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Have we become a culture of dependence? As far as we can see, the "producers" continue to support the "non-producers" instead of, say, "going on strike." Why do people generally think that they have a "right" to live off someone else? Is this something we are learning from our parents? The massive amounts of borrowing and money printing are keeping this going. In fact, some even ask why we should pay taxes at all if we can just print money. Would the economy be in better shape if the welfare state were reduced? Is dependency good or bad?


Welfare states face an inescapable paradox: The level of production needed to sustain a welfare state cannot be sustained by a welfare state. This paradox is created by policies that encourage the redistribution and consumption of wealth while discouraging its creation. In the face of such perverse incentives, living standards must fall even though, for a time, they may be maintained through borrowing...

The material well-being of any society's people rests on the quantity and quality of goods and services they produce. All goods and services consumed by the unproductive members of society must be taken from, or paid for by, the productive. Welfare state policies ensure that the ranks of the unproductive will grow and those of the productive population will shrink, and that the productivity of the dwindling number of producers will fall. As a result, the quantity and quality of goods and services available will drop and poverty will rise...

The philosophy underlying the welfare state, "From each according to his ability, to each according to his need," leads people to display minimum ability and maximum need. To the extent this philosophy is actually followed - more often, wealth flows from the politically weak to the politically strong - people will band together along ethnic, gender, religious, and other lines to compete to be seen as the most needy and therefore the most worthy of a larger share of an ever-shrinking pie...

As government grows it will increasingly be seen as the answer to any and all difficulties, and people will demand government solutions to increasingly minor inconveniences. Legislatures will respond by enacting ever-more-stringent regulations on individuals and industry, further reducing adaptability, independent and entrepreneurial thought, risk-taking, and productivity. Centralized, bureaucratic rule will erode people's self-reliance, initiative, and sense of local community.

The Paradox of the Welfare State


Original posting by Braincrave Second Life staff on Nov 19, 2010 at http://www.braincrave.com/viewblog.php?id=387

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