Economic Human Rights (42): Some Facts About Welfare in the U.S.

Welfare – meaning the provision by the government of a minimum level of material wellbeing and social support for all citizens – is a strange thing in the U.S.: it’s not directed mainly at the poor, it’s underfunded, it seems to be compatible with a high poverty rate, and it’s not colorblind – at least not in its effects.

Take a look at the following facts (source):

  • In 2010, nearly half of Americans lived in a household that received direct government benefits. That’s up from 37.7% in 1998.
  • At the same time, government revenues have been declining: adjusted for inflation, federal tax revenue was the same in 2009 as it was 1997, even though the U.S. population grew by 37 million during that period. In 2011, the federal government took in $2.3 trillion in tax revenue, and spent the exact same amount on military, Social Security, Medicare, and Medicaid alone.
  • The share of entitlements like Social Security and Medicare going to the bottom fifth of households (based on income) has fallen from 54% in 1979 to 36% in 2007.
  • The result of all of this: nearly 1 in 6 Americans – and more than 1 in 4 blacks – still live in poverty. The unemployment rate in 2009 was around 10% – for young, uneducated African-American males it was even 48.5%.

None of this should lead to the conclusion that the U.S. welfare system is completely dysfunctional – unemployment insurance, for instance, has rescued millions of Americans from poverty during the last recession. What it should lead to is serious consideration of the possibility and desirability of a completely new system.

More posts in this series are here.

Advertisements

Economic Human Rights (41): Unemployment, a Cost-Benefit Analysis

Unemployment is a violation of an individual’s right to work. It stunts her creativity and diminishes her wellbeing, in a material, moral and psychological sense, in many cases even pushing her into poverty, ill health and depression.

For a person with no pre-existing health conditions, losing one’s job increased the chances of reporting a new health problem by 83 percent. Overall, the newly unemployed had a 54 percent chance of reporting fair or poor health. (source, source)

Unemployment is also self-perpetuating because it makes it harder to find a new job – employers prefer candidates who already have a job. In addition, it depresses wage levels, even decades after the end of a spell of unemployment.

Needless to say, these costs don’t affect only the unemployed themselves. Their families and children also suffer:

We find that a parental job loss increases the probability of children’s grade retention by 0.8 percentage points, or around 15 percent. After conditioning on child fixed effects, there is no evidence of significantly increased grade retention prior to the job loss, suggesting a causal link between the parental employment shock and children’s academic difficulties. These effects are concentrated among children whose parents have a high school education or less. (source)

And the ripple effect of unemployment covers the whole of society. Unemployment has a social cost: above and beyond the fiscal pressure – unemployment benefits have to be paid, either through increased taxes or cuts in other public services – it deprives society of valuable input and human ingenuity.

Still, all these costs should not blind us to the real benefits that unemployment can bring. And I’m not talking about those few individuals who are “liberated” from their mind numbing jobs and take the chance offered by unemployment to start a successful business doing something they always wanted to do but never had the chance or guts to do. Neither am I referring to kidults reveling in “funemployment”, staying with their parents well into their twenties or beyond, and taking the opportunity to prolong their childhood. Those are not the majority of the unemployed.

However, some among the majority may also find a silver lining. Maybe unemployment makes them less materialistic and more financially prudent; maybe some of them will use their free time to volunteer and educate themselves; society may become humbler and gentler; maybe concerns for social justice become more prevalent since the unemployed, ex-unemployed and their friends and families have become more conscious of the role of luck in life’s outcomes, as compared to the limited role of desert. Some health indicators may improve:

Interestingly, though high-stress events such as foreclosures and unemployment may hurt the health of those directly impacted, there’s some evidence that recessions have a positive impact on a nation’s health overall. In 2000, Christopher Ruhm, an economist at the University of North Carolina at Greensboro, found that a 1 percent rise in a state’s unemployment rate led to a 0.6 percent decrease in total mortality, looking at mortality changes in the United States between 1972 and 1991. … economic downturns could improve health through “declines in smoking, excessive alcohol consumption and overeating during recessions as people look for ways to save money.” (source)

Of course, there’s no way these benefits cancel out all of the costs. Unemployment is a scourge and a human rights violation, and capitalism doesn’t do itself any favors by maintaining and temporarily inflating its “industrial reserve army“.

More on the human cost of unemployment is here and here.

Economic Human Rights (40): How Do Poor People Live?

The poor tend to become a number, a statistic, an undifferentiated mass, especially here on this blog. Talk of the “bottom billion” and the one-dollar-a-day people only makes things worse. Of course, it’s important to know the numbers, if only to see how well we are doing in the struggle against poverty. But to actually know what we have to do, we need to know what poverty actually means to poor people. How do these people live? Which problems do they face? Who are they? None of this can be captured in numbers or statistics. Pure quantitative analysis doesn’t help. We need qualitative stories here, and these stories will necessarily differentiate between groups of people because poverty means different things to different people.

Keeping in mind the caveat that poverty is “multidimensional” and that it varies with the circumstances, is it possible to give a more or less general impression of the “lives of the poor”? There’s an interesting attempt here. Banerjee and Duflo analyzed survey data from 13 countries in order to distill a picture of the way people live on less than one dollar a day, of the choices they have and the limits and challenges they face.

The countries are Cote d’Ivoire, Guatemala, India, Indonesia, Mexico, Nicaragua, Pakistan, Panama, Papua New Guinea, Peru, South Africa, Tanzania, and Timor Leste. Obviously, the lives of the poor are very different in these different countries, and vary even for different groups within each country. Still, some general information can be extracted:

  • The number of adults (i.e. those over 18) living in a family ranges from about 2.5 to about 5, with a median of about 3, which suggests a family structure where it is common for adults to live with people they are not conjugally related to (parents, siblings, uncles, cousins, etc.). When every penny counts, it helps to spread the fixed costs of living (like housing) over a larger number of people. Poverty has consequences for family structure, and vice versa.
  • Poor families have more children living with them. The fact that there are a large number of children in these families does not necessarily imply high levels of fertility, as families often have multiple adult women.
  • The poor of the world are very young on average. Older people tend to be richer simply because they have had more time to accumulate resources.
  • Food typically represents from 56 to 78 percent of consumption expenses among rural households, and 56 to 74 percent in urban areas.
  • The poor consume on average slightly less than 1400 calories a day. This is about half of what the Indian government recommends for a man with moderate activity, or a woman with heavy physical activity. As a result, health is definitely a reason for concern. Among the poor adults in Udaipur, the average “body mass index” (that is, weight in kilograms divided by the square of the height in meters) is 17.8. Sixty-five percent of poor adult men and 40 percent of adult women have a body mass index below 18.5, the standard cutoff for being underweight. Eating more would improve their BMI and their health, and yet they choose to spend relatively large amounts on entertainment. Which just shows that the poor have the same desires as anyone else and choose their priorities accordingly.
  • The poor see themselves as having a significant amount of choice, and choose not to exercise it in the direction of spending more on food. The typical poor household in Udaipur could spend up to 30 percent more on food than it actually does, just based on what it spends on alcohol, tobacco, and festivals. Indeed, in most of the surveys the share spent on food is about the same for the poor and the extremely poor, suggesting that the extremely poor do not feel the need to purchase more calories. This conclusion echoes an old finding in the literature on nutrition: Even the extremely poor do not seem to be as hungry for additional calories as one might expect.
  • Tap water and electricity are extremely rare among the poor.
  • Many poor households have multiple occupations. They may operate their own one-man business, sometimes more than one, but do so with almost no productive assets. They also have jobs as laborers, often in agriculture. And they cultivate a piece of land they own. Yet, agriculture is not the mainstay of most of these households. Where do they find non-agricultural work? They migrate. The businesses they operate are very small, lacking economies of scale and without employment opportunities for people outside the family. That’s a vicious circle because it means that few people can find a job and are forced to start petty businesses themselves. This circle makes economies of scale very difficult.
  • The poor tend not to become too specialized, which has its costs. As short-term migrants, they have little chance of learning their jobs better, ending up in a job that suits their specific talents or being promoted. Even the non-agricultural businesses that the poor operate typically require relatively little specific skills. The reason for this lack of specialization is probably risk spreading. If the weather is bad and crop yields are low, people can move to another occupation.
  • The poor don’t save a lot, unsurprisingly. Some of it has to do with inadequate access to credit and insurance markets. Banks and insurers are unwilling to give access to the poor and saving at home is hard to do; it’s unsafe and the presence of money at home increases the temptation to spend (that’s true for all of us by the way).
  • In 12 of the 13 countries in the sample, with the exception of Cote d’Ivoire, at least 50 percent of both boys and girls aged 7 to 12 in extremely poor households are in school. Schooling doesn’t take a large bite from the family budget of the poor because children in poor households typically attend public schools or other schools that do not charge a fee.

