Positive Rights Across Countries

In market economies, one is expected to earn money and use that money to buy the basket of goods you want and need.(Food, energy, shelter, healthcare, insurance, ect.) Nobody demands the government pay for all the goods in the basket because we’ve all been taught that that won’t work. But it’s common to demand that certain goods in the basket be covered by the government. “It’s the current year! How can we not have the government providing X.” When you’re used to this, you can’t imagine an alternative way of paying for those goods, if the government doesn’t provide it, so the theory goes, people won’t have it.

What’s interesting is that the goods differ across countries. In the West, the common demands are for health care, education, and child care. In much of the developing world, people demand electricity and energy subsidies. In Lebanon, the government gives the state-run electricity company around 1.25 billion a year. With 6 million people in Lebanon, that’s 833$ per family of four. How does the BBC explain the not-too-surprising state of electricity in Lebanon, with frequent outages? “Under-investment!” They also cite the fact that about half the electricity provided by the government electricity firm is stolen. It quotes one protester in Lebanon(emphasis added):

It’s crazy to think that we’re in 2019 and still have three hours a day when there is no electricity,” says Lara Kais, 33, who helped organise the protest camp.

Now, one could interpret this charitably, as a demand for market reforms. But as far as I can tell, this isn’t what the protesters are demanding. The demands are rather vague, an end to “corruption” and the sectarian system of government. Apparently many of them want “technocratic” government. One wonders if the term is an imperfect translation from the original Arabic. I’m sure there’s “corruption” in Lebanon’s electricity sector. As a natural monopoly, it is ripe for the imposition of monopoly rents, particularly in a place like Lebanon where one neighbor is an enemy and the other has an ongoing civil war. But there are reforms that could help regardless of how corrupt the leadership is. First step is simple: legalize private electricity generation. Second step: end the subsidies, so that if those who run the company want to make money, they have to do so by actually providing electricity, even if overpriced. Third step: crack down on electricity theft.

There seems to be a pattern with demands for subsidies. The first things to be subsidized are bread or other food staples. As countries grow richer, the demand is for energy. As they grow richer still, they start demanding education, healthcare, and childcare subsidies. While you still see a lot of food subsidies in rich countries, it’s mostly the farmers demanding them, ordinary people don’t care. What’s next in this series?

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