Freeman

ARTICLE

Free Giving vs. the Welfare State

FEBRUARY 01, 1972 by CHARLES R. LADOW

Mr. La Dow, of San Diego, recently retired as a teacher of social studies in high school.

Despite the ever-burgeoning tax burden of our welfare state, voluntary giving by the American people goes on apace, as the number of philanthropic appeals steadily increases. Without recourse to statistics, the average person’s daily mail, plus reiterations in the media, assure him of the persistent success of privately supported causes. Furthermore, the buildings and equipment of privately funded philanthropic institutions are visual proof of their vitality. Tax deductibility only partially eases the cost of giving, a cost assumed by persons of every class. The major motive for giving is clear; in this private sector, the individual is allowed to give to causes which he truly wants to support. Also, he is assured of the effectiveness of his donations by the knowledge that he can withdraw support whenever he believes an organization is no longer worthy and the certainty that such organizations are aware of his option.

The "public philanthropy" of the welfare state possesses no such motivation and no such safeguard. Based, of necessity, on class legislation, it appeals to the greed of the individual, as a member of some arbitrary, abstract group. (Private philanthropy would be in the same condition if its beneficiaries were empowered to vote upon, and lobby for, the nature and amounts of their benefits. Who would contribute to such institutions?) Since all classes of citizens, directly and indirectly, are now dependent on public largesse, it is understandable that each individual is motivated to vote so that his class, hence himself, will get the largest possible share of public funds. (The person is rare, indeed, who asks for a cut in wages or benefits!) Hence, we are faced with the odd spectacle of a millionaire allowing Medicare to pay for his operation, while a recipient of relief goes to the doctor every time he has a sore thumb. People of every class and political persuasion are aware of the shortcomings of governmental welfare programs; but the very nature of the process impels them to demand more of the same. There is also the haunting, long-held, fear that, if we should scrap these programs and turn to a free market, we would have a ghastly depression.

Reality suggests otherwise. Should we continue as we are doing, a terrible awakening is certain to come. The truism of economics is inescapable: "Wants are unlimited, while resources are in limited supply." We have been squandering our resources for decades, having attempted to repeal the law of supply and demand and the natural restraints it imposes. The continuing vitality of Hong Kong, surrounded by totalitarianism; the astounding recovery of war-devastated Germany and Japan; these are examples of the effectiveness of open competition. Our welfare state is even threatened, economically and militarily, by the totalitarian powers. We must awaken from our long holiday. Are the

American people too effete to answer a challenge of "blood, sweat, toil, and tears?" Their record of voluntary giving and ability to rise quickly to real emergency indicates otherwise.

No Lack of Philanthropy

As to any fear that dismantling of the welfare state would dry up philanthropy in this nation and see people dying for lack of food or medical care, one need only read the daily paper to see the improbability of such happenings. Even with the load of tax-supported welfare, the people’s response to individual troubles is amazing. Appeals for help for the unfortunate are usually oversubscribed; nor is such help given, or taken, in a demeaning way. As always, it is public welfare, not private charity, which is truly demeaning. Generosity and gratitude are beautiful emotions which draw persons together as no public largesse can do. Think of the good which could be done voluntarily if the funds extracted for public welfare measures were left in the hands of individuals!

The foregoing suggestion may not justly be called Brahministic or devoid of concern for the common man. The tax load of the welfare state falls most heavily on the common man, who is in no position to claim capital losses or tax shelters, or to pass along his tax costs in the form of higher prices. The easy road to great fortunes and the tax-free status of many of our wealthiest persons are hallmarks of the welfare state. At the other extreme, the poor man, spending most of his income for necessities, is locked into the cruel bind of tax and inflation. Who pays for the government’s farm programs? The only honest reply: "The poor people in the cities." On the other hand, farmers are impoverished by rising costs of machinery and supplies due to government pampering of organized labor, plus the exorbitant taxes and interest which stem from the profligate policies of a welfare state. The true charge of Brahminism fits best those welfare policies which are designed to fasten the individual to a place in an arbitrary caste system of "benefits" while taxing away his chances of social mobility.

Failure of the current administration to even begin to dismantle the bureaucracy as promised indicates a need for major surgery.

When government officials, in so many cases, seem no more aware of fundamental economic law than are their constituents, it is difficult to see how correction can come. It usually takes a great shock to shake a nation into a grand decision. The blitz-bombing did it to England. Catastrophic defeat accomplished it in West Germany and Japan. Such feats, as in England, are often ephemeral. The magic of Germany and Japan may well end in reaction. However, the debacle of 1929, which introduced our welfare state and started a movement continuing to this day, is some proof of our persistence, however perverse. Nevertheless, a steady growth of conservative opposition, both in quantity and quality, has been apparent. Those who are rebuffed are obliged to pursue education and improve their talents, while those in power grow slack. It may well be that when the next shock comes, as it surely must, voters will be ready to listen to the call to turn philanthropy back to the people.

 

***

William Feather

Which town is better off, one which organizes a new uplift movement every three months, or one which opens a new factory?

The William Feather Magazine, December 1971 

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February 1972

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