Economic Human Rights (38): A Silly Argument Against the Right to Food

The right to food (art. 25 of the Universal Declaration i.a.) doesn’t get a good press. Only a handful believe that it’s comparable in importance to rights such as free speech or freedom of religion. This disdain surprises me. And it’s not just that it shows a failure to understand the interdependence of rights – none of our rights make any sense on an empty stomach. If you know that 6 million children under the age of five die of hunger every year there is at least a prima facie reason – although not a sufficient reason, I admit – to claim that there should be a human right to food.

The counter argument goes as follows: if we grant people a right to food, they will stop working and just watch television all day while the government gives them food. That will destroy both the economy and people’s character.

I think that’s really silly. Let’s make an analogy with an uncontroversial right, the right to free movement. This right doesn’t mean that the government should “give people movement”. That doesn’t make sense. People claiming that right don’t ask for the government to move them. What they ask is

  1. that the government doesn’t hinder their free movement (hence a legal prohibition on internal border controls, restricted zones etc.); and
  2. that the government helps people to acquire the capability to move freely if they don’t have that capability (hence assistance to people with disabilities and the construction of public highways).

The same is true for the right to food. This right doesn’t tell the government to give people food. All it demands is that the government doesn’t take away people’s food or people’s ability to acquire food (as it did in the case of Ukraine’s Holodomor), and that it helps people acquire the ability to get food. The latter may imply temporary food provision (or giving cash for food) to those in dire need, but this provision is aimed at capacity building, and should stop when people’s capabilities are restored.

A closely related discussion is the one about positive and negative rights. See here.

Economic Human Rights (37): Basic Income as an Alternative to the Welfare State

The welfare state is the name for a collection of different government policies and programs designed to help the poor. Those policies and programs may include healthcare benefits, unemployment benefits, old age pensions, child benefits, some types of education subsidies, aid to the disabled, food stamps, housing subsidies, minimum wage rules, collective bargaining rights etc.

The welfare state is criticized in a number of ways. I’ll just mention a few arguments against it, without going into much detail and without replying to them:

  • it creates dependency and destroys self-reliance, responsibility, effort and other virtues
  • it rewards the undeserving and promotes subsidized idleness
  • it violates property rights because the taxes necessary for funding welfare are a form of theft
  • it imposes slavery on the productive and the responsible because it forces them to work for the benefit of the lazy and the irresponsible
  • it destroys incentives for taxpayers to become productive
  • it’s self-destructive because it destroys the prosperity that it wants to redistribute (the destruction of incentives results in the destruction of prosperity), or because it renders poverty more attractive
  • it’s not sufficiently targeted to the most needy: wealthy families may get child benefits, and wealthy pensioners may get healthcare subsidies
  • it requires a heavy state bureaucracy that usurps the right to invade the privacy of potential welfare beneficiaries (in order to ascertain whether people deserve benefits: are people really unemployed or unemployable? does their health status merit health benefits? etc.)
  • it can be gamed and people may engage in welfare fraud.

Some of these criticisms are evidently more pertinent than others, but let’s not evaluate them one by one. If we assume that there’s some truth in some of them, then it may be worthwhile to look at some possible alternatives. People often propose non-state solutions such as private charity (enhanced and encouraged by way of tax policy, education etc.). An advantage of private charity is that it fosters solidarity, virtue and a sense of belonging. However, it’s also counter-cyclical in the sense that it’s least available when most necessary (e.g. during economic recessions). Moreover, it tends to be unreliable and unequal (it may not cover all the needs of all poor people all of the time).

Another possible alternative is to keep a system of state provision of welfare, but to radically alter the specifics of the system. For example, one could give people a guaranteed and unconditional basic income at a level high enough to cover basic needs. Every individual would receive the basic income whatever his or her predicament, current or future. It would be funded with tax revenues, and therefore wouldn’t be a reply to the theft and slavery criticisms of welfare, but those criticisms are weak anyway (because they imply that all state activity, including policing and infrastructure, are illegitimate). It would, however, be a strong reply to the privacy infringing aspects of the current welfare system. A basic income, since it’s unconditional, would not require intrusions into the private lives of citizens in order to ascertain whether they deserve a benefit or not. It would undo the complexity of many current programs and hence also remove the need for a large bureaucracy. And it would counter the charge of assisting the undeserving: although many undeserving would receive a basic income, few would complain about it since everyone would receive it. Welfare fraud also would obviously become impossible.

An added advantage of a basic income system of welfare would be that it allows people to take more risks. They know that they won’t be destitute if things don’t work out. More risk taking can be socially advantageous because it can result in more innovation, more productivity etc.

However, notwithstanding the set of advantages, a basic income system will probably not be a perfect substitute for existing programs. It’s questionable, for example, whether a basic income, even one that is set at the highest sustainable level, will be enough to cover certain catastrophic healthcare costs. In general, a basic income theory doesn’t take into consideration the fact that different people have different needs and abilities and therefore require different amounts of resources.

Economic Human Rights (35b): What’s So Funny About Charity?

I’ve stated before why I believe charity helps to prevent poverty, and why it’s better than government welfare, at least in principle. The welfare state, in my view, is a fallback option when charity fails (as it often does).

The usual argument against this view is that charity is bound to fail because it’s crowded out by the welfare state. People don’t and won’t assist others because they think that they already do enough by paying taxes, whatever the effectiveness or fairness of the tax system. The evidence for the occurrence of crowding out is, however, unclear, and that’s a “charitable” interpretation of the evidence.

Another criticism of charity is closer to the mark:

Charity is counter-cyclical. When the economy is booming and there’s less need, there’s also more capacity. When the [economy] is worse and there’s more need, donations dry up and there’s less capacity. That’s not a criticism of charities: It’s hardly their fault. And nor is it a criticism of the people who donate — or stop donating — to charities. When you’re worried about paying your mortgage, it’s harder to help other people pay theirs. But it’s a big part of why we need a robust, federal safety net that’s immune … from the ravages of the business cycle. (source)

Indeed, as the need for charity rises, the supply diminishes, and vice versa. That is why a theory of poverty alleviation that depends solely on charity is incomplete. However, implicit in this argument is that the welfare state is immune to the business cycle, which is obviously incorrect. A recession means a drop in tax revenues and a simultaneous increase in demand for welfare transfers (there are more unemployed etc.). Hence, a recession means a weakening of the capacity of the welfare system. That’s exactly the same mechanism that makes charity unreliable.

