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I've been circling this idea of a "government bank account", for allocating resources to government services in an equitable way.
The idea goes, just because services are government-administered doesn't mean they aren't subject to scarcity. And the disconnect between user and payer means that people use services with no regard to cost, and providers operate with no regard to quality. If only we could subject this to market dynamics!
The libertarian runs with this and says that all services should be paid for in cash (and removed from the aegis of the government, for good measure). But then people are shut out of public life, compounding inequality and misery over generational time scales.
If we're not going to entirely jettison the idea of a welfare state (which I would rather not; alle Menschen werden Brüdern and what not), then I would suggest a second currency, one which accrues regardless of work or merit, and which legally cannot be traded away.
This puts to the people some interesting questions. Would you rather go to work via the toll road, or heat your home hotter? Would you rather cash a welfare check, or receive end-of-life care?^1
The parallels to the Chinese social credit system are elucidating: whereas they've turned their whole society into a prolonged exam (they love taking exams), I'm proposing an exercise in private property x inalienable rights.
This also opens up more palatable avenues wrt congestion pricing, private/public competition, etc. Probably does interesting things to the meta of democracy but I haven't thought that part through.
^1 Yes, we Québécois receive electricity and healthcare as government services. To be frank, I don't know why you'd do it any other way.
How different is this from just giving them money? (maybe while subsidizing some goods)
It is paternalistic and egalitarian.
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If you just give them money, some significant portion of the population will spend it on a new plasma TV instead of holding on to it to pay for government services when they need it. If you give them an EBT card that can't be used for a plasma TV, they're more likely to remember the card when it comes time to "buy" government services.
Right, but they'll also, sometimes at least, figure out the best ways to convert the EBT card into a plasma TV, through some other good along the way. At least, I would imagine? A simple example is using government electricity to do things you can get money from (bitcoin mining??), but I'm sure there are all sorts of other things you do, if you wanted to be irresponsible with the money.
You're right that some percentage will absolutely figure out how to game the system. We already know this because people have been buying (or stealing) laundry detergent and soda and converting that to drugs. See, e.g., https://www.aei.org/carpe-diem/the-tide-theft-phenomenon-why-has-the-laundry-detergent-become-such-a-hot-commodity-among-thieves-at-drugstores/
However, this requires more effort than trading cash for drugs/plasma TVs. That additional step reduces misuse of the government handout. Of course, the question then becomes whether that reduction is enough to offset the costs of the EBT program plus any unintended consequences. But at a first pass, it's reasonable to expect that a restricted debit card is going to be more effective than straight cash.
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Why not allow people to trade it away?
Because then you're back to giving people money and selling government services, with everything that implies (inequality, disproportionately privileging people with low time preference, etc)
I don't understand the inequality issue. Wouldn't everyone get the same amount of money?
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And won't it be effectively traded away anyway, if people really want to? As long as anything it can be used for is liquid, there's a way to extract resources from it, even if it's at a loss.
You don't need it to be impossible for them to trade it for standard money for the system to achieve its purpose. You just need enough negative pressure that it is never traded as a proper replacement for normal currency in general.
As long as it all terminates in being spent on government services, it's still a government services cap and trade system. If you punish people for routing around and trading it, that's a tax on selling it. If you actively let people trade it in for real currency at a loss, that caps the market for routing around it and makes doing so less worthwhile. Etc.
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It would only be enforceable if there weren't a significant quantity of tradeable goods that you could get from the government through this system.
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I imagine that every kid a family has is a huge cost against this government bank account, due to the cost of public schools. While I would like it - I could homeschool to save up for retirement - it would create a perverse incentive to lower birth rates further.
Not if the "money" accretes from birth.
In that case, parents will be making choices for their children that can seriously impact them later in life. It's bad enough now, but I'm imagining a parent running out their children's government bucks on various things, leaving the kid with no social net for the rest of their lives (or until they get children of their own.)
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Fellow Beethoven fan?
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Serious question - how will this system weather the news articles where single mothers can’t afford to heat their home?
This policy is appealing from a first principles/Econ perspective, but the optics are hopeless.
Another Hanania article for ya!
https://www.richardhanania.com/p/womens-tears-win-in-the-marketplace
How does Hanania consistently manage to not miss, time and time again?
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Yud wrote about the optics of poor widows back when rationalism was still cool.
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I want this, but for clamping down on safetyism-as-excuse-to-do-nothing; I think directly pricing in the cost of inaction or prohibition on certain activities (through policies and otherwise) would be a great way to force the paranoid to have to directly pay for it, limiting the moral hazard inherent in the concept of safetyism by attaching a price to it, paid to those affected as a redistributive tax on delaying development.
I’ll have more to say about this later since I don’t currently have time to make this more coherent, but know that I believe this concept is sound at its core when it comes to things that don’t have direct and obvious costs; or in other words, society should have a hard limit on how much hysteria it is allowed to exercise.
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The same reason one does anything as a private service: because one believes that either it's not a proper function of government, or that the private market can provide the service better. Pretty straightforward tbh.
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