Foundation for Economic Education • 1997 • 208 pages • $14.95 paperback
Dale Matcheck is assistant professor of economics at Northwood University, Midland, Michigan.
This timely collection of essays is a rich and diverse anthology united by a recurring theme, namely, that the welfare of a human being contains spiritual as well as material components. A compelling case is made that the proper role of the state in promoting this welfare is to provide the environment in which people are free to strive, to achieve, and to live with the expectation that they may enjoy the fruits of their own labor. The articles represent some of the best writing that has appeared in The Freeman on the subject of the welfare state.
In his excellent introduction, Hans Sennholz argues that the era of experimentation with socialism and welfare statism is coming to a close, and that the passage of federal welfare reform in 1996 is a harbinger of more changes to come. What these changes are, Sennholz does not specify, but he makes it clear that it will be difficult for recipients of public assistance to move into private-sector jobs unless the legal obstacles that destroy so many entry-level opportunities are removed. He reminds us that transfer payments are not the only entitlements created by the welfare state. Compulsory unionism, heavy payroll taxes and mandated benefits, minimum wages, occupational licensing, and other constraints imposed on labor markets have greatly reduced upward mobility among the poorest members of society.
Furthermore, the public school monopoly has left so many young people without basic skills necessary to compete in today’s labor market. However, if we are to judge by the recent debate concerning the minimum wage, the Congress is not prepared to pass, nor is the public prepared to accept, the reforms necessary to create a truly free labor market. The new direction of public policy remains very much in doubt. Already, there are proposals to replace welfare with workfare, while some have suggested a simple privatization of the entitlement system, with private nonprofit agencies replacing the state bureaucracies.
The authors represented here would clearly take issue with the idea that forcible redistribution of income can produce desirable effects on society, no matter who is administering the system or what the work requirements may be. William Graham Sumner’s classic essay The Forgotten Man calls into question the morality of even well-intentioned redistribution schemes, while Henry Hazlitt’s essay False Remedies for Poverty explains clearly why the goals of such programs are so rarely realized in practice. Other articles chronicle the unfortunate consequences of these policies using historical examples from ancient Rome to modern Sweden. The final article in the collection is must reading for every American high school student. In it, Bertel Sparks uses examples drawn from the American experience to support his contention that effort made by individuals, striving to improve their lot in life, continues to be the surest route out of the poverty trap.
The implication of this anthology is clear: freedom is a necessary component of any true measure of individual welfare. As Milton Friedman has observed, government programs that seek to expand the material well-being of citizens at the expense of their freedom are likely to end up providing less of both. Readers seeking to better understand the social, economic, and political impacts of the welfare state will find this collection of essays a valuable resource.