Fortunately, the welfare state can bridge over recessions by going into debt, something that few private charity donors will do. This means that a welfare state can keep its anti-poverty transfers going in times of increased demand for funds and decreased supply of funds.

More on charity here.

Economic Human Rights (35): A Right to Unemployment Insurance?

Article 23 of the Universal Declaration of Human Rights provides a right to work, as well as a right to “free choice of employment and to just and favorable conditions of work”. That right protects us against slavery, forced labor, unfair wages, and unsafe working conditions. The same article offers a right “to protection against unemployment”. That clause can be interpreted in two ways:

  • it can mean that if we’re out of work through no choice of our own, we should get help to find work (either from the state or from our fellow citizens)
  • or it can mean that if we’re involuntarily unemployed, we should get some monetary compensation for the loss of salary or income and the financial stress that we suffer as a result.

It’s the latter interpretation that is made more explicit in another article, number 25, of the Declaration which mentions “the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control”.

So it seems we have a right to unemployment insurance or unemployment benefits. The obvious justification for this right is material wellbeing: the absence of poverty is also a right.

However, there are some other types of justification of unemployment insurance. Some call UI an “automatic stabilizer” in times of economic hardship: Keynes taught us that both unemployment and falling wages lower consumer demand and can lead to even greater unemployment. Stingy or absent unemployment benefits lower demand even more. In that view, which does sound plausible, unemployment insurance isn’t just a good in itself and for the individuals concerned (as well as for those who may someday suffer unemployment and who can suffer some amount of stress because of the risk), but is necessary for the periodic regeneration of capitalism and for the smoothing of the business cycle. Benefits are also efficiency enhancing because of another reason:

One of the possible advantages that is touted for more generous UI (including by Mike Konczal) is the idea that it allows for better job matching—people can wait to find the right long-term job opportunity instead of taking the first job that becomes available. (source)

It’s better to have people perform the jobs they prefer because they’re likely to be most efficient there. Hence, it’s better to give them more time to find the right job, and to give them unemployment benefits so that they have the time.

Others, however, call this right a foolish invention because it destroys incentives to work at the level of individuals, and reduces incentives to create wealth at the level of companies (because of the relatively high tax rates that come with the welfare state, that in turn comes with benefits such as unemployment insurance). It doesn’t enhance efficiency at all, on the contrary. But the evidence for this view is not so strong:

Evidence suggests that individuals do prolong their job search when they receive unemployment benefits, partly because they are looking for the best possible job. But the magnitude of this effect is likely to be small.

A recent study … compared lengths of unemployment among those eligible for unemployment insurance with those who were not eligible. Their statistical analysis suggests that extended benefits accounted for only four-tenths of 1 percentage point of the nearly 6 percentage point increase in the national unemployment rate over the last few years. (source)

Still others call the right to unemployment benefits a foolish invention, not because of reasons that have to do with overall economic efficiency, but because they believe that the unemployed have no one else to blame but themselves for their misfortune, and therefore can’t demand help from others. Those others can voluntarily decide to help the unemployed, in a spirit of charity that extends even to self-inflicted misfortune, but the unemployed don’t have a right based on moral concerns to demand such help. And indeed, there may be some logic to such a view: if we all believe strongly that we deserve what happens to us, we are likely to work hard, show discipline and self-control and hence achieve success. Conversely, those who think that the causes of their misfortune are always outside of their control, are not likely to invest much effort in their lives. However, morality and life are much more complicated than that. The best efforts can lead to disaster, and apathy can lead to success. People who are not the sole authors of their success can be required to help those who are not the sole authors of their misfortune.

Economic Human Rights (34): The Cost of Human Rights, and of Economic Rights More Specifically

Human rights cost money. It’s often claimed that economic human rights aren’t really human rights because they are so expensive for many governments in the world that they can’t realistically impose duties: governments of poor countries can’t be expected to respect a duty to provide healthcare, housing, food, work etc. Ought implies can. You can’t be under an obligation if there’s no way you can honor that obligation. It’s claimed, therefore, that economic rights are mere aspirations rather than rights.

Yet, the same argument can be made about the supposedly more distinguished and respectable freedom rights. It’s strange, many countries in the world can’t manage to create the institutions and the governance to enforce freedom rights, simply because they don’t have the means (and sometimes the willingness), and yet this fact doesn’t make people think twice about the reality of freedom rights.

Providing effective and non-corrupt police forces and judiciaries is expensive. Probably just as expensive as providing a good public healthcare system. True, rights have to be enforceable, and duties shouldn’t be farcically unrealistic. But I fail to see the ontological difference here between freedom rights and economic rights.

We also shouldn’t overestimate the cost of economic rights. The purpose of these rights is not to have a government that gives healthcare, food, work etc. to every single citizen. That would destroy the economy. A system of economic rights will require that most people provide these goods for themselves through work and economic activity. It will also require that citizens show generosity and help each other. Economic rights also create duties for fellow-citizens. The government supplies the goods in the remaining cases, when self-help and mutual help are not enough.

As a result, the cost of economic rights isn’t as high as a cursory reading of these rights would imply. Conversely, the cost of freedom rights is often higher than one would conclude at first sight: true, these rights often require abstinence and forbearance (“don’t invade my privacy or inhibit my speech”) and that’s something cheap. But the enforcement and equal protection of those rights and the enforcement of forbearance requires an efficient government, which is expensive.

Something about another cost issue related to human rights, namely the relative cost of freedom and dictatorship, is here.

Economic Human Rights (33): Sweatshops

No one’s in favor of sweatshops in developing countries (or elsewhere for that matter). But that doesn’t mean you have to believe that campaigning against them is a good thing. It’s quite possible to simultaneously believe that something is bad and that its disappearance would make things even worse. Generally, people work in the disgusting circumstances of a sweatshop because the alternative is even worse. People tend to select the occupation that’s least harmful and most profitable for them.

So even though sweatshops do indeed look like a microcosm of human rights violations – degrading working conditions, low salaries, and long hours, exposure to harmful materials, hazardous situations and extreme temperatures, abuse, exploitation (including sexual exploitation) and child labor – they may be better than the alternatives – a fine world we live in – and the fact that most sweatshop workers aren’t coerced by their employers indicates that this is the case.

Sweatshops insult our western sense of justice because we have a relatively low threshold for injustice. Without the opportunity to work in a sweatshop, many people in the Third World would be forced into subsistence farming, scavenging of garbage dumps, begging or even prostitution. All these alternatives may offer lower incomes and worse conditions. Campaigning against sweatshops can lead to their closure and force people into the even less appealing alternatives.

That’s why I argue against campaigns and boycotts. However, campaigns don’t have to lead to the closure of sweatshops and loss of jobs, and can even make things better – go figure:

We find that anti-sweatshop campaigns led to large real wages increases for targeted enterprises. We also examine whether higher wages led these firms to cut employment or relocate elsewhere. The results suggest that there were some costs in terms of reduced investment, falling profits, and increased probability of closure for smaller plants, but we fail to find significant effects on employment. (source, source)

A successful multinational may be profitable enough to be able to afford wage increases [as a response to campaigns], and may prefer to take wage increases on the chin rather than move its business around. (source)

Economic Human Rights (32): The Economic Cost of Taxing the Rich

Taxation is linked to human rights in several ways:

I personally belief that a progressive tax is best in light of the last two concerns. In a progressive taxation system, higher earners pay a larger percentage of their income on taxes. Compared to a regressive taxation system (people with higher incomes pay less in percentage of their income, as in the case of a consumption tax or VAT) or a flat tax (the tax percentage is the same for all income groups), a progressive tax reduces income inequality: it makes incomes more equal in a direct way because it reduces the income of higher-earning families by a larger percentage than the income of lower earning ones; but also in an indirect way because this system – under certain conditions – yields more tax revenues which can then be spent on poverty reduction and the safety net. Also, it seems to be a good example of a just and fair system. The strongest shoulders should carry the most heavy burden. Someone earning a low income can end up in poverty after paying a small percentage in taxes; a wealthy person will perhaps not even notice paying a relatively large sum in taxes.

