Dominic Frisby

The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.

But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.

I’m going to suggest something that many might find upsetting and outlandish — that welfare would be more effective, more varied, more widespread, and more affordable if there were no state involvement.

People instinctively think that without a welfare state, the poor and needy would not be looked after. At such an unacceptable prospect, people then become fervent in their defense of government welfare systems. You can see the passion people feel about this erupting all over the Twitter and the blogosphere.

…the state now has a near monopoly on compassion.

Before we start, I want you to get your head around one thought: Suggesting that the welfare system is not working and that we should do away with it is not the same as suggesting the poor and needy should not be looked after. No, in fact, it’s quite the opposite.

The provision of care is a delicate, complicated, and unpredictable process. Sometimes, money might help the recipient toward self-sufficiency, but sometimes not. Giving money might lead to a temporary lessening of suffering, but often, it can lead to greater dependency and less self-reliance.

Sometimes something local is required, sometimes something practical, sometimes something psychological or emotional, sometimes something specific to the individual’s circumstances. Sometimes what’s needed is a proverbial kick up the backside. Different circumstances require different forms of care.

You also need to consider the dignity of the recipient. It can be demeaning to receive charity. On occasion, anonymity might be required — but on other occasions, it might not be. How on earth can anyone hope to design a top-down, one-size-fits-all system of state welfare that can meet all these varying needs consistently over time?

Then there is the matter of the giver. He or she must also be considered.

Compassion, care, and the giving of charity and care are essential human functions. They are a part of human nature. People need to give as much as they need to receive. You need only to see the pleasure children get from giving as evidence of this. Even perhaps the most ruthless, murderous drug trafficker that ever drew breath, Pablo Escobar, was a prolific giver. He built houses, churches, and schools in his native region of Medellin on a scale unmatched by the Colombian government.

In the charitable process, the giver has needs too. Sometimes, the giver wants to be anonymous; sometimes he wants recognition. Sometimes, he or she likes to be involved with the recipient in some way, sometimes not.

But in the process of state care, the giver’s needs are not even considered. Taxes are taken, and that is it. We are given no real say in how the money we have earned is spent, barring a vote of dubious effect every couple of years.

Often, the giver is morally opposed to what his taxes are being spent on.

The forced giving that is taxation actually destroys the altruistic satisfaction that people get from giving voluntarily. To help others and to share with them is part of humanity. But in a world in which government is responsible for the care of the poor and needy, that compassion is removed from life. As a result, the state now has a near monopoly on compassion.

In fact, it is even more bizarrely specific than that: The pro-large-welfare-state left wing has the monopoly on compassion. Anyone who doesn’t agree with the concept of a large, generous welfare state is deemed heartless and selfish.

While you have to pay the government through taxes to provide welfare (or heath care or education), your ability to provide any of these things for yourself or your family is reduced, because you have less money. Often, after taxes are taken from you, you then can’t afford to pay for your children’s school, your doctor, your hospital, your home, or your charity to others — so you find yourself depending on government help in some way. And so more and more people, in some way or other, are caught in the ever-growing dependency net.

What’s more, if the state is providing care to the needy, you are then absolved of the responsibility to do so.

Meanwhile, government welfare, as well as being inflexible, is expensive. The large organizations through which care is administered can be inefficient and wasteful. Worse yet, they are prone to corruption and rent-seeking (people gaming the system in some way).

If you look at food, clothing, or technology — essential human needs that, largely, are not supplied by the state — we have, over the last 30 or 40 years, seen dramatic falls in price and dramatic improvements in quality. Competition has driven costs lower. Yet welfare has not experienced the same improvements.

Why not? Because thanks to the state’s near monopoly, there is no competition.

The idea of competition in welfare is offensive to many. But we need it if we are to improve quality and lower costs.

The greatest expense in our lives is not, as many believe, our houses or children’s educations. It is, in fact, government. But imagine a world with minimal state. Suddenly, that expense is removed. Without the cost of the state, we have more capital to spend and invest. People are empowered. Our ability to help others is increased.

In a world with no state, what’s more, suddenly our responsibility to help others is also increased. If the state is not helping people, we must. Simultaneously, thanks to competition, the help we want to offer is cheaper, more varied and better in quality — organizations are competing with each other to offer better help at a lower price.

The result will be more affordable welfare, more widespread and diverse welfare, more flexible welfare that can provide for specific needs, more effective welfare, more onus to provide welfare — ultimately, better welfare.

Without a welfare state, the poor and needy won’t be looked after, you say? I suggest they will be — to a much higher standard than they are today.


Dominic Frisby
for The Daily Reckoning

Ed. Note: No matter what direction the “welfare state” decides to go in, there will be a way for you to combat any negative side effects. You can live a happier, healthier and wealthier life than you ever thought possible, just by following a few simple pieces of advice. Sign up for the FREE Laissez Faire Today email edition to get full access to this kind of information, every weekday afternoon.

This article originally appeared in Laissez Faire Today

You May Also Like:

“We Should Trust Our Allies More Than Our Citizens”

Prr Lzkdrqxcwm

In a surprise turn of events, Sen. Dianne Feinstein, Chairman of the Senate Intelligence Committee, announced that her committee would hold a “major review into all intelligence-collection programs.” Heh... What do you think the odds are they actually find anything? Our resident alien reporter, Prr Lzkdrqxcwm, gives his unique interpretation of the events...

Dominic Frisby

A jack of all trades, Dominic Frisby wears many hats in his professional life. A comedian, an actor, a presenter and a writer-producer. And yet he still finds time to write a column for Moneyweek about gold and finance. His beliefs are simple: sound money, small government and natural law.

