Sunday, February 10, 2013

Five big issues - five government responses - five libertarian answers

The UK has had high profile news items all week, so I thought I'd quickly summarise the issue, what the government said and what it should have done...

The issues being:

Gay Marriage
EU Budget
NHS deaths
Paying for long term care of the elderly

1. Gay marriage: A bill was introduced to the House of Commons to allow same-sex marriage.  It was a free vote, but was passed overwhelmingly as just under half of Conservative MPs, and most Labour and Liberal Democrat MPs voted for it.  It retained protection for marriage celebrants to be able to refuse to conduct ceremonies for religious reasons.

Government view?  Free vote, but David Cameron advanced it, and most Cabinet Ministers supported it.

Libertarian view?  Marriage shouldn't be a state matter.  It should be a matter of contract between adults, which can include a standard form, but can be varied in advance.  As such, sex should not be a barrier to it.  The right response should be to simplify law on marriage, to grandfather the rights entered into at the time of the marriage, but have a simple standard form marriage for the future which covers property, provision for children etc and divorce.  

A same sex couple should be allowed to marry, but the sole role of the state is legal enforcement of the contract and provision for property and custody matters on its termination.  That should not preclude people of a religious bent choosing different marriage frameworks as long as it does not involve the initiation of force or prohibiting the termination of the contract.

2. EU budget:  The European Union agreed to a six year budget which is around 4% lower  (in real terms) than the previous budget, breaking the path of regular increases in spending above inflation.  This was achieved by the UK, Germany, Netherlands, Denmark, Sweden and Finland pushing hard for   savings in the budget, although it is more a cap rather than actual commitments on spending which will be below that.  In actuality, the UK will still pay more, year on year, than it does now, because of commitments signed in 2005 by the previous government to wind down Britain's rebate.

Government view?  This is a great victory over the European Commission and those countries that pushed for spending cuts.  The UK isn't isolated in seeking reform to the EU.

Libertarian view?  Almost all that the EU does is inefficient and immoral.  The Common Agricultural Policy imposes costs upon European citizens both in taxes and in higher food prices, as well as decimating the competitiveness of farmers in many developing countries.   It is being increased, because farmers in accession countries (e.g. Poland) are paid one-third of the subsidy levels that those in western countries get.  At the very least, instead of increasing subsidies to the east, subsidies to the west should have been reduced so the ratio was identical.  The CAP is a politically driven sop to farmers, mostly driven by France and Italy, and it is neither deserved nor efficient.  Beyond that, the EU has been expanding its activities, when its only legitimate activity should be enforcement of the single market and confronting Member States which impose laws, regulations or procedures which effectively block it.

Yes, a budget cut is in the right direction, but far too little.  The CAP should have been cut, even if it was to reduce the 3:1 ratio by cutting subsidies to a 2:1 rate.  The EU remains a small liberal project overwhelmed by a grand socialist project, and it is incompatible with free markets and small government.

3. Over a thousand deaths in an NHS hospital due to negligence: A report on Staffordshire hospital declared that 1,200 patients died needlessly between 2005 and 2009 because of wanton neglect and failure by doctors, nurses and management. 

Government view?  The NHS is simply wonderful, but this is unacceptable and somebody should be responsible, but nobody should be made a scapegoat, but some people should be made to be accountable, but the management responsible shouldn't be, but the NHS is wonderful.

Libertarian view?   The NHS is the closest model to a Soviet health system in the Western world.  It is endemic in a health system which is the fourth largest employer in the world, the largest employer in Europe, that accountability and concealing the truth will be part of a monolithic centrally planned system.  It should be broken up.  At the very least, all residents should be offered the choice of taking some of their taxes back to buy private health care and everyone else placed into a government insurer which buys services on behalf of its customers.  NHS providers should be split up and the NHS itself disbanded.  People should be accountable for their own healthcare, and as a transition all pensioners and people close to pension aid should have costs met by the taxpayer, and those on low incomes have their insurance accounts topped up.  The Western world is full of insurance models that deliver better outcomes and accountability.  It is time to smash the state religion that the NHS is the envy of the world - it is only the envy of the people who work at it and the politicians for whom is the last remnant of the totem of the centrally planned socialist state.  There is no reason to be confident that the practices seen in Staffordshire are not replicated elsewhere, it is time that users of the health system had a direct relationship of accountability with providers.  Let people leave the NHS and give them their money back.   Even bigger than that, let's have an intelligent debate about health policy that sets aside the ludicrous and vapid NHS worship that treats discussions about alternative models as blasphemous presumptions that the USA is exactly what should be replicated.

