The Down-Side of the Welfare State

You can't vote yourself richer forever.

Over the years, Scragged has published a number of articles explaining how Confucius' philosophies of governance apply to what's going in the United States today.  Some of our Chinese friends were incredulous at the thought that Confucius' ideas would be relevant to Western Civilization, such as it is.  After some palaver, however, they were willing to believe that Confucius' insights might be as universally applicable to all human societies as Euclid's axioms about geometry apply to all flat surfaces.

Confucius' major insight was that there is no limit to bureaucratic greed.  When the Emperor doesn't chop off the heads of enough dishonest or greedy bureaucrats, they start stealing money or wasting it on unnecessary expansion of their red-tape empires.  Government effectiveness goes down, taxes go up, the bureaucracy starts stealing from the defense budget, and society eventually collapses when virtue runs out.  Edward Gibbon reports that stealing from the defense budget to spend on "essential services" became common before the Roman empire collapsed:

A large portion of public and private wealth was consecrated to the specious demands of charity and devotion; and the soldiers pay was lavished on the useless multitudes of both sexes, who could only plead the merits of abstinence and chastity.

- Edward Gibbon, The Decline and Fall of the Roman Empire

Top-Down Virtue

Confucius believed that virtue flows from rulers down to citizens, but he had never heard of democracy. The idea that the people could influence or control government was foreign to him.

In a democracy, virtue can flow from citizens up to rules if citizens vote non-virtuous rulers out of office but getting rid of non-virtuous officials requires virtuous voters. This is a universal truth which keeps being rediscovered whenever things go really wrong in a democratic society. George Soros, one of the most recent savants to notice this, wrote of the necessity of virtue flowing from the electorate up into the government:

Karl Popper [a philosopher who advocated the creation of the "open society" and who wrote about the limitations of the scientific method] assumed that the purpose of critical thinking is to gain a better understanding of reality. That is true in science but not in politics - the primary purpose of political discourse is to gain power and to stay in power by any means required, and those who fail to recognize this are unlikely to be in power.

The only way in which politicians can be persuaded to pay more respect to reality is by the electorate insisting on it, rewarding those whom it considers truthful and insightful, and punishing those who engage in deliberate deception. In other words, the electorate needs to be more committed to the pursuit of truth than it is at present.

Without such a commitment, democratic politics will not produce the desired results. An open society can be only as virtuous as the people living in it.[1] [emphasis added]

Mr. Soros, an extremely successful financial trader, recognized the importance of individual and collective virtue in society. The Chinese term "virtue" is an extremely broad word; the closest approximation in English is a combination of "morality," "duty," and "responsibility."

Confucius believed that children are born selfish; an infant's only concern is to have its needs met without regard to whether it's convenient for someone else to feed it or change its diaper. Confucius taught that parents and teachers are duty-bound to teach children how to assume the responsibilities, requirements, and duties of adulthood, the sooner the better.

Confucius and the Welfare State

In addition to not imagining democracy, Confucius failed to foresee the welfare state. No one imagined the Imperial Chinese Government government taking care of people who couldn't or wouldn't work.

The only form of old-age pension available was having enough sons to take care of you. Sons were needed both to carry on the family name and to support the parents when they became old. A girl would join her husband's family and help take care of her in-laws; raising a girl and providing her dowry brought no benefit to her parents.

China has always been a crowded country which was subject to periodic famines.  Lacking effective contraception, parents put excess female infants to death either to save food or to stop the mother from nursing so that she could get pregnant again to have a son.[2]

The American Experience

In American democracy, things have generally turned out pretty decently over time because we voters have the ultimate check on the mendacity of politicians. When things get too bad, when government loses virtue, we the people vote them out and things improve a bit.

Up until now, our population has been well-enough educated that we know better than to believe all of a politician's promises. When politicians promised too much, we knew better than to elect them.

This perceptiveness has been lost as we've changed from wanting to provide for ourselves to wanting government to take care of us. Politicians are only too happy to promise anything that will get people to vote for them; by voting for politicians who promise more than they can deliver, we encourage them to lie to us.

