The Welfare State: Shredding Society

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What societal
and cultural rewards has the welfare state reaped? Lyndon B Johnson's
War on Poverty is now 4 decades old. In many European nations, where
the idea that the state should alleviate poverty and care for the
poor originated, the struggle is much older. Otto von Bismarck,
the 19th century German Chancellor, is credited with
the creation of the first modern government-run old age pension
program in the 1880's. This model gradually spread around the world
in various incarnations. The intentions behind welfare programs
were arguably for the common good, but the results have been anything
but positive for society. The welfare state has created an environment
that has been gradually shredding the very fabric of culture and
civilization itself.

Economic incentives
do matter, and in the case of modern welfare programs, the incentives
have been highly caustic to civilization itself. A stable ordered
society is not something that comes from a government, but rather
from the social values of the society itself. No quantities of laws
and cops on the street have made Washington, DC a safe city, nor
will it short of complete totalitarian rule, if even then. When
government puts in place policies that create incentives that are
at odds with the very fabric of society, the gradual decivilization
of society will be the result.

I am typically
not an empiricist, but statistical correlations this blatant are
hard to ignore. The programs of the Great Society appear to have
yielded dramatic results within a decade, though they were not the
intended results. As the perverse incentives of the welfare state
began to produce results, society became increasingly dysfunctional.
The "transvaluation of all values" to use Nietzsche’s
term, though in the sense that Oswald Spengler used it, has found
its catalyst in the welfare state where tried and true traditional
values are endlessly attacked and replaced by new sets of values
that tend to be nothing more than a rejection of the old. The cold
hard utilitarianism, materialism, and social theory of Mills, Marx,
and the Frankfurt School gradually have replaced a millennium of
traditional Western values. The welfare state is not only the bastard
child of this evolving new set of values, but its very existence
has allowed for the subversion of the values that make culture and
civilization possible.

One telling
statistic of the values and civilized behavior of a society are
crime statistics representing people's respect for others and their
property. While many crime statistics have recently improved, which
may speak to a number of factors including an aging population,
higher incarceration rates, and welfare reform, they remain significantly
higher per capita since 1960. Rapes have more than tripled on a
per capita basis, as have aggravated assaults, while vehicle theft
and several other categories have more than doubled, with the notable
exception of murder, which has increased to a lesser extent.

Many statistics
of the family paint a similar picture. Births out of wedlock were
consistently at or below 5% between 1940 and 1960. By 1970, the
rate had risen to over 10% and has continued to rise to 33% of all
births today. Even children born to two married biological parents
are much more likely to experience divorce and a single parent household.
Divorce
rates increased
from 9 to 23 per 1000 married couples annually
from 1960 to 1980, while leveling off at 20 per 1,000 through 1998.
How much of this leveling off in divorce rates is the result of
relationships in groups with higher divorce tendencies never evolving
past cohabitation is difficult to ascertain. Over half of children
born today in the US will live in a single parent household, while
in some areas the rate is much higher. It is hard to ignore the
statistical relationship between crime and family dissolution.

While crime
and family destabilization may be two of the more obvious results
of the welfare state, there are many others. The stigma for single
mother births has virtually disappeared. Intergenerational dependency
on government programs with the related lack of skills for self-sufficiency,
much like a farm animal unable to live without the farmer for food
and shelter, has created people without hope or ambition. People
today have on average a much higher rate of time preference meaning
that there is a much greater tendency to spend than save today than
in the past. This is also reflected in the contemporary attitude
of the need for immediate gratification. The social safety net influences
the way people save and spend money.

In Europe,
the welfare state has achieved similar results. It would be simplistic
to say all societal changes were a result of government policy and
programs. Some of the changes in attitude that lead to the welfare
state programs being enacted may have also have resulted in changes
to society itself. I am not taking the position that government
policies and programs have been the one influence of societal change,
but theory and evidence indicate that the welfare state has exerted
a powerful influence on the structure, quality, and stability of
society.

There was
a marked deterioration of many societal measures over the last third
of the 20th century as noted above. The fraying of society
is endemic. There is a definite atomization of society as membership
in fraternal organizations has declined across the board and neighbors
often hardly know one another. A family having dinner together has
become much less common. Single parenthood is rampant.

