Pure and Impure Paternalism

Let’s begin with a fundamental distinction between pure and impure forms of paternalism. Paternalistic intervention is an intentional act of beneficence where a benefactor violates the liberty of a beneficiary in order to provide an unwanted benefit. Beneficiaries and benefactors can be either individuals or groups. Within group-based paternalism, we can also differentiate between governmental paternalism (state paternalism) and non-governmental paternalism. Under state paternalism government acts as the benefactor by exercising the coercive power of government via regulations and taxation. For now let’s focus on group-based state paternalism.

Pure state paternalism is where the group whose liberty is being violated is identical to the group that may benefit (seat belt laws). Impure paternalism is when the group whose liberty is violated is larger than the group that is targeted for benefit. (laws that restrict access to sudafed)

Another feature of state paternalism is that it often benefits the benefactor and/or third parties, and therefore, masks conflict of interest and corporate welfare. Most paternalistic laws are initiated by providers. In modern societies, acts of pure paternalism are extremely rare. After all, in the “real world” of state paternalism, politically well-connected third parties almost always benefit such as: daycare centers, beauty salons, tatoo parlors, mental institutions, drug companies, psychologists, and psychiatrists. Seat belt laws benefit the engineers and manufacturers that produce seat belts. Drug laws benefit the alcohol industry and criminal organizations. (Admittedly, this is an empirical observation. If I'm wrong, please correct me!)

Now what can we say about those intended paternalistic benefits? Well, the fact of the matter is that many (if not most) paternalistic interventions enforced by the state, benefit the providers much more than the targeted beneficiaries. Do you really believe that laws that restrict access to marijuana protect anyone other than pharmaceutical companies, local police departments, and the employees of the Drug Enforcement Agency? (Another empirical observation!) As a modest proposal, let me suggest that justified paternalism requires that beneficiaries actually benefit from their loss of liberty. Libertarians tend to be highly critical of state paternalism because it rarely benefits intended beneficiaries and almost always masks corporate welfare. I’ll try to develop this theme in subsequent blog entries.

The Drug War

The easiest target for a libertarian public policy critique is the ongoing Drug War. From the outset, let me state unequivocally that I do not know of any libertarians that advocate drug use or abuse. However, the distinction here is important. Drug use becomes drug abuse, if and only if, it violates the non-aggression axiom or the property rights of others. In those cases, we expect government to punish offenders. So if you are stoned, don’t get in a car wreck and harm others! Drug use that is merely self-destructive and/or destructive of personal relationships must not and cannot be effectively controlled by government. You’ll have to pay the costs of your drug use. So don’t expect us libertarians to pay for your hospital bills when you pick a fight with a three-hundred pound NFL player in bar, and don’t expect us to pay for your rehabilitation and/or marriage counseling. You and your family can pay for it all. Put it on your Visa or MasterCard, take out a second mortgage on your home, or cash in your retirement funds! Libertarians prefer to let the free market work solve these kinds of problems. If you’re too stoned to work, then you simply cannot afford to be a self-sustaining drug addict or alcoholic. If you choose to steal from others, you’ll go to jail. Life is full of choices! But in the final analysis, the Drug War has been its own worse enemy. When you make drugs or alcohol illegal, and expend vast public resources monitoring and enforcing drug laws, you invariably raise the risk associated with selling and buying drugs and therefore raise prices. Because the government does not enforce contracts within the illegal drug trade, buyers and sellers enforce those contracts on their own through the use (and threats) of violence. If you plan on selling illegal drugs, you better be willing to beat up and/or kill non-paying customers. If you don’t, your buyers simply will not pay for their drugs. If you buy drugs that you can’t afford to pay for, you better have a loaded gun ready to protect yourself. If you would prefer to avoid shooting it out with a ruthless, well-armed drug dealer, you’ll choose to steal from your non-violent neighbors to pay that debt. (But don’t steal from a libertarian because he/she probably has a loaded gun waiting for you!) Hence, the illegal drug market attracts armed, ruthless buyers and sellers that are willing to violate the non-aggression axiom. If drugs were legalized tomorrow, and government began enforcing those risky contracts the most violent transaction costs would disappear. For a while, non-violent drug dealers would enter the market in search of profits, which may temporarily increase the supply of drugs , but dramatically reduce the market price. Now, let’s talk about long-term employment opportunities. Would you rather be a drug dealer that sells marijuana or cocaine for $1 a pound on the free market, or work at McDonalds for $8.00 an hour? At these prices would you bother to drive or fly to Columbia to pick up your inventory? Would you even be willing to pay Federal Express delivery charges? Moreover, at those prices you could afford to buy all the drugs you want on your McDonald’s salary and you wouldn’t be tempted to risk stealing from your unarmed, non-violent neighbors. In short, legalize drugs and soon the supply of drugs will be drastically reduced, and all of those ruthless former drug dealers will move into another illegal trade such as prostitution or gambling. If we make abortions or guns illegal we can expect them to move into those potentially lucrative markets too. In short, unlike social conservatives and bleeding heart liberals, libertarians understand how black markets work. Free markets are much more efficient enforcers of personal morality than the Drug Enforcement Agency of the United States Government.