Welfare State Doctrine

Mr. Fox is President of the St. Lawrence Cor­poration, Ltd. This article is taken from his annual report to shareholders in Montreal, April 15, 1959.

Bureaucracy is by no means limited to Washington; we have a full and spreading measure of it in Canada. Here are some figures.

The Ottawa government had 195,390 people on the public pay­roll in 1958: a jump of 10,000 over 1957. The 10,000 added to the pay­roll in 1958 were equivalent in number to all the workers making automobiles in the vast General Motors plant at Oshawa, Ontario.

In the ten years since 1948 the number of people on the Ottawa payroll has been increased by 62,000 or nearly 53 per cent. In the twenty years since 1938 the in­crease has been 136,000 or 309 per cent. Our population growth since 1938 has been 55 per cent.

Through the last twenty years, in peace or war, good times or bad, Ottawa thus has added to the pub­lic payroll an average of 6,800 peo­ple every year. That yearly in­crease alone is 2¹/₂ times the total of our company’s full-time employ­ees in 1958, and we are not a small company.

But the Ottawa payroll is only part of our bureaucracy. We also have the multiplying numbers at­tached to provincial and municipal governments. These are difficult to ascertain but I believe it a cau­tious estimate to say that ordinary government payrolls throughout the country in 1958, paid out of taxes, totaled over 400,000 people.

The 400,000 compares with some 60,000 workers in 125 pulp and paper mills across the country, and pulp and paper is Canada‘s biggest industry. In fact, the 400,000 con­siderably exceeds the combined total of workers employed in Can­ada‘s twelve leading industries as listed in the latest Canada Year Book.

And the 400,000 is by no means the full story; it represents only the ordinary departments of government.¹

Our multiplied and multiplying bureaucracy in Canada is an off­spring of what has become known as the Welfare State, a pseudonym for state socialism. The Welfare State also breeds overspending and inevitable inflation. The combina­tion of welfarism, bureaucracy, and inflation is now our top danger.

If we in the Western world ever succumb to aggression, economic or military, it will not be due to the aggressor; it will be from our own debilitation. When we surren­der self-reliance to leaning on gov­ernment paternalism we are like a man who leaves his legs idle in fa­vor of crutches that he does not need. He will end by having no muscle. We can end by getting too flabby to work hard or to fight.

To see what has happened to us, we need to look back thirty years or so. The doctrine of the Welfare State in Canada began then as a struggle for social justice in which men like J. S. Woodsworth, right or wrong, were dedicated mission­aries. Mr. Mackenzie King adopted the doctrine as a political tactic in his early seeking of support to re­habilitate his party and his dex­terity was imitated by Mr. R. B. Bennett in a new deal maneuver for the 1935 election.

Since then we have had a con­tinuing performance by all politi­cal parties, federal and provincial, in trying to nut-do each other by offering larger and larger doses of Sugar Daddy benevolence as a striving to stay in office or to get there. In this technique of be­guiling voters with their own tax money we have never had more notable examples than in 1957 and 1958.

The Handout Habit

After thirty years of acceler­ating welfarism, what has been the effect? We had a public ex­ample last month in the Ottawa excursion of 1,100 western farm­ers seeking a 300 million dollar handout and, worse still, in their bands-and-flags reception by some members of parliament. The fact that the excursion was a flop does not alter its sorry contrast with what we used to think of as the strong free spirit of the West, where men were men not mendi­cants.

But I do not single out the west­ern farmer; there has been a great loss of self-reliance amongst all of us. Dependence on government now pervades our thinking. With in­dividual industries,² labor bodies, cultural groups, and institutions of every kind it has become a habit to look to governments for allow­ances, subsidies, bonuses, benefits, grants, bounties, subventions, and all the other fancy words that mean handout.

Despite oppressive taxes and shrinking dollar value we still try to fool ourselves that the handouts are something-for-nothing and our newspapers unfortunately abet the delusion by their careless habit of saying that “the government will pay.” It should be painfully plain that a government can pay for nothing; only the taxpayers pay.

Within relatively few years, wel­farism has changed our ideas of how to get ahead in life. In place of hard work and the seeking of opportunity we now look for se­curity and leisure without want­ing to earn them. And leisure to­day is seldom put to use; often it means nothing better than squat­ting over television’s endless stupe­faction.

Paying for Promises

During the last war there was a slogan about choosing between guns and butter; it was like the challenge of “blood, toil, tears, and sweat.” We now have to match ourselves against hard tough peo­ples who know nothing of security and leisure. But we are being led, and are acting, as though we can muster all the guns we may want and still indulge in the unlimited butter and soothing-syrup that welfarism promises to hand out.

Indulgence is the essence of the Welfare State even when, as now, it means putting taxes higher in the face of pledges to make them lower. Political welfarism has no place for the ordinary household and business practice of cutting expenditure to stay inside income.

Politicians still bet on voters be­ing foolish enough to think that welfarism means something f or-free, that higher taxes and bigger spending don’t matter as long as the handouts keep coming. And the politicians still seem right about some people, for there are some who try to think that a government is coping with inflation when it taxes more even though it shows no attempt to spend less.

We do almost anything to avoid straight thinking about what’s happening to us. We don’t even talk plainly about business any more. We now use the bureau­crat’s jargon about economic cli­mate and segments and sectors of the economy when we’re only try­ing to say how things are going.

Some Reasons and Convictions

Now these are disagreeable mat­ters to talk about. You may won­der why I do, and at a meeting of company shareholders. I have four reasons I would like to mention, and here they are.

1. The spreading of the Welfare State, with its offspring of bureauc­racy and inflation, is a deadly course for this country as it is for any country. It enervates our char­acter as a people and is a cruel hoax upon those it is supposed to benefit the most. As earnings and savings dwindle in real value, those to suffer most are bound to be the people of smallest means.

2. We cannot look to politicians or any political party to halt the spreading of indiscriminate wel­farism. The aim of politicians is to win elections. They tell them­selves that the people ask for wel­farism; that it will continue to catch votes. Therefore, whetherthey think it good or bad, political party strategists will go on offer­ing more and more of it until the people themselves stop them. In over thirty years we have had no sign of statesmanship in Canada to let us hope for anything differ­ent.

3.       Since we cannot hope for it in politicians, leadership will have to come from the people and from a free press determined to serve the country’s interest rather than the election hopes of any political party. The Canadian people and the press can halt welfarism by turning against it; by making politicians see that it will lose votes, not catch them.

4.         Every person who is opposed to unrestricted welfarism thus has a public duty to say so, and there is no place where the subject does not belong: in homes, churches, social groups, business. Every one of us has freedom and perhaps survival at stake in calling a halt to the fatal combination of wel­farism-bureaucracy-inflation. To sit back and not bother means to lose by default.

It is with these convictions that I’ve taken our meeting today as an opportunity to say what I have said. If you have similar convic­tions, I hope you also will find op­portunities to declare them. We should all do our best to stand up for what we believe in.

Foot Notes

¹Ottawa figures do not include armed services, government agencies, or crown corporations such as CBC. (In 1958 CBC alone had 6,300 employees and took $41 million out of taxes for its capital costs and operating deficit.) Provincial and municipal estimates are based on various authentic sources and are also for or­dinary departments; they do not include school teachers or municipal police and fire forces.

²Pulp and paper is one industry that has never asked for or taken a government handout. Even in the 1930′s with half our newsprint mills operating in bank­ruptcy the industry made its own way, against world competition, without seek­ing subsidy or favor or charity of any kind.