Insights 43/2014: Poverty: efficiency versus compassion?

(Child) poverty: efficiency versus self-professed compassion?
Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz

William Voegeli, a senior editor at Clarement Review of Books, recently gave a speech, The case against liberal compassion, at Michigan's Hillsdale College that raised the question of why many (US) liberals appear to feel that no matter how much governments are spending to alleviate and prevent poverty, the latest amount is always shamefully inadequate.

He put US federal spending on welfare, including health and education, in 2013 at 2/3rds of all federal outlays and 14% of GDP. In real per capita terms it was 254% higher in 2013 than in 1977, yet there was no correspondingly dramatic reduction in poverty.

In New Zealand, central government spending on social welfare and assistance, including health and education was 74% of central government current spending, excluding on finance costs and capital consumption, in the year ended March 2013–according to Statistics New Zealand figures. This represented 23% of GDP. In real per capita terms, it was up by of the order of 160% between fiscal years ended 1978 and 2014 based on Treasury's long-term fiscal series, although the comparison is only indicative given the change in accounting systems between those years.

An alternative interpretation to the liberal assertion that the current level of spending is insufficiently generous is that it is insufficiently effective. Yet Voegeli quotes a disturbing number of US liberals including President Obama, Franklin Roosevelt, Tip O'Neil and Paul Krugman who have variously portrayed such debates as a battle between empathy and compassion on the one hand and cold-bloodedness, mean spiritedness, or worse, on the other.

Voegeli observes that those who care the most about alleviating poverty should be the most passionate about opposing wasteful government spending. After all, every taxpayer dollar squandered in some way is a dollar that could have been used to help the poor. Yet, much welfare spending is "showered on people who aren't poor" and many government spending programmes are not systematically, rigorously and regularly reviewed in value-for-money terms given their politically-entrenched nature.

So Voegeli puzzles over why US liberals are not leading the charge against waste in government. He suggests that too many of them are prone to feeling good about good intentions rather than worrying enough the likely efficacy of proposed remedies, taking political and bureaucratic limitations and unintended consequences into account.

Yet ineffectual remedies represent a failure to help the object of one's self-professed compassion. Compassion without efficiency puts compassion in question.

Kiwis are swimming in free waters, and they don’t know it
Rose Patterson | Research Fellow | rose.patterson@nzinitiative.org.nz

Fish don’t know they are swimming in water. Similarly, many Kiwis don’t know they are living in freedom. They’re usually just preoccupied with whether they are swimming on the left or the right of the fish tank.

I’m reporting from the Atlas Network Liberty Forum in New York where I’ve spent four days with free enterprise think tankers from all around the globe.

New Zealand gets high praise from those in the know. The others typically ask about our economic and civil liberties. The Economic Freedom of the World report puts New Zealand behind only Hong Kong and Singapore on economic freedoms; Legatum’s 2014 ranking puts New Zealand in top place on civil liberties. Kiwis should be continuing to ask questions about whether we are too spied-upon, but mostly, we are free.

It is only when you jump outside of our goldfish bowl when you see how free we are.

A highlight of the conference has been the “Think Tank Shark Tank”, a Dragon’s Den style competition for think tankers who pitch their ideas to potential donors. Baladevan Rangaraju from the India Institute won for his idea for a phone app - I-torrney. Indian police are notorious for their abuses of power; I-torrney is a pocket lawyer that gives people quick information on their legal rights. If they are illegally charged, with the push of a button they will be able to report it to Rangaraju’s group, who will make it publicly known, ultimately pressuring police to change.

This example of social entrepreneurship brings three things to mind.

First, technology is putting power, quite literally, into people’s hands. And, it is the forces of competition in a free market that are making smart phones accessible to the many, not just the few.

Second, Atlas Network donors have just given Rangaraju $25,000 (USD) to develop and promote his app. One of the positive side effects of the wealthy getting wealthier, not often acknowledged, is the growth of philanthropy for social entrepreneurship: a lot of wealthy individuals care deeply about making the world a better place.

Third, stories of police abusing their power in India, and many other stories of people around the world still fighting for their basic freedoms, shows just how lucky New Zealanders are.

Of course, New Zealand has work to do. The Initiative is researching how children can access a good education regardless of their background, how young people can get a foot in the door to owning their own home, and how to ensure our fiscal policies are sustainable for future generations.

But most of all, our job is to ensure that New Zealanders never fall into complacency about the freedoms that we have.
________________________________________
Thought police
Dr Eric Crampton | Head of Research | eric.crampton@nzinitiative.org.nz

In 2009, I wrote a piece on the social costs of drugs for NORML; it appeared in their NORML News magazine. The police later sought to have several issues of NORML News deemed Objectionable; some articles described hashish production methods.

The Office of Film and Literature Classification determines who is allowed to consume which thoughts. Every film distributed here must have a rating from the Censor’s Office; video games must also be rated if they have been restricted in Australia or the UK. Some of these ratings can help parents make informed decisions; others go just a tad beyond that. A film rated as RP13 is one that a twelve year old can watch with an adult. But one that is rated R13, like “Sharknado 2: The Second One”, is illegal to watchwith your twelve year old, if you import the DVD or stream it on Net flix. If it airs instead on TV One, that’s okay: a different law applies.

If you sit down to watch Sharknado 2 on Netflix with your twelve year old, you will have committed an offence of strict liability under Section 125, with fine of up to $3000. If you knew about the Classification Office’s decision, you could instead get a fine of up to $10,000 or up to 3 months in jail; Section 126 increases the penalty if you have reasonable cause to believe the film is restricted, and I’ve just told you it is. Congratulations! And thanks, Office of Film and Literature Classification, for making it illegal for me to make that decision about what’s appropriate for my family. This isn’t helping parents make informed decisions; it’s thought control.

The issue of NORML News in which my article appeared wound up being deemed R18. I could be fined up to $10,000, or be subject to imprisonment, for giving a copy to my kids for any future high school research projects.

It gets worse than that. Lots of books were deemed objectionable in the 60s for gay and lesbian content; those rulings still stand. The proposed “Objectionable Publications and Indecency Legislation Bill” toughens penalties: Don’t be caught watching a Netflix title deemed Objectionable in New Zealand, like the 2010 remake of “I Spit on Your Grave”. And be careful which books you import from Book Depository.

The Herald reports that New Zealand’s Chief Censor is rather aggrieved: Kiwis are accessing films online that haven’t been rated by his office and video game manufacturers are not keen on paying substantial fees to his office for classifications. I’m aggrieved instead that this office still exists.

I’ve written before about our being the Outside of the Asylum. This is very much Inside-the-Asylum stuff.

On The Record
Thrifty Germans urged to spend, The New Zealand Herald, 14 November 2014.

Under the bonnet, Germany is stalling, Dr Oliver Hartwich, The National Business Review, 14 November 2014.

Merkel set for quick Key visit to NZ, The New Zealand Herald, 14 November 2014.

Can Juncker survive ‘Lux Leaks’?, Dr Oliver Hartwich, Business Spectator, 13 November 2014.

Rodney Hide on the myth that is child poverty, Whale Oil Beef Hooked, 10 November 2014.

As a school decile shake up looms Rose Patterson argues there are bigger questions to address, Rose Patterson, Interest.co.nz, 10 November 2014.

ends

© Scoop Media