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Friday
April 11, 2008

Welfare Corrupts by Tibor R. Machan

Before anything else it needs to be noted that most of the welfare recipients are not unwed mothers but people doing business as major corporations. They receive subsidies, bailouts, protection from competition and so forth, all undeserved, all unjust, all lacking any legitimacy in a genuine free country. American firms, as thousands of others around the globe, have managed to persuade politicians to provide them with benefits at the expense of people who haven’t consented to any of the takings that provide the funds that make all this possible. (Read more...)
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Post 0

Saturday, April 12 - 9:37am

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Paraphrasing Lord Acton -- ". . . and absolute welfare corrupts absolutely." :-) Tibor makes an extremely important point here, and one that gets far too little emphasis in today's context by either political party. Even though both parties would presumably acknowledge these points, if pressed, they'll go out of their way to evade them when it is politically expedient. Someone needs to hold their feet to the fire.

The socially deleterious effects of tax-supported welfare are now too obvious to be denied. Even the Democrats are now painfully aware of them, but their whole political orientation is based on the altruist-collectivist premise, so they're caught between a rock and hard place -- between their cherished ideals of a Big-Brother Safety Net and the realization that the safety net has become a noose choking off its alleged beneficiaries' ability to thrive.

The truth that no one of any political prominence is addressing, neither Republican or Democrat, is that people are responsible for their own lives, and need to be HELD responsible for them -- not treated as children to be taken care of by the rest of society.

- Bill

Post 1

Saturday, April 12 - 1:04pm

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As Tibor explains so clearly, our political system has inculcated in many people an attitude of entitlement to the wealth of others.

Farmers are notorious welfare takers, corrupted by eighty years of agricultural subsidies that they are reluctant to let go of even after grain prices rose 300% recently. Strike up a conversation with a grain farmer about the injustice of farm subsidies (including the fact that the subsidies get capitalized into artificially sky high land prices which makes it very difficult for young farmers to pay for farmland from production) and his response will be resentment. Walk into a farmer bar, and one will hear frequent complaints--about the weather, which can be merciless and devastating; about fertilizer prices, which have quintupled over the last 6 years; about machinery prices, which only get higher and more out-of-reach; but above all else, about the so-called "cheap-food" policy of the federal government, which is thought by rural know-nothings to be dedicated to depressing grain prices to placate the masses. Even if the rains come and crops are great, one will hear frequent complaining about grain prices, as though inadequate prices were an injustice that good crops and rainfall could never wipe away.

I've noticed that one of the tragic consequences of welfare corruption is the loss of the ability to think objectively. Farmers seem addicted to the idea that their imagined entitlement is a sort of First Idea, compared to which any other fact is logically subordinate, irrelevant, insubstantial. So to justify their taking, they repeat absurd mantras like "parity, not charity"; or they fantasize about the federal government conspiring to cheapen grain prices even as it pays them a lot to take farmland out of production!

Their habitual whining is legendary. There's a joke about the difference between a grain farmer and a Boeing 747: , in contrast to the farmer, the aircraft stops whining after it takes off for Hawaii. People notice that gatherings of livestock ranchers, who are unsubsidized and who experience feast or famine as a matter of course in their business, are remarkably free of such habitual complaining. When things get tough, they don't get bitter; they're more likely to get philosophical about how one has to expect the bad years along with the good years.

Post 2

Monday, April 14 - 8:44pm

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Little mention of the corporate parasites who benefit at everyone else's expense from the state fiat writeoff of liability.... Wonder how many would survive as free market businesses??

Post 3

Tuesday, April 15 - 2:21am

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I wrote: "Before anything else it needs to be noted that most of the welfare recipients are not unwed mothers but people doing business as major corporations. They receive subsidies, bailouts, protection from competition and so forth, all undeserved, all unjust, all lacking any legitimacy in a genuine free country. American firms, as thousands of others around the globe, have managed to persuade politicians to provide them with benefits at the expense of people who haven’t consented to any of the takings that provide the funds that make all this possible...." I wouldn't call this "little mention."

Post 4

Tuesday, April 15 - 5:34am

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Speaking of corporate welfare:
http://online.wsj.com/article/SB120821609494914471.html?mod=opinion_main_review_and_outlooks

Post 5

Wednesday, April 16 - 8:17pm

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Well... That's just one paragraph, and it doesn't address the distinguishing feature of the corporation - limited liability by state fiat. Risk doesn't just disappear because the state pulls out a gun and forbids other people and companies from receiving justice when corporations generate disasters - often because they can't economically justify taking proper safeguards, given that their risk is capped at the assets of the artificial person - the corporation.

Post 6

Wednesday, April 16 - 8:23pm

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Robert Hessen would diasagree with you in defining that as the essential of a corporation, far less of it being in fiat.... http://www.econlib.org/LIBRARY/Enc/Corporations.html

Post 7

Thursday, April 17 - 12:29am

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It is odd that nearly every time I write a column on X and some of X's implications, someone complains that I didn't write the column on Y, which might also have been considered but wasn't my topic by a long shot. For example, I have written several books on business ethics, numerous scholarly papers and a great many columns and have covered the topic of limited liability in most of these, yet because on this occasion, when I was discussing the nature of welfare and wanted to make sure folks knew I include corporations as recipients of government largesse as very much part of the welfare system, I am chided for not revisiting the limited liability topic. Sorry but not everything that can come to mind about a topic need be discussed in just one column or even book!

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Post 8

Thursday, April 17 - 8:50am

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Robert Hessen would diasagree with you [Phil Osborn] in defining that as the essential of a corporation, far less of it being in fiat....://www.econlib.org/LIBRARY/Enc/Corporations.html.

Yes. See also his book In Defense of the Corporation.

Post 9

Thursday, April 17 - 6:20pm

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Oops... Sorry, Tibor. It's just that the "standard" objectivist position has been to conflate corporations with free market businesses. In as much as I see the socialization of risk as a prescription for disaster, more than any direct subsidies, etc., I have something of a hair-trigger response when there is no mention of this in a piece such as yours.