Democracy and the Welfare state by Ohmyrus

If seventy people rob thirty richer people (in a country of 100 people) of their hard earned money that is criminal. But if these seventy people elect a government to tax the thirty richer people and give the money to them, then that is democracy. Does that make sense?

Essentially there is no difference between a welfare state and robbery. A robber uses a gun to deprive someone of his property. In a democracy, the gun has been replaced with the ballot box. That's the only difference. Violence is still needed. If you don't pay your taxes, the police (who has guns) will send you to jail. The result is the same.

It was reported in 1988 in the Economist that less than 1% of poor people are those who have high school education and stable marriages. Therefore, it is the more virtuous, diligent, smarter people who must subsidize the lifestyle of the less virtuous, diligent and smart people. This is a flaw in democracy. (Inspite of this and other flaws, democracy is still the best form of government devised by man which is a reflection of the sad state of human affairs. )

Let me tell you a story. Once upon a time, there was a somewhat secluded island with about 500 people who were mostly farmers and fishermen. Disputes were few and were informally settled by 'elders'. So there was no need for a formal government.

As time went by, some of the islanders grew more prosperous than the majority of the people. Some of them got rich out of luck. But most did it out of hard work, skill and discipline.

But the majority did not do as well. A few of these even did abysmally. Some of them suffered from bad luck but it was mostly because they were not as diligent or skilful as those that prospered. Some even neglected their jobs and wasted their time seducing their neighbors' wives or getting drunk on rum. They noticed that some of them were much more prosperous than they were and could even afford to buy luxuries that came with passing trade ships.

Years went by, the population grew and the system of elders was under strain. Robberies, initially unheard of, were becoming common. A group of the poorer islanders who spent their time drunk or chasing women decided to try to rob the fewer rich farmers and fishermen. After all, there were more poor than rich islanders and they would be outnumbered.

But they were dissuaded from doing so because a clever islander came up with a better idea to get their property. Why not set up a government based on one-man-one vote? The elected President would of course need a police force to keep law and order.

Initially, the richer islanders liked the idea because they thought a police force would protect their property from robbers. Of course, they would have to pay taxes to support the police force but that is the price you pay for secure property rights. Or is it?

Soon, to get elected to the Presidency, the votrepreneurers were promising to tax the fewer rich and redistribute their wealth to the poorer islanders. Any votrepreneurer who runs on the promise to protect property rights could not get elected. The few voices who denounced welfare as legalized robbery were denounced as greedy or selfish people who do not want to share their wealth. But to this day, I cannot understand why those people who want others to give them their hard earned money are not considered greedy when those who want to keep their hard earned money are greedy.

This story, though fictitious, has happened in nearly every democracy and America is no exception. The Reagan and Newt Gingrich revolution to cut the size of the government has failed. In reality, it had no chance of succeeding given the income distribution and the one man one vote system. Since the New Deal, transfer payments (welfare and entitlements) by the Federal Government has increased.

In the 1960s, transfer payments comprised less than one third of the Federal Budget. Today it accounts for 60%. (1) What makes this trend even more painful is the surrender of the Republicans to the welfare state. C. Bradley Thompson wrote about this in an insightful essay, 'The Decline and Fall of American Conservatism.' (2)

According to Thompson, Irvin Kristol, who is the Father of Neo Conservatism advised Republicans to surrender to the reality of the welfare state. To win elections, you must persuade voters to switch sides. The traditional conservative stance of cutting entitlement programs has cost them votes. But the welfare state is to be given a conservative spin. The money should be used to nourish the Republicans' conservative base - the Christian right. Votrepreneurers like George Bush listened to his advice and he won a narrow victory against Al Gore in 2000.

Thus was born the concept of compassionate conservatism. While the traditional conservatives like Reagan and Gingrich wanted a smaller government and hence less transfer payments, Bush wants a conservative welfare state. His signature idea is the faith based welfare programs administered by churches.

His idea is that they can do a better job than government managed welfare programs which resulted in welfare dependency, breakdowns in families and drug abuse. It remains to be seen if his idea can work. But one thing is for sure, Government spending has shot up.

During Bush's first term, total spending rose from $1.86 trillion to $2.48 trillion. Federal spending as a percentage of GDP rose from 18.5% to 20.3%. Even without the effects of September 11, government spending still rose. The Republicans are no longer the party of small government. Say bye bye to the Reagan revolution.(3)

To end this article, let me quote a very wise man, Ben Franklin.

'Democracy is two wolves and a sheep voting to decide what to have for lunch. Liberty is a well-armed lamb contesting the vote!'


(1)Patrick Chisolm, 'Triumph of the Redistributionist Left,' Christian Science Monitor, January 23, 2006.

(2)The Objective Standard, Fall 2006 Volume 1, No. 3 http://www.theobjectivestandard.com/issues/2006-fall/decline-fall-american-conservatism.asp

(3)Stephen Slivinsky, 'The Grand Ole Spending Party: How Republicans became Big Spenders,' Cato Institute Policy Analysis no. 543.
Brian Riedl, 'Federal Spending - by the Numbers,' The Heritage Foundation, October 7, 2005.