I have this theory, there are lots of people out there who are less fortunate than me. I make an effort by making donations and thinking kinds thoughts, while I sit comfortably in my warm and cosy apartment. I watch people shuffling past my place pushing shopping trolleys with their groceries, or in many cases what appears to be their worldly possessions, and I empathise like crazy, while sitting safely behind the floor to ceiling glass windows that led out to my balcony.
Should I be feeling guilty? should I be doing more? do I owe them anything at all? Should the social welfare system be providing them more support? or should the free market be all that is needed to fix their ills?
I used to think like a bit of a socialist, or maybe more like Robin Hood, and that the rich should be taxed to buggery and all their riches reallocated to those less fortunate than the rest of us. On that basis I didn’t feel so bad about giving so much of my income in taxation to be ‘redistributed’.
But recently following a discussion with a close friend I began to think was I kidding myself, does the system owe those who don’t are aren’t able to support themselves, especially economically, anything at all?
If you listen to Friedman and others postulate that the core role of businesses is to maximise profits for their shareholders, and that free trade and capitalism is the only way forward. He says that no society is without greed, they are instead run on greed. He also stated that there is no role for big government in the social welfare agenda, small governments with little regulation (if any) are the way to go.
Now I used to get rather hot under the collar about the views of Friedman, no friend would want to raise the subject near me as I was likely to get all self-righteous. But on reflection, is taxing the rich and giving it to the poor and disadvantaged the way to go?
Are we making it better for people through social welfare? Or are we just creating a culture of dependence and supporting under achievement? Is taxing those that are creating wealth to give to those who lack the capacity to support themselves a good thing? Or are we better to encourage them to work for a living so they can support themselves? Or if we give income support or welfare, put a time limit or restrictions on it so that everyone is encouraged to participate in the generation of wealth?
Economists tell us that having a higher participation rate, i.e. people working, is a good thing and should be the aim of governments. Getting people who have disabilities or lower capacities to work, even if only part-time, decreases their dependence on social welfare and increases their contribution to wealth generation and the economy as a whole. Now surely that is a good outcome?
In my past I would have thought that making the less advantaged work was a bad thing, akin to slave labour. But on reflection, having a job has more than just economic benefits.
Does a job make someone feel better about themselves? does it exercise their minds? motivate them to strive to achieve?, give them new skills? allow them to save money and free them to make their own decisions?
To a degree I think having a job, even if part-time, does all of those things. I personally earn a living to pay for my lifestyle, at least that’s what I tell myself. In reality 9-5, and a bit more really, Monday to Friday, I am at work. