Wednesday, 16 February 2011

Debunking welfare myths

Scoop’s Gordon Campbell just posted an article purporting to debunk what he calls “right wing welfare myths” that are commonly trotted out by “beneficiary bashers.”

Quick as a flash, welfare commentator Lindsay Mitchell debunks his debunking. Sample:

CAMPBELL: “The vast majority of people want to work. The history of the last ten years in particular shows that when jobs exist, people work.”
MITCHELL: “The ‘history of the last ten years’ shows almost the opposite. During the economic boom numbers on the DPB dropped by a maximum of 15 percent and numbers on the sickness and invalid benefits continued to grow. Only the dole total dropped significantly.”

Sadly, in this first debunking of Campbell’s ten “myths,” neither mention either the minimum wage or the level of welfare payments themselves, which between them set a “floor” for wage payments above the market-clearing price that virtually ensures that labour markets will never clear. (Price any product above what the market will bear and you’re going to have truckloads left on the shelf.)

And in their fuller pieces neither Mitchell nor Campbell mention the three biggest welfare myths embraced by left-wing and right-wing welfare enthusiasts alike: i.e,

  1. the notion that the economics of welfare states is sustainable; and
  2. the idea we can all vote to make ourselves rich; and
  3. the immoral assertion that you and I are our brother’s keepers.

It isn’t, we can’t, and we aren’t.

The sovereign debt crisis faced by virtually every western nation should demonstrate to anyone with eyes to see that welfare-state economics is unsustainable.  “The chronic economic stagnation produced by a system that subsidizes idleness while punishing work has thrown young people into a hellish economic dead-end”—and thrown governments into a crisis from which there is not enough money in the world from which to bail themselves out.

The debt of the failed welfare state experiment is drowning every nation that has tried it. From Ireland to Portugal, from Scotland to Wales, from Greece to Spain to the US—all now confront the simple truth that the welfare state and its debts is simply unaffordable.

The experiment itself was founded on the “practical” notion that people could somehow vote themselves rich—and governments could get themselves elected on that promise. But not even Keynesian economics can make this impossibility happen for more than a few political cycles—not even Keynes himself could turn stones into bread and debt into real produce, not without the sleight-of-hand of taking that bread out of someone else’s mouth first.

And the experiment would never even have been tried without the utterly immoral notion that we are all our brother’s keepers—and, having legally and morally disarmed those who have to pay for the promises, that the economic security of hundreds of thousands of people can be guaranteed by nothing more than the ability of a government to put its hands into other people’s pockets. It is an impossibility. And more:

Morally, the promise of an impossible “right” to economic security is an infamous attempt to abrogate the concept of rights. It can and does mean only one thing: a promise to enslave the men who produce, for the benefit of those who don’t.

The very concept of the welfare state is both  morally insupportable and practically unsustainable.

That its supporters are now on the back foot, and having to debunk those who point this out, is perhaps the first sign of hope in a generation.


  1. You should knock that into a opinion piece for the Herald PC.If they did print it I'd love to see the hate mail! ;-)

  2. Welfare of course a much larger ponzi scheme than anything Bernie Madoff could ever have come up with.

  3. Yes, because the poorest nations in the world are the ones that have big welfare system - see the poverty in Scandanavia and Japan vs. the U.S.A.. And of course it was the beneficiaries that brought about the GFC, not the fat cat capitalists. Do you actually have any evidence of a purely capitalist society that has succeeded beyond a few generations?

  4. @Tiffany: The reason for boom & bust is neither capitalists nor beneficiaries--not directly anyway. It was govt manipulation of money supply causing an unsustainable boom, creating bubbles that were always going to burst.


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