Brandon Smith provides the best description of Socialism that I have read in a while (my emboldening):

A country that feels the need to socialize has, in my view, already failed culturally.  It is an open admission by the public that they are unwilling or unable to take responsibility for their own prosperity.  If a society is not able to function in a healthy economic manner without the force of government (an abstract entity often manipulated by corrupt ideals) resulting in the creation of artificial and precarious balance using fiat stimulus and overt taxation, then the people of that country are not remotely independent and self sufficient.  That is to say, only a nation filled with pathetic overgrown children would actually need government to enforce mandatory “charity”, welfare, healthcare, etc.  A truly healthy society supported by strong and self sustainable individuals would not beg to be parented by government.  If a country is so unbalanced as to stoop to socialism, then its ailments already extend far beyond anything government (even good government) could ever hope to cure.

Obamacare, its tentative application, and those who blindly support its introduction in the U.S., are an example of a weak people groveling for handouts they do not work for nor deserve.  Socialism is defeat.  It is a waving of the white flag by a society and the trading of that culture’s liberty for the illusion of fiscal security.  It is the act of an adolescent and naïve populace groveling for an allowance from their “motherland”.

The cultural failure of which Mr. Smith speaks is neither natural nor sustainable. In the absence of government, it could not exist. Those who were dependent would be few. Private charity would take care of the truly needy but not those who chose dependency as a lifestyle. Without government, those who chose not to work would not eat.

Even with government, cultural failure is not sustainable. The involvement of government as a charitable and caring institution sows the seeds of its own and society’s destruction. Two outcomes are unavoidable:

1. More people become “needy.”
2. The economy slowly destructs.

Dependency

The more something is subsidized, the greater the demand for whatever that is. As it becomes more “profitable” not to work, more people opt to trade effort for leisure. Does anyone seriously believe that people would work if they were offered the same or similar pay for staying home? There is a reason we call it “work” instead of “play.” Most of us have other things we would rather be doing.

The perverse incentives kick in long before welfare reaches an equalization of wages or salary. If one works for $100 per week and is offered $50 for not working, then he can stay home and collect $50. He is given a choice to  ”buy” full leisure at an opportunity cost of $50. Actually the cost is less than that because it is no longer necessary to pay for clothing or transportation required by a job. Plus there would be no “waste” of 9 hours or so per day.

The above reasoning may not resonate with those with good jobs. However, imagine yourself as an untrained person just entering the workforce. If the minimum wage does not make it “illegal” for you to work, the trade-offs between dependency and effort can look pretty attractive. If you perceive your outlook as slim, the attractiveness of living without work is enhanced. Sadly, not getting on the escalator when you become eligible for the workforce is doubly damning. Whatever skills you might have or might have developed never appear. Lives of some of the young are literally ruined with the attractiveness of this “free lunch.”

The damaging effects of welfare have been known for a long time. Benjamin Franklin observed long before America took the welfare state road:

I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.

Innumerable quotes like this one are available. Some of them pre-date Christ.

The Welfare State

If men have known for centuries the harm that welfare inflicts upon its recipients, then why do all democracies eventually evolve into welfare states? Thomas Sowell states:

The welfare state is not really about the welfare of the masses. It is about the egos of the elites.

The first sentence is indisputable. The second one, while true, is not necessarily the primary political motivation for a welfare state. While ego gratification achieved by politicians spending other people’s money to “do good” should not be discounted, there is a stronger and even more selfish political motivation. Welfare is the modern politician’s dream. It enables him to bribe voters for their support. “I’ll give you this, if you give me your vote” has become an implied pact between various constituencies and politicians.

The promise goes beyond social welfare programs, extending into corporate welfare. Corporations fund politicians in return for favorable treatment by government. Often this favorable treatment crosses the line into corruption.

Neither voters nor corporations who benefit from this scam have reason to complain. They are getting something for “free,” or at least mostly at the expense of others. Politicians and parasites both win.

The economy, however loses.

How Government Welfare Destroys An Economy

Government has no money and produces no wealth. It is incapable of doing good, other than by doing harm to some group in the economy. All funds come from someone, either in the form of taxes or printed money. In the former case, the people whose money has been taken are harmed. In the latter case, everyone is harmed, but that is a story for another day.

Anything government does can be done by individuals acting separately or jointly. Some things, it is argued, can be done more efficiently as public goods rather than private ones. But these are few and could be provided privately if they were truly necessary.

Government is different from individuals in that it reserves for itself the exclusive right to coerce. Much of what it does would be considered criminal behavior if engaged in by the private sector. Whether the loss of freedom and choice is worth providing this power is moot.

The more government takes and redistributes, the more a society is harmed. Those on the receiving end begin to accept living at the expense of others as a right. Those who are produce see their rewards for effort diminished as more is taken from them. The political incentives provided contain the roots of societies destruction.

Over time the parasites vote themselves more benefits and the politicians, in exchange for their votes, are only too happy to oblige. Both political parties are in a competitive race to win elections. Both participate in this race to the bottom in order to get themselves to the top.

Eventually the parasites overwhelm the producers. Living standards decline (arguably that process began in the 1970s in the US, masked by people living beyond what they produced via the credit explosion). Society becomes poorer as the unproductive class grows relative to the productive class. Eventually more people ride in the wagon instead of pulling the wagon. As the producers shrink, so does the pie available. A smaller pie means less to share and a declining living standards.

The most basic lessons of economics pertain to supply and demand. These two are integral:

• The more you subsidize something the more of it you will get.
• The more you penalize something, the less of it you will get.

Government tries to flaunt the laws of nature and economics because these laws restrict what government considers indispensable services. Society, however, existed long before government and could exist without government, at least as government is currently construed. One may argue that some government is efficient (for example providing common defense), but even these services could be provided privately. In the few cases, where efficiencies may be shown, most of what government does is both inefficient and would not be done by voters without the coercion of the State.

When government was limited in what it did, an efficiency argument might have been valid. However, government long ago left the restricted area of providing services allowed in the Constitution. For the last 100 or so years, government efficiency would be a tough argument to defend. Certainly no one should have to defend the last fifty years.

Bigger government, at some point, becomes inefficient and harmful. Beyond this point there is an inverse relationship between the standard of living of a society and the size of its government. The US and other democracies are now passed this point. The economic crisis that we currently experience results from too much government involvement.

Initiative, lives and standards of living are now declining and have been for a decade or more. The productive still toil, but Atlas is beginning to shrug. John Galt can be pushed only so far.

The political elites do not seem to care so long as it doesn’t disrupt their time in the trough. After all they have become the new wealth class in society and want to retain that status.