Mittwoch, 5. Oktober 2011

Welfare State - I: TINSTAAFL and the Welfare State

The principal thesis of this paper is that, in reality, there is no such thing as a free lunch and that the major problem with the Welfare State, as it is being understood in many European countries, is that it tends to create the illusion as though there were such a thing. By creating this illusion, the Welfare State impedes those forces that have historically worked for the betterment of society, namely: the reasonable competition of thought and performance.

The idea of a ‘free lunch’ is not part of natural human expectations (in primitive society - one can safely assume - it was simply accepted that one had to hunt in order to get food on the table, and in modern society one simply accepts that one has to pay for a meal in a restaurant). At the same time, the fear of not being able to have lunch at all is still very much an issue for many people even in today’s advanced civilization. Symbolically speaking, the Welfare State, as understood in many European countries, tends to suggest that the best way to provide lunch for everyone is to provide it free of charge. Where that happens, the basic reality of there not being such a thing as a free lunch is being ignored. That way - this paper suggests - the alleged cure becomes part of the problem because it creates expectations which cannot be fulfilled on a sustained basis (i. e. the expectation that there can always be free lunches). At the same time, those forces that are necessary for the betterment of society overall (i. e. the reasonable competition of thought and performance) tend to become impeded.

In primitive society - one can safely assume - there was no debate about the fact whether it was right or wrong that one had to struggle for survival; it was a necessity. In modern society, the struggle for survival seems to be unevenly distributed: the „have’s“ need to struggle less and the „have-not’s“ are expected to struggle more.  The question is, however, whether the term „struggle“ is an adequate term at our present stage of civilization. „Struggle“ does imply in one sense or another that success comes at the expense of someone else; that there is only one deer to shoot and that it is „either him or me“ to shoot it. Modern thought should convince us that there is enough deer for all and that we will shoot the most for all if we marshall our resources towards that common objective. Or, as the proverb says: „If you give a hungry man a fish, he eats once. If you teach him how to fish, he eats forever“. Fishing can be fun, provided that one is allowed to fish where the fish are. Being given a fish (when unable to catch one) is a tacit admission of defeat, and it makes the recipient dependent on the donor.

Human potential is best observed when it is being the most tested. The post-World War II period provided for an unparalleled challenge for mankind to rebuild. And when modern mankind was forced to focus its attention on obvious (and undebatable) challenges, it succeeded. It was not government that achieved those successes; it was the marshalling of resources by the people to one common goal, it was the effort and undertaking of individuals that made it possible. Government only provided the framework for allowing that to happen. And in those instances where government did not provide for an adequate framework (such as in East European communism), the results did not happen.

„There is nothing that I can give you“, an Austrian leader told his people shortly after the end of World War II. „Except I ask you,“ he added, „believe in the future of your country!“  (Editorial comment: „Believe in your own abilities!“). Less than 2 decades later, another political leader phrased it differently by saying: „Ask not what your country can do for you; ask what you can do for your country!“ These are classic examples of the themes that Welfare Government should put forth. To misunderstand that is the classic foundation of present day’s Welfare State.

History tells us that nothing comes free of effort: neither the pyramids, nor medieval castles, nor the Autobahns were built without effort. The question is not whether effort is required to achieve results but rather, whether the targeted results are appropriate ones and whether the effort to achieve them is fairly distributed. There is no free lunch! The questions are: who should pay for it and who should eat how much of it? If the Welfare State answers those questions adequately, then the Welfare State is the objective to aim for. This paper does not suggest that the Welfare State can under no circumstances answer those questions adequately. It does suggest, however, that - over time - the Welfare State tends to be poorly suited to solve the problems that had lead to its creation in the first place because it tends to impede those forces that are necessary for the lasting betterment of society: the reasonable competition of thought and performance.

1 Kommentar:

  1. Hello Mr. Kastner,

    I will take up the invitation for discussion and decided to enter into it here.

    Concerning this article I will start with following. While in social sciences other than economics the idea that there is something like a "primitive society" has long been discarded.
    It is a huge flaw of economics to still live in the chauvinistic terms of the 19th century scholars like Adam Smith. Especially if when looking into it our society is not a very bright one, but rather the most stupid wasteful society that probably ever was.

    more at: Der Blick aus der Ferne

    (my comment was too long)