The counter-narrative states that high tax rates discourage people; they are a disincentive to hard work and effort. High tax rates for high incomes discourage people who work relatively hard (they work hard supposedly because they earn a lot). Because high tax rates punish the most productive elements in a society, the whole of society suffers. More productive people will limit their productivity because they don’t want to fall into a higher tax bracket, and the money they pay in taxes can’t be invested in the economy. Taxing the rich therefore has an unacceptable economic cost. Conversely, low tax rates for the rich produce benefits for all (this is trickle down economics, read also about the Laffer curve).

But this narrative doesn’t quite stand the test of data. As is clear from this link, high tax rates don’t slow down economic growth, and low tax rates don’t speed it up. This paper also supports the claim that moderate, as opposed to dramatic, increases in marginal rates don’t have any impact on the willingness of the wealthy to participate in the economy. They won’t go Galt. Atlas won’t shrug, except to signal indifference.

The top income tax rate was 91% (beginning at taxable income of $400,000) … [in] the period from 1951 through 1963. Those were the golden years of the U.S. economy, in which the average annual rate of productivity growth was 3.1% (compared with about 1.5% after 1981). Of course, the growth might have been even faster had the marginal tax rates been lower, but the coincidence of high rates and high productivity raises challenging questions for those who believe that high marginal tax rates carry an unacceptable cost. (source)

To be fair, marginal tax rates are a crude measures of tax burden. There’s a difference between marginal tax rates and effective tax rates.

  • A marginal tax rate is the tax rate that applies to the last dollar of the tax base (taxable income or spending, usually income). It’s not the rate at which all your dollars are taxed. It’s the maximum rate you’re paying on any of your dollars of taxable income.
  • An effective tax rate refers to the actual rate, i.e., the rate existing in fact, for the entire income, after tax deductions and credits and taking into account lower rates for lower income brackets (see here). It’s your total tax obligation (including your income tax and any other additional taxes and/or credits), divided by your total taxable income.

But even if we look at the effective tax rates of the rich, we see that this has steadily decreased over the decades, with little or no positive effect on overall economic performance.

And when there’s no positive effect of decreasing tax rates, there’s probably also no negative effect of increasing tax rates. To the extent that the wealthy (and productive, although those groups obviously don’t overlap completely) respond to changes in the tax system, their responses focus not on increased/decreased labor, productivity or investment, but on tax avoidance (see here).

Economic Human Rights (31b): Certain Objections

Economic rights are a subset of human rights. Put very briefly and simplistically, they are what could be called anti-poverty rights: for example, there’s a right to a certain standard of living, to social security, to work, to fair wages, to healthcare, housing etc.

It’s an understatement to say that there’s no universal consensus on these rights. Some say that these aren’t “real” human rights (like Bill Easterly for example). Others say that these rights are useless or even harmful. Here are a few of the most common objections raised against economic rights.

The big state criticism

Economic rights are believed to require invasion of privacy and hence violations of an important freedom right (freedom rights such as free speech, privacy, habeas corpus etc. are usually distinguished from economic rights, political rights etc.). In order to verify whether people have a right to social security benefits or healthcare benefits, the state has to check people’s income (legal and illegal), their family composition, their health, their medical consumption, their lifestyle etc.

The assumption behind this criticism is that the state is the only or the main party responsible for the realization of economic rights. This is not the case. People in need can call on other people to help. And these other people have a moral responsibility to help. The duties of mutual assistance, charity and philanthropy point to a horizontal aspect of economic rights. People in need do not only have a vertical right to assistance, or a right directed at the state. Their economic rights can be addressed at their fellow citizens, and these have a duty to respect and protect these rights. It’s only when horizontal duties fail that the state should intervene. If we think of economic rights in this way, the dangers of an overbearing state don’t look that ominous anymore.

The rule that economic rights should – in part – be realized by citizens has another advantage as well: economic rights tend to foster community spirit and feelings of solidarity and belonging.

But this insistence on solidarity shouldn’t obscure the rule that people have a responsibility to help themselves and support themselves. This kind of independence is a part of freedom and an important good. Solidarity comes into play only when self-help is unsuccessful or impossible, and the state comes into play only when solidarity is unsuccessful or absent.

Different kinds of duties

Another objection: some say that economic rights, if they are rights at all, are radically different from “normal” human rights – also called freedom rights – and can therefore be given a lower priority (and maybe aren’t even real rights at all). Freedom rights imply duties of abstention or forbearance, whereas economic rights require duties of active help, involvement and intervention. In the case of violations of freedom rights, the remedy is easy: stop doing what you’re doing. In the case of violations of economic “rights”, the remedy is often very difficult if not impossible. If there is no work, no one can give it to me. If a country is poor, no one can raise the standard of living.

When freedom rights are violated, the victim can go to a court and a judge can force the violator to stop his or her actions. When economic rights are violated, it’s useless to go to a court. Not only isn’t there an obvious violator who can be stopped, there is often no one who can stop the violation from happening. Hence it looks like these rights are unenforceable and often have no remedy. Rather than rights, it seems that they are aspirations or policy goals, often long term policy goals.

However, there’s again an erroneous assumption underlying all of this. The distinction between the two types of duties – forbearance and active assistance – isn’t clean-cut. Freedom rights require active intervention by the state in order to enforce forbearance. They require an efficient judiciary and police force. For some states, this may be as unattainable as prosperity. In fact, it’s precisely because of a lack of prosperity that many states are unable to guarantee protection for freedom rights. Of course, the fact that economic rights are a prerequisite for freedom rights isn’t a sufficient reason to call them rights. But neither is it a reason not to call them rights.

Conversely, economic rights often require more forbearance than active intervention. Economic rights in China during the Great Leap Forward would have been better served by state forbearance. All types of human rights require forbearance and intervention. Perhaps economic rights generally need more intervention, but that is a difference in degree and not in essence, and it isn’t a sufficient reason to reject the label of “rights” for the aspirations inherent in economic rights.

Ought implies can

There’s another criticism of economic rights, related to the previous one. Economic rights are said to violate a general rule for rights: ought implies can; there can be no obligation to do something if there is no capability to do it. You cannot have a duty to help someone who’s drowning if you can’t swim yourself. Hence the person drowning doesn’t have a right to be assisted by you. The same is said to be true of economic rights which therefore aren’t real rights. If a poor country doesn’t have the resources to help its poor citizens, then these citizens don’t have a right to be helped.

However, we don’t follow the same logic in the case of freedom rights. Freedom rights also require resources, as we have seen. When a state doesn’t have the resources necessary to protect its citizens’ freedom rights, we usually don’t say that the citizens of such a state have lost their freedom rights. People have rights irrespective of the probability that they can be protected. Or better: the less people’s rights are protected, the more important it is that they have rights. And anyway, violations of economic rights don’t occur because there are insufficient resources but because of an unequal distribution of resource, nationally or internationally. So the “can” part of “ought implies can” isn’t as fanciful as the critics of economic rights believe.

