Sunday, January 23, 2011

Winners and Losers

In any social order many people will be unsatisfied with their possessions and status. The fact that their situations don't measure up to their expectations may be due to lack of effort or ability, or to mere bad luck, but in some cases they will with some justification blame the social order itself: they could easily imagine some other order in which their talents and abilities are more valued, and this other order will likely seem "better" to them, not merely because they would benefit personally, but because people tend to come to the attitude that whatever they excel at is in some sense important, and if the world does not value it, the world is somehow defective.

Consider a libertarian conception of how the world ought to be, in which an individual is entitled to what he makes himself, what he is given, and what he receives in a freely agreed to contract, and in which there is no restriction on production or contract. Contrast that to the world as it is. Who benefits and who suffers from the actions of government?

Winners include those who receive goods and services from the state, either gratis or subsidized, and also those who have better paying or more prestigious jobs than they would absent government action. This may include those employed directly by the government, government contractors (in those cases where the contractors get a significantly better deal than they would selling their goods and services to private entities), people whose jobs are protected by licensing requrements, an employees for whom the government has interceded in disputes over wages and working conditions. Losers are those who pay taxes, those who are denied opportunity to obtain well-paying jobs which they are perfectly capable of performing, and those who pay more than they should for goods and services because the state has restricted their availability.

Almost everyone is to a certain extent in both categories, but obviously some are big net winners and others big net losers. Unsurprisingly, for the most part winners favor big government and losers oppose it. Of course, because forcible transfers and restrictions on opportunity destroy wealth more must be lost than won, but that does not imply that losers outnumber winners. Even if losers do outnumber winners in fact, many losers will believe themselves to be winners because the benefits they receive tend to be overt but the costs are often hidden. Nonetheless, because a free market is capable of producing enormous disparities of wealth, it is quite likely true that our current structure produces more winners than losers. And even if it is not true, it is probably impossible to convince most people who believe themselves to be beneficiaries of government that overall they are victims. There are too many persuasive people with an interest in convincing them otherwise, and they quite sensibly would look on claims as to how they might benefit from some hypothetical changes with suspicion.

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