Wednesday, December 31, 2008

"Fairness" or foolishness?

According to today's NZ Herald,

Mr Maharey - made a Companion of the New Zealand Order of Merit - has a concrete reminder of the measure he considers his greatest achievement during his 18 years in Parliament (nine of them in Cabinet).

In a frame on the wall of his new office is the law - complete with the Governor-General's signature - that introduced Working for Families, a gift from staff at the Ministry of Social Development. "It's not just a piece of legislation," Mr Maharey says. "It represents to me the high point trying to address that issue of fairness. That's what I was in politics for."

This is a politician whose idea of fairness rests on what he and his colleagues decide it is. In other words fairness is an arbitrary line drawn subjectively, not according to any principle of property rights or individual rights.

Under Working For Families it is considered fair to take the fruit of one individual's efforts and give it to another deemed more worthy or deserving.

My definition of fairness (as described in the Concise Oxford Dictionary) is " just, unbiased, equitable, legitimate, in accordance with rules."

Only the last requirement is met because the rules are set by those who do not understand the preceding.

But even putting aside matters people with different philosophies will argue about, WFF will ultimately have negative effects due to the inherent distorted incentives. It will reduce productivity, entrepreneurship and personal responsibility. Is that 'fairness' or foolishness?


Swimming said...

how will WFF reduce productivity?

Heisenbug said...

Take my neighbour - he's a boilermaker by trade and gets quite a chunk of WFF in the hand each week (almost $300 IIRC). Before WFF, he used to do quite a bit of overtime - most Saturday mornings, some long days - because the extra money was worth it to him. Now he doesn't bother because it would cut into his WFF benefit. Result? Less product produced (by definition, lower productivity). It's really quite simple. WFF introduces a significant disincentive to work, to be more productive, to excel.

Anonymous said...

Consider these statements:
LM: "[Steve Maharey's] idea of fairness rests on what he and his colleagues decide it is."

Harpoon: Lindsay Mitchell's idea of a good politician rests on what she and the VRWC decide it is.

Neither is fair. If you can't see that, you shouldn't bother to raise the issue, since you've failed to think enough about it.

Why? Because fairness (a concept incedentally impossible to address fairly in a single blog post or comment) is about rights AND justice AND property AND relationships AND history AND a heck of a lot of other aspects of context.

WFF is about targetting tax cuts on those who generally need it most

Lindsay Mitchell said...

Harpoon, VRWC?

Thanks Heisenburg.

There is also the effect on the employer. If the government is topping up the worker's wage, that relieves the employer of doing it (and by necessity, lifting productivity). There has been protest from the Greens about the subsidy that WFF gives employers.

Anonymous said...

VRWC - ironic reference: 'vast right wing conspiracy'

Often used in sarcy tones by rightwing bloggers such as those at Slater and the chaps at No Minister.

Anonymous said...

WFF is about targetting tax cuts on those who generally need it most"

Decided by whom? At who's expense? By putting which persons wellbeing over which others?

Ahhhh socialism....supposedly classless yet still having those two old groups....the planners and the planned.

Heisenbug said...

Harpoon, WFF isn't about targeting tax cuts; it's not about tax cuts at all. It's about income redistribution, from the highly productive to the chosen few. It's a very old, highly inefficient method that achieves, ultimately, nothing more than the impoverishment of all.

Anonymous said...

WFF is in-your-face, plain wealth redistribution.

What's wrong with keeping the money you earned without having to go throught this farce? I'm all for individuals doing what they want with their own money.

Or could it be the state wants to have a little more control over its citizens? Hands off, I'd say.

Anonymous said...

Heisenbug: "WFF isn't about targeting tax cuts; ... It's about income redistribution, from the highly productive to the chosen few."

Yes, sort of. But When one talks of what something is about, one should be talking about the strategic goals (what it's about) rather than the operational tactics (what it is). Your portrayal is a right-wing slant focussing on the tactics. I'm guilty of this too.

What Working For Families is ABOUT is ruducing financial hardship for Kiwi families who need it (rather than want it). Look up 'Diminishing marginal value of income'.

Futher, if you're saying that a progressive tax system combined with targeted social policy is a great big evil, will you condemn the National-led government if they too implement it? If not, why not?

Manolo: "What's wrong with keeping the money you earned "

What's wrong with it is that it is then not targeted. Look up 'Diminishing marginal value of income, and think about it in the context of income spread across a family of, say, four.

Anonymous said...

One persons need,real or imagined,is not a reason nor a right to the money or time of other people.

Those that think it is are advocating slaves and thanks.

Anonymous said...

James, what countries would you like to live in, that have no redistributive progressive tax system?

Clue: you don't want to live in New Zealand, since the Mactional government is retaining redistribution and progressivity.

Lindsay Mitchell said...

Harpoon, You seem to be a person who believes implicitly in the state and its authority and power to organise individuals into a structural and operational model that endeavours to make people as 'equal' as possible. Most people who read this blog question and reject that assumption. It is no good asking us which country we want NZ to be like. There isn't one. But speaking for myself I see that the pace of social change has been so rapid in my lifetime that we can go forward to a different future if only we would make an effort to throw off lazy, cop-out ideas.

Anonymous said...

I can't help but feel annoyed about WWF because from my observations those who get it don't seem to be any more deserving than me! But seriously I work hard and am responsible but nevertheless only earn a modest income. It irks me that I'm being taxed more to pay for WWFs which doesn't benefit me at all in fact just increases the amount I pay out in tax. Many families who receive WWFs were coping just as well as people like me before WWF was introduced.
It's like Pandora's box once it's been opened it can't be undone.


Anonymous said...

Clue: you don't want to live in New Zealand, since the Mactional government is retaining redistribution and progressivity."

And I'm riding my mate Rodney Hide all the time to change that as much and as fast as possible.

Meanwhile can you offer us a moral and principled defence of the redistributionist State and how its not a massive violation of the rights of the individual and impracticle to boot?

Those who argue for the force of the State to be used to mould and restrict man are those who want to be the State.....and they should be watched and if nessessary dealt with....they are a threat to us all.

Anonymous said...

Harpoon (5.16pm) said something along the lines that WFF was targeted assistance for families who needed it.

Sorry Harpoon - not true as evidenced by my two daughters, one with 4 children the other with 3. Both of whom regularly told before the election that they would be voting Labour because it gives them money they don't need.

Anonymous said...

Dave - a workmate of mine reduced his working week from 5 days to 3. Took the pro-rata drop in income but that put him into an income bracket that with the number of kids he has, he actually gets only a few thousand a year less than if he was working five days. He still counts as full time employed because he is doing more than 22 hours or some such thing. So he gets four day weekends at my expense. And you ask how productivity drops?

Brian Smaller

Anonymous said...

Harpoon I hope you have read Brian Smallers post above. Yet more evidence that WFF is a crock.

You made the claim on one of Lindsays threads a couple of days ago that you could not debate with me because I resorted to abuse. A statement I strongly refuted and asked you to provide evidence.

Here I and others are debating and you have disappeared.

Heisenbug said...

I don't understand how or why income redistribution is a good thing. If I need more money, I don't go thinking "How can I get a hand-out?" - instead, I think "How can I earn more money?". I think second job, I think upskilling, I think increasing my productivity. The notion that income must be "fairly" distributed is a nonsense; why should I pay for someone else's failure? I don't ask anyone to pay for mine.

Lindsay Mitchell said...

Heisenbug, Beautifully put.