The Myth of Social Welfare

(On Friday, I promised to comment further on “Why Be Free?”  Here is the second installment.)

As free men and women, we cannot pretend that others should want what we provide.  My poetry may pacify some urge I have within, but I do not expect others to support me in that regard.  I cannot expect that merely having children obligates my neighbor to support them or that my company’s inability to better foreign competitors justifies tariffs.  Freedom requires that we actually benefit others, not that we force them to support us.

This is a frightening notion for some.  So frightening that they will go to great lengths to mask their terror at the prospect of facing reality.  Ayn Rand called them second-handers–people who live not through the exercise of their own abilities, but by confiscating the production of others.  A second-hander rarely survives by outright theft.  That would be unseemly and too easy to identify.  Rather they create the fiction of social welfare.

Social welfare is alleged to be a kind of justice.  In reality, it means whatever the party in power calls it.  During a mugging, the perpetrator and the victim are identifiable.  Money or some other value is taken by one party for the benefit of the other.  In Congress, money is taken from “all of us” for the benefit of “the less fortunate.”  Even the phrase “all of us” is too revealing for statists to endure, so they say they are only taxing “the richest”–the ones who have more than us.  They leverage envy, the worst in humanity, against production, the best.  All the while, their smoke machines obscure the real nature of the theft.

The friend you see betraying others will eventually get around to you.  For decades, we have stood by while our government robbed Peter for the sake of Paul, embarrassed that we were part of the game–a farmer getting a subsidy, a teacher getting paid through taxes, a parent watching Sesame Street with a child, yet we were not willing to stand up and say, “Enough!”

There is no one left to rob.

While our government piled up debt that cannot be paid and molested successful citizens, we failed to watch freedom melting away.  It was always the other guy who was getting juiced.  Now we face a crippling debt, the steady erosion of our liberty, and the imminent collapse of our currency.  The social welfare lie has caught up to us and we are about to pay a heavy price for our complacency.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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2 Responses to The Myth of Social Welfare

  1. Dustin B. says:

    I must ask, because I desperately need an answer. What happens if we default on this debt? Why can’t we just say, to hell with the banks and to hell with the system that has brought us to the situation we are in now?

    I never taken a course in economics and I am very curious to know what sort of fallout there would be. I’m increasingly frustrated with this corporate-fascism that has taken over our country. I want capitalism… not crony capitalism.


    • Terry Noel says:

      You raise a terrific question, Dustin. No one knows precisely what would happen if the US defaults on its debts. In theory, they never need to because the government can always print money to pay it off. That goes both for the part owed us citizens and the part owed to other countries. Of course, inflation is the inevitable result. Other countries would be unhappy with us in the extreme were we to inflate our way out of our debt, but I would not be surprised to see that in the near future.

      Part of our advantage in the global economy is that the dollar is a “reserve currency,” kind of a standard against which other currencies are valued. That gives us a big advantage in that our money has always been trusted more than others. Lose that trust by defaulting or monetizing the debt (inflating it away) and we lose that advantage.

      The solution in my view is steady, relentless pressure on politicians to address the root problems in our financial system. They are numerous, but can and must be dealt with. To everyone who expresses concern such as you, I recommend learning all you can about the problem and teaching as many people as you can. When people’s eyes are opened to the scam that is our fiat money system and the circus clowns who run the government, they will ride herd on the villains. Patience, perseverance, and persuasiveness will win the day. Thanks for commenting.


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