“Other People’s Money”

I’ve been listening to the Republican Presidential candidates invoke the phrase “other people’s money” as an indirect attack on social spending.  The idea is that food stamp programs, welfare assistance programs, medical assistance programs, and the like are theft.  They involve the government taking resources (by threat of force) from successful people and giving it to other, generally undeserving, people.

On second thought, that sounds more like "robbery" than simple "theft," but I digress.

For rhetorical and psychological effect, the undeserving recipients are usually depicted as dark skinned - or “blah” people if you trust former Senator Rick Santorum.  But that (false) claim is ancillary to the logic of their main argument.  Their basic point is that whatever you acquire within a free market system, using your own talents, skills, resources, and so forth, is yours, provided that you did not engage in coercion or fraud when acquiring it.  Taxing high earners to provide resources for the less fortunate is theft, pure and simple.

Republicans also argue that social spending is counter-productive because it creates dependency and other moral hazards.  But when push comes to shove – i.e., when it can be demonstrably demonstrated that social spending has a positive effect on the needy and/or everyone else, “theft” is the fall back argument.

The “social spending is theft” conclusion rests on the libertarian premise that, absent coercion or fraud, individuals have an absolute property right to everything they acquire within a voluntary market system.  Of course, most libertarians concede that some government spending via coercive taxation is permissible.  But only spending for things that are necessary for a market economy –infrastructure and defense are good examples.  Spending to improve the lives and opportunities of the needy, or their children, is theft.  Such spending is, in the words of Mitt Romney, Newt Gingrich, and Rick Santorum, the government forcefully taking “other people’s money” and giving to someone else.

What to make of this?  Well, for starters, the libertarian premise itself rests on an even deeper premise.  That deeper premise is that a voluntary free market system that effectively protects participants from fraud or coercion is just.  Put another way, for libertarians, there are only two prerequisites for a just social system – the absence of coercion and fraud.

This is known as a “rights” based theory of justice.  The idea is that (1) justice exists so long as no individual’s rights are violated; and (2) in a market system free of coercion and fraud, no individual’s rights are violated.  This means that any pattern of holdings emerging from transactions conducted within a voluntary market system free of coercion and fraud are just.

And, if I hold what I hold justly, I have a property right to my holdings.  No one, including the government, may seize my holdings by force, even if the purpose for such seizure is benevolent and wise (which it probably isn’t anyway).

In coming posts, I will examine this deeper premise.  I will argue that it is a theory of justice that most people, when they give the matter adequate thought, will reject.  I will also attempt to describe the best competing alternative to the rights based theory of justice – a theory developed by the late John Rawls known as “justice as fairness.”

However, in what remains of this post, I want to illustrate why all of us should be highly suspicious of the rights based theory of justice without recourse to a complicated moral argument – I want to do this with a story.

I have friends (a married couple) who adopted a baby girl.  Baby girl was born severely premature due to her birth mother’s drug use.  Baby girl required several weeks of intensive hospital care just to keep her alive – but keep her alive it did!  Baby girl is now a healthy young girl who can expect to live a long productive life and provide joy and love to her adopted family for many years to come.

Great story huh?  But who paid for the several weeks of intensive hospital care?  I don’t know what the final hospital bill was, but I recently racked up a $30,000.00 medical bill for a four-day stay in the hospital for a ruptured appendix.  I’m sure her bill was substantially larger – several hundred thousand dollars at a minimum.  I know her birth mother didn’t pay for the care – she had zero financial resources.  I also know that her adoptive parents didn’t pay for the care – her adoption was not finalized until after the hospitalization, so she was not covered by her adoptive parents’ medical insurance.

The corporation that owned the hospital might have paid for the care, but that is unlikely.  Any medical corporation that routinely gave away its care would become bankrupt in short order.  Nor am I aware of any charity stepping in to ease the burden.

The fact is none of these parties paid for her care.  Her care was almost certainly paid for with “other people’s money.”

Imagine that!  Our government seized “other peoples' money” and gave it to Baby girl to save her life.  And she wasn’t even a “blah” person.

Oh my God!  Call the Republicans immediately!  Let’s have another debate!

Joe H.