(If you’re just joining this series, feel free to read the previous installments.)
Welfare – Has it Helped the Poor? (Part 3)
Thus far, we’ve looked at how, like most government programs (even the well-intentioned ones), the “War on Poverty” has been both an abject failure in its own right and has caused numerous unintended consequences. The two premises in this “series within a series’ are that:
#1 We do indeed need to help those who cannot help themselves.
#2 Government is not the proper, nor the best qualified, entity to take on this important job.
We’ve discussed some of the problems. But, what is the solution?
Non-proft and for-profit organizations and the individuals who comprise them.
Non-profits have always been the main and most effective helper of the poor. People coming together voluntarily to make sure their fellow human beings are cared for and assisted; both for the immediate and long-term.
When left to do what they do best, non-profit, private charities, both religion-based and secular have a proven record of excellence. They care, they are helpful, they are efficient, and they foster independence rather than dependence (and, when independence is not possible, they continue to provide sustenance).
I’m also a big proponent of “for profit” charitable organizations. These are ventures that would be founded and run by entrepreneurs. They would solicit funds from individuals and companies in order to support one or more types of poor. The big differences between these organizations and the government-run ones would basically be:
#1 The private, for-profit charity would be more accountable to their clients (donors), having to show them exact figures as to where the money would go, how it is spent, and how much they got to keep for their efforts. And, if they cheated and were caught, they’d be held accountable and perhaps face prison time, as opposed to the huge government bureaucracy backed by the full force (literally) and support of the government.
#2 Because this for profit, private charity would be run by a business person with a profit motive it would be run more efficiently. The fact is, private organizations run by someone who has a vested financial interest in its success runs their company much more efficiently than do bureaucrats who will make the same amount of money for not making changes and “messing up the works.”
#3. Those who are “gaming the system” will have no source of “suckers” willing to give them money for free. This also frees up additional monies in order to help more of the truly needy.
#4 Since private taxpayers, by not having to pay into the present wasteful welfare system, will save thousands of dollars per year, they’ll have more to donate to these private, more efficient charities.
#5 Also, for the same reason as the above, those who truly are needy will see more charitable dollars and genuine loving-caring assistance than they ever have before. They will also be empowered and encouraged to help themselves to get off this privately-provided welfare and gain back their self-esteem; self-esteem they can now pass on to their descendants.
People ask, “Do you believe in a safety net?'” Once we redefine the term “safety net” as being provided by individuals and voluntary groups, whether not-for-profit or for-proft as opposed to government, absolutely yes!! But remember, people help people; governments don’t help people. They hurt people. And, even if their intentions are good, their results are not. And good intentions plus negative results, do not equal positive results.
Who are government politicians and bureaucrats anyway to imply that without their force, we won’t help out our needy brothers and sisters, whether for one-time emergencies, or to provide them with a helping hand until they can get to their feet?
In the final part of this mini-series, we’ll look at the ultimate insult of a government-enforced welfare system.
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Thanks, Bob
Nothing like the good dose of TRUTH. Socialism discourages giving and stifles creativity!
Thank you for this, Dear Bob,
Many people are afraid of knowing the truth, much less speaking or writing about it!
I’m very interested in “hearing” the truth.
I’m glad that you aren’t afraid to tell the truth.
I’m looking forward to more…
Pamela
Thank you Pamela and Kris,
One of the main reasons for writing this multi-part piece regarding Welfare is because it’s important for people who support a Government Welfare System to be able to really see that it has failed miserably, and also to understand that those of us who are opposed to the current system are just as caring about helping the poor as they are. The only difference is the belief in how helping the less fortunate is best accomplished.
Government-enforced Welfare has two very moral problems; one is that it does far more harm to the poor than help; the other is that it is a forced re-distribution of wealth. Both are wrong and both are harmful to everyone involved.
I’m hoping that this series of articles is helping the people who might favor big-goverment (Socialism) to understand that it is both harmful and immoral, while helping those who already believe in small Constititutional government to be able to more effectively and persuasively share the benefits of such. This is done both through knowledge and tact/kindness.
Hi Bob,
If anyone can get a message across with kindness and tact, I know that you can, and you will. That’s the reason I “listen” when you “talk” 🙂
You are so right, Bob. Government starts with good intentions. They see the need (like we all do) and want to help. What those who advocate government-sponsored “cures” don’t realize is that historically the damage done is far worse after government attempts to help. Free and voluntary help systems are necessary. We can help the really needy much more through private, charitable organizations than any government agency.
Thank you for sharing this with us. Free minds and free markets (to borrow from Reason magazine) work best.
As usual, Terry, you are right on the mark. Thank you for joining the discussion.
