It is often trumpeted as a virtue that “civilised”, social democratic countries offer their citizens one or more types of “social safety net” in attempt to eliminate the most dire effects of, say, unemployment, illness or some other kind of incapacity that could inflict a condition of extreme poverty upon the individual members of the citizenry. The idea is that the most basic wants will always be guaranteed by the state should one be unable to provide them for oneself and no one need have any fear of hunger or lack of shelter – situations that are said to be “intolerable” in a modern, 21st century society.

The first problem with this theory is that poverty is not some selectively appearing disease that crops up every now and then to infect an otherwise healthy and wealthy society. Rather, poverty is the natural state in which human beings first found themselves. When Adam and Eve were expelled from the Garden of Eden they saw the world to be a barren and harsh place that is capable of providing precious little – may be just oxygen to breathe – without the conscious effort of its inhabitants. The only way to alleviate this harsh situation is for humans to work to produce the goods that they need and, eventually, to bring about capital investment in order to expand the amount of consumer goods that can be enjoyed – whether it’s cheap food, housing, education, holidays or whatever – a process that only really got underway in any significant form in the 1800s. If the individual beneficiaries of a social safety net are not able to produce these goods themselves then somebody else must do so. Simply legislating the welfare state into existence does not create the goods and services it needs to dispense to the poor and needy in order to banish poverty and want. Rather, existing goods have to be forcibly confiscated from those who have produced them and dished out for free to those that haven’t. Social safety nets are compulsory redistribution programmes, not wealth creation programmes and any benefit one receives under them will be at the expense of another person.

The economic effects of this are familiar to economists not only in the “Austrian” tradition but of other free market persuasions also. The most naïve error made by any proponent of redistribution is to believe that people’s behaviour is somehow hermetically sealed from the government intervention that seeks to achieve a certain end – i.e. that increased taxes on activity A will not discourage people from carrying out activity A; or increased funding to eliminate a “dire” situation will not, in fact, exacerbate that situation. Whenever a new tax is proposed the estimations of new revenue to be raked in are always based, incorrectly, on the assumption that people will still wish to carry on doing the taxed event just as they did before, as if the tax makes no difference. And if some new programme to be financed by this revenue is proposed, they will calculate the amount of money needed to cure the existing problem without considering whether throwing money at it will make it worse. All else being equal, if you pay people to when they do something they will do more of it; if you charge someone when they do something they will do less of it. In the case of social safety nets, if people are charged to produce wealth in order to fund it the cost of creating wealth is forcibly raised. Relative to other activities such as engaging in more leisure time, the attractiveness of producing more goods, more capital and more resources is reduced. There will, therefore, be less production, less capital investment and fewer consumer goods at higher prices – hardly the situation that one would expect to be conducive to the abolition of poverty. Similarly, if you grant a guaranteed right to be paid upon the occurrence of a bad event – such as sickness and unemployment – then you lower the cost of that event and the relative cost of preventative measures is raised. All else being equal, you will have more sickness, more unemployment and so on.

The focus of many of these social safety nets today appears to be on so-called “hardworking families” – never mind the fact that single people also work hard and struggle to make ends meet. Children, in particular, appear to be little more than a metaphorical blank cheque that the state writes to “protect” them from poverty and hardship. Yet children do not appear out of nowhere and a conscious decision must have been made at some point to have a child – or at least to carry out the act of procreation. The same economic effects will therefore result from any safety net that benefits parents with children. If you pay people when they have children then there will be more children in families that struggle to pay the bills. The resources to feed these hungry young mouths must be confiscated from those who do not have children – either through inability, a lack of desire or good old fashioned financial prudence – and redistributed to those who do.

The running theme through all of this, therefore, is that throwing free money at a problem in which people have at least some kind of influence will only aggravate that problem. Indeed, in spite of more than half a century of the welfare state we in the Western world still seems to be afflicted with the scourge of poverty – although a rather bizarre form of it where those who are poor appear to suffer more from obesity rather than from starvation. One would associate progress with a reducing, not widening social safety net. We might as well also mention the “cynical” view that government prefers to retain people in a state of dependence because it means more reliance upon the state and more votes.

A powerful weapon in the arsenal of proponents of the welfare state is the false dichotomy – that the choice is either between a government social safety net motivated by care and compassion on the one hand or some kind of selfish, greedy, sink-or-swim and dog-eat-dog society on the other. This is plainly ridiculous; the free market exists precisely because people have needs and others are willing to advance the means to fulfil them. The whole purpose of insurance – presently and regrettably distorted by government interference – is to protect from genuinely catastrophic events that are not your fault in return for a premium paid in advance. Furthermore, opting for the alternative of the free market does mean the abolition of care and compassion – rather, it gives people the freedom to be caring and compassionate. Indeed it is such private benevolence that is discouraged by the welfare state as it obliterates the need to cultivate personal relationships upon which you can rely. Real benevolence, selflessness and caring for one another springs from these relationships and from private choice; the forced redistribution demanded by the state, however, leads to the very opposite – bitterness, antagonism and cynicism when your hard earned money is taken to be given to others, all of whom – in spite of whether they are genuinely needy or not – are tarnished as workshy and endless breeders. It is no accident that many of the great charitable foundations appeared in the nineteenth century, the most relatively free and capitalist period in history – and not in the era of the welfare state. As for the argument that social safety nets are necessary for civilisation, what could be less civilised than violently wrestling something you want from someone at the point of a gun?

The social safety net therefore needs to be realised for the destructive force that it is – not as a hallmark of economic and societal progress but as one of retrogression of civilisation and as a retarding influence on the very real cure for poverty and illness – more capital, more production and more goods for everyone to be able to buy at cheaper prices.

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