When we hear this from people, we have to be prepared to respond with logical correction.  This wrongheaded thinking – that centralized state control “cures” welfare whereas capitalism causes it – is sometimes found in our workplaces and communities and needs correction.

In fact, in response to the last blog post someone replied, “Capitalism is the only system that has welfare. Not Communism or National Socialism. Only Capitalism. This is because the freer market as we are now seeing, deliberately creates a larger pool of unemployed to keep the wages down. As this drives down wages, more people become dependent on welfare through top ups.”

Aside from the “interesting” logic in this piece, (hey, why not deliberately fire EVERYONE [what's 10% unemployment, let's go for 100%!]  that will really get the wages down and that way we can hire them back and then fire them again and keep doing it forever!!!), let’s just take a look at this claim that Communism and National Socialism are systems that “don’t have welfare”.

Could it be that Communist and National Socialist systems are welfare? Group member and commenter Jack Foster says yes and gives us all some sound arguments and logic to add to our mental store.

Here’s his comment in its entirety:

“Communism is a theoretical economic system characterized by the collective ownership of property whether you work or not. It other words, the whole system is a Welfare System.

National Socialism is a vague and ambiguous political term that typically refers to Nazism.

Socialism is an economic system characterized by the state ownership of the mean of production and distribution. In other words and put simply, the government is the only employer. If you are out of work, it is the government’s responsibility to provide you with work since they are the only employer. That makes this whole system a variation of the Welfare System.

Capitalism is an “economic system” characterized by the privately owned means of production and distribution. Development is proportionate to the accumulation and reinvestment of profits gained in a free market. In other words, compensation is relative to a work’s value and usefulness to someone else.

In truth, capitalism is not an “economic system,” but the natural economic order of our world. When two children—who have no knowledge of economic systems—decide to trade baseball cards on the playground, they do so under capitalism’s inherently understood rules. Each card has a perceived value dependant on its scarcity and usefulness. A trade is not performed until both sides agree to the price. That is capitalism.

Capitalism even has a method by which the poor and downtrodden can be lifted and supported. Through charities, one can pool their monies to help those in need. If that charity loses the public good graces (through scandal, misappropriations of funds, high overhead costs, or inappropriate recipients), its funds will dry up. It will eventually fail and a new charity will emerge to take its place. This is the self correcting ability that underlies the whole of capitalism.

The Welfare System (the idiom) is not really related to any economic system. It is a wholly own subsidiary of the government. The Welfare System relies on the government to take from those that “have” and give to those that “have not.” The governments top down approach lacks the self correction of the capitalist charities and quickly evolves into the aforementioned stories of fraud and abuse.

The lack of self correction is not the only problem within the Welfare System. Firstly, it strives to replaces the goodness of the individual with the false goodness of the government. Whereas an individual may have morality, the government does not (and should not.) After convincing its governed of its “goodness,” the government will then muscles charities out of the market by unfairly regulating them and then drying up their funds.

Secondly, the government mandates the taking of funds from the wealth creator for the government’s coronated “welfare recipients.” The wealth creator cannot control who receives these funds. As such, these funds are directed to those with the strongest government lobby, not to those in the greatest need or to those that have more compelling goals.

Thirdly, the government agency, who distributes these funds, neither knows nor cares who receives them. For it, the measure of its worth is not in whom they help, but in how much distribute. This model is fraught with fraud, for the bureaucrat will feel no pain (though job loss, reduce authority or decrease of funds) when these frauds are discovered. This notion will always lead to the aforementioned inefficiencies. 25% distribution of fund is appalling but inherent.

Fourthly, the welfare system is a faceless entity that engenders a sense of entitlement. Many think that because it is their government handing out “free” money, they are entitled to it. After all, they are apart of the governed. Eventually, this will lead to the thought that they must “get these free funds before someone else takes it from them.” But what they refuse to acknowledge is that those fund do not come from the government—for the government can only gain money by first taking it—and that money is most unsurely not free.

The statement, “We are from the government and we are here to help you.” should send a shiver down every spine of freedom loving citizen, for the government will only help those that will give it more power; and the Welfare System is it biggest tool.”

Thank you, Jack, for your astute contribution.

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It’s no wonder that big business is never leading the charge against welfare reform.  Many of them are great beneficiaries of it and it allows them to also “receive a handout” from the government.  Corporate cronyism.  The lobbying dollars the big businesses spend ensures that Big Government favors Big Business over Small Business.

Government regulations impose higher costs on small businesses, because the “cost per employee” to meet the demands of the regulation are much higher for small businesses.  No wonder some corporations actually advocate for more legislation and restriction on business – it keeps upstart competitors out of their market.

Perhaps most disturbing is the way welfare funds are used.

Think about this.  If you as a small business owner or as a small business employee were able to keep more of your money, you could actually create more jobs (by expanding your business and hiring others if you are an owner) and spend more in your local enonomy (if you had more take-home pay after taxes), THEREBY LOWERING THE UNEMPLOYMENT RATE AND ACTUALLY LOWERING THE NUMBER OF PEOPLE ASKING FOR WELFARE HANDOUNTS.  (I’m shouting this because it’s a fact no one seems to get!)

Taxation for welfare programs BEGETS the need for more welfare programs (and therefore more taxation).

Now, let’s talk about the consequences of Welfare dependency.  It makes us all worse off and actually enables bad behavior while diminishing the need to be personally responsible.

I received the following email this week from a member of the SBABG facebook group.  He works at a large national convenience grocery chain, but is very sympathetic to our small government message.  He writes:

You know what would be nice? If welfare could have more restrictions. 99% of all Electronic Benefit Transfers  (EBT) transactions  for welfare recipients at my store are for candy, chips and pop. Very, very rarely do I see someone actually use EBT for a necessity.

It would be interesting if there was data that showed how much junk food vs necessities was purchased with EBT.

At least energy drinks such as Rockstar or Red Bull are not covered. A guy tried to buy one a few months back and when EBT wouldn’t cover it exclaimed “They should pay for that!!”. Ummm, No!, I should not have to pay for you to drink sugar water!  I know there are people who actually need welfare, but I think the majority of people on welfare are too lazy to try and find a job (even before the economy went down).

Welcome to the harm that Big Government does.  Apparently, we are unable to work out social problems in our local communities, so Big Government takes from the most productive among us, gives handouts that do not fulfill their stated objective, and thereby ensures that the problems are permanently with us.

As we like to say, “Way to go Big Government!”

Do you have any “nightmare stories” you’d like to share?  Please leave them in the comments below!

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