Should the welfare state be eliminated all at once or phased out over time? Some of the most committed freedom-devotees waffle when it comes to that question. They maintain that the immediate elimination of the welfare system would be unfair or harmful to those who benefit from the welfare apparatus.
We must never lose sight of the fact that the welfare state is founded on an immoral principle. The political system is used to take coercively the wealth and income of some and transfer it to others. The person whose property is plundered is denied the basic right to dispose of his property in the manner he chooses.
We also must take care not to doubt the efficacy of freedom and the market process. When people are unable to turn to the political system for sustenance and support, and instead must rely upon their own efforts and the voluntary efforts of others, the resulting economic vitality benefits everyone. In Germany after World War II, Ludwig Erhard one day surprised everyone by lifting the extensive economic controls which the Allies had imposed on the German people. Despite all the dire predictions of the harmful effects Erhard’s action would have on the German economy, the result was the beginning of the German economic miracle.
In the 1930s, serious doubts began to be raised about the effectiveness of the National Industrial Recovery Act, the pervasive economic controls which regulated American businesses. Many argued that the regulations would have to be removed gradually, rather than all at once, because so many people had become dependent on them. One day the Supreme Court declared the Act unconstitutional, and immediately the American economy began to revitalize.
Perhaps the best example of a sudden removal of a welfare system took place when Lee surrendered to Grant at Appomattox. Prior to the Civil War, blacks in the South were provided their food, housing, employment, and other necessities of life. There were those who argued that the slaves were too dependent on the system to be immediately permitted their freedom. Nevertheless, the newly freed blacks rapidly adjusted to their new lives of liberty and self-reliance.
To eliminate the welfare state, the “button” should be pushed. Why? Because to argue for the continuation of an immoral action, even for a short period of time, is itself immoral. Furthermore, freedom works: the creative abilities of human beings enable them to respond quickly to the market process.
This piece by Mr. Hornberger originally appeared in the June 1988 issue of The Freeman, published by The Foundation for Economic Education, Irvington-on-Hudson, New York.
