Puncturing the Charity Myth

The invaluable Ezra Klein has a typically excellent post today, skewering Cato’s David Boaz for–once again–suggesting that if only liberals would stop progressive taxation, then conservatives and the wealthy would make up the difference through private charity.

This is one of those conservative zombies: it just won’t die, no matter how many times you try to drive stakes through it with facts. Klein does about as good a job as you can with a short post.

I can add, however, a thought experiment: remember Hands Across America? That was the big, nationwide movement for people all over America to, well, hold hands to remember the homeless. On May 25, 1986, five million people held hands over more than 4,000 miles, and they contributed money to homelessness and hunger organizations as part of the effort. Think of it as a standing walk-a-thon. It was quite a big deal: it was built up in the media for weeks. People had parties in their houses. Corporations donated millions. And in all, it was an amazing take, for one day: $20 million dollars.

Now imagine if we did Hands Across America every day of the year, every year. Impossible? Of course, but we’re in Cato fantasyland here. If we replicated this extraordinary civic effort every day, including holidays, weekends and Super Bowl Sunday, then it would raise annually somewhere around $7.3 billion.

In other words, it would raise less than half of the annual federal budget for the TANF program (what replaced AFDC), which itself was always tiny. It wouldn’t come close to matching Head Start, job training, Food Stamps, WIC, child care, child welfare, affordable housing, and of course Medicaid. It wouldn’t even be close to a drop in the bucket. And that’s making the heroic assumption that we could even do it.

So consider me skeptical that the private sector will make up the difference. It’s an appealing soundbite, a distant cousin of “cutting taxes will allow us to grow out of the deficit.” There is such a thing as adult libertarianism–a philosophy that candidly acknowledges the severe deprivation that will occur in the severe diminution of government, and advocates it nevertheless. The charity myth isn’t it.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

13 thoughts on “Puncturing the Charity Myth”

  1. The libertarian critique of gov't is substantially correct on pragmatic grounds. On average, free market solutions do better and harm fewer people than gov't run solutions. At the tails, laissez faire can massively outperform and massively underperform gov't programs. The charity zombie is one example of underperformance.
    I think the LP would do better to offer renewable monopolies on providing services, ala "privatized" fire departments. Tying incentives to improved services to the poor to, you know, actually serving the poor might not be an awful idea. But the psychopathic paranoia that passes for libertarian philosophy prevents even this much.
    Usually, they either offer up the charity zombie or they try to monetize morality. If being a good samaritan is such a nice thing, people won't mind paying a premium for fair trade goods and therefore the invisible hand will ensure moral behavior by CEOs.
    Personally, I think the LP spends far to much time with the invisible hand inside their intellectual pants.

  2. Perhaps I'm missing the thrust of Cato's argument, but I don't really understand the logic in general that seems to be in play here.
    Progressive taxation is effectively taxation of the wealthy. If abolishing progressive taxation would incent the wealthy to make up the difference in charitable contributions, then the argument is effectively that the wealthy would contribute all the money that was given back to them by the tax refund. But if that were true, shouldn't everyone be indifferent to taxes vs. charitable contributions? After all, the end result – not having that money – would be the same.
    Thus, advocating the elimintation of progressive taxation only makes logical sense if the wealthy don't plan on giving all of this money away. In fact, the less that's contributed, the more sense this makes. And I don't think anyone with a reasonable understanding of human nature would be surprised by this. So what am I missing here?

  3. Uh, No Nym,
    We tried private fire departments in this country in the 19th C. It doesn't work. If you'll check the history we had:
    Brawls break out among fire companies for the right to fight a fire. The fight went on while the structure was burning.
    Homes and apartment buildings left to burn because they weren't insured by the proper company.
    Delayed response times because the firehouse for your company was too far away.
    We got smarter and decided that fire-fighting was better handled as a governmental function. We were right — some things (public safety is an excellent example) are better handled as governmental functions. We no longer have street brawls between firefighting companies — now we have mutual aid pacts among governmental entities and the fights are behind closed doors. We pay less for fire protection and have better fire protection than we would under a privatized system.
    So if you want to argue that privatizing charity is a good idea, fine. But find an example of privatized government services that works.

