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Perhaps this will be the first in a series of posts on the topic. Despite my many incantations on this website decrying outright socialism and corporatism, a good portion of today’s economic policy is couched in terms of the political economic model known as utilitarianism. While its intellectual roots probably predate the 18th century, utilitarianism rose in popularity after Jeremy Bentham’s writings of the late 1700s and John Stuart Mill’s writings in the mid-19th century.

Boiled down, this model asserts that actions should be undertaken if the incremental benefits from such action exceed the incremental costs. And while Bentham and Mill and many others probably had some notion of Pareto efficiency in mind (i.e. take the action so long as no one is hurt), modern manifestations of the model take a Kaldor-Hicks approach (i.e. take the action if, in principle, the losers can be compensated by the winners). One of the major problems with this model (and many others) is that they are not rooted in any moral foundation. For example, a true utilitarian might promote a policy whereby resources are transferred to the wealthiest member of society and from the poorest, if the happiness of the wealthy member increases by more than the dissatisfaction of the poorest. Such a transaction would be thought to be efficiency improving.

In any case, I’d like to pose a simple question to supporters of the modern welfare state. I hear often that “we” have a responsibility to provide health care to all, education to all, secure retirements to all, and so forth. We can argue about the specific economic problems with these proposals in other places, for now I want to ask a moral question. What moral justification is there for me to be forced to provide these goods and services to strangers when I am compelled neither by law (nor increasingly by custom) to provide such services to family members or friends?

One Response to “The Moral Foundation of the Welfare State”

  1. Michael says:

    Love the emphasis on “can” under Kaldor-Hicks approach; how often are they compensated? I heard one announcer put it something like this: Democrats see a man with two suits and demand he give it to a person with only one. Republicans demand that Democrats only take a jacket.
    Mike, the fmr. bachelor

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