Citizen Coupon

Imagine there was no such thing as a library, and that members of the current neoliberal policy consensus were to sit down today and invent it. They might create complicated tax expenditures to subsidize the poor purchasing and reselling books, like the wage support of the earned income tax credit. They might require people to rent books from approved private libraries, with penalties for those who don’t and vouchers for those who can’t afford it, like the individual mandate in the latest expansion of health care. They might come up with a program where they take on liability for books that go missing from private libraries and thereby boost profits for lenders themselves, like federally backed private student loans. Or maybe they’d create means-tested libraries only accessible to the poor, with a requirement that patrons document how impoverished they are month after month to keep their library card. Maybe they’d exempt the cost of private library cards from payroll taxes, or let anything calling itself a library pay nothing in taxes.

Of course, there’s no saying exactly what the neoliberal library would look like. But we know one option that wouldn’t be on the table: the straightforward public library, open to all, provided and run by the government, which our cities and towns enjoy every day.

Whatever the furor around Obamacare, the fundamental ideological conflict surrounding the welfare state in the United States is no longer over the scope of government, but instead over how the government carries out its responsibilities and delivers services like education, health care, old-age pensions, and a wide variety of other primary goods. Conservatives and neoliberals envision a government that provides a comparable range of benefits to the one advocated by earlier American liberals. But rather than designing and delivering services directly, the neoliberal government provides coupons for citizens. Coupons—often defined in anodyne terms such as “vouchers,” “premium support,” or “tax subsidies”—can be used to purchase services in the private market. Whenever neoliberals have sought to expand the scope of the welfare state or conservatives have tried shrink it, they have come bearing coupons.

Over the past thirty years, efforts to privatize what government does and replace it with vouchers have taken hold in elite policy circles. But recent popular pushback against the privatization of Social Security, the use of private military contractors, and the voucherization of Medicare in Paul Ryan’s budget shows that the way we provision government services is still a point of contention.

A voucher is generally a subsidy that gives an individual a limited amount of purchasing power for specific kinds of goods and services. Vouchers place limits on the types of goods and services that can be provided but allow for a large amount of choice within those limits. Direct, public provisioning and vouchers should be thought of as existing along a continuum. Public provisioning can range from government monopolies, like defense, to public options that are in competition with private options, such as K-12 schools and universities.

Advocates of the coupon state point to many advantages. Individuals can choose among market competitors, best satisfying their own preferences and elevating the best products. In a competitive market, the sellers respond by increasing the quality and quantity of a good for a given price, bringing efficiency to bear. This unleashes the advantages of market competition while still allowing the government a role in helping with the allocation of certain goods. And since the amount the voucher is worth is capped, it allows for better state budget control by forcing additional costs onto the individual, if that becomes a goal of policy makers.

There are major drawbacks, however. The benefits of vouchers skew upward, because taking advantage of them requires information and resources. Coupons delivered through the tax code or steady employment regressively benefit those who pay the most in taxes or receive the most benefits from their employers. These programs are less visible to the public, giving the impression that the private market is more “natural” while hiding the government’s role in creating these markets. Meanwhile, voucher systems create new coalitions of business interests, providers, middlemen, and conservatives to defend their version of the welfare state.

by Mike Konczal, Dissent |  Read more:

Illustration: Uncredited