{Note from Bob: For some of the best marketing advice around, go to http://www.TerryBrock.com. The man knows both technology and relationship marketing and combines the two expertly.}
Bob,
What extent would you say that the United States is socialist? And what country do you think is the shining example of capitalism, if not U.S.?
I watch the news and wonder how much longer the government can keep pulling trillions of dollars out of thin air and debasing the dollar. There has to be a big consequence to this.
Hi David, I’m not really sure how to answer your question in terms of the extent. I mean, to the degree we are not free economically and personally to make our own decisions in accordance with our personal values and desires (providing, of course, that we don’t infringe upon anyone else’s right to do the same), that is the extent to which a country is socialistic.
Basically, there are two types of freedoms; economic and personal. Both are important.
The Heritage Foundation, in conjunction with the Wall St. Journal publishes a ranking of countries that are the most economically free. If you’ll visit http://www.heritage.org/Index/ you’ll see both an explanation and their rankings.
I’m not aware of a similar ranking for personal freedoms but there could certainly be one. Readers, do you know of any?
Regarding your concerns expressed in your second paragraph? Well, I certainly agree with you.
positively loved this perspective. I agree totally. I am the youngest of nine kids from a hard working middle class farm family. I am also an entrepreneur and an active donor and volunteer of private non-profit organizations. I have immediate family members who have formed my opinions through abuse of our welfare and social security systems. These same family members had the exact same opportunities that I had, and have chosen to live off the loopholes of government subsidies – and they are the same family members who have created generational welfare legacies.
It is time for people (like me) to tell my story from a first hand perspective. Our country and the future of my kids depend on it!
Donna Reese
Erie, PA
Very powerful, Donna. Thank you for sharing!
Bob, while I completely agree with your premise that government is not the solution to welfare issues and private charity is, I have a bit of a problem with a profit based organization being a major part of the solution. Perhaps it is endemic to the whole issue, but isn’t there a built in conflict of interest? If a company makes money, and people earn their living by providing charity, isn’t there at least a bit of a conflict to the idea of trying to ‘solve’ the problem? Just as the government bureaucrats need the ‘poor’ to generate and keep their jobs, isn’t that same motivation present in any profit based company?
This seems to be a built in conflict in several areas. I think of most modern ‘civil rights’ groups that seem to thrive on perpetuating racial strife rather than cooperation. Or medical research groups that get millions in ‘research’ grants for, say, cancer. If they really found a solid solution, they would no longer receive that money, nor the prestige from their positions.
I hate to cast aspersions on anyone’s motivation (I know there are good, sincere folks in these areas), but there does seem to be a built in conflict here, and it is human nature to ride a good thing as long as possible (i.e. as the current formulas for the welfare system promote).
Hi Thomas, what excellent thoughts and questions. Thank you for sharing those.
Here are my thoughts about it:
1. Sure, anything could happen. And not only might there be a natural tendency for that to happen; we also need to keep in mind that free market doesn’t mean necessarily honest and truthworthy (usually, yes; just not always). What it does mean, however, is more accountability, since a free market approach (whether profit or non-profit) is answerable and accountable to the individual doners, as opposed to the government variety in which they simply take by force. The more free-market something is, the less the chances they can get away with being both unscrupulous and lazy and unthinking.
2. Since, in a sense, a for-profit charity would not necessarily be run much differently than a not-for-profit (when considered, both have a vested interest in keeping going whatever they are involved in) I don’t think that would end up happening anymore than the occasional times it does with a non-profit. Mainly, for the following reason . . .
3. There are so many people out there who actually do need these kinds of services that I think we have a long ways to go before “having to manufacture needy people to accept charity is an issue (sad and disturbing as that is).
However, Thomas, you could very well be correct. One thing about free market solutions is that you never know exactly how they’re going to work out. On the other hand, one thing we do know is . . . they always work better than government solutions. 🙂
Anyone else care to chime in on Thomas’ excellent point?
Bob
Hi Bob,
You’ve got some great thoughts here and I’d like to hear your thought on taking your point a step further with “market failures”. A basic principle of basic economics 101 is that a free market does not always result in the outcome that is best for everyone, including those directly involved. You give the example of the free rider problem where someone benefits from the system without putting into it.
In principle government intervention is used when there is a market failure of some sort (imperfect or asymetric information, monopoly, etc).
If the market were a better solution than the government why isn’t the market doing this on it’s own already? Historically, why didn’t this ever happen successfully?
The government may not do a good job or creat additional problems, but the alternative (nothing) better? What’s getting the the way of private sector doing what you propose?