  4. One thing that gets me angry about the libertarian party, which I am a member of, is the fantasy land idealism when it comes to taxes.
    We need more pragmatic Libertarians who look reality in the eye and see it for what it is, we need some taxation or government would crumble.

  5. We're in the process of privatizing fire control again, you know: It's called "sprinkler systems"; You build the structures so that they don't burn in the first place, rather than letting them catch fire, and sending a crew to put it out. I've always been rather impressed by how unimaginative some people can be, when it comes to finding non-governmental ways of accomplishing certain goals… You might almost detect a bit of relief in their discovery that something "can't" be done in a free market way.

  6. Sprinklers and similar systems being required by regulations in buildings over a certain size certainly has nothing to do with it. Good old private enterprise.

  7. @ BC:
    I'm not referring to the 19th century ones, but the 21st century ones.
    Many municipalities have learned that they can bid the ownership and management of local firefighters to private contractors. The bids go up for renewal every few years. This has proved, to my knowledge, to be an efficient blend of public and private solutions.
    The private managers have strong incentives to cut costs to keep the contract and keep making money, the local gov't keeps auditing them to ensure that they are doing their job. Think of it as a natural serial monopoly.
    Many ambulance services are similarly privately run, some cities even permit competition.

  8. @ Kevin:
    The typical small l response is that the examples you cite are contaminated by perverse incentives due to gov't regulation. In some cases this argument is sensible, in some cases not. For a philosophical libertarian to claim that the environment would get much better if only we adopted Coasian solutions is a bit disengenuous, since enforcing those solutions requires the long arm of the law.

  9. No Nym,
    In all of the privatizations that I'm familiar with, someone ends up holding the brown end of the stick. I'm something of an exception in my family, having become an academic rather than a firefighter (like my brother and four of my male cousins.) Can you cite some examples of municipalities that have followed this model?
    I have some suspicions about what happens, but I'd like to check them out.

  10. @Brett,
    Having sprinkler systems doesn't obviate the need for fire departments. You still need them for regulatory functions (e.g., to make sure the systems work and that other fire codes are followed), for rescue functions, to fight fires in areas where sprinklers aren't (e.g., grass fires, residential fires, etc.), for legal functions (investigating fires is its own specialty that police departments don't handle well), and finally as backup for when the sprinklers fail to contain a fire.
    I'm all for sprinkler systems: they save lives and property. But you couldn't do away with FDs even if you did a universal retrofit with sprinklers. You could downsize your department, but you couldn't eliminate it.

  11. " But you couldn't do away with FDs even if you did a universal retrofit with sprinklers."
    THAT is the sort of thing I mean. In the real world, sprinkler systems, and inherently less flamable building materials ARE gradually displacing fire departments as a way of dealing with the threat of fire. There's no physical/technological reason this trend can't go to completion, and render urban conflagrations such a low probability event that maintaining a fire department ceases to make sense. Nor is there any reason save for bureaucratic turf concerns why sprinkler systems have to be regulated by "fire departments", rather than some other agency.
    Indeed, sufficiently agressive fire defense technology would prevent the spread of fire from one building to the next, allowing us to offload regulation of fire prevention to insurers, by eliminating most of the negative externality concerns.
    In short, when you don't start out dedicated to defending the existance of intrusive government, you don't end up blinded to the possiblities which might render it redundant.

  12. Fine, Brett.
    It doesn't matter what you call it, you're still going to have to have somebody to put out wildfires, to investigate arsons, to conduct heavy rescues, and as a final line of defense against failure of your active/passive fire defense systems.
    Call it the tulip department if you want to, I don't care.
    Incidentally, I've never known anyone who needed a fire department for any reason who considered their visit an unwelcome government intrusion. Oh, whoopsie — I just remembered a case where the building owner probably considered it an unwelcome intrusion. You see, he'd stashed a body in the structure and torched the building …
    In short, when you're absolutely convinced that John Donne was wrong and that social Darwinism is the proper model for human relations, you end up blinded to the reality that government can be a necessary good.

  13. "Incidentally, I've never known anyone who needed a fire department for any reason who considered their visit an unwelcome government intrusion."
    Yeah, by definition, people who *need* something tend not to oppose it. Which doesn't begin to address the question of whether the advance of technology might not render certain needs so atypical that it ceases to make sense to address them through centeralized government agencies.

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