If the problems of the welfare state are so obvious, why is it so popular? The answer has two parts. First, the minimum principle: Humans are conditioned to attempt to obtain as much as possible for as little effort. This is an evolutionary reasonable principle of action, which made us always be on the lookout for more efficient tools and methods of creation. However, we have a problem when this disposition meets with political power.
The reason? Because politics, being based on the coercive nature of the state, can promise benefits that seem to cost nothing to the recipients. From their point of view, this is amazing: no effort, yet profit. Sounds like a good deal, right? Bribery of voters, such as granting benefits or soon a universal basic income, are part of this, but also regulations that favor interest groups instead of the general population.
The majorities end up getting entranced by these unconditional promises and comparable “free” offers. Of course, someone has to pay for it in the end. In theory, this problem can be overcome by using reason and persuasion; in practice, the minimum principle is stronger. Politicians or rulers who advocate cuts in benefits will sooner or later be voted out of office or replaced. Otto von Bismarck, the famous German chancellor and inventor of the welfare state, logically called it “state socialism”. At the end of his life he drew the following conclusion:
“It is possible that once I am dead, our policy will perish. But state socialism is cramming its way through. Anyone who takes up this thought will come to the helm.”
The following, recurring pattern results from these insights:
1) Almost all people want to increase their standard of living. They want to do this in the simplest possible way.
2) The easiest way to increase your material standard of living is to take something away from others.
3) Most, however, find it difficult to simply march into a shop and take goods without payment or take their neighbor’s money.
4) It is easier for them to hire a third party to do the job, who will tell them that the whole thing is legal and who will also wrap the mantle of morality.
5) That is why people turn to the state. For the state is the only institution that is allowed to take away the fruits of others’ labor unpunished. However, this does not change the character of the process which, in the same society, would otherwise constitute theft or robbery (“Thou shalt not steal”). That’s the real “populism” nobody talks about.
6) Governments and politicians serve these wishes, otherwise they will be voted out or removed in favor of those who do so.
7) Gradually more and more social groups find out how to use the power of the state for their own purposes. The state, not economic activity, becomes the main source for raising your standard of living.
8) Fewer and fewer people end up working in the productive sector. Fight over distribution intensifies and public debt grows.
9) Finally, the state runs out of money. The resulting crisis leads to radical reforms or even systemic changes. The whole process starts anew.
Unfortunately, the dynamics described here also ensure that the state interferes more and more in private life. The possibility of leading one’s life according to one’s own taste, and thus human diversity par excellence, is becoming increasingly restricted. Since in democracies in particular, but not only there, almost every interest group tries to take their personal wishes into account, the number of laws, the tax burden and the national debt inevitably increase over time.
How do we solve this? By implementing a stable system, in which the rules are defined in a mutual contract that cannot be unilaterally changed. By running governments as efficiently as we run companies, giving them a balanced set of incentives. By providing citizens with maximum self-determination, through a voluntary governance framework and full freedom of exit.
In other words: By creating Free Private Cities.
Interested in Free Private Cities?
Then read our book: https://www.amazon.com/