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Who’s Blind?

Here’s a letter to a very aggressive and increasingly rude correspondent – an American college student who describes himself as a “progressive humanitarian rationalist.”

Mr. Ethan Petersen

Mr. Petersen:

You ask why “free market believers [are] blind to hardships and suffering caused when government benefits are taken away by budget cutters like President Trump.”

Because I’ve not commented on Trump’s budget proposals, I’m unsure why you pose (and with such vitriol!) this question to me.  Still, I’ll address your question.

The premise of your question is faulty.  Like you and other Progressives, we who oppose big, grasping, intrusive, officious government are not blind to the benefits enjoyed by recipients of government largess.  Therefore, we are not blind to the losses suffered by those who must get by with less government largess when budgets are cut.  Unlike you and other Progressives, however, we also are not blind to the losses suffered by those whose resources are seized in order to pay for this largess.  Therefore, we also are not blind to the gains enjoyed by those who get to keep larger shares of their own incomes when budgets are cut.

When budgets are cut, it’s easy to see the likes of government employees who lose jobs, farmers who get smaller subsidy checks, arts exhibitions that must now survive exclusively on private contributions, and poor people whose welfare payments fall.  But the analysis and conversation nearly always stop there.  If cutting funding for some government-funded activity is found to cause some hardship (and which such activity isn’t so found?), cutting government funding of that activity is typically deemed cruel and wrong.  But what is too-seldom asked is: As compared to what?  What will those who now keep more of their incomes spend this money on?  In what ways will the money now left in the private sector be invested?  What new products, businesses, and economic opportunities might be created now that the state no longer seizes these resources from those who create or earn them?  And how will system-wide incentives change when government reduces taxes and spending?

It is, I’m sure, immensely gratifying for you to strut your adorned moral superiority when you believe that you and your ilk are uniquely aware of the benefits enjoyed by recipients of government largess.  Yet your sanctimonious accusation that libertarians are “blind” to unseen consequences of budgetary moves reveals that the blind one is you.  You see only the benefits enjoyed by those on the receiving end of government spending.  You are blind to the corresponding burdens of such spending.  You ignore the losses imposed not only on those who directly pay for government-bestowed benefits, but also on the much larger number of easy-to-miss people – consumers and workers – whose economic well-being is jeopardized when the state takes more and more resources out of the private sector (which is governed by the discipline of having to please consumers who spend their own money) and places these resources at the disposal of politicians and bureaucrats (who are governed only by the discipline of having to please voters and interest groups by spending other people’s money).

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030