  • Encore1fois

    Why would people help the needy if they derive no personal benefit from it? On the other hand, the state benefits if the needy are not driven to delinquency in order to survive. However, it is also true that money from the state more often goes to self styled helpers who are more interested in their own welfare than that of those they are mandated to help, when they are given free rein to do so in any way they see fit. I do not see any of this improving with the devolution of charity work to private entities. If there is no public money involved, there will be no public oversight either and plenty of room for abuse of those who do not have the means to fend for themselves.

  • Victor Kauffman

    ” If there is no public money involved, there will be no public oversight either and plenty of room for abuse of those who do not have the means to fend for themselves.”
    What you are basically saying is that forced charity which is not genuine charity is necessary in order to prevent abuse. How preposterous! That in itself is the greatest abuse that hurts those in need most of all. Maybe if you are the one gaming the corrupt system and lining your own pockets with money you did not work for, that would make sense.

    Private charity organizations who do their job inefficiently or pay their managers way to much would not last very long in the free market. The donors would be the ones providing the oversight as it should be. If you are going to donate to charity without first doing your due diligence you are a fool.

  • RapidRay01 .

    Tell that to the people that have had their jobs shipped overseas to the low wage countries ! People , such as yourself , have no problem shipping jobs overseas , then turning around and blaming the effected workers for their Current life experience !

  • LolitaP4

    I would love to investigate how “welfare” was instituted but for now it appears FDR addressed the problem of “not enough money” by “creating” jobs resulting in people receiving paychecks used to pay rent, pay utilities, buy food, purchase clothing and and even afford entertainment. Those decisions allowed citizens in this country to afford to buy homes, go back to school, and a lot of us didn’t have to worry about the unexpected expenses. That might seem elementary but compared to today, and since the mid to late 70′s, the words spoken have been to reduce the deficit by cutting back on social security and senior benefits, reduction of funds for education and social programs, and removal of productive programs for those who are struggling. Prices and fees are set by heads of corporations and are increased almost daily. Salaries are stagnant and the jobs are scarce and/or skills are lacking to fill the available slots. Arguments by some are politically “created” to protect self-interests rather than serve the politician’s constituents. There are millions of humans affected by those decisions who would love to go to work and be able to afford the basics and the extras in the richest country in the world.

  • Tom Sawyer

    Food stamps are the biggest bang for the buck the govt spends money on. All money comes from the govt so who really cares how its spent as long as its spent. People have no problem with their tax dollars going overseas to destroy another country, destroy infrastructure, destroy whatever and then use our tax dollars to rebuild but somehow if you give people who were born into less than ideal surroundings, with little chance of improving their lot in life someone that is wrong and immoral in your world. I for one don’t care if my tax dollars help citizens in this country remain housed , clothed and fed.

  • Erik

    Good for you, Tom. So open up your bank book and start writing checks to Uncle Sam. In exchange, the Govt can lower my taxes and I’ll support the charities I choose. The problem with your argument is you assume everyone in the world must think as you do and be satisfied with a very “meh” Govt organized charity state. The phrase “I for one…” is the key. So go ahead…be the one…send your money and happily watch a large percentage of it siphoned off for overhead, greed, corruption, and inefficiency. Meanwhile, how about leave me to my own intelligent (and generous) decisions to send money to the organizations I have carefully researched and choosen so I can see the wise use of donated funds in my community?

  • Erik

    Three words that rebut you entire argument: “Convoy of Hope.” One of my favorite local charities that spreads disaster relief around the world. Not a dime of Govt money. There really are good people in the world who don’t work for the Govt and are extraordinarily dedicated, efficient and effective at helping people. And what about that “oversight” you say is missing? It’s handled via PRIVATE oversight by the person (me) giving the dollars because I CARE where my dollars go.

Recent Articles

The Awful Way Social Security Might Be “Saved”

Dave Gonigam

The US Social Security program is complete mess. The funds needed to pay these benefits are quickly drying up, and agreeable solutions are in short supply. But all is not lost... There actually IS a viable way to "save" Social Security. But as Dave Gonigam explains, you're probably not going to like it. Read on...

Important Facts You Need to Know the Ebola Outbreak

Stephen Petranek

This summer, the worst Ebola outbreak ever recorded hit sub-Saharan Africa. But the greatest danger, as Stephen Petranek explains, is that the virus will have a chance to mutate into a form that spreads more easily. And if that happens, there will be far reaching consequences - from both a health and an investment side. Read on...

Laissez Faire
A Free Way to Turn Your Unique Skill Into Real Money

Chris Campbell

Everyone in the world has a unique talent or skill that someone else might find useful. Whether it's editing video, speaking Spanish or even eating paper, chances are there is someone out there willing to pay for what you have to offer. Today, Chris Campbell shows you one way to find those consumers and how to make your skill work for you...

The End of the “Gun Control” Bull Market

Greg Guenthner

For the last few years, gun enthusiasts have been concerned that the Feds would find a way to block their access to firearms. Now those fears appear to be subsiding... and so do gun sales. Greg Guenthner explains how to navigate this market in the coming months and years. Read on...

The Most Important Trait of Any Successful Resource Investor

Henry Bonner

The gold mining sector is one of the most difficult areas of the market to navigate successfully. But there is money to be made here. Henry Bonner sits down with one of the giants of this industry and picks his brain about how to find winners in this market and the four things every great investment has in common. Read on...