Economic rights are superfluous and useless

This is supposed to be the case because free markets should automatically produce a certain standard of living for everyone that is high enough to realize the goals inherent in economic rights. Free trade, deregulated markets and low taxes cause profits to rise, which in turn means more investments, which in turn means more and better jobs and higher incomes. All boats rise on a rising tide.

Now, it’s my belief that history – and especially recent history – has shown that this isn’t enough. Free markets are beneficial, but they don’t automatically provide high standards of living for everyone.

Economic rights are harmful and counterproductive

This is a stronger version of the “useless” argument. Economic rights are believed to require a big state (see above), high taxes and intrusive regulation. All of this hinders the economy and the creation of wealth. As a result of economic rights, there is less wealth to redistribute, and economic rights therefore undo what they want to achieve.

They are also harmful in another way: they violate freedom rights, especially the right to privacy and the right to property (because of redistribution). We’ve already seen that we can mitigate this risk when we include horizontal duties. But even if this risk is real, why should property and privacy automatically rank higher than the absence of poverty? If we assume that economic rights are real rights, then it’s not surprising to see that they can contradict other rights. Contradictions between human rights are very common. The right to privacy is often in conflict with free speech for example. Sometimes one right has to be limited for the sake of another. So why should this be a problem when dealing with economic rights?

Of course, one shouldn’t dramatize. Economic rights and freedom rights are generally not incompatible. On the contrary, they are interdependent. Freedom for the poor often doesn’t mean a whole lot. But, on the other hand, the squeaky hinge gets the oil: poverty has to have a voice if it is to be eliminated.

Economic Human Rights (29): Unemployment Benefits in the U.S. and Elsewhere

Strange as it may seem to some, unemployment benefits are a human right, and rightly so in my opinion. Poverty makes rights impossible, and unemployment benefits save many from poverty, especially during a recession in which unemployment isn’t just a phase between two jobs. Read for instance art. 22, 23 and 25 of the Universal Declaration:

Article 22: Everyone, as a member of society, has the right to social security.

Article 23: Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

Article 25: Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

Three times! They must have meant it.

Compared to many other industrialized countries, the U.S. usually adopts a very critical attitude towards social and economic rights in general, and hence also to the right to unemployment benefits. Which is apparent from its relatively stingy system.

At just under $300, the average weekly benefit is less than half the average private-sector wage. Mississippi’s maximum benefit of $230 is not much more than the federal poverty threshold of $200 for an individual. (source)

And it’s not just the total amounts of the benefits:

Compared with the systems in other industrialised countries, the American unemployment-insurance (UI) scheme pays lower benefits for less time and to a smaller share of the unemployed. … States often require beneficiaries to have worked or earned an amount that disqualifies many part-time and low-wage workers. They also disqualify people seeking only part-time work – even though many people now work part-time for family reasons. Benefits typically last for only six months, more than enough time to find a new job in normal times but not in recessions. (source)

This isn’t only a human rights issue. Especially in a recession it can mean making things worse. When people lose their jobs, you don’t want them to lose a large part of their purchasing power since economic recessions are made worse by falling consumer spending.

However, making the system of unemployment benefits more generous would almost certainly require higher taxes. And although the U.S. is a low-tax country (compared to other industrialized countries) that seems pretty utopian right now (given the already hysterical fears about the fiscal consequences of the healthcare proposals).

Economic Human Rights (28): The Health Consequences of the Recession and of Unemployment

The Economist called it the “unsurprising research finding of the day“, but I think it’s a useful confirmation of an existing intuition: this paper finds that the recession can have a beneficial effect on the health of some people who lose their job because of it, namely those people spending their new leisure time in a healthy way. Other people, however, spend their leisure time cultivating some of their pre-existing unhealthy habits, or find themselves depressed and without employer-provided healthcare (especially in the U.S.). Because their healthcare has become more expensive now that they are unemployed, they decide to go without treatment or tests.

Results showed the body mass of the average laid-off food-lover increasing by the equivalent of more than 7 pounds for a 5-foot, 10-inch man weighing 180 pounds during unemployment. Similarly, frequent drinkers on average doubled their daily alcohol intake after losing their jobs and before finding another one. (source)

Elsewhere in the world, and especially sub-Saharan Africa, it seems that the health consequences of the global recession are more dramatic:

The financial crisis will kill between 28,000 and 50,000 babies in sub-Saharan Africa this year, according to this paper. The reasoning here is straightforward. For people on subsistence incomes, a fall in GDP can be fatal. The paper’s authors, Jed Friedman and Norbert Schady, estimate that a one percentage point fall in per GDP across sub-Saharan Africa is associated with a rise in infant (defined as under-ones) mortality of between 0.34 and 0.62 per 1000. If we multiply this increase by the number of births this year and by the 2.4 percentage point difference between GDP growth this year and last (a reasonableish estimate of the effect of the crisis), we get a figure of between 28,000 and 50,000. … Of course, you can quibble with the numbers. But the general story holds. For the poor, income is a matter of life or death. Which brings me to my question. If one-in-seventeen British babies were to die this year because of the financial crisis, it would be the biggest media story for years and there’d be rioting in the streets until the government did something. So, why the silence? Chris Dillow (source)

Economic Human Rights (21): Sweatshops

Sweatshops don’t have a very good reputation. They impose degrading working conditions, low salaries, and long hours, and they expose workers to harmful materials, hazardous situations and extreme temperatures. In many cases, the workers are young women who are vulnerable to abuse and exploitation – including sexual exploitation – by their bosses. On top of that, many sweatshops violate child labor laws. Hence, sweatshops have been called a form of modern slavery, and not without reason. They indeed look like a microcosm of human rights violations.

Most, but not all, sweatshops are situated in the third world countries, where labor regulations are lax, salaries low and trade unions not very powerful. Third world countries also don’t have a high level of technology intensity in industrial production, making it profitable to employ manual labor. Western companies often outsource high technology factories in the West to low technology sweatshops in the South. In the West, sweatshops also exist, but mostly in the illegal economy.

However, many economists who can’t possibly be accused of heartlessness or indifference when it comes to the problem of global poverty, have defended them. There’s for example Paul Krugman, Jeffrey Sachs and Nicholas D. Kristof. They argue that the alternatives in many countries are worse. Sweatshops may insult our western sense of justice, but that’s because our economies offer in general much higher standards of work. In third world countries, sweatshops are a step forward for many people. Without the opportunity to work in a sweatshop, many of them would be forced into subsistence farming, garbage scavenging, begging or even prostitution. All these alternatives offer lower incomes and worse conditions.

Furthermore, many of the young women working in sweatshops see their employment as a way out of gender discrimination. It’s a form of liberation from the oppressive local and traditional systems in their rural hometowns. They move to larger industrial towns, earn a living, have their own rooms, and as a result they can escape an early (and often arranged) marriage and early motherhood. And without the burden of an early marriage and motherhood, they can develop their education.

Developing countries starting their manufacturing sectors in the form of sweatshops, can expect improvements elsewhere in their economy:

The growth of manufacturing has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. Paul Krugman

So it’s probably not a good idea to try and abolish sweatshops, or to boycott products produced in sweatshops. We may do more harm than good when we force people out of sweatshops and into other types of employment. What we have to do, however, is to promote better labor standards and working conditions in existing sweatshops, and do so realistically. Demanding immediate implementation of western standards is silly, given the level of development of third world economies, and would result in the end of sweatshops. But western companies that use or trade with sweatshops can be pressured to do something about the worst aspects of sweatshop labor.

