A liberal state (2)

One thing which many people find scary in liberalism is its lack of tax-funded welfare. It is hard not to ask “but what would I live on if I lost my job?”. I will try to shed some light on this and a few other related issues.

The social destitution scenarios are often illustrated by stories of the poor dying in the gutter in the 19th century England. But what we need to realise is that poverty is relative and people are poor only if there are the wealthy around them. The Dickensian losers should not be compared with the owners of the textile factories but with the disadvantaged citizens of the pre-industrial era. This comparison makes one realise that, overall, the Industrial Revolution brought with it an enormous social advancement and has improved the lot of most citizens. The entrepreneurial types benefited the most but all others could take advantage of the huge employment opportunities created by the booming industries. Millions moved into the cities to enjoy their preferred lifestyle but even those who kept working the land had a growing market for their produce. Compared to late feudalism a 19th century England was a vibrant land of diverse opportunities for those who were ready to take them. Even those who failed to keep up with the rate of changes eventually benefited from the modern inventions like sanitation, transportation, infrastructure, access to press, public libraries, labour saving devices etc. The ones who inhabited the Dickensian gutters would have been much worse off under feudalism and this is the only meaninful comparison.

The other misconception is that it was socialism which, somehow, invented social welfare. This is wrong on many accounts. Social welfare, understood as those better off helping the disadvantaged had always existed on a family, community, religious and charitable levels. People used to help other members of their own families and communities when they fell on hard times. This was done out of compassion, religious imperatives or even through desire to be remembered for being a good person and not a selfish dick. Industrial Revolution produced another brand of semi-institutionalised charity funded by the rich. The great industrialists like Carnegie, Guggenheim, Vanderbilt poured billions into social causes and their mission is continued for example by the Gates Foundation. But there is one important difference between the family or community level support and the state welfare. The help offered to family misfits and other losers came with conditions. For example “sure, we will give you food and shelter but why don’t you wash, shave and check if the smith down the road needs a helper?”. State welfare on the other hand is unconditional – to expect people to sort themselves out in return would be patronising and judgmental. I will let you decide which system produces better social results.

But the main issue is that while a liberal state does dish out less it also takes way less so the citizens get to keep the money which they may choose to put away for emergencies. They may decide to buy health insurance, start education funds when their children are born etc. They keep more of their wages and have to assume certain responsibilities. Many people also feel that the state somehow creates the funding to make things happen in the community but the opposite is true. To be able to fund a project the state has to first collect the taxes. This requires an army of politicians, lawyers, accountants, taxmen and other hangers-on facilitating the process. All these people must be paid which creates overheads and inefficiencies. There is no value added by the state usurping a role of an intermediary between the wage-earners and, say, ballet dancers putting on a show at a local playhouse. If we did not collect taxes to pay the dancers the ballet lovers would still support the good shows (and the bad ones would go bust). It is not that because of the state we are getting more good shows – if fact we are getting less because the dancers become public servants and grow lazy. Good art (much like inventiveness) thrives on competition and pressure. Neither the Dutch nor French government looked after van Gough  – maybe that is why his paintings are worth millions these days!



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