Footnote on the welfare state.

In June of 2010 Arthur Brooks (writing in the WSJ Slouching Towards Athens) had this to say, not about Greece whose economy at the time was in intensive care, but about us:

More and more Americans, especially younger Americans, will grow accustomed to a system in which the government pays better wages, offers the best job protection, allows the earliest retirement, and guarantees the most lavish pensions. [and he goes on to say that] against such competition, more and more young, would-be entrepreneurs will inevitably choose the safety and comfort of government employment….

Has it happened here, that the young are settling for more secure and possibly better remunerated government employment? Perhaps, although I don’t think so. But are we at risk of taking that wrong turn as Arthur Brooks seems to be saying?
Isn’t America still the first among nations in respect to opportunity. There is opportunity in America to improve one’s lot and it’s for this reason that people still come here numbering in the tens, the hundreds of thousands. Last year alone there were nearly a million immigrants who became American citizens.
But what Brooks says is probably true of a number of other countries, Greece certainly, but perhaps also, the country where I spend at least a month or two every year, France.
The French have become well accustomed to a government that offers important advantages over the private sector, better wages, better job protection, early retirement and better pensions, not to mention the various just “living” subsidies that would reach everyone in the government’s vain attempt to level the playing field for all its citizens.
But most governments will never have the means to be the people’s principal provider, let alone level the playing field. Most, because there are exceptions like Saudi Arabia, and our own Alaska, both with huge fossil fuel windfalls.
But more often the people will have to provide for themselves. The government’s coffers will never be full enough to satisfy the promises that a succession of previous governments, both conservative and progressive, may have made to the electorate in their own attempt to hold onto the reins of power.
Problems arise principally because the people don’t accept that the government can’t be all things to all people, that the handouts cannot continue, that they must make due in many cases for themselves.
And the people are not just the poor and the needy for whom government will always be the principal provider. The “people” in France may very well be members of elite organizations such as the airline pilots, the pharmacists, and the notaries all of whom have recently demonstrated against government actions that would remove some of their advantages.
And the people may be and often are, again as in France, the unionized workers in the country’s transportation and communication industries, who often demonstrate and go on strike when their handouts are threatened by a reformist government, rendering reforms that do get through rarely more than window dressing.
The elected representatives, both here and in France, much like the people who elected them, are mostly thinking about their own advantages, most often in their case, about what it will take to be reelected. No less than the people who are profiting from government handouts, the government officials don’t want things to change, but that their own advantages remain after whatever would be reform does take place.
Of course the French, not just the French but all of us, will have to live and learn, and on the basis of that learning seek to promote private initiative, making it easier to start a business, buy a property, trade and exchange, realize a new product idea, while at the same time not growing the size and the reach of the government.
Socialism, that form of “government,” with which a growing number of welfare democracies are flirting, has never succeeded. And why is that?
Well Ludwig von Mises’ 1922 answer to the question still rings true, — Socialism can not work in any form. Why? Because it creates nothing, makes nothing. One might say much the same thing about the welfare state. And people do, but not yet does the country as a whole seem to be listening.

 

 

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