Government
programs have not only created dependency, but have allowed people
to escape the social norms that were the result of centuries of
successful social behavior. The welfare state put in place a series
of incentives that broke people free of the restraints of personal
discipline. Before the advent of the full-blown welfare state, an
out of wedlock birth was a familial disaster. The moral constraints
of the time had some very good economic reasoning within it. Without
a father, a single mother would have an extremely difficult time
providing for the child, and her fitness for marriage would come
into question for many suitors. The result was most likely to be
either extreme poverty, an additional burden on the mother's parents,
or adoption for the child. When the government steps in and subsidizes
behaviors that in previous generations would have resulted in great
hardship or even death, a sort of social Gresham's Law takes place
where bad behavior chases out the good. Why have a father and husband
around when the state will assure your financial situation? Why
find a new job when you can collect unemployment for some time?
The changes in societal incentives have resulted in a change in
societal rules.

Non-judgmental
governmental programs where the more dysfunctional the behavior
the greater the subsidy were put in place. Therefore, if having
one child out of wedlock was worth X dollars a month, having two
children out of wedlock was worth X+1. Getting married was discouraged
since benefits would be lost, thus welfare subsidies created a disincentive
to marriage. It was often of more economic benefit for a father
to be absent in a low-income household than to create a two-parent
family. Since the state was now picking up the tab, a woman could
break free of familial pressures. A high school girl could
get pregnant and the state would provide her with her own apartment.
It would be difficult to argue that this did not exert a powerful
influence on social norms.

The incentives
put in place continued to spread throughout society. The effects
on crime were direct and indirect. The direct influence was that
with an unfeeling non-judgmental social safety net irresponsible
behavior was subsidized. You could be a drug-addicted single mother
and the government paid for your habit. The discipline of personal
responsibility was broken and the children suffered. Indirect effects
included devaluing the importance of men, no longer having the responsibility
of providing for their families; the government now picked up the
tab. Attitudes toward women have been reduced to "bitches and
hoes" in some areas, since women are no longer seen as a potential
monogamous mate, but rather a sexual conquest without obligation.
Increasingly, children were raised by single mothers who were oftentimes
dependent on government welfare programs. Girls continue to model
their mother's behavior and the cycle of dependency continues. These
incentives were especially detrimental for boys since they no longer
had good male role models to emulate living at home. In some cases,
this has led to increased gang membership for a sense of belonging
and role models. Is it any wonder that crime and incarceration rates
began to spike?

The government
has slowly recognized the disease with myopic clarity, taking steps
to move welfare recipients back into the workforce, while failing
to understand the full extent of the damage they do. In the typical
governmental effort to find new revenue streams, state governments
have developed a child support system of Orwellian proportions to
feed state coffers. Now the welfare state views the non-custodial
parent, usually the father, as another income stream to help offset
welfare payment expenses. This creates a disincentive for legal
work since payments are income based, and increases the incentive
to work in a black market setting. Government has created yet another
criminal class for those who are unable or refuse to pay. People
are well aware of the nightmare that has become family law, creating
a disincentive for marriage and having children. The better educated
with better jobs are more aware, and have more to lose financially
from divorce with children. For example, an established financially
secure man in his mid-twenties or beyond may be very hesitant to
risk his accumulated wealth in divorce, and to have future income
tied down with child support payments for 18 years. It may be enough
to induce some to delay or avoid marriage completely, or not to
have children. Thus, a higher percentage of kids are born to welfare
families and low-income subsidized families, with the state picking
up the tab, and fewer to middle class families. Declining birth
rates with negative population growth has become the norm worldwide
in nations with extensive welfare regimes.

The
weakening of local institutions has been another result of the welfare
state. Before the welfare state, people often joined fraternal organizations
that served as a private social safety net. Churches and church
based organizations such as the Salvation Army also served in the
role of social safety net. This was at a time when living standards
were much lower, so the resources available were much less than
would be available today. These organizations brought people together
out of genuine caring and self-interest, helping to create a sense
of community. The concept of looking to the government for assistance
was not the dominant vein of thought in most developed nations.
Tocqueville commented in Democracy
in America
how in Russia if a church is to be built the
people petition the Czar while in America the community comes together
and builds the church without government assistance. It did not
even dawn on most Americans of the time to ask. Even the Russian
serf, though servile to the czar, did not expect the czar to feed
his family.