Economic Human Rights (20): Health and Wealth

A few more words about the relationship between poverty and health. First of all: both are human rights issues. Article 25 of the Universal Declaration states:

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

The concern is that people may find themselves in a trap. Their poverty causes ill health because healthcare costs money, because poverty leads to malnutrition etc. And their ill health leads to further poverty, because they aren’t as productive as healthy people.

The ill health of poor people isn’t a problem only for these poor people. If they were more healthy, they would be more productive and more creative, and the economy as a whole and the wellbeing of society as a whole would benefit. Healthy children are also likely to stay in school longer, and hence will be more valuable to society when they grow up.

There is, of course, some obscurity regarding the direction of the causation: rich countries may be more healthy on average mainly because they spend more on healthcare. But it may also be that they have become rich because their health was improved first. Impossible to disentangle all this, because the “wealth of nations” is the result of hugely complex processes of many forces and counter-forces.

For example, there were some developing countries that benefited from WHO assistance after World War II and from breakthroughs in medication (such as penicillin). These countries, therefore, didn’t improve their health through economic growth and increased wealth. Health improvements were caused by external forces. One result of these health improvements was increased life expectancy, but as a result of this increase, there was population growth that went beyond GDP growth, resulting in declining levels of income per head. After some decades, the economic benefits of having more people in the economy, and reduced birth rates caused by better healthcare (and access to contraceptives), reversed the trend. There’s an interesting study by Acemoglu and Johnson here.

Others, however, have pointed out that this is just a tiny piece of the puzzle, and other factors can push societies in other directions. An increase in the population doesn’t necessarily lead to Malthusian problems. International trade and cooperation for example, but also technological improvements have sharply reduced the possible impact on an economy of an increase in population levels.

Economic Human Rights (19): Spreading the Wealth Around

The necessaries of life occasion the great expense of the poor. … The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. … It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion. Adam Smith

The purpose of economic rights is the equal possession of a minimum supply of those fundamental material means, which are necessary for the continuation of life in a decent way. If there are some people who have less than the minimum, economic rights will redistribute some of these means. In other words, these rights will take some things away from those who have enough and give it to those who do not have enough. This is possible because, globally or even nationally in some cases, there is enough for everybody. The only problem is the unequal distribution.

Economic Human Rights (14): Health

Health is a human rights issue in two respects. First, people have a right to health care and health insurance. Article 25 of the Universal Declaration states that

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

The International Covenant on Economic, Social and Cultural Rights is more specific. Article 7 guarantees the rights to safe and healthy working conditions. Article 10 deals with child labor:

The employment of children in work harmful to their morals or health or dangerous to life or likely to hamper their normal development should be punishable by law.

Article 12 states:

1. The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. 2. The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for: (a) The provision for the reduction of the stillbirth-rate and of infant mortality and for the healthy development of the child; (b) The improvement of all aspects of environmental and industrial hygiene; (c) The prevention, treatment and control of epidemic, endemic, occupational and other diseases; (d) The creation of conditions which would assure to all medical service and medical attention in the event of sickness.

The second way in which health is a human rights issue is the fact that good health is a precondition for the enjoyment of all human rights. In this way, bad health is similar to poverty. You have to be healthy and without pain in order to be able to use freedom rights and political rights. A sick, suffering or toiling person is thrown back upon himself and unable to relate to the outside world, just as a person who concentrates exclusively on his or her body for pleasurable reasons. Intense bodily sensations of any kind – positive and negative – shut us off from the world, because they make it impossible to perceive anything except our own body. In other words, they make the use of our classical rights impossible or undesirable.

Economic Human Rights (12): Life Expectancy

Life expectancy, or the average length of life in a given population (mostly a country), is of importance to the issue of human rights. A low life expectancy means shorter life spans. Now, it’s not because a life is relatively short that is has to be less fulfilling, less happy or less meaningful. However, it is obvious that a longer life will allow for more activity, self-development and freedom, and hence for more enjoyment of human rights, than a shorter life.

Moreover, longer life expectancies are often an indicator of better health and healthcare, and good health is a prerequisite for human rights. Bad average health or healthcare and low life expectancy, on the contrary, are indicators of poverty, and poverty is in itself a violation of certain human rights and makes other human rights impossible.

Life expectancy in Western countries today is almost double what it was in the pre-modern era. This is the consequence of highly reduced infant mortality rates, modern medicine (e.g. before modern medicine, one in four women died in childbirth), improvements in sanitation (sewers) and nutrition, etc. Especially in the last century did we see enormous progress. In the US for example, life expectancy at the beginning of the 1900s was 50 years. At the end of the same century it was 77 (with differences of course between male and female and between social classes; poverty, in particular, has a substantial effect on life expectancy).

Of course, as in most cases, the developing countries haven’t achieved the same levels as the West. They have improved their numbers but there are still large and shocking inequalities in life expectancy, with Africa again bearing the heaviest burden. Sub-Saharan Africa (partly because of HIV) has even seen a decrease in life expectancy during the last decades. The former USSR also saw a decrease.

 

 

 

A person’s life in one of the poorest countries will on average be half as long as the life of a person fortunate enough to be born in a rich country.

(High infant mortality rates in a particular country can bring down rates of life expectancy at birth drastically. In these cases, another measure such as life expectancy at age 5 can be used to exclude the effects of infant mortality to reveal the effects of causes of death other than early childhood causes. However, that’s somehow “cooking the books” since infant mortality does reduce the life expectancy of the infants in question. On the other extreme are some people who want to include aborted fetuses in life expectancy rates).

Economic Human Rights (11): Length of the Working Day

Enjoying your human rights doesn’t only mean that other people are not doing certain things to you. It also means that you are able to do certain things with other people; debating, associating, participating in cultural events or (local) government etc. Hence, rights such as free expression, assembly and association require a personal investment of time and effort. In this sense, it can be said that work conditions and especially labor time or the length of the working day can make a huge difference for human rights.

Over the last two centuries, and especially in the high performing economies of the West, we have achieved high productivity through automation, organization and technology, and therefore companies no longer have to force workers to spend their waking lives in the factory. The labor movement of course also contributed. (One can also reasonably claim that the shortening of the working day was achieved thanks to neo-colonial exploitation of developing countries and trade barriers).

The poorer countries of the world, and in particular Africa, can only dream of the western working day.

Of course, shortening the working will not automatically result in the flourishing of human rights. People may well decide to waste their leisure on bullshit.

Economic Human Rights (9): Homelessness

Without your own house, it is difficult to have and enjoy private property. Hence you are more likely to suffer poverty. Without a house or your own place in the world and without your own intimate and personal things, it is obviously more difficult to have a private life. The four walls of your private house protect you against the public.

Independence, self-reliance, autonomy, and therefore freedom are capacities which rely heavily on private property and a private place. Private property and a private place are also important for the creation and maintenance of relationships. When you have your own house and your own place in the world, you can live in a particular world, in a very concrete social context of friends, enemies, neighbors and other types of relationships. A place in the world is always a place in a particular community.

Therefore it seems that homelessness is not only a violation of a human right as such (the right to housing, article 25 of the Universal Declaration) but makes it very difficult to enjoy other human rights as well. Examples are the right to the absence of poverty (also article 25 of the Universal Declaration) and the right to private property (article 17 of the Universal Declaration), but it also hinders freedom in general, freedom in the sense of independence and autonomy.

