Here is a good question. Does government welfare actually harm the poor, and if so, how?
Who would give to the poor if government welfare was supposedly taking care of them?
Socialism is not magic. Whatever comes out of it, something else was destroyed in order to put in it. Because of its institutional nature, government welfare is an inefficient method of welfare production, so the total supply of welfare will be smaller and the demand for welfare much higher with government welfare.
Well, the very nature of the welfare system harms the poor in the sense that it’s a disincentive towards employment and personal initiative in general. It’s the whole “giving the man some fish vs. teaching the man to fish” thing. Welfare also hurts the poor in that the political means necessary to fund it inherently creates more poverty. That’s the gist of it as far as I can tell.
I’m sure there will be some excellent posts in this thread about how government welfare programs can harm the poor in the long run; I will probably agree with them.
However, we should not forget that these programs do make some people better off, certainly in the short-run and quite likely even in the long-run.
Unless your audience has a good understanding of economics, it’s usually going to be counter-productive to make the argument that when someone receives a welfare check every month, that is somehow “harming” him (the recipient).
A better question (for utilitarians) would be: do government welfare programs make society as a whole worse off? And even better, IMO: regardless of their results, are government welfare programs morally justified?
It is not the reception of the check that harms him. It is the taking to produce the check that does. Whether the value that is lost from this taking is greater than the value that is received from the check is a problem of individual valuation.
The role of economists is to understand the lost opportunities. Government welfare is not free.
It inflates the dollar. It increases unemployment. It increases taxes.
Private welfare is enough to feed all of the poor in a free society. Deregulation would make healthcare, school, gasoline, housing much less expensive. So deregulating the economy is better.
Here’s one way to answer that question: do poor people tend to choose Welfare over their available alternatives? If so then Welfare helps the poor, all else being equal. Obviously some people who are eligible for welfare reject it, for whatever reason – this only applies to those who do.
But if you are asking whether most poor people are better off without the existence of a welfare system at all, that’s a much more complicated question. If all other government intervention in the economy remained, then getting rid of welfare would probably hurt the poor that would have chosen it, but might help those who would have rejected it anyway. This is because those who would have been basically just consuming goods now have to produce as well, and more production drives down prices for everyone. Or, if private charity stepped back in as people stopped feeling like the poor were taken care of by the government, then maybe things would remain mostly the same, except that the people who gave would be those who derived the most pleasure from it, rather than whoever the government happened to tax.
Now, if you got rid of welfare and got rid of government intervention like zoning laws, “consumer protection” regulation, licensing laws, taxes on small businesses, minimum wage requirements, and all the other things that make it much harder for a poor person to start his or her own business and earn some money, it would make most poor people much better off. There will always be some people who prefer living on Welfare to working and becoming self sufficient, even if their lifestyle would be far more comfortable with work. Many of these people have been on Welfare a long time, or are children of parents who are on Welfare. I can’t say I blame them, but it’s not fair to those who work and are taxed by the government to support them.
Welfare promotes government-dependence of the poor at the expense of those who are able to make a living without the help of the government.
Who cares? It does hurt those who paying for it, that is the important part.
Well, by the very least, left-liberals care. You could give them all the moral and practical arguements you want on the behalf of the net-payers, but if they are still convinced that it “helps the poor” they will continue to ideologically and politically support welfare because they are concentrated on the ends. So I think that if they could be reasonably persuaded as to the fact that it ultimately does not help the poor in the long-run, that even if we grant that it helps some poor people on one hand it creates just as many poor people (if not more) on the other hand, or that it effectively makes it easier to be poor (therefore creating stagnation rather then lifting people upwards), people on the left would be more likely to change their minds about it. Because if all you do is talk about the relatively well-off net-payers, they’re going to keep ideologically supporting it and view you as simply “defending the rich”.
My anecdotal two cents: in my experience, the most severe effect is psychological. The problem here in Finland seems to be that people can have a subsistence existence on welfare (which some supplement with unreported work) and the idea of cutting people off is a huge political no-no. So you end up with lethargic people who, in a best case scenario, do nothing or, in a worst case scenario, resort to alcohol or drugs. And this affects all age groups. For example, my father hasn’t worked for a decade and the system doesn’t mind. Around half of my friends don’t work, or do so only sporadically. And all of these people are very lethargic and depressed, some to the point of being suicidal.
So the welfare state is very destructive in my eyes. And the fact that these issues are never discussed in the right context (being caused by the system) annoys me to no end.
But that is just my anecdotal rant. I’m sure the Social Democrats et al. can pull some heartstrings to prove me wrong…
The problem with a question like this is that it encourages people to commoditize wellbeing. In other words, the answer will usually end up by saying “On the whole, welfare makes the poor worse/better off because…” or “In addition to the net costs/benefits realized by the poor as a result of welfare policies, society as a whole gains/loses because…”
The reality is that welfare programs help poor people in a lot of ways, and probably hurt them in a lot of ways too. Being able to live without fear of literally starving to death or dying as a result of an easily curable disease doesn’t seem like a controversially helpful thing. Assistance with finding a new job, free education for one’s children, and protection from the elements don’t seem like they would be up for debate either. At the same time, welfare encourages people to view themselves as having been deprived of their right to something, and therefore being entitled to compensation by society. It discourages productivity, and contributes to the emergence of cultures where poverty is an expected part of life.