With the advent
of the welfare state American's traditional independence from government
changed. There was no longer a need for communities to support each
other locally. The social bonds that once tied people together were
shredded. Dependence on government to do more and more increased.
Membership in fraternal organizations has atrophied as government
has assumed many roles these organizations once filled. The role
of private charitable institutions has declined. Today, society's
structure has today become much more simplified and atomized. The
interconnectedness that once existed amongst people like a great
spider web has atrophied, with the simplified impersonal connections
to government now being dominant. People and organizations now petition
the government to request tax dollars to fund their pet projects.

The welfare
state has also created an incentive for people to have a higher
rate of time preference. Unemployment insurance and welfare benefits
reduce the necessity of people to save. This results in a change
in the habits and outlook of people. Compounding this mindset is
the Federal Reserve's inflationary monetary policy and artificially
reduced interest rates, incentivizing the "I want it now"
mentality that has resulted in America's culture of debt.

Cultural governmental
dependency is the norm in much of the world. The welfare state has
led to servility and socially dysfunctional behavior. Freed from
the discipline of fiscal responsibility, and the norms of family
and society, the ability to live a self-destructive life style and
not perish is possible. The more dysfunctional the behavior the
greater the subsidy as illustrated by Dalrymple's work, "Life
at the Bottom". This type of behavior is exemplified by the
carnage and chaos that ensued in New Orleans after hurricane Katrina.
Looting and pillaging has become a typical reaction to a disaster,
or a sporting event for that matter. The welfare state has decivilized
the people and now is reaping its reward. An increasingly unstable
and chaotic society has been the result.

The human
disaster created by the welfare state will have grave consequences
for society in coming decades. Citizens are gradually being replaced
by the mob, demanding ever more from politicians who are only too
happy to bribe the people for votes with their own money. This dependent
attitude coupled with a sense of entitlement and a willingness to
use violence to achieve ones ends does not bode well for the future.
If the premise that welfare states are destructive to society is
accepted, and that the nation state itself is in decline along with
its ability to provide social services, seeking a more effective
non-political and socially beneficial solution is a rational decision.

The future
may belong to those who are able to create societies that do not
depend on the whims of an increasingly bankrupt and inept state.
A community or several communities may form that realize it is in
their self-interest to divorce themselves from all request for governmental
assistance. This self-interest would most likely be the result of
cultural, social, or safety concerns.

There is evidence
that the process of separation from state services has been increasing
in recent years. The home school movement and the increase in private
schools are examples of the strong sentiment that exists that question
the effectiveness and moral values of government-supplied education.
The cultural Marxism that has become endemic in the public school
system has concerned many parents to the point where they have sought
quality education that also reflects their values elsewhere. This
rejection of government-supplied education has not yet translated
to other social services, but there is reason to believe that there
may be underlying pressures at work that will eventually lead to
a demand for social services completely separate from the State.

An interesting
model for this already exists in the United States, the Amish. The
Amish are a people who believe the best way to maintain their faith
is to remain separate from the rest of society. They pay taxes,
though can apply for the self-employment exemption from Social Security
since they do not collect Social Security, but instead take care
of the elderly themselves. They also do not accept any other welfare
programs, but assist those in need within the community structure.
For the Amish, this concept of community assistance generally extends
to insurance as well. The point is that the Amish have chosen to
separate themselves from the trappings of the State to maintain
their culture, their faith, and their way of life. They believe
it is their responsibility to take care of their family and community.

There are
also examples of private charitable organizations acting as a social
safety net. The Salvation Army is a prime example. From the 19th
century to the present, the Salvation Army has fed the poor and
housed the homeless in addition to other roles. Its mission was
changed to a degree by the advent of the modern welfare state, but
it still provides valuable private services to those in need. Some
will argue that private charities cannot provide an adequate social
safety net. Typically, these people are also advocates of the "War
on Poverty". As has been demonstrated, poverty reduction programs
have done little to reduce poverty and have many negative effects.
If one accounts for economic growth and higher standards of living
since the early 20th century, and the greatly higher
rates of taxation now endured, there is no reason to believe that
with the abolition of the income tax for example, that raising sufficient
funds would be an issue for private charity.

