Wednesday, August 10, 2011

In The Belly of the Goose

What the European riots are about, at bottom, seems clear. The social welfare state is unsustainable and its clients are feeling that keenly. The recipients of various benefits need more largess from the government: more, though, is not to be had. They need more because in the present economic climate of inflation and unemployment and little growth, the dole doesn't go as far as it used to. While I was not the first to guess the direction things would take, I was accurate at least. If you rob Peter to pay Paul, Peter goes broke eventually, and then Paul turns rebel.

It's not only happening in Europe. We are beginning to get reports from America of the disaffected and disadvantaged acting out in similar ways. There is not a lot of press coverage: an incident at the Wisconsin State Fair, some peculiar events in Philadelphia. More incidents are, doubtless, coming soon.

The Western democracies are discovering the fundamental error in their thinking about social welfare spending. In America, the idea that we could promote tranquility by making payments to  the urban poor has long been questioned. We cannot get rid of the system, however, because it comes with its own built-in voting block of supporters, consisting of those who get the benefits, and it has another block of supporters, at least as dedicated: those who think "redistributive justice" (to use Obama's term) is somehow the fair and kindly thing, and not to do it is cruel.

Of course, we now see that the supposed moral questions are moot, since the system of social welfare spending must collapse under its own weight. We have done no favor to those whose expectation in life is that the government charity check will always be there--for it won't.

The elderly, who receive old age pensions through Social Security--well no one worries about them, so much, because old people do not riot in the streets, as a general rule. But of course they are prone to vote against cuts to Social Security. "Hey! I paid in all my life. Where's mine!?" If they were given the real answer to their question, they might take to the streets, old or no; Tylenol works wonders, for a little while.

So what we have, looking at welfare, Social Security and the myriad of other social benefit programs, is a system of payments that cannot endure and which we are unable to stop. We have bumped up against Stein's Law in one of its uglier manifestations. If you prefer old stories to modern maxims, we have become actors in a retelling of Aesop's story of the goose that laid gold eggs.

There is no help for it. The idea is too firmly entrenched: Government should draw money out of the productive economy, to help the poor. It is a thing thoroughly believed by all the deeply caring liberals and by nearly all the beneficiaries  of social programs.

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