We have recently see a demand for a “benefits charge card”, one which would replace cash and control the items a benefits recipient is “allowed” to purchase.
This may seem seductive to some people and for very different, often almost diametrically opposed, reasons.
Some may object to misuse of monies that were taken by force from people of limited means, often unable to afford the items being purchased, and so want to control that spending so as to defend the interests of the hard-pressed taxpayers. Others see it as a way to prevent people from purchasing things they just plain object to or deem as wrong or luxurious, such as gambling, Sky TV, alcohol or tobacco. Who knows, others might, underneath it all, just want to control people.
For a while, some years ago, I held the first view, being exercised at the taxation of the lower paid and the indiscriminate way the State appeared to both spend and distort the choices that were presented to people. At the same time I also felt strongly that those who were often demonized were, in fact, rational actors, making the most of the options presented to them and so were not, in truth, “to blame”. They played the system, but the creation of a playable system was neither of their doing nor their responsibility. They were not MPs who thrust and elbowed themselves forward as law-makers and representatives. I demand the latter behave with an internal moral compass even when the rules are absent or even contradictory, to know when to do “what is right”, for how else could they be charged with repealing bad law or creating new, good law. I do not hold the former to that.
There is an inconsistency between the overall Libertarian view that the individual is the best person to decide how to spend the money they have and the concept of a Benefits Debit Card. Benefits may not be “earnings”, but it is income all the same. So, I feel, to be consistent, if one is to say that a person is entitled to benefits of a certain amount – putting aside the issue of welfare reform for a moment and keeping everything else the same – then that individual is best, all things being equal and on average across all recipients, to decide how to spend such benefits, how to spend the income they receive, not some official, nor some righteous Authoritarian. To best ensure that welfare given is spent as well as can be overall, one must therefore leave it to the individual recipient to decide – relying on the State, some committee or a central authority is certain to result in sub-standard choices and solutions just as it occurs across the board.
What of the fact that the money to pay for it was taken by force?
It is bad enough that people are forced to pay into a scheme. It is worse that the money they pay in might go to others who misuse it. But what is worse still is if someone is forced to pay into a system and then, when the State sees fit to “pay back” some of that money, it demands to control how that person spends it. That is, to me, the final indignity. It presumes guilt and wrong-doing before any has been done. It forces the collection of wealth and then controls how any returns are spent. I suppose this is what some think of when they say “cradle to grave”. Considering that the vast majority of benefit recipients are or have been honest, hard-working and often over-taxed souls, the idea that you then control how they spend the benefits could be seen as a form of vile, feudal, collective punishment and control.
The very idea of a “Benefits Debit Card” is but a distortion upon a distortion. It is fundamentally wrongheaded for that very reason alone. If there is an error, fix it at the root, do not try to apply a further distortion to the dysfunction, least of all a distortion that affects everyone, not just those the distortion is intending (on the surface?) to target. If the Card is meant to rope in everyone, I suppose one could assert that it does affect everyone it is intending to affect, but then the idea fails even more miserably due to the fact that it intends to control the spending of all people who have been forced to pay in.
The root problem is that we have a State-enforced, monopolistic system of legally-binding, often dysfunctional entitlements funded by coercion that plays havoc with peoples life-choices, undermining their natural common sense and common feelings of fairness and decency. There is currently almost no link between contribution and benefits. There is currently no link between the giver and receiver, even if one is willing to hold one’s nose, look the other way and disable rational thought long enough to label a taxpayer as a “giver” to begin with.
While it might be an exercise to see how to remove distortions to the system, such as caps to benefits income either in total or to prevent one already on benefits amassing more over time by growing one’s family, it is, when one looks at the situation as a whole, a distortion to the distortion of open-endedness of benefits. It is, again, a distortion on a distortion. While it might function as a segue from “here” to “there”, a long term solution it is not, albeit infinitely better than a Benefit Debit Card.
The real answer to a dysfunctional coerced monopoly is to shift to a voluntary, and thus highly likely to become a pluralistic, system, where individuals may (or may not) contribute to unemployment insurance and unemployment relief charities, the former to benefit themselves and the other to benefit those who are not covered as they are. In such an environment, the individuals use true democracy at the personal level to pick their providers and mechanisms for redistribution. Unless you are fundamentally an Authoritarian, a dictator or form of totalitarian, you would agree that most people most of the time will make reasonably good choices, this should produce a better outcome than any State system could in the long run. It will not produce a perfect system to look after everyone in the ideal way, but then again what we have does not either, even though people promise that one day it could do if only, if only…, which is, basically, a conceit, a lie.
What if an unemployment insurance company decides to implement a Debit Card? People who object would shift away to other providers. Others might want to remain, willing to have that trade-off between premiums and disbursements. The same goes for charities. Some would want to see their money used that way and that is their choice. Those applying to that charity would know the situation. Other charities might not use such a mechanism, and so those who objected to controlling those in receipt of their charity in such a way could direct their funding appropriately, or found their own charity that did not.
What if people did not sign up to any form of insurance? If you feel you are in the majority in thinking this might happen and you want something done for such people and feel most other people agree with you, the answer is clear – you contribute to a charity that looks after such cases. Do not worry, the charity will be well funded by the majority of well-meaning people who agree with you, unless you are being misled by a horde of hypocrites who do not put their money where their mouth is, but prefer to see the money of others put there, instead.
A pluralistic, voluntary system would satisfy the sincere in both camps – those who want to see such controls on spending and those who do not. Those who want redistribution of a certain kind and those who want it of another, and all points in-between. Well, I say satisfy, as there are some who do not wish to see any alternatives to their own totalitarianism, but, frankly, I refuse to entertain such people.
 I think the housing situation in this country would be improved dramatically if Housing Benefit was folded into benefits and people all had to rent in the market at market rates and the end to State and State-subsidized housing.  yes, money is not in truth “paid back”, for the entire system is a massive, unfunded and rotten-to-the-core Ponzi scheme that would be illegal for any other entity to run if it were not run by The State. No, I withdraw that – it does not even qualify to be a Ponzi scheme, for even Ponzi schemes expect people to pay in before they join.