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With the Christmas season
upon us, bringing peace and goodwill to every decent heart, the
free-market enthusiast has an even better than normal chance of
being asked why he or she does not care about the wellbeing of
others. Supporters of the welfare state imagine that they are
the compassionate ones, and that we who favour economic liberty
are heartless Scrooges. How else could we oppose state-run and
taxpayer-funded healthcare, education, housing, pensions, or
unemployment insurance? We all deserve coal in our stockings for
daring to speak ill of government safety nets.
Writing in the 1840s,
Charles Dickens can perhaps be forgiven for his caricature of
the rich businessman as heartless. Life was hard in those days,
and the widespread advances in prosperity brought about by the
Industrial Revolution had yet to make themselves truly felt. But
in this day and age, the continuing slander of libertarians as
lacking in compassion is less forgivable, and needs to be
challenged in no uncertain terms.
Clearly, not all rich businessmen resemble Ebenezer Scrooge. In
our own time, for instance, two of the world’s wealthiest men,
Bill Gates and Warren Buffet, are giving away large portions of
their fortunes to help the needy, as others did in earlier
generations.
More importantly for my
thesis, though, is the fact that not all libertarians are rich
businessmen, or rich at all, for that matter. As Roderick T.
Long writes in a 1994 essay, “Who’s
the Scrooge? Libertarians and Compassion,” libertarians are
often portrayed as saying, “I should not be forced to
help you.” Of course, they could just as easily say, “You
should not be forced to help me,” or, “She should
not be forced to help him.”
Indeed, as Long points
out, the equation of the moneyed, capitalist class with
libertarians is doubly misleading. Not only are libertarians
found in every economic stratum, but businessmen by no means
make up a solidly libertarian block. Rather, they “are more
likely to be lobbying [government] for special favors,
protectionist legislation, and grants of monopoly privilege
while their libertarian neighbors struggle to make ends meet.”
Libertarians, of course, are staunchly opposed to political
favours, protectionist legislation, and monopoly privileges—and
for the same basic reason that we are opposed to the welfare
state: we are against all initiation of force. Politicians and
bureaucrats initiate force just as surely when they outlaw
private health insurance or tax people to pay for public housing
as they do when they bestow monopoly power or tax people to
subsidize a connected corporation. In all of these cases, force
is used against one group of people in order to benefit another
group.
Supporters of the welfare
state may counter that it is obscene for a society as rich as
ours to allow people to starve in the streets or go without
medical care. We simply should help those who cannot help
themselves, they might say. It’s just the right thing to do.
But is it really
compassionate to force people to help others? Personally, I
think helping others is a wonderful thing to do. I don’t think
it warrants sacrificing one’s own wellbeing, and I don’t think
it is a moral duty per se, but I do think it is a positive thing
that should be encouraged. In a libertarian society, I would be
free to try to persuade others of my point of view, as would
those who believe that helping is a moral duty even to the point
of self-sacrifice. What neither of us would be allowed to do is
impose our own moral vision on others who see things differently.
I believe that many people who support the welfare state are
compassionate. They may not think of taxation as force, or they
may try to elude the knowledge that it is force, or they may
simply believe that the good of welfare statism outweighs the
bad of enforced taxation. They intend to see that others are
helped, and they think that the end justifies the means.
Not only are they wrong
about the end justifying the means; they are also wrong about
their chosen means being the best path to their stated end. If
you want to help others, free-market capitalism is a better
means of doing so than the welfare state. The welfare state
takes from some and gives to others, but many practical
considerations make this transfer anything but frictionless. The
disincentives to both productive taxpayers and recipients of
state largesse, the inefficiencies of bureaucratic control, the
suppression of innovative competition, and the corruptible
nature of the humans who must manage the whole house of cards
all chip away at economic growth and hence future prosperity for
all.
On the other hand,
capitalism unleashes human beings’ natural propensity to improve
their own lot and channels it into pursuits that others find
valuable and are therefore willing to purchase on the open
market. To the extent that this invisible hand has been allowed
to function, it really has lifted all boats. Almost everyone
living in a developed country today lives better than kings of
yore in a multitude of ways. Much of the rest of the world is
catching up, too. (If you don’t believe me, check out
this stunning demonstration by Hans Rosling.)
And to be clear, rich
businessmen don’t just help humanity when they give their money
away. They help humanity primarily by making money in the first
place, i.e., by creating wealth. In the 1998 John Stossel
Special “Greed,” the founder and CEO of Cypress
Semiconductor, T. J. Rodgers sums up this point nicely:
Our company was worth zero in 1982. It had
one employee—me—and it was in debt. Today it has 2500
employees. Our company today is worth 1.4 billion dollars.
All of that money has been created. That is a positive thing
that impacts favorably the lives of a lot of people. They
buy cars with it, they go to school with it, they retire on
it… The world is better off when I make a dollar, not worse
off.
This holiday season, let’s give thanks to all of those mean old
Scrooges who helped humanity by helping themselves—and the
system of relatively free-market capitalism that allowed them to
do it. |
