Consuming Capital

The last few months’ news headlines are beginning to synch up with my thoughts. After hearing Mitt Romney make his “controversial”, “47%” statement (scandalous I’m sure) I decided I should consider to either stop thinking, or stop looking at the news so I don’t have to alert Morpheus that there’s a glitch in the Matrix and deal with all the dramatic repercussions Mouse had to. Is Mitt Romney right when he stated that since 47% of people are dependent on the government they won’t vote for him anyways? I’d put money on it, Obama will probably get 47% of this election’s vote. But that’s not the controversy. What is controversial is the deeper point Romney was implying, and to which the liberal (progressive, statist, fascist, pick your fancy) was reacting with such malice and faux shock. The reason for this manufactured outrage is to sooth the liberal’s conscious and avoid a rational examination of one of the mainstays of their ideology; if they can personally attach a negative emotion/connotation (the manufactured outrage) with what Romney said they must necessarily be right, therefore there is no need to take what he said seriously or examine it. It is a psychological defense mechanism employed against placing their arbitrary, normative ideology under rational scrutiny. I can see it now, t-shirts mocking what Romney said, bumper stickers that have stupid little quips about “just” wealth distribution. Anyways, the deeper political point that Romney was driving at when explaining the Obama voter mindset is this; why will these people never vote for him?
The popular philosophical justification employed for the welfare state is one of collective responsibility. This means that everyone in a political boundary is responsible for everyone else within that boundary, that if one person falls behind we all fall behind, that since you live in close proximity to one person, you are somehow financially responsible to them by under force of law. It is easy to see that this is not the case in reality but a vision the statist (liberal) only wishes the American people internalized. When someone works overtime to make more money than they would have by simply sticking to working their normal time allotment, while another quits a job just because they don’t like it, there is probably going to be a difference in monetary outcomes if they both earn roughly the same wage. But the point is this; one person made the free choice to work while the other made the free choice to quit, not everyone in the country worked or quit simultaneously because there are 310 million people here all with their individuality to account for. There can never be something as “the collective” in an individual entity sense, only in the sense that a group of people united and determined to work together to achieve a common end using similar means. After this is accomplished the collective is dissolved, people are never dissolved unless they are room temp. But if everyone is an individual who constantly acts as if you are your own person, how is this whole “collective responsibility” idea going to work? The only foreseeable, and historical, way it can work is if it is enforced by a government that has fundamentally no boundaries. The reason being is if you want everyone in society to be collectively responsible to each other, there is little to no room for an individual’s private interests to get in the way of this normative, political goal.
This belief in the collective was a reaction to the effects that laissez-faire capitalism had on the political and social environments of the time. Those who invented it did so as to retard the liberating effect the free market had on the commoner both politically with the rise of classical liberalism (now conservatism) and its two corollaries; equality before the law and representative democracy, and materially with a higher standard of living being more widely available. They sought to re-institute the power that was “lost” with the advent of representative democracy into an all-powerful institution that could control all the “wild” and “disordered” actions of individuals pursuing their own economic and occupational interests (a.k.a being free) and channel them to whatever goal those in charge deemed worthy. They settled on the god-state, the apparatus of coercion and compulsion in society. Whoever was in control of this institution should control the people who placed them there, for their own good of course. This is the weapon of choice the liberal employs against freedom and individual liberty.
Welfare nowadays is nothing more than massive wealth confiscation and “redistribution”, or whatever euphemistically contrived word one would use for transferring stolen property to someone else. It does not create wealth and it isn’t fair, hence the reason liberals named it as such. It isn’t fair because the government, which, again, is the social apparatus of coercion, forcibly takes property (mostly in the form of money) against many people’s volition. If your neighbor and his four big sons came to your house armed to the teeth (but their weapons aren’t drawn) and calmly asked for 25% of your annual income, you would probably call the police. Unfortunately in our case the police or military can easily be substituted into the above example. Don’t believe me, try not mowing your lawn or allowing the inevitable city lawnmower to mow your lawn for two months, see what happens. Welfare can only take place when the most powerful physical force in society, the government, forcefully takes from one group of people and “gives” it to another group. One interesting characteristic (and ultimately its fatal flaw) is that the welfare system in our country doesn’t fully take into account why people are asking for welfare, or how they got to the place they are in. It simply takes from someone who goes out and earns it and transfers (not gives) to another who didn’t earn it.