But this is an Austrian message board, and so we should be focused on Austrian kinds of questions. Do the poor consider themselves better off as a result of government assistance? When phrased in that way, the answer is almost unquestionably yes. Do poor people truly understand their desires, and the means for achieving them, well enough to properly determine the beneficial nature of welfare? In many cases, probably not. Would it be comprehensible to say that given the poor people’s ends, welfare is on the whole a beneficial influence? The answer would surely vary between individuals. It is simply preposterous to say that welfare hurts the poor, and only slightly less so to say that it is always helpful. But it is almost certain that in at least some cases, welfare does more harm than good, and in others, the opposite is true.
But this is the Political Theory sub-forum. Which seems to indicate non-Austrian discussion, since Austrian economics is supposed to be value-free. Hence no political theory should enter into it. At least that is how I have interpreted it.
As a vast generalization, yes. But no issue is absolutely positive and absolutely negative. Welfare clearly does damage even with superficial inspection, in the form of alienation from society, etc. It also depends on who the recipient is. A handicapped person will benefit from welfare, since that person would rely on charity in any case. But will an able-bodied and -minded person benefit? I would argue, that in general, they wouldn’t. Consider the path for a recently laid off person in a free market society and in a welfare society. In a free market society, the person would have to look for work as soon as possible. In a welfare society the person could take a break from working (a surprisingly common practice), could nitpick on what work to do (also very common) and in general would have far less incentive to work. In this setup, the person is far more likely to start a new job earlier in a free market society, and thus will end up in a better financial situation, than in a welfare society. So, when compared with the alternative, welfare is actually detrimental to an able-bodied and -minded person in most cases.
When I pointed out that this is an Austrian forum, I was implying that the paradigm of praxeology would be helpful in discussing this issue, and I was surprised that people weren’t using it. Further, while this question is located in the political theory section of the forum, there’s nothing about it that goes outside of the discipline of economics.
On the second part of your post, you basically reiterated exactly what I said and provided a few more examples, so I’ll just assume that you’re agreeing with me.
I haven’t read the comments to your question, so someone might have covered this already:
Whether welfare is good or bad for the recipients is irrelevant, it is still stolen money. If A steals B’s wallet and hands it to C, A has committed a crime. Tax = theft.
The fact that a person is poor does not give him a right to the contents of the pocketbook of a person who is not poor. Theft is wrong and immoral, period.
If the question were understood to be considering the individual recipient of the welfare then it would appear to me that it harms the individual because it decreases the recipients’ motivation for ‘self-help.’ This in turn leads to lack of self-esteem. Which means it harms the poor in the long run.
In so far as taking care of the handicapped and the like prevents riots and more, welfare contributes to the public good. I think the big distinction to be made is between the deserving poor and the undeserving poor. Yes, ideally non-governmental charities would take care of all of it, but to abolish one system before the other one works would only cause mayhem.
Well, I think this is fallacious if you include all aspects of the situation.
To accept stolen bread from another’s table may fill one’s belly (and so one is ‘better off’ in this narrow sense) but it also makes you an accessory to the crime, and both dependent on and obligated to the thug who stole it - and who now owns you. So now you are a criminal and a slave. But a criminal/slave with a full belly. I think it’s a stretch under any definition to call that condition of humanity ‘better off.’
So…who gets to decide just who is ‘worthy’ and whom ‘unworthy’? You? Me? The State?
From where I’m sitting, mayhem doesn’t look so bad when compared to the alternative: a slow and agonizing descent into slavery.
You also have failed to show how empowering the State to “take care of the handicapped” 1) is more effective than the alternatives, all things considered, and 2) prevents riots and contributes to this “public good.” And on that note, I’d like your definition of public good.
A lot of people don’t understand how welfare can hurt the poor, because like Marx, they think of welfare as simple wealth transfers from those who have it to those that need it.
I.E., if the government takes $10 from you and gives it to me, I benefit, obviously.
If we expand this even greater – say that the government takes $10 from ten people and gives that money to ten other people. The ten that get the money all benefit, obviously.
But this doesn’t necessarily hold true when you’re speaking in terms of entire classes of people giving other entire classes of people money. Because when wealth distribution is on such a massive scale, it can have severely negative economic impacts, such that the transfer of wealth benefits no one and is a loss for everyone.
In the extreme, this is obvious: Imagine the government increasing taxes on the wealthy to a gazillion percent, then rounding up their wealth, and showering American ghettoes and slums with cash. On the surface, the poor benefit greatly, but this short-term gain is soon followed by disastrous economic consequences.
Simply put, you’re taking money away from the most productive and giving it to the least productive, without addressing the underlying problem that the poor are poor because they either can’t or won’t produce anything that others want.