The Daily Caller

The Daily Caller

How libertarianism helps the poor

Photo of Matt Zwolinski
Matt Zwolinski
Associate Professor, University of San Diego

Everybody knows that libertarians are greedy capitalists who favor the maximization of profit above all else. “Taxation is theft!” they cry, but the exploitation of the working classes fails to elicit any similar moral outrage. Libertarians, everybody knows, care about the rich to the utter neglect of the poor and vulnerable.

But everybody is wrong.

The reason for the common misperception, of course, is that libertarians oppose many of the governmental policies that are commonly thought to benefit the poor and working classes. Libertarians oppose redistributive taxation, oppose the minimum wage, oppose workplace safety regulations, antitrust laws, and many other restrictions on business. But none of this means that libertarians are indifferent to the plight of the poor. After all, just because you care about something doesn’t mean you want the government taking care of it.

People make three important errors when thinking about libertarianism and the poor.

The first mistake is to believe the government when it claims that its policies are intended to help the poor. They almost never are. The great bulk of redistributive taxation and subsidization goes to benefit interest groups that are politically powerful, not economically vulnerable. Think Medicare, agricultural subsidies, and the mortgage interest deduction. And most existing regulation of business is, paradoxically enough, for the benefit of business itself. Regulation raises the cost of doing business, and so establishes a barrier to entry that benefits large existing firms at the expense of their smaller competitors. Occupational licensing, for example, whether of doctors, lawyers, or barbers, is almost never forced upon an unwilling industry by public-spirited regulators. Rather, it is actively sought after by established members of the profession itself, eager to insulate themselves against potential competition. And politicians are all-too-willing to cater to the interests of the economically powerful. Libertarians, in contrast, believe in free markets, and truly free markets are the enemy of big business.

The second mistake is to confuse intentions with results. Even if government policies were intended to benefit the poor, we would have good reason to expect them to fail. Good intentions often produce unintended consequences. Increased safety regulations at airports lead more families to travel by the much more dangerous method of driving and so lead to a larger number of deaths. Laws that limit price increases on essential goods in the wake of natural disasters lead to fewer of those goods being brought to market and more people having to suffer without them. Government bailouts of failed firms encourage more failed firms. Perverse consequences like this sometimes surprise us, but they shouldn’t. Society is a complex and dynamic system. Politicians lack both the knowledge and the incentive to cope with it effectively. Libertarians propose to deal with it by decentralizing decision-making to individuals who are free to make choices based on their expert knowledge of their particular circumstances. Individuals and corporations should reap the benefits of good decisions, and pay the costs themselves when their choices turn out poorly.

The last mistake is to think that a concern with regulation and taxation is the sole defining feature of libertarianism. Libertarianism is about individual liberty, and while economic liberty is a part of that, it is not the whole. True, libertarians believe that greater economic freedom would benefit the poor, but many of their non-economic reforms would arguably have an even greater impact. Ending the war on drugs, for instance, would disproportionately benefit poor families who live in neighborhoods destroyed by the gang violence created by criminalization, or those who lack the financial and social resources to keep their children out of prison for crimes of mere possession. Reining in American military adventures overseas would not only save taxpayers money (fiscal conservatives should compare the cost of PBS subsides to the cost of a Trident missile), but would benefit especially the working-class families whose children bear the lion’s share of the human costs of war. Finally, libertarians are virtually unique in the political landscape in consistently calling for free trade not just in stuff, but in people. Concern for the poor should not stop at a nation’s borders. And while we might reasonably decide that foreign aid to the world’s poor is ineffective, one of the least painful (and most effective) things we can do to help them is stop preventing them from seeking work and a better life in our country.