People respond to incentives. It would seem rational that if we are to “give” other people’s violently confiscated property (and therefore time because of the labor expended to earn it) away we should do so in a very cautious, guarded fashion. If someone feels that they need to have five kids before the age of 24 without bothering to secure the means to support them, why should someone else who did the morally (and economically) responsible thing be punished? Likewise regarding saving for Social Security. Why should those who work hard and constrict expenditure in the present (save) be punished for those who want to live solely in the moment by taxing them the same? If someone wants to save let them save, if they want to spend let them spend. If they want to act immorally and have five children out of wedlock without a job to boot let them. Just don’t make those who took school seriously, studied hard, work hard every day, are conservative with their money, and are overall productive members of society subsidize those who pissed their way through school, don’t want to earn their living yet feel entitled to our property, and spend like its December 21st. Individual responsibility is the only morally fair or “just” (if you’re a liberal) social ethic.
This fetish to continually implement the welfare state stems from the fact that liberals/progressives want equal economic outcomes, not opportunity. They see materialistic egalitarianism as “just” (think social justice) due to their ignorance of economics. The main fallacy they are caught on hook, line, and sinker is the ancient belief, inapplicable to the free market economy, that rich people are rich at someone else’s expense, that the fact that they are rich is proof that someone, somewhere out there is now poor. Also, the Marxist “immiseration of the Proletariat” myth influences them as well, which states that the wealthier the rich get, the poorer everyone else becomes. This is of course is self-evidently false, and has been proven so over and over for the last two hundred years by people way smarter than me. In a free market, the economy (all of its prices, goods supplied, and labor purchased by employers) is dictated by the common people placing their money votes (their purchases) towards the goods/services they want or desire. The wealthy, mostly land owners, investment capitalists, and entrepreneurs, are forced to prostrate themselves to the wishes and whims of the combined choice of the consumer, if, or course, they wish to remain wealthy. In the free market, the rich do not become so through the violent looting of the poor like they did in during the days of rampant despotism and autarkic economic systems (feudal society), the government is the institution which does a job of unsurpassed excellence in mimicking this social arrangement.
The only way the rich can loot from the poor in a free market is by using the strongest force in society, the government. This (looting) can only happen if the government actually has the power and legal credibility to perform such acts. But the only way it can perform such acts are if it is given a sophisticated and benign sounding rationalization to gain the popular support it needs to do so, something like “collective responsibility”. This is a longer way of saying the solution (more government interference or welfare) isn’t the solution to the problem, it’s the problem.
Does it work? The short answer is No. Economically this is why; people respond to incentives. Since people tend to have an aversion to getting their property violently confiscated (even those on welfare) because it lowers their standard of living, they take measures to minimize these occurrences and vacate those places that make it a habit, if they can. Inner cities, where welfare usage is rampant, are notorious for their high unemployment, decaying infrastructure, and high crime rates. This is because it takes the available capital (money) created through production and transfers it to people who did not earn it. Originally this capital is vital because capital goods (the machines or goods you use at work) need to be kept up because they cannot function indefinitely into the future, they need constant reinvestment by the firm in order to continue production, to produce consumer goods and pay their employees’ wages. When these are all taken from them they have to make a decision to stay in business, normally by firing some people or relocating so they can produce more efficiently. If taxes were lower or non-existent businesses would have a large surplus of capital available and an incentive to reinvest back into the economy, therefore creating jobs that were previously non-existent. Someone ultimately has to work these jobs, so someone who was previously unemployed is hired, raising his standard of living from whatever he was collecting on welfare or from charity, to his very own property in the form of a paycheck.
On a higher-minded note, welfare also robs people of their dignity by making them completely dependent upon other people like a child, and from “acting”, or employing specifically selected means to achieve definite ends. If a capable person is not allowed to exercise their reason, their “acting”, they become bored eventually engage in all sorts of mischievous acts in order to give meaning to their existence. This is an important faculty humans are endowed with, denying them the ability to exercise their reason creates a class of entitled, economically ignorant citizens who, since they receive money for “free”, believe the only reason they do not have more money is because the people who have it (although lower earners pay taxes as well) are withholding it from them. They are prone to use the government apparatus to loot those who they feel are responsible for their predicament and see the economy as a power-struggle between the rich and the poor, something that we have debunked above.
The only way the welfare state can continue is if the production (wealth generating activities) carried out by productive people outstrips the consumption carried out by the leaches of society. Once this is no longer the case the game is up. Now since the people who are used to collecting income without expending labor can no longer get it, they resort to the only means they know how to start collecting again, violence. This is the danger of the welfare state, turning citizen against citizen; these are the effects of consuming capital.

Simeon Burns

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