The argument used to build the case for government sponsored subsidized housing on the surface sounds humanitarian, but economically and morally is far from it. The data that supports the assertion that access to housing helps people lift themselves out of poverty on the surface appears to be reasonable, but is fraught with peril if looked at critically. Getting subsidized housing does raise the standard of living of a select group of people simply because they are receiving cheaper goods provided by the government. The government’s subsidy though isn’t coming out of nowhere.
What’s not stated clearly is that group B in the government forcibly takes money from group A, and hands it over to group C. What is seen is the house the needy gets. What is not seen is the injustice done to those whose assets are forcibly confiscated to provide for this house. What is visible is the rise in the standard of living of those with lower productivity. What is not visible is the penalization of those who have a higher productivity. If providing housing were the way to end poverty, why not provide housing to the entire country? Wouldn’t it just lift the entire Pakistani populace out of poverty? I am sure many of us have a feeling there is something not right with this argument. Something along these lines has already been tried in the former Soviet Union, and the results, to put it bluntly, were catastrophic.
As with any service provided by the government, there’s always a percentage of the funds that magically disappear in the process. If we believe the government is efficient, say just for the sake this argument, does it really change the outcome? Any good when subsidized and made available below the market price causes the demand of that good to go up. People simply want more of it. So naturally people will demand more government subsidized housing. Who will decide who gets to live in these houses? Isn’t it obvious that the government in one way or another would assign itself the task of picking the names of those selected for the benefit? And is the government going to favor those who are connected or supportive of it or those who are not? No matter what is done the end result is an increases in either taxes, government debt, or monetary inflation. All three cause to a worsening of the economic and political conditions in the country, and lead to a further erosion of freedom.
The Pakistani government is in charge of the electricity, water, railways, roads, canals, dams, security and a host of other services. Which, if any of these services stand out for their exceptional performance? Is the electricity available? Is the water clean and abundant? Are the railways functional? Are the roads congestion free? Are the canals properly maintained? Are the dams working to capacity? Is the security situation in the country sound? The list can go on and on, but the only conclusion that can be righly drawn is that involving the government in any endeavor causes more problems than it solves. And the problems that are solved are solved with minimal efficiency.
Being poor is not a crime, but forcing the unwilling to help one just might be. There are no free lunches in this world, and those who demand a benefit, as long as some other sucker is made to pay for it, are themselves no less than parasites. It is this kind of forced behavior that takes away the incentives from the people to be generous themselves. There are no restrictions on those who are willing to voluntarily offer their help. The Edhi foundation is a good example of this. The idea of helping the needy and lightening their burden is very noble at its core. It’s the forced implementation of this idea, by using coercion and government policy that lead to greater harm. It brings about the kind of negative results that are not satisfactory even in the eyes of those who favor such actions. To expect an already bankrupt government to provide more subsidies, and then wonder why the same government is unable to resist foreign aid, and as a result influence from foreign governments is pure lunacy.