will have to mediate. Politicians will decide what's a legitimate need and what's merely a desire that can be denied. Decisions about consumption cannot be left up to the consumers.

And people will take advantage of the politicians' rules. Chad is new to town. He makes the same money as Alice and Bob and contributes $150/mo. just like they do. But he understands that the government will take care of his needs, and this affects his decisions. He could live downtown near Bob… but he'd rather live way out in the exurbs, even farther away than Alice. Transportation to work is most assuredly a "need", so the government will pay $150/mo. for the gasoline he needs to commute. And at least a modest amount of telephone service (say $25/mo.) is certainly a "need", too. The government wouldn't let him go completely without it. Now Chad is enjoying the open spaces of the exurbs and receiving $175/mo. in benefits while paying only $150/mo. in taxes. Where did the extra $25/mo. come from? Why, from Bob, of course — surely he doesn't need to talk to his far-flung family so often. He can get by on only $75/mo. worth of telephone service. Isn't it more important that Chad be able to get to work? Won't everyone agree? Except Bob, of course — but he's a selfish bastard, only protesting because he's a net loser in the system. But that's a feature, not a bug: the system is supposed to distribute wealth towards the people who need it most! We've long since forgotten that Chad's large need is a result of a choice he made that was influenced by the incentives created by the government's system.

The situation of Chad is an unfortunate consequence of the real goal of the system: to help people like Dave, a poor man with a small income, who needed help even before the system was created. Dave wasn't responding to the system's perverse incentives. Dave isn't guilty of anything. He's the person we wanted to help — and now we can help him, albeit at Alice, Bob, and Chad's expense.

But what have we done in order to help Dave? We have turned Chad into a moocher while turning Alice, Bob, Chad, and Dave into adversaries. We have removed their ability to make their own consumption decisions, substituting instead the distant judgment of someone who has no direct knowledge of their lives. We have taken from three in order to give to one.

Was it worth it? What if, instead, those who were concerned with Dave gave him money voluntarily? Or gave it to a charity, which would in turn help Dave and others like him?

Then we would not turn Chad into a moocher — he would decide to live closer to the city, so that his income matched his expenditures. We would not turn Alice, Bob, Chad, and Dave into adversaries. Alice, Bob, and Chad would retain control over their consumption decisions. So would Dave, although the choices available to him may depend on the amount given to charity.

Would there be enough donations to help Dave? If the legislation to create the program had enough votes to pass, those concerned with Dave would seem to be in the majority. Would he get less help than under the government program? Perhaps, although this is uncertain. (We have to consider how much could be saved by not encouraging people like Chad to become moochers.)

The most significant difference is a moral one: Gifts to charity are voluntary. Taxes are forced. I recoil at forcing people to do things. If they won't do something voluntarily, it's because they have a reason not to! Overriding their judgment is a very serious matter. To do it is to assert that their judgment is wrong, that that their goals are inferior to yours, and that you have the right to assert your preferences over theirs.

If Ed wants to buy a dress for his girlfriend, I'm not going to force him to give that money to the homeless instead. I wish we would all grant each other the same respect.

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