Larry
Bob,
Thank you for your response. I think you have excellent points. There is always the possibility of dishonesty (profit, not-for-profit or government), but at least in a free market scenario, the donor has the option to stop providing if fishy circumstances are uncovered.
Come to think of it, isn’t that what a free press is supposed to be about – uncovering any fishy circumstances so that the participant (or taxpayer) can take action to stop the dishonest situation? Of course taking action is easier when the situation is free market as opposed to government forced, eh?
Thomas,
Your second paragraph summed it up perfectly. Thank you…great points!
Bob
Hi Larry,
Thank you for your thoughts and questions. Much of what you wrote provides us with an excellent opportunity to look at premises, and how important they are to understanding a situation. So, if I may, I’m going to ask you to scroll down and I’ll do most of this as a back-and-forth dialogue between us:
Larry wrote: Hi Bob, You’ve got some great thoughts here and I’d like to hear your thought on taking your point a step further with “market failures”. A basic principle of basic economics 101 is that a free market does not always result in the outcome that is best for everyone, including those directly involved.
Bob responds: You are absolutely correct in that a free market doesn’t guarantee a succesful outcome for the particpant(s). After all, while some businesses succeed, other businesses fail. I would have to ask you, though, what that proves with regard to your question; that government should run businesses because then they *would* be successful? I don’t think anyone (even defenders of big government) believes that. Larry, free-enteprise does not equate to Utopia. There are no guarantees of success in a free market; there is only a guarantee of choice; that a person who *freely chooses* to do so, can invest in themelves, can create, can produce, etc. as according to their own personal value system. Whether enough consumers *choose* to buy from them in order to make the enterprise a success is strtictly between the two parties. Who ever promised a guarantee of success in a business venture?; the only thing guaranteed by our Constitution is the opportunity should someone decide to go after it. And, by the way, if you’re thinking that the free market doesn’t always have a beneficial result for the consumer, I would agree with that, as well. Remember, though; it goes back to choice; any transaction in a truly free market is because both the buyer and the seller believe that they are making the very best choices in their own interest. I freely decided to buy fish for dinner the other night instead of chicken. Afterwards, I thought, “I wish I had chosen the chicken.” Would I have been better off with a government bureaucrat making that choice for me (which, would be by force)? Next time, I might make a differnet choice based on my own self-interest. Remember, free-market does not equal Utopia, but it’s certainly much better than being the child of a nanny state.
Larry wrote: In principle government intervention is used when there is a market failure of some sort (imperfect or asymetric information, monopoly, etc).
Bob responds: Let’s go back to “premises.” What exactly do you mean by “market failure?” The market itself does not fail; people fail, ideas fail. I don’t really know how “imperfect or asymetric information” fits into the equation. It’s up to the entrepreneur to do his or her homework and make sure the get the correct information. In terms of monopolies, however; this is where I take the biggest issue. I will respectfully challenge anyone to go back into history and tell me where there has been any significant monopoly that was not either an outright government monopoly (i.e., the Postal Servide) or a monopoly supported, endorsed and/or protected by the government. Without government protection (meaning force) there can be no significant monopolies; at least not for long because someone will always come along to offer an alternative.
Larry wrote: If the market were a better solution than the government why isn’t the market doing this on it’s own already?
Bob responds: Larry, with all respect, this is actually the greatest “false premise” of all. Your very question indicates (actually, states a premise) that there has been a free market that was at one time allowed to exist without government interference and that it failed, so government must help. Not the case at all. Rather than take the space to explain it here, I’ll ask you go go back to the first article in this series where I explain that we have never had a totally free market (though at one time we came as close as any country ever has) but that, over the past 80 years or so we have drifted further and further into a socialistic, government-controlled abyss. Your very question – while I appreciate your asking – is itself based on a totally false premise. Remeber, Larry, first there must *be* free-enterprise before it can fail.
Larry writes: Historically, why didn’t this ever happen successfully?
Bob writes: Again, refer to above response.
Larry writes: The government may not do a good job or creat additional problems, but the alternative (nothing) better?
Bob responds: Actually, yes; government doing *absolutely nothing* (except for their Constutionally legitimate enumerated powers; mainly stopping people from force and fraud) is better. Much better. In fact, much, much better. And, every country in which government has gotten its far-reaching tentacles out of the hands of its businesses has seen amazing growth and prosperity.
Larry writes: What’s getting the the way of private sector doing what you propose?
Bob responds: Government being where it doesn’t belong, which is everywhere but where it is Constitutionally authorized to be.
Thank you, Larry, for participating in our dscussion. I hope you didn’t take my responses to you an personal or offensive in any way; that was certainly not the intent and, if they came across that way, please accept my apologies.
Best regards,
Bob