If economics was enough to pivot the world away from welfare statism, we would have abandoned its flawed economic policies long ago.
Tearing down a tree without killing its roots first, won’t stop the tree from growing.
Redistribution policies are mainly and initially grounded in the concept of community. Marx’s famous egalitarian statement “From each according to his ability, to each according to his needs” not only calls for redistribution of income and wealth as such, but also inexplicably says that those who can’t satisfy their needs themselves will be protected by the community.
Not difficult to see why variations of this idea haven’t lost their appeal. Who doesn’t want to be part of a protective supportive community? However, what should worry us here is whether this community is voluntary or imposed by force.
The welfare state demonstrates the latter.
The basic distinction between socialism and classical liberalism is that socialism puts community first, while classical liberalism centres around the individual. While there is some truth to it, the definitions miss out that putting the individual first doesn’t mean fencing him off from the rest of the world. Individualism lets every individual decide what kind of community he wants to be part of, and in what way he seeks to be involved. Classical liberalism, with individualism at its core, points us to the idea of a voluntary community.
Communities are key to individual wellbeing because they allow us to feel connected to other human beings: as part of a movement, a church, a charity, or a business organisation etc. Most importantly, communities provide a feeling of security. When individuals fail to find it within their communities, they turn to the state. The state, in this case, is similar to a parent waiting for a teenager who rebelled against their authority to come back home and trade his freedom to make decisions for parental protection.
In The Constitution of Liberty, F.A. Hayek elaborated on this, “No longer is the individual generally the member of some small community with which he is intimately concerned and closely acquainted. While this has brought some increase in independence, it has also deprived him of the security which the personal ties and the friendly interest of the neighbours provided. The increased demand for protection and security from the impersonal power of the state is no doubt largely the result of the disappearance of those smaller communities of interest and of the feeling of isolation of the individual who can no longer count on the personal interest and assistance of the other members of the local group.”
Redistributions of income, public health regulations etc. are more effective on national levels since they use the territorial and cultural aspects to enforce the idea of community and to justify their scope. The welfare state argument generally rests on the belief that people are more prone to help their fellow citizen, than foreigners. It then proceeds and says: “let me facilitate this for you.”
Classical liberalism is not ignorant of people who are worse off, as is widely believed. On the contrary, it is too much concerned with their wellbeing to let the state take care of it. Private philanthropy as a prime example of a voluntary community has proved to be much more effective.
The welfare state can afford to be irresponsible and give for the sake of giving because it redistributes the money it has taken by force, not earned. Philanthropy, on the other hand, is basically a transaction, with all the corresponding characteristics. As a transaction, philanthropy knows no territorial or cultural limits.
Yes, most of us are sympathetic to the worst-off and want to “belong”. No, we don’t need the state to infringe on our freedom to choose and take our money by force to achieve this and make us feel safe and protected. Where the state seeks to improve our lives by imposing a new regulation, we should build a supportive voluntary community.