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Democracy, Economics

Bringing Free Trade to Governmental Systems

Free trade for thee, but not for me…

That’s kind of what it feels like these days.  Where you have certain segments of workers that are vastly affected by free trade (for instance, manufacturing), while others are not (for instance, physicians).  There could be many reasons for this, but it got me thinking about a couple things, specfically related to whether free trade could be expanded to governmental tax and benefit systems.

This is really just a stream of consciousness so certainly not completely worked out or buttoned up.

But here it goes anyways…

If free trade applies to things like manufacturing, agriculture and the like, why can’t we do the same for government tax and benefit systems?

For instance, could it be possible for people in the US to buy into France’s system – essentially paying French taxes and the getting French benefits. It might not be possible for everything. For instance benefits which are truly localized like roads and perhaps education (though im not really sure about that) and such but for things like healthcare, social security, minimum wage, unemployment, etc. I think it would be entirely possible.

First, what are the potential positives?  Allowing free trade of government benefits would certainly allow for people to counteract what is increasingly being seen as a system that is rigged in favor of those at the top of the economic ladder.  That is to say, it would allow Citizen X of the US to say, I don’t like the idea of giving rich people tax breaks which result in cutting my Medicare benefits…I much prefer France’s system.  It could essentially provide competition or governments to come up with the most attractive (and efficient) tax and benefit systems possible or risk losing customers (i.e., taxpayers).

And what would be the potential drawbacks?  I see the difficulty in administration being something to worry about.  the sheer choice available to individuals could possibly be dizzying.  There’s also the question of how to vote on specific laws covering benefits.  Would it be citizens that live in the area are the ones who vote?  Or citizens that buy into the system that do?  And if the latter, would that mean that, similar to how corporations do now, rich people would flock to areas that have the lowest taxes, and that we would see governments as a result, competing to have the lowest taxes on earth?  Would some governments happily try to offload their benefits to other countries?  And, probably the biggest question is would the influx of newcomers result in the system breaking, first due to revulsion to the idea of benefits being provided to an “other” (and specifically a poor or minority “other”) and secondly, under its own financial weight?

I think those concerns can be mitigated, especially if the free trade for government benefits were restricted to certain segments of government taxing and spending.  The big areas in almost every country that has any semblance of a welfare state are health insurance (Medicare, Medicaid), old age insurance (Social Security) and defense.

 

Assuming defense as a localized benefit, that leaves health insurance and old age insurance.  Each of these are largely paid into with dedicated taxes, benefits are much much more easily administrated and distributed than say, a Head Start program, and, the different benefits can be more easily compared side by side.

This is how much I pay in.  These are the benefits I get in return.  Bueno?  No bueno?

At this point, it’s a pipe dream, but I thought the idea of free trade for government benefits was an interesting question to ponder and explore…

I’m certainly interested in other people’s thoughts and reactions…What works?  What doesn’t?  How?  Why?

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