Economic Human Rights (8): Poverty

Poverty is a violation of human rights. Article 25 of the Universal Declaration states:

“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”

And we all know the devastating effects of poverty on other human rights.

Economic Human Rights (6): Health

Bad health and suffering create the same problems as poverty. You have to be healthy and without pain, in order to have a cultural and political life and to be able to use freedom rights and political rights. A sick, suffering or toiling person is thrown back upon himself and unable to relate to the outside world, just as a person who concentrates exclusively on his or her body for pleasurable reasons.

Intense bodily sensations of any kind – positive and negative – shut us off from the world, because they make it impossible to perceive anything except our own body. In other words, they make our public and political life and the use of our classical rights impossible or undesirable.

Hunger and consumption, as well, force you to concentrate on yourself and your body. You do not have the time, the energy or the desire to concentrate on the world. When you are eating or thinking of eating, you are imprisoned in cyclical biological necessities and in your metabolism with nature necessary for the preservation of life. You have to avoid sickness, pain and hunger – as well as their extreme opposites – to be open to the world and fit for cultural and political life.

Economic Human Rights (5): Rights or Aspirations?

Is it justified to use the word “rights” in the context of economic rights such as the right not to suffer extreme poverty? Are these rights comparable to classical freedom rights or are they an example of the way in which superficial reasoning destroys the meaning of words? Are they rights or are they mere aspirations or desires masquerading as rights?

The claim that the expression economic rights is an oxymoron is based on the following reasoning. Rights have to be enforceable. There is no right without a remedy. If a right is violated, then it must be possible to redress the situation in a court of justice. It has to be possible to find somebody who is responsible for the violation and who can stop the violation. If nobody can be forced to respect a right because nobody has the power and duty to respect it, then it is useless and wrong to speak about a right. Take for example the “right” to have a climate in which the sun always shines and in which the temperature is constantly between 25 and 27 degrees Celsius. This can be a desire but it can never be a right because it is not enforceable. There is no remedy if it is violated; there is no way to redress the violation. A court of justice cannot decide that the government should take action to realize this “right”. Nobody is responsible for a violation and nobody can stop a violation. Nobody can be forced to respect the “right” because nobody has the power to respect it, and hence there is no right.

It is not uncommon to hear the same kind of reasoning in the case of economic rights, although in international law these rights enjoy a similar level of protection as classical freedom rights or civil rights. What we do in the case of a violation of classical rights – ask a judge to force the violator, for example the government, to respect our rights – is often impossible in the case of economic rights. If there is no work, then a judge cannot force the government to give us work. If there is no money, then a government cannot have the duty and responsibility to provide social security and thereby eliminate poverty. Ought implies can. The rule that we should not impose a duty on someone who is unable to fulfill it, does not pose any problems in the case of freedom rights. If the government violates our right to free speech, then a judge can force the government to protect our right because this protection only requires that the government stop its actions.

This criticism of economic rights is based on an exaggerated distinction between forbearance and active protection. It is true that freedom rights often require forbearance and economic rights active involvement and commitment. But things can also be the other way around. All human rights depend on judicial and police institutions that in turn depend on the protection of the state. Even a right such as free speech needs the active involvement of the judiciary and hence the state in order to be protected. If our right to free speech is violated, then we may need the help of a judge and perhaps even the police in order to force the violator to stop his actions. And for some states, it can be just as difficult to fulfill their duty to provide efficient judiciaries and police forces as it is to fulfill their duty to provide work and social security.

If freedom rights need as much active involvement as forbearance, then the same is true for certain economic rights. The right to food in an amount sufficient for survival is often better served by government forbearance than by government action. Look for example at the Great Leap Forward and its disastrous consequences for the people of China. All human rights need actions as well as forbearance. According to the circumstances, a right can be more or less positive or negative. The right to food in Mao’s China was relatively negative and directed against state intervention. In many inner cities, it is relatively positive and directed at the passivity of the state. All human rights require both intervention and abstention. And it is, therefore, unfair to dismiss economic rights on the grounds that they impose duties on the government that are different from the duties imposed by “real” rights.

Economic Human Rights (4): Taxation

What if different kinds of equality contradict each other? For example equality before the law on the one hand (laws must be equal for everybody and should not discriminate) and material equality as promoted by economic rights on the other hand.

Material equality is often promoted by way of taxation based on legislation. The purpose of taxation is the redistribution of property. The problem is that redistribution only benefits one group of people and harms the interests of the rest of the population. Taxation laws do not seem to be equal for everybody and do not have the same result for everybody. It seems as if they discriminate against certain people. A wealthy person can claim that laws must be the same for everybody and that a law which forces one person to give and allows another to receive is illegitimate. A law against murder does not, at the same time, force one person to abstain from murder and allow another person to murder. So why should a law on taxation be allowed to discriminate?

First of all, there is no reason to believe that the principle of equality before the law is an absolute principle. It must be possible to make trade-offs between principles. If one principle – for example equality before the law – does serious harm to another principle – for example material equality – then it may be acceptable to sacrifice or limit one principle for the sake of another. Sometimes, one has to make a choice and one has to establish priorities. This goes both ways. Too much attention to material equality can be counteracted by way of the principle of equality before the law.

However, it may not be necessary to limit the principle of equality before the law. Taxation laws do not discriminate, at least when we define discrimination as giving something to one person and denying it to another without good reason. Economic rights indeed give something to one person and not to another. Even more so, they take away something from one person in order to give it to another. However, the former person is not denied the thing that is given to the latter. He or she has and continues to have the same thing as the one given to the latter. The consequences of taxes are equal for everybody because they make sure that everybody has the same minimum of material means. Taxation laws do not cause discrimination or inequality. On the contrary, they are designed to eliminate discrimination and inequality, not only at the level of material well-being but also at the level of political influence, because material inequality causes political inequality.

We have discrimination when a law only benefits one group of persons and when there is no good reason why other persons should not benefit. It is clear that there is no good reason why wealthy people should benefit from taxation laws in the same way as poor people, except of course when they themselves become poor. Everybody can be in a position in which he or she needs taxation laws.

The right to free speech does not benefit everybody in an equal way either. Some people gain more from this right than other people. A colored person suffering from discrimination needs this right more than a white, middle-class person without political worries. However, there is no reason to claim that this right contradicts the principle of equality before the law.

Economic Human Rights (3): A Right to Have a Right – Economic Rights as Prerequisites for Other Rights

Economic rights are important prerequisites for public and political life and for the full use of freedom rights and political rights. They are seldom claimed for their own sake only. They are a means for something else. If they are respected, they take away an obstacle on the road to public and political life and to the full use of classical human rights. They are only the first step on a long journey. There are values other than a decent continuation of life and we need other types of human rights in order to protect these other values. Economic rights are important but insufficient. Economic rights guarantee the continuation of life in a decent way (not just the continuation of life tout court, because this is guaranteed by the “classical” right to life) and thereby guarantee the possibility, and only the possibility, of something more, for example a public and political life. They cannot turn this possibility into a reality. Only freedom rights and political rights can do so.Economic rights are seldom claimed for their own sake because

darkness rather than want is the curse of poverty … [T]he predicament of the poor … is that their lives are without consequence, and that they remain excluded from the light of the public realm. Hannah Arendt

The poor man’s conscience is clear; yet he is ashamed … He feels himself out of the sight of others, groping in the dark. Mankind takes no notice of him. He rambles and wanders unheeded. In the midst of a crowd, at church, in the market … [H]e is in as much obscurity as he would be in a garret or a cellar. He is not disapproved, censured, or reproached; he is only not seen … To be wholly overlooked, and to know it, are intolerable. John Adams

Man is unknown and unseen and, on top of that, he cannot see, he cannot learn from others, follow others, contradict others etc. Economic rights together with freedom rights and political rights take away this darkness and allow people to see and to be seen. When economic rights satisfy basic needs, they only create the possibility of and some of the prerequisites for public and political life. Contrary to classical rights, they do not create the reality of such a life. Economic rights give access to this life but they do not regulate and guarantee this life. Economic rights have a rather negative role: they taken away the obstacles on the road to public and political life, whereas the classical rights contribute in a positive way because they protect and promote public and political life.

