Jean-Jacques Rousseau famously wrote:
In order then that the social compact may not be an empty formula, it tacitly includes the undertaking, which alone can give force to the rest, that whoever refuses to obey the general will shall be compelled to do so by the whole body.
And thus were sowed the seeds of the modern welfare state. FDR revived it under the banner of the "The New Deal". Australia's only sacked Prime Minister, Gough Whitlam, sold "It's Time" for universal welfare to the Australian public. And now Kevin Rudd, a man known for his control freak tendencies, is peddling Mussolini-lite feel-good, nanny-state policies. Examples here, here, here, here, here, here, here and of course here (almost within the first six months of a three year term). Anyone feel like a Change?
Well, Messers Sauders, Humphreys, Dubossarsky and Samild ride to the rescue and provide us a contemporary revision of Rousseau's old dictum: choose to be free. Through a confluence of classic liberal and obscure libertarian ideas, they succeed in fashioning a prototype post modern welfare state. Their suggestions are well reasoned albeit controversial.
Their paper is separated into two parts: Declaring Independence written by John Humphreys and Declaring Dependence written by Eugene Dubossarsky and Stephen Samild. An (long) overview is provided by Peter Saunders.
Humphreys' primary contention is that rather than have governments legislate and "bill" its citizenry, the government should "empower" its citizenry to declare Self-Sufficiency. He proposes that all government services should be means tested. The issues associated with implementing this would be remedied by government services being assigned a market value, the legislation of tax-free compulsory savings plan and tax cuts that would cover the high effective marginal tax rates for people coming off welfare. This would effectively force much of middle and middle-to-upper class Australia off welfare.
However, I contend that Humphreys' proposals would have greater force when coupled with a radical simplification of the tax system. Were the income withholding tax scrapped, struggling families would be incentivised to increase their income by finding a second job. Were the tax-free threshold significantly increased, aspects of the high effective marginal tax rates would be resolved with some compensation in place for lower income families. This compensation would be necessary to shield them from the impact of a flattening of income tax rates and an increase in the consumption tax. The latter would serve to encourage higher income earners to set aside more than the minimum compulsory savings, given their higher propensity to save (Economics 101). And whilst I am beating the tax reform drum, the flat income tax rate should be inflation-indexed on a well-specified and regular basis.
Humphreys' second contention is boilerplate libertarian spiel. If a Self-Sufficient has consistently demonstrated their ability to live responsibly, independent of government support, then they should be able to declare independence. They would be immune to violations of nanny state regulations such as seat-belt laws and be able to get away with crimes the author deems to be "victimless". The problem with this of course, is the definition of a "victimless" crime. It isn't always clear that the liberties these self-declared Independents would regain are "victimless". The author doesn't appear to acknowledge this ambiguity.
The second part of this paper is titled "Declaring Dependence" and looks at the flip side of Humphrey's work. Dubossarsky & Samild contend that a condition of receiving welfare is the an individual choosing to declare dependence. And in so doing, Dubossarsky and Samild argue they should lose their right to vote. The disenfranchisement of Dependents would serve a few purposes:
- Short circuit what the authors call the "self-enlarging state"; and
- Provide further incentive, should the Dependent value their enfranchisement enough, to work toward self-sufficiency.
We would cease to hear the pre-election whining of "pork-barrelling" because government would now longer have an incentive to buy their way to victory from the communal purse. Whilst Dependents would lose their right to vote, they would of course fully retain their rights of free speech. And as the authors note, it is inevitable that interest groups would be developed that would amplify the voice of the disenfranchised, particularly in a sympathetic media. The authors argue that although this proposal (choosing welfare comes with a non-material cost) appears radical, it is in fact supported by strong proponents of expansive enfranchisement such as classic liberal thinker, John Stuart Mills.
For many years, public policy has lacked a coherent framework with political leaders creating half-baked policies such as the first-home owners grant, the private health insurance rebate and childcare support. This paper spearheads an effort to redress this imbalance by providing brave politicians with the prototype of a post welfare state.
And it will require a smart and brave politician to understand the proposals and argue their merits to a sceptical public. Indeed, on reading this paper, particularly the second, I felt a deep unease with the proposals. It is controversial given that the starting point is rooting out our pervasive egalitarian culture and replacing it with a more elitist model. When even I, a lifelong conservative/libertarian, find some proposals difficult to digest, it suggests a level of radicalism (or perhaps retrogressiveness) that requires acknowledgement. And this introduces, even to the brave public servant, political intractability. It will require a few politicians with the rare combination of having true commitment to the long-term good of those whom he serves and the ability to confront instinctive public scepticism with reason and good argument.
In the end however, liberty is something that is shared both by the right and the left of politics. Witness the likes of Belinda Carlisle: