What percentage of the CA GDP might consumer expenditures on water be,For the past couple days I've been plagued with daydreams of a socialist minarchy (if there's such a thing; I know "libertarian socialism" almost always refers to some faction of far-left anarchism) where instead of taxes there are water "fees" that fund modest stipends that are guaranteed to every resident from conception to the grave. The stipends would have to be big enough to cover rent and food. The state would have to have a monopoly on both water and currency, which makes it not at all libertarian by my standards. The total amount of money in circulation would have to be greater (probably much greater) than the value and amount of water being used at that time, because the amount of money coming in through water use would have to be roughly equal to the amount issued through the stipends (if the former is less than the latter then there would be inflation), and there needs to be enough currency floating around for people to save or spend on little vanities like internet access or art supplies or weed.
if CA water were distributed at a market price instead of heavily
subsidized?
If you know this kind of socialism would be doomed from the start - doomed like Khmer Rouge doomed, tell me now. You probably won't deter me from continuing to think about it, but yeah.
And since I couldn't find anything on something like this, I had to make up my own name for it - stipendism. Glamourous, huh?
Props to the Georgists, to Proudhon and Bakunin et al, to erudite progresive neoliberals and to Swedish-style social democrats, to the Property and Environmental Law professor who I've talked to twice, and to numerous others...
Don't worry, I'm not going statist all of a sudden. I've just been thinking about what kind of state socialism I would find most amenable, and I had to start making one up. I would be impressed with myself if this turns out to be theoretically viable.
So I'm going to be asking more questions of Facebook, if I get some helpful info as answers to the above question. Anyone know someone who's good at constructing economic models and has a lot of free time?
I don't think I get it. You want to subsidize people's rent and food, which are necessities, so in order to take in money to pay for them, you charge an arm and a leg for another necessity, namely water? How does that do anything other than just pay for their rent and food while lettng them believe that money is for water?
ReplyDeleteWho, me? No, *I* don't want anything subsidized by taxes. This is just the state socialism that I might be least likely to disapprove of.
ReplyDeleteYour description of it might be accurate, but I wouldn't use "an arm and a leg" so quickly. People say that the price of water is way lower than "market price", which I guess is whatever price people would be willing to pay for it. "Market price" typically does involve competition, but I don't know how they would have competition, or predict what the price would be in competition, when the major water sources and means of water delivery are owned by the government. But, supposing that a water monopolist can guess what the market price of water should be - and yes that's a big if - there's still the difference between price and cost. Price is what people are willing to pay, while cost is what it takes to deliver the water. And with water, my guess is that the price naturally would be WAY higher than the cost.
So the sunshine and roses way to describe it would be a water monopoly that uses its proceeds to fund universal welfare.
And yes, this basically would be moving money around in a circle. I have it mapped out on a piece of paper on my desk right now. Of course, this is pretty much what governments do already, minus the inflation.
Though governments do this with the intent of rectifying what they see as social injustices, or to fund "necessary" public goods (with the quotes to indicate that it may not be essential that they are provided publicly) using taxes on private commerce.
ReplyDeleteIn your example, all of food, water, and living space seem to be the same category of commercial item, i.e. basic living needs, which means that it would be hard to think of a justification to charge more for one to pay for the other. One would need to come up with an argument like that people who use lots of water somehow take food away from their neighbors, and therefore they should pay a percentage to the neighbors to help offset their increased food costs. But if anything, I'd say the opposite is true, since the production of food is one of the activities with the highest water demand.
I'm not sure what you're saying, but I think I agree with you. About taxing one service/good(water) to fund other services and goods(food, housing, utilities, internet access): some of the increased price of water is transferred over to food and also to electricity, since water is used to produce both, so a water "fee" is also a broader consumption tax on several different goods and services.
ReplyDeleteA stipendist government, however, would just say that the price that it's selling water at is approximately the price that water users would have to pay on a free market, that there is no added price to the water, and that the difference between the price and cost of water would be just as high if the water were provided for profit by private companies, except the stipendist government puts that entire difference in the people's stipends. They might be lying about free market prices being just as high, but that's what they would be saying.
I think a concern that's bigger than one good or service carrying the cost of other goods and services is one class of people bearing a larger part of the burden of the stipends. For the money supply to remain steady (and that would be very desirable), issuance through stipends would have to be as low as government income through water fees. For income through water fees to be as high as issuance through stipends, those individuals who rely primarily on supplemental income would have to consume proportionately more water than those individuals who rely primarily on their stipends. They would, hopefully, because they generally would have either a higher standard of living or more dependents. If either is the case, though, then the water fee boils down to a graduated tax on those who consume more. Stipendism would then be quite similar to conventional social liberal systems where those with more at their disposal bear a proportionately greater share of the burden than those who have less, except in stipendism it's those who *consume* more who would be bearing a greater burden. Of course, that's the whole purpose of a consumption tax.
I guess you see the people who use the most water being the biggest "consumers". But while there are some extravagant and luxurious uses of water--like big swimming pools and pretty gardens--I still see agriculture being one of the largest water users.
ReplyDeleteIn which case, it is almost hypocritical to say on one hand that agriculture is one of the few things that is important enough to be government-subsidized (so people don't have to pay for their own food to be grown), but on the other hand to make one of its "raw materials" the only taxable commodity. If the government is paying for people to be fed, it follows that they probably want the most for their money, which means they would be best to try and be as conducive to food production as possible.
I've known for a long time that agriculture is the biggest water use. I've also known that animal agriculture wastes water. A higher fee on water would encourage farmers to not waste so much, and to grow more plants as opposed to animals.
ReplyDeleteCan you rephrase your second paragraph? I'm not sure I know what you mean.
I agree with your prediction that the farmers, who would want to sell at a profit, would try to grow as much food with as little water as possible. This would result in less money going to the central bank through water fees than being spent on agricultural produce, or any other goods or services. If the *only* form of income is the stipends, then that would be a real a problem. But I imagine quite a few people would want to consume more than just food, utilities, and a roof, and they would want to suplement their stipend with income from a job.
ReplyDeleteTo rephrase the second paragraph:
ReplyDeleteA common criticism against any kind of "consumption tax" is that it makes value judgments on different forms of consumption relative to one another, by taxing some and not others. The forms of consumption that are taxed are in some way "punished" by that.
Similarly, any kind of government subsidy on an activity can be seen as encouraging that activity, and is also open to the criticism that the money is being spend inefficiently.
So in your system agriculture is the way of life that is "punished" the heaviest, yet it is also held up as one of the few things that is "good" enough to receive government subsidy, which would seem like a weird contradiction. In addition, the water tax means that any government money going to agriculture would not yield as large a rate of return as if water were cheaper, which invites the inefficiency argument as well.
I agree.
ReplyDeleteNow about subsidies, the only subsidy that agriculture would be getting would be from people choosing to spend portions of their stipends on food. Of course, people who rely primarily on stipends would be spending a greater proportion of their money on food than on toys, so that's the "leg up" that agriculture has.
The reason that I find stipendism less repulsive (and less repulsive is an important term here) than other kinds of socialism and social liberalism is that when people are simply given an amount of money which they may spend at their discretion, without any particular good or service receiving a direct subsidy or through all-out socialization, there would be less of an artificial increase in demand and there would also still be some competition.
I kinda got the idea of stipends from the school voucher system that moderate libertarians propose, and which is used in Sweden. The voucher isn't designated to subsidize any particular school; instead money is allocated to a consumer who would choose which school best meets his or her (child's) needs. This theoretically allows for competition, in that it doesn't bind the government beneficiary to some pre-approved set of crummy government service. Of course, school vouchers are still education subsidies, just indirect ones, and they can still have the same problems that other government interventions have.
Also, a stipendist government, if one should ever occur, would gawk at the word "punish" being used to describe its water "fee". Water is still thought of as a natural monopoly, and the government officials would contend that the price they charge is charitable compared to the prices a private monopoly would charge.
The weirdness of a good being both taxed and indirectly subsidized isn't that weird compared to the weirdness of agriculture in the U.S. today receiving direct subsidies while the labor of farm workers is taxed (in many places farm workers get a tax credit, which is an indirect kind of subsidy, but they're still taxed).