Monday, November 14, 2011

welfare debunked: the crisis of our time

[The welfare state] is the outcome of a three-stage development during the last one hundred years, beginning with the stage of individual relief graded according to genuine needs, passing through public social insurance, and ending up in today's stage of universal, all encompassing security.

Social demagogues use the promises of the welfare state and inflationary policy to seduce the masses, and it is hard to warn people convincingly of the price ultimately to be paid by all. All the more reason for those who take a more sober and longer view to redouble their efforts to undeceive the others, regardless of violent attacks from social demagogues, who are none too particular in their choice of means, and from the officials of the welfare state itself.

Few people can still close their eyes to the contrast between the extraordinary successes of a social and economic order relying on the regulating and stimulating forces of the market and free enterprise, on the one hand, and on the other the results of a continuous redistribution of income and wealth for the sake of equality. It is a contrast which is intolerable in the long run. One or the other will have to yield -- the free society and economy or the modern welfare state. To use the words of another distinguished British economist, Lionel Robbins, a man who weighs his words carefully, "the free society is not to be built on envy."

Government-organized relief for the masses is simply the crutch of a society crippled by proletarianism, an expedient adapted to the economic and moral immaturity of the classes which emerged from the decomposition of the old social order. This expedient was necessary as long as most factory workers were too poor to help themselves, too paralyzed by their proletarian position to be provident, and too disconnected from the old social fabric to rely on the solidarity and help of genuine small communities.

People regard as progress something which surely derives its origin and meaning from the conditions of a now all but finished transition period of economic and social development. They forget that if we are to take respect for human personality seriously, we ought, on the contrary, to measure progress by the degree to which the broad masses of the people can today be expected to provide for themselves out of their own means and on their own responsibility, through saving and insurance and the manifold forms of voluntary group aid.

Are we to call it progress if we continuously increase the number of people to be treated as economic minors and therefore to remain under the tutelage of the state? Is it not, on the contrary, progress if the broad masses of the people come of age economically, thanks to their rising incomes, and become responsible for themselves so that we can cut down the welfare state instead of inflating it more and more?

A short time ago, a member of the House of Commons movingly described her father's plight in order to prove how inadequate the welfare state still is. But this is not proof of the urgency of public help; it is merely an alarming sign of the disappearance of natural feelings in the welfare state. In fact, the lady in question received the only proper answer when another member of Parliament told her that she should be ashamed if her father was not adequately looked after by his own daughter.

Today's welfare state is not simply an improved version of the old institutions of social insurance and public assistance. In an increasing number of countries it has become the tool of a social revolution aiming at the greatest possible equality of income and wealth. The dominating motive is no longer compassion but envy.

Crisis of the Modern Welfare State by the US House Joint Economic Committee in July, 1994
As excerpted from the book "A Humane Economy: The Social Framework of the Free Market" by Written by Wilhelm Röpke in 1960. Excerpts are from the chapter, "Welfare State and Chronic Inflation."

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.
- The Life of Reason: Volume I by George Santayana, 1905

History, in par, repeats itslef.
- Mr. Kuhlman, high school history teacher

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