WELFARE BY GOVERNMENT CONTRADICTS WELFARE-PUBLISHED BY FEE (THE FOUNDATION FOR ECONOMIC EDUCATION)
For more than 50 years, we’ve had the misconception that welfare is the responsibility of the government: the delusion that it is the government’s role to provide financial aid, food stamps, child care assistance, healthcare, subsidies for farmers, and other benefits to underprivileged and impoverished citizens or suffering companies. Contrary to popular belief, welfare has only been beneficial to recipients and contributors when this responsibility is delegated to the people in the private sector.
The welfare state impairs welfare in the name of welfare.Welfare is financial or social support given to people in need. Prior to massive government involvement, charities, benevolent associations, friendship societies, and fraternities have historically been successful in providing relief to the needy.
The modern definition of welfare, also referred to as the welfare state, is the public administration and bureaucratization of charity. This means that welfare is no longer a voluntary and altruistic action of private citizens, but the governmental extortion of one group of people for the benefit of another. Since welfare provides aid or support to people in need, modern “welfare” is a contradiction because other people with needs are coerced to appropriate and redistribute their resources! The welfare state impairs welfare in the name of welfare.
How Did We Get Here?
The modern American welfare state was founded by the administration of President Franklin Delano Roosevelt (1933-1945), but exponentially expanded after the declaration of the War on Poverty in 1965, under President Lyndon B. Johnson. Johnson’s Great Society included the Economic Opportunity Act, which added amendments to the Social Security Act and established Medicare, Medicaid, the Food Stamp Act, the Child Nutrition Act, and the Housing and Urban Development Act. It also attached amendments to the Davis-Bacon Act, enhancing the minimum wage.
Only 33% of heads of households currently in poverty have earned income versus unearned income, compared with 66% 1960.The purpose of these programs, amendments, and laws was to eliminate poverty and alleviate racial disparities. But great intentions do not necessarily produce great results.
Today, the welfare state consists of 200 federal and state programs and $22 trillion spent in taxpayers’ dollars since the War on Poverty’s inception in 1965. Many believe that the welfare system is the necessary cardiovascular system of American society. However, statistics have proven otherwise.
In 1959, prior to the War on Poverty, the poverty rate in the United States was 22.4%. The rate precipitously decreased to 12.1% in 1969, after the declaration of the War on Poverty. As of 2015, the poverty rate is 13.5%. It is important to mention the government spends 16 times more on welfare and anti-poverty programs than it did in 1965, with very little to show for it. The stagnation of the poverty rate was caused by governmental disincentives to productivity and work.
Only 33% of heads of households currently in poverty have earned income versus unearned income, compared to the estimated 66% in 1960.
The Ripple Effect
Many of these governmental assistance programs penalized married couples because their combined household incomes would cause either penalties or the expulsion of the welfare recipient from the anti-poverty programs. This resulted in an increase in cohabiting couples whose relationships were temporary, as well as a rise in illegitimacy from 22% in 1960 to 41% as of 2014.
The welfare state crippled motivation and productivity, which increased the probability of children being born and raised in broken homes.Two-parent households have a higher chance of avoiding poverty than single parent households. For example, the poverty rate for married couples is only 7.8% compared to the 44.5% for single, female-headed households. The welfare state continued to cripple motivation and productivity even after the implementation of the welfare reforms under President Bill Clinton with the passing of TANF (Temporary Assistance for Needy Families). Furthermore, it destroyed the nuclear family structure, which increased the probability of children being born and raised in broken homes.
The declining poverty rate predating the expansion of the welfare state was especially noticeable in the African American community. In 1940, the poverty rate for the Black community was 80% and this rate precipitously declined to 40% in 1960 and ironically, the poverty rate today for the African American community is 26.2% which is nowhere comparable to the 40% decline prior to the expansion of the welfare state by President Johnson in 1965.
One may ask what the alternative to the welfare state was before 1965. The answer is mutual aid and benevolent societies created for the purpose of providing financial aid, life insurance, housing, medical care, education, and other charitable necessities and amenities to widows, orphans, physically impaired, and deprived groups of people. These societies encouraged in their members and recipients reciprocity, thrift, self-sufficiency, responsibility, productivity, and mannerly behavior. Members who exhibited drunkenness, dipsomania, laziness, mischievousness, iniquitousness, or malice would face expulsion from the society and lose their benefits.
A Uniquely American Solution, Taken Away
The benevolent societies of the past voluntarily provided welfare for people who needed it. People were proud to voluntarily contribute to these societies because of the incentives of networking with esteemable and reputable members, the recreational amenities, and the desire to help the less fortunate prosper on mutual and favorable terms for all parties. These programs were valuable for both recipients and contributors in contrast to the governmental programs that exists today, which for the most part causes dependency and resentment.
The private welfare societies also helped immigrants in major cities like New York, Chicago, and Philadelphia become self-sufficient and prosperous through conflict resolution programs, credit systems, providing social services, curating charitable activities, providing English language classes, sponsorships for businesses, etc. These benevolent societies were commonplace throughout American society.
It was economic opportunity in the United States, even in the midst of nativism and racism, which incentivized productivity and voluntary charity for people to work interdependently and cooperatively to extricate themselves from the bottom in order to ascend toward the top.
The legendary political scientist Alexis de Tocqueville lauded American civil society and philanthropy in his book Democracy in America. He noticed the propensity of Americans to help one another in the name of charity and betterment and noticed this virtue as unique to the United States at the time. Philanthropy was indispensable to American society long before government intervened in welfare.
As de Tocqueville wrote:
In the United States, as soon as several inhabitants have taken an opinion or an idea they wish to promote in society, they seek each other out and unite together once they have made contact. From that moment, they are no longer isolated but have become a power seen from afar whose activities serve as an example and whose words are heeded.
These societies owned hospitals, health clinics, residential properties, schools, convenient stores, gymnasiums, laboratories, etc. During the 1920s, a time when social welfare constituted only 1% of the country’s Gross National Product, one-third of males belonged to fraternal societies. Members of such societies carried $9 billion worth of life insurance. These societies consisted of groups such as the Independent Order of the Odd Fellows, the Security Benefit Association, the Modern Woodsmen of America, the Black Grand Unified Order of the Oddfellows, the Modern Woodsmen of the Union, the Ancient Order of United Workmen, the Loyal Order of the Moose, the Freemasons, the Knights of Columbus, the Independent Order of Saint Luke, the United Order of the True Reformers, the Consolidated Chinese Benevolent Association, and various other groups who catered to the needs of the people and helped them stand tall on their own two feet.
People need to stop relying on the welfare state to solve problems.These mutual aid societies were the foundation of social welfare in this country. These societies exemplified brotherhood, sisterhood, cohesiveness, productivity, fraternity, and service. The three general types of societies were fraternal, mutual aid, and life insurance societies.
A lot of these benevolent societies’ programs were mitigated with the creation and expansion of the War on Poverty by President Johnson. Healthcare became subsidized, which led to the co-opting of hospitals from the hands of benevolent societies to the federal government. This in turn led to a dramatic decrease in membership in these self-sufficient, benevolent societies, and, in some cases, their nonexistence.
In conclusion, we as a people have historically done a better job in providing welfare on mutually favorable terms to the needy than the federal government. People need to stop relying on the welfare state to solve problems because it has generally done a disservice to the people at the expense of $22 trillion. Welfare is voluntary charity to people in need, and not the extortion of one group of people in order to provide to another, which generally causes laziness, low productivity, and disunity in families. Private welfare is advantageous to our welfare, while the public welfare state is not welfare at all.