From: drg@bubba.ma30.bull.com (Daniel R Guilderson)
Newsgroups: ne.politics
Subject: Re: Smaller government means MORE money for the poor
Date: 1 Sep 92 21:33:09 GMT
Organization: Bull World Wide Information Systems, Billerica MA USA

In article <BZS.92Aug30050302@ussr.std.com> bzs@ussr.std.com (Barry Shein) writes:

   This is flawed, charities have their overhead also.

Yup, so when the government gives a grant to private charity, the
overhead is compounded.

   But note for example the recent scandal claiming that the Chairman
   of the United Way was living high on the hog, taking all sorts of
   perks. 

Yup, now I can take a closer look at UW and decide if I really want to
continue to contribute to that particular organization.  It might be a
better thing if I try to make contributions directly to some of the
charities that UW serves.  I can do that today.  I don't have to wait
till the next election to try to impart what little influence I can on
some political candidate.

   More important is the question as to whether or not people will give
   voluntarily without knowing whether their neighbor is also giving.

Oh oh, the "free-rider" problem rears its ugly head.  For someone who
feels self-righteous in giving to his favorite charity, does he really
care if his neighbor gave also?  I doubt it.  For others what about
peer-pressure?  Heck, burning the flag is legal and around April 15
everyone probably feels like doing it but they wouldn't want to
disturb the neighborhood.  But seriously, it isn't illegal in my
neighborhood to have a crab-grass lawn but noone does because the
peer-pressure to keep a halfway respectable lawn is too great.
Peer-pressure should not be underestimated.

   That's important to people, and if they believe that everyone around
   them is making excuses not to give (more important to replace the
   furniture or whatever) then the system can easily collapse.

What if they believe that everyone around them is evading taxes?
What if everyone believes the politicians are corrupt?
What if?

So the system collapses.  Every system ever built by man has
eventually collapsed.  Stuff happens.  Does anyone know of a
civilization that collapsed due to the free-rider problem?  Public
perceptions are an important thing but I don't think you have made a
very compelling argument for the free-rider problem being a fatal flaw
of voluntary contribution.  Check out the Catholic Church sometime.
The only way they stay afloat is voluntary contribution.
Peer-pressure has worked handily for many, many years.  To the point
that even people who really shouldn't be embarassed by their lack of
contribution, contribute anyway.  I guess pride is a very hard thing
to suppress.  Sure, there are free-riders in the Catholic Church but
people aren't too worried about it.  Maybe they figure God will even
things out in the end.

   So it's hard to think of an example of a society where your completely
   voluntary scheme has ever worked.

I wish I could give you a definitive response to this thought but I'm
not very well read in history.  I have heard that Iceland was quite a
libertarian society for a number of years.  I vaguely remember that
there were a couple of other civilizations which were essentially
libertarian.  I would also like to point out that the late 19th
century US was a time of great growth for private charities.  The
government wasn't much involved in entitlements at that time and the
country was experiencing great economic growth.  I once got called
here for saying that people were probably in better shape back then
than they are now.  Well I can't give you a one-page essay on why I
believe that but I can't imagine why everyone and his brother was
breaking down the door to get into the US if it was as bad as the
liberal crowd has said it was.  Maybe when I get around to reading a
few books on the subject, I can comment further on it.