4. Horsemeat in beef products:  A food manufacturer has been found to have predominantly horse meat in its beef lasagne, and some other products have had traces of horsemeat.  There is little sense that it is a health issue, rather a fraud issue, but it appears to have been sourced from a Romanian abattoir and there are implications that it is a criminal conspiracy to supply cheap meat fraudulently.  There is now concern that even with rigorous food labelling, people cannot trust cheap meat.  It appears that "value" low cost supermarkets are primarily implicated in selling the products, with the brand Findus, being the one responsible.

Government view?  It is a scandal and a wide range of meat products are now being tested for authenticity, and information is being shared with food regulators in other European countries, as the horse meat products have been sold in several countries (notwithstanding that horse meat is normally consumed on the continent, this is about horse being passed off as beef).

Libertarian view?  This is fraud, and should be treated as such.  However, secondary to this are the market distortions created by the Common Agricultural Policy.  Meat moves freely and tariff free within the EU.  However, the EU imposes strict quotas on beef from outside the EU, such as a limit of 1,200 tonnes a year from New Zealand.  It also imposes a 20% tariff within that quota.  Although it allows outside quota beef in, it must have a tariff of around 100-250%.  All NZ beef imported into the EU must meet strict labelling and traceability conditions, unlike the subsidised EU beef.

There are obvious pressures to source cheap beef for low priced products, but the EU Common Agricultural Policy prevents this by propping up inefficient producers in the EU.  The quotas on imports should be abolished immediately, and tariffs abolished, so that beef can be imported at low cost and high quality.  It wont stop fraud happening, but reduces the pressure to substitute real beef for cheap alternatives due to trade protectionism.

5. Care of the elderly:  The government wants to address "the issue" that elderly people who need full time care in a rest home have to pay for it, unless they have no assets or savings (whereby taxpayers pay).  A report recommended a cap be placed on how much people pay for such care, which then means taxpayers pay beyond that.

Government view?  It wants to introduce a cap, although higher than was recommended, on the grounds that people "shouldn't have to sell their home" to pay for care.   

Libertarian view?   There is no moral reason for people to not pay for their own care in old age.  The only moral argument is that those who have not saved get their care paid for by money taken by force from others,  and that it is more likely that those who have saved or own their own home, have paid far more in tax than those who have not.   The better response would be to equalise taxes.  Have a flat income tax beyond a high income tax free threshold (e.g £15,000, around half the average income).   This makes it easier for people to save.   Furthermore, inheritance tax should be scrapped.  The idea that people shouldn't have to sell their home, but that it is ok for the state to confiscate part of the value of it when they die, is hypocritical.  A clear approach, and lower taxes, would help promote a market for insurance to provide for care in old age.   That would promote more saving, which provides money for funds to invest in the process of providing for such insurance.


thor42 said...

*Excellent* post!

I tell you what - I'm in New Zealand, but even here, I'm steering clear of preprocessed meals for a while. No Shepherd's pie, no lasagne meals.

Anonymous said...

Bere we go again...

Have a flat income tax beyond a high income tax free threshold

That's absolutely no a flat tax. it is a proportional tax, and with a high threshold, it is closest to the kind of income taxes we have in the Welfare West than any flat tax.

Maggie's poll tax was nearly a flat tax - £1000 per head (but unfortunately 110reduced to £200 for children & students). A real flax tax is just that - one number, irrespective of wealth or income. If - and it can only be for leftist reasons - the next best option is a capped - propertional tax - the exact opposite of what you're suggesting: say 30% of the first £10,000 of income, and 0% afterwards (that's the cap).