Nevertheless, economic rights are very important, even though some people think of them as a joke (when will we have the right to sunshine, do they ask). Economic rights are necessary for the full use of classical rights. An economic right is therefore a right to a right. We have the right to be in a position in which we can fully enjoy our rights. Economic rights are required in order to establish the conditions necessary for the exercise of classical rights.

“[E]very human person and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural and political development, in which all human rights and fundamental freedoms can be fully realized” (Declaration on the Right to Development).

However, the opposite is also true: you have to have classical rights in order to enjoy your economic rights.

Economic Human Rights (2): Hierarchy of Duty Bearers, Ctd.

There are no good reasons to discredit economic rights, such as the right to a decent standard of living or the right not to be poor. These rights must have the same standing as other types of rights, mainly because different types of rights are interdependent and economic rights are prerequisites for other types of rights. But, it is equally wrong to give priority to economic rights or to violate other types of rights in order to respect economic rights (for the same reason, that is, interdependence). The Chinese government often makes this mistake.

When people have a right not to be poor, who has a duty to help them? In western welfare states, one has the tendency to point to the state and to the so-called social safety net which these states have created (unemployment benefits, healthcare subsidies etc.). However, the state is not the only and not the first party responsible for the protection of economic rights. If we don’t accept this, and argue that the state is the first or perhaps even the only party responsible for the protection of the poor and their economic rights, then we are open to the criticism of the “big state”.

On the other hand, the opposite position is also wrong. The free market does not independently ensure respect for economic rights (although it helps). Active measures, based on duties imposed on specific duty bearers and emanating from economic rights, are also necessary.

The first and most important duty is one to yourself. People should be, when possible, self-supportive and able to help themselves. People don’t like to ask for help. We should try to create the circumstances in which people can satisfy their own basic needs and can be self-supportive and responsible for their own fate (or at least we should not destroy these circumstances). People value autonomy, control over their own lives and independence. They generally prefer not to depend on help.

As long as this is possible, economic rights are irrelevant and no specific duties come into play. Economic rights are necessary only when people fail to be self-supportive, either because of misfortune, genetic deficiencies, accidents, crime, institutional bias, racism, neo-colonialism etc.’a0In these cases, economic rights create different kind of duties for different persons and with different intensity (or priority or hierarchy):

  • personal assistance or charity
  • redistribution by the state
  • development aid
  • etc.

The hierarchy in this system of duties is the following. When economic rights become necessary, it is first in a face-to-face situation, for example within the family or between friends or members of a group (they are horizontal rights). This is based on the valid assumption that closeness means a greater ability to help. He or she who can do more, should do more. It would be wrong to ask a distant persons to invest a relatively greater effort to accomplish something, when a person closer by could accomplish the same with less effort. And closeness typically, but not always, means a greater ability to act. A mother can take better care of her children than someone else. A co-citizen of a state, because he or she pays taxes to the social safety net, is better placed to help the poor in his country, then an outsider would be.

And because these people can do more, they have a moral obligation to do more. Take the example of two people watching a third person drowning in a river. One of these witnesses is a good swimmer, the other less so. It is obvious who has the greater duty to assist. But both have.

But when this face-to-face assistance fails – and it regularly does, either because of a lack of morality, or because all the people in the face-to-face community suffer the same fate – then our duties arising from economic rights take on a larger geographical and ultimately also an international sphere, in which one person should help other and more distant persons (if one’s personal surplus is large enough to do so) (economic rights are still horizontal).

And when this fails as well, and only when this fails, can a state intervene (economic rights become vertical – although one could claim that they are still horizontal because the state, through its system of taxation, merely enforces philanthropy). When the state intervenes, it has to do so first and foremost for the benefit of its own citizens, again because it is closer and better able to help. It has a monopoly of power and force, and can collect taxes and redistribute wealth. But when a particular state isn’t self-supportive – as is the case for the majority of states – then international assistance is necessary.

Duty is a bottom-up affair. Accordingly, economic rights should not be viewed primarily as the business of a state; otherwise we will lose both the benefits of self-support (autonomy) and the community spirit which results from spontaneous mutual assistance. Allowing economic rights to be realized at the level of citizens’ relationships will strengthen the feeling of belonging. The fact that our economic rights are realized in part by our responsible fellow citizens, enhances community feelings and again supports the statement that human rights are not individualistic and do not only deal with the relationship between citizens and a state. Focusing too much on the duties of the state will create a mentality of passive reliance on government support and a mentality of dependence.

A word of caution: none of this implies chauvinism or nationalism. The nation, state or family in which one is born is arbitrary, and hence of no moral concern. All individuals everywhere have equal rights and equal moral claims to the goods necessary for subsistence. Thomas Pogge has insisted on this point. But people don’t have equal duties resulting from these rights. Our duties are stronger with regard to some people, namely those closer by and those we are better able to help. But ultimately, we have some duties to everyone.

Economic Human Rights (1): Hierarchy of Duty Bearers

It is probably correct to see in the policy to “outsource” social services to faith-based organizations an effort to undermine the division of church and state and to financially support radical christian organizations with taxpayers’ money. Very likely it is also an effort to promote christianity (by giving organizations money for social services they can more easily proselytize).

However, economic rights should not be viewed as primarily the business of the state, otherwise we will lose both the benefits of self-support (i.e. autonomy) and the community spirit which results from spontaneous mutual assistance. Allowing economic rights to be realised at the level of citizens’ relationships will strengthen the feeling of belonging. The fact that our economic rights are realised in part by our responsible fellow citizens, enhances community feelings and again supports the statement that human rights are not individualistic and do not only deal with the relationship between citizens and the state. Focusing too much on the duties of the state will create a mentality of passive reliance on government support (for yourself and for others) and a mentality of dependence (state help kills self-help). Egoism, isolation, irresponsibility and helplessness will become the main features of society. We will only have rights and no duties, rights moreover which only the government should respect and realise. In order to avoid this, people should be allowed to act responsibly. They should be responsible for themselves and for others, and the state should not take away this responsibility without good reasons (for example the responsibility of parents to care for their children or the responsibility of individuals to find a job).

The state is responsible for economic rights only if everything else fails. Only those who are helpless and who have been forgotten by private philanthropy can call on the state for assistance. In this case, the state does not abstain or does not make laws which forbid something; it executes policies that result in an equal supply of those goods and services necessary for the satisfaction of basic needs. These policies are mainly taxation, redistribution and development aid and can be seen as the enforcement of citizens’ duties. When the state forces you to pay taxes, it forces you to fulfil your duties arising from the economic rights of your fellow citizens (which is why tax fraud and tax evasion are particularly reprehensible crimes: the existence of taxes is already a stain on the reputation of mankind, because taxes exist as a consequence of the fact that people deny their responsibilities). It is the duty of the state to force the people to fulfil their duties, their duty to be self-supporting if possible and their duties towards each other if necessary.