Private charities
have an incentive toward greater efficiency and effectiveness since
they are competing with other charities for money and volunteers.
If they fail in their mission, they may experience declining contributions,
possibly to the point where operations will cease. In simple economic
terms, the amount of assistance that reaches the recipients of government
welfare benefits are only a fraction of the resources consumed by
the supporting bureaucracy. The elimination of bureaucratic rules
that fail to distinguish between simple economic hardship and destructive
personal behavior would be a great benefit. Disincentives toward
bad behavior would be more likely in private charities. Subsidizing
substance abuse and illegitimate children would be less likely.
Government-based programs are based on a flawed premise. They force
people to support them rather than relying on compassion. It also
creates a top down approach, rather than community based. The result
is the bureaucratic unfeeling inhuman face that is the modern welfare
state. Reliance on private charities rather than government programs
would create more stable, interconnected communities.

In an increasingly
relativistic society, those that do not wish to endure the process
of decivilization with all its trappings, may find that creating
or joining communities that separate themselves to some degree from
the State and society at large to be the only way to continue their
way of life. This type of community may take shape in a number of
ways and does exist today to a certain extent. Home Schoolers form
communities where they share events and common interests. Groups
like the Amish form their own communities. Virtual communities on
the internet are another possibility, though they may tend to lack
the effectiveness that a close nit geographically concentrated community
would have. Receiving periodic emails and web blog postings are
not the same as living and working closely together in creating
an effective community. The Free State Project is another example
where people are moving to a common location for a common goal.
There is a new current where people are gradually distancing themselves
or trying to change government. The next logical step is to work
to separate your group from the state much as the Amish have already
done, though not necessarily separate from society. The Amish provide
a very old model that provides a guide for future social organization
without statist influence, with or without the religious trappings.

The simple
solution to the destructiveness of the welfare state is to abolish
it and allow private charity to fill the vacuum. The likelihood
of this occurring in the short run is not good. Therefore, those
who wish to live in a community that represents their personal values
and without the detrimental effects of the welfare state will need
to create their own communities.

The archetype
of this type of community would have dominion over its own property.
This means the community would decide who may or may not be a member
of it, and who could own property within it. Outsiders that did
not meet the criteria as set forth by the community would be rejected.
Those who are members but violate the contractual principles of
the community would be forced to sell their property under contractually
agreed upon conditions, and would leave the community. Under these
circumstances, a community could contractually keep drugs out of
their neighborhood, for example. Owners of neighborhood crack or
meth houses would face expulsion. Neighbors would certainly be able
to ascertain if a problem exists long before law-enforcement typically
does. Other communities may allow self-destructive behaviors. Each
community could decide on its rules in a founding community charter
for everything from zoning issues to lifestyle. This contractually
binding document would spell out the rules of the community, and
would prevent arbitrary application of its regulations. It would
also provide for a method of amending the charter, which a prudent
community would require either a supermajority or unanimity for
charter amendments to better assure community continuity. Of course,
less rigorous informal models of this sort could exist as they have
existed for millennia.

Reversing
the social carnage created by the welfare state will only occur
by creating socially sustainable communities. Stable community non-state
institutions were the norm prior to the advent of the welfare state.
The state, with its policies and perverse incentives, has shredded
community infrastructures and cohesiveness throughout the developed
world. Ironically enough, it may require some petitioning of the
state in order to acquire the ability to fully control ones own
community, since this violates many existing laws enacted over the
course of the 20th century. This is not to say that the
welfare state is the only cause of social problems in our modern
society, since it is a reflection of deeper undercurrents of a particular
Weltanschauung, but it certainly exacerbates societal problems by
incentivizing socially destructive behaviors. Only by removing societies
from the control of the state will it be possible to create truly
culturally sustainable caring communities, where members are free
to live in the society they choose, and engage in the pursuit of
happiness.

February
7, 2007

Mark
Owen [send him mail]
is an adjunct professor of economics at Northwood University. In
addition, Mark led the repeal of Owosso's historic district in 2001.
He soon found himself elected to the Owosso City Council, and is
today mayor pro tem. He is a 1992 graduate of the Ludwig von Mises
Institute.

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