Frederic Bastiat put it simply, "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."Here Thomas Sowell puts a bit more flesh on it in "Something for nothing?";
People who think that they are getting something for nothing, by having government provide what they would otherwise have to buy in the private market, are not only kidding themselves by ignoring the taxes that government has to take from them in order to give them the appearance of something for nothing. They are also ignoring the strings that are going to be attached to their own money when it comes back to them in government benefits.
That is not even counting the fact that government programs are usually less efficient than similar services provided by private enterprises.
Yet the illusion of something for nothing has kept the welfare state going — and expanding. If there is something for sale in the marketplace for ten dollars and you would not pay more than five dollars for it, some politician can always offer to get it for you free — as a newly discovered "basic right," or at least at a "reasonable" or "affordable" price.
Suppose that the "reasonable" or "affordable" price is three dollars. How do you suppose the government can produce something for three dollars that private industry cannot produce for less than ten dollars? Greater efficiency in government? Give me a break!
The fact that you pay only three dollars at the cash register means nothing. If it costs the government twelve dollars to produce and distribute what you are getting for three dollars, then the government is going to have to get another nine dollars in taxes to cover the difference.
One way or another, you are going to end up paying twelve dollars for something you were unwilling to buy for ten dollars or even six dollars. But so long as you think you are getting something for nothing, the politicians' shell game has worked and the welfare state can continue to expand.
3 comments:
"One way or another, you are going to end up paying twelve dollars for something you were unwilling to buy for ten dollars or even six dollars."
People will gamble that they won't have to pay the 12 dollars - they want someone else to. So while the true cost of govt provision will be more than the market cost, the fact that the state can be used to get someone else to pay the cost makes it attractive for many.
Yes it is a fiction that one can get something for nothing from the point of view of the entire tax base, but it is clearly wrong to suggest that particular recipients will pay for all that extra cost through taxes, etc. As long as redistribution means someone else bears the brunt of the extra cost then many people will not care since they really are getting something for nothing. It isn't a fiction to them.
And so the unwashed majority continue to live on the back of the prosperous minority...
gekko, this particular Sowell column related to middle class welfare if you like. I agree that some people pay no tax (accept on their benefit) and in a material sense they do get something for nothing. But they lose a great deal of freedom and choice and dignity and autonomy and hope.
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