I understand the authors' point completely and I seem to be coming around to his way of thinking myself, but I still feel the need for the government to provide some kind of safety need for those who are suffering economically, just out of humanitarian reasons. The question seems to be, how do we strike a happy medium between a true "free enterprise" economy and the welfare state? Is it possible? Is it desirable? Obviously, the welfare state in present society, includes the big banks and Wall Street investment houses as evidenced by the bailouts. Those government handouts dwarf those given to the poor and disadvantaged. That is the biggest part of the problem as I see it. I'll need a bit more time to wrap my head around this...
Why Do We Need a Welfare State to Redistribute Wealth?
by Jacob G. Hornberger
One of the big reasons that liberals support the welfare state is the covetousness-and-redistribution factor. Liberals hate the fact that some people are rich while other people are poor. Moreover, the rich, liberals say, only get richer while the poor get poorer. Therefore, liberals claim, we need the government to confiscate wealth from the rich and redistribute it to the poor.
Nick Martin, a 59-year old former New Yorker who recently moved to Kansas, could teach liberals the errors of their ways. He’s a poor person, rich person, poor person, all wrapped into one. Martin is proof positive that the rich don’t necessarily become richer and in fact oftentimes become poor. Martin could teach liberals that the market process is very good at redistributing wealth, without the intervention of the state.
As the New York Times pointed out in a recent article, Martin started out as a poor person. Ten years ago, he inherited $14 million, overnight becoming a rich person. The government seized $4 million as part of the liberal agenda of using government to take from the rich in order to give to the poor. That left Martin with $10 million.
Over the next several years, Martin and his family lived the good life. They bought nice homes in New York and England, into which they poured hundreds of thousands of dollars in remodeling costs. They bought three nice cars, including an Aston Martin. They had three horses, one of which cost $173,000.
In 2007 the crunch came, as the housing market and the financial crisis hit, both of which squeezed the Martins. “We started selling cars, shotguns, antique furniture, whatever,” Mr. Martin said. Unable to meet margin calls on stock investments and unable to keep up with mortgage payments, the Martins ultimately lost it all.
Today, Martin is living in Kansas, where he is teaching a course in vineyards to a class of seven students at Highland Community College. Having sold his Aston-Martin for $395,000, he drives to work in an 11-year old Ford Explorer and lives in a $900 a month tract house. His wife and 13-year old daughter are joining him this month.
Do liberals love the Martins? Well, now they do. But when they were rich, liberals undoubtedly hated them as much as they hate all rich people. One can easily imagine liberals seeing Martin after he inherited his money and exclaiming, “I loved him once, when he was poor, but now that he’s rich, I hate him. It’s not fair that he has more when others have less. I hope the government takes away his money and redistributes it to others who are less fortunate.”
Today, Martin is back in the ranks of the poor and is now equal with all the other poor people in life. That means that he is also now once again loved by the liberals, who must now redirect their envy and covetousness toward those who are still rich.
The irony is that it was the market process, not the welfare state, that redistributed Nick Martin’s wealth — well, except for the fact that the housing and financial crises weren’t really the result of the market process but rather the result of government interventionism, but that’s another story. Just don’t tell that one to the liberals. They’ve convinced themselves that the mortgage and financial crises are the failure of “free enterprise,” just like the myth they cling to regarding the Great Depression.