Kenneth McDonald Is a Toronto writer on economic and political subjects. This article Is reprinted by permission from The Toronto Sun, December 14, 1978.
Though addressed to Canadians, the ideas apply in all nations.
Canadians who complain about the growth of governmental spending are often challenged to be specific. "All right," they are told, "what would you give up?"
As a response to criticism it’s deceptively simple. It assumes, first, that citizens have a say in the making of policy and, second, that the spending growth has been for their benefit.
Both assumptions are false. Let anyone who doubts it try to recall, during any of the election campaigns in 1968, 1972 or 1974, being asked to vote for or against a specific policy.
Was their opinion sought about immigration, or multiculturalism, or permissiveness, or official bilingualism, or foreign investment, or the "progressive" tax system? It was not.
Did any of the candidates, while promising heaven on earth if they were elected, offer any estimate of the cost to the electors? They did not.
The fact is that government’s chief occupation has become the redistribution of wealth and income—which is the well-worn euphemism for taking money from those who earned it and giving some of it to others who didn’t.
This has involved a fundamental change in the nature of representative government. Its prime responsibility is to guard the peace in which citizens can go about their business, creating wealth in the process.
Now the role of guardian has been submerged in another: that of participant in the business of citizens. Unable to create wealth, governments redistribute it. While doing so, their own employees and procedures consume about 30 per cent of the wealth that was created.
This fundamental change has given citizens the impression that governments do indeed have money of their own, an impression that politicians have not been slow to encourage. Hence the electoral promises of "help" for this group or that region, but never of where the help is to come from.
The trick is performed with the aid of a very simple device: never to let the giver know who the receiver is.
The money we "give" through taxes goes, we are told, not to people but to programs. The programs provide jobs for administrators and inspectors and social activists and all the rest of the welfare state’s hangers-on.
It is as if a family of five, with one son either unable or too idle to find work, instead of taking the responsibility themselves, were to hire someone to keep him company—a sixth wheel to be carried along with the fifth.
Now it is charged that cutting back on governmental spending will result in a cutting back of services that citizens have "demanded."
Many of them, however, were not demanded at all, they were simply manufactured by bureaucrats as the natural product of an overgrown bureaucracy.
There is no doubt that after 15 years of changing the emphasis from production to consumption, changing it back again will not be easy. Nor can it be done without some dislocation. A generation has grown up to the idea that there is a free lunch, courtesy of government.
The penalty for over-consumption is the same for a nation as it is for an individual: inflation. Caused by governmental spending, the cure is to reduce it.
The answer to the question, "What would you do?" is "Reduce spending by governments, and encourage individuals to produce more by letting them keep more of their own earnings."