History shows that voters are quite capable of electing non-virtuous leaders. After extensive exploration of the reasons why the Nazis were able to become the largest political party in Germany through free and fair elections, William Brustein said:

My central thesis is that the mass of Nazi followers were motivated chiefly by commonplace and rational factors - mainly their material interests - rather than by Hitler's irrational appeal or charisma. In this way Nazi supporters were no different from average citizens elsewhere, who usually select a political party or candidate they believe will promote their interest. Thus, I suggest that evil as an outcome may have very logical origins and that evil is not always easily discerned - a chilling recognition.[3]

My central argument is that the Nazi party's emergence between 1925 and 1933 as the most popular political party in Germany resulted largely from its superlative success at fashioning economic programs that addressed the material needs of millions of Germans.[4] [emphasis added]

Voters who "select a political party or candidate they believe will promote their interest" are not acting virtuously by Confucius' standards. Virtuous citizens concern themselves with the overall public interest rather than with their own short-term selfish wants.  Virtuous citizens take care of themselves rather than expecting society to pay their bills.  In this case, the voters seem to have been unaware of the Nazi's plans to consolidate their power and stay in office regardless of the voters' wishes.

The Long-Term Issue

For the last hundred years or so, American politics has revolved around the question of whether individual citizens ought to take care of themselves or whether government ought to provide for everyone. This question was behind the debate whether to start the Social Security system - some believed that government ought to take care of old people, others held to the Confucian view that care of the aged was an individual or family responsibility and was not a government matter. As in Germany in the 1930's, the "government should do it" crowd has gained more and more influence in America.

When government wants to do anything, whatever it does has to be paid for by taxpayers either directly through taxes or indirectly through inflation and debasement of the currency. The more the government wants to do, the more power it needs and the less liberty citizens have. The more the government wants to do, the more money it needs and the less money wage-earners are able to keep.

When taxes get too high, people work less and government revenue goes down; this is why lowering taxes can often increase government revenues, a phenomenon known as the Laffer Curve after the economist who first demonstrated the effect.[5]

The problem is that it takes virtue on the part of individual voters to realize that government help always comes at a very high cost - the more money people get from government, the more the bureaucrats get to tell people what to do. Taking government money seems like a good idea at the time but always leads to loss of liberty.

The choice at every election is between taking responsibility for yourself and having liberty or having the government take responsibility for you, in which case, the government tells you what to do.

That's the real question for our day - will we keep our tradition of liberty which requires that we take care of ourselves, or will we voters give up our liberty and allow the politicians to promise to take care of us?

Government Can't Afford to Care for Everyone

In our hearts, we know that politicians are lying when they say they'll take care of us, but we may be dumb enough to let them try anyway.  History shows that when government gets enough power to take care of us, it's powerful enough to do other things which are not so appealing.  The Nazis were able to fix the German economy, but their program didn't end well.

We've written about the tendency of the Democrats to steal elections when they can't win fairly and we've shown how power-hungry people can subvert a democratic systemThere's talk of amending the Constitution so that Mr. Obama can run for a third term as President.  But thus far, none of these things will make a permanent change - unless we let them.

History shows that there are only two ways citizens can affect government - the ballot box or the bullet box.  If we continue to permit ballot fraud, we'll lose our ability to change government via the ballot box and we'll have to turn to the bullet box.

Which will it be, ballots or bullets?  The choice is ours.

[1]Soros, George, The New Paradigm for Financial Markets, Perseus Books Group, 2008 p. 39

[2]Mjngello, David E., Drowning Girls in Ancient China: female infanticide since 1650 (Rowman & Littlefield, 2008) p 21

[3]Brustein, William, The Logic of Evil, (Yale University Press, 1996) p xii

[4]Brustein, William, The Logic of Evil, (Yale University Press, 1996) p 1

[5]Laffer, Arthur B. "The Laffer Curve: Past, Present, and Future." June 1, 2004, available online at

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Economics.
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