THE ENTITLEMENT SOCIETY
In the New Year’s edition of the O’Reilly Factor, Bill O’Reilly did in his inimitable way what no other network journalist has had the wisdom or courage to do. He explained that the outcome of the presidential election hinged on the votes of welfare state beneficiaries. In other words, consistent with virtually every prior presidential election, economic self-interest largely determined each person’s vote. It was in the perceived self-interest of tens of millions of Americans now on food stamps, on welfare, on social security, on Medicaid, and on Medicare to vote for that candidate who pledged to keep intact all welfare programs in perpetuity (indeed, to expand them) despite the reality that the costs of those entitlements vastly exceed the coffers of the federal government. O’Reilly explained that over sixty percent of those earning under $30,000 per year voted for Obama. Within that segment, he added, there were enough welfare state beneficiaries to give Obama the slight margin he needed for re-election. Until that Entitlement Society is persuaded that its best interests are served through capitalism rather than socialism, O’Reilly reasoned, it will be very difficult indeed for Republicans to regain the White House. The exercise of that power of persuasion, O’Reilly said, requires “a very special person.” Bill, how about you?
O’Reilly would be a formidable politician, indeed. He has tongue tied and bewildered more than a few guests appearing on his show. His breadth and depth of understanding are superior to any person now contemplated as likely to run in 2016.
Whether O’Reilly is led into national politics, the issue he identified on New Year’s day is central to Americans’ (and Republicans’) future. In an open letter to Mitt Romney sent during the campaign, I explained that he desperately needed to demonstrate his interest in the welfare of those suffering economic hardship and in the superiority of capitalism over the welfare state. I recommended that he go to parts of the country hardest hit by the recession, meet with residents, and bring local government and national business leaders together in support of new enterprise zones initiatives. The idea would be to cut corporate and individual tax rates and regulation substantially in those zones to encourage business development and employment. I urged him to hold out that promise to those suffering and dependent on government as the only viable alternative.
Although it will take a very special person to persuade government dependents to become independent, we should not allow our present despair to become permanent. Throughout the ages two undeniable forces have uplifted mankind. They are what the vast majority of people yearn for in this life: freedom and free enterprise. The history of mankind is one of tyrants amassing controlling power, bringing a people to subjugation and then being overthrown by the servile who demand economic and political freedom. Concentrations of power, redistribution of income, and planned economies inevitably fail, leaving a legacy of mediocrity, lessened standards of living, and misery. People led to believe that government can replace the market are always disappointed. In time, people refuse to be enslaved and the bonds of governments collapse or evolve into forms more accepting of freedom (witness the former Soviet Union and Communist China).
With freedom comes economic opportunity. Economic opportunity leads to a liberating struggle, not a servile struggle to appease those in power who will determine access to a loaf of bread but to a struggle by competing entrepreneurs to invent a new kind of bread that the rest of us will think superior to the old. Adam Smith’s capitalism is moral precisely because it recognizes that the baker’s economic self-interest leads him to produce affordable and delectable bread that equates with the desires of those who would consume it. Rather than a government loaf, which is of one kind only consistent with a political recipe, for which competition is generally prohibited, and for which access is limited, the capitalist bakers’ loaves are affordable, come in all shapes, sizes, colors, textures, and ingredients, and are available to all because competition leads to a zealous effort by producers to satisfy popular demand down to the last open mouth. He who satisfies demand best reaps the highest financial return. His standard of living is elevated, but so too is that of all who purchased his bread. The drab and depressing environment of the socialist state is replaced with the dynamic and exhilarating environment of the free market.
Indeed, only free markets create wealth, all other forms dependent on government are parasitic and, so, grow in proportion to the host’s diminution. Whenever restrained by parasitic government, free markets labor with difficulty and dysfunction. Whenever unleashed, those markets rebound, leading to a world that while imperfect depends on meritocracy which serves as its own corrective force, ridding the imperfections. Pollution, for example, is less now than it was at the turn of the Twentieth Century, not because government somehow managed to remove pollutants from the environment but because pollution is economically inefficient; eliminating pollutants leads to greater productivity and less cost. Consequently, industry, not government, leads the way in inventing means to transform pollutants into beneficial forms of energy or material of commercial utility.
For those who now cling to welfare at the bottom rung of the economic ladder, they do so because hope and opportunity appear beyond their reach. The solution to the problem is to remove government barriers to accessible free markets that offer hope and opportunity. If I receive a government check as my primary or sole means of sustenance, I will be loath to part with that check unless convinced that by so doing I can improve my station beyond that which the government provides.
There are two ways I may be persuaded to relinquish the check. The first is if the government program fails to meet my needs (if the effective amount provided to me is less than the cost of satisfying my most basic needs). The second is if the economic opportunities surrounding me reveal a clear means for advancement whereby I can raise my standard of living beyond what the government can provide.
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If the government continues to refuse substantial reductions in size and scope and to tax and spend more, the unsustainable entitlements will eventually reach that tipping point where most welfare beneficiaries will find dependency on them an unlivable condition. If we wait for that occurrence, which is not far off, government and the market will be in very dire straits and dependents will suffer grievously. The only way out, which will inevitably occur to people (even in Europe), will be a free market unconstrained by government. In other words, the inevitable direction of history, in favor of freedom and free enterprise, will triumph over the intrigues of man (the lust for political power and control over everything). If we are wise, or if, as Bill O’Reilly hopes, a very special person arises with extraordinary persuasive powers, the Entitlement Society will see that there is no future for Greece, for California, for Maryland, or for the United States as a whole unless each restores the primacy of a free market and causes government to recede to the limits of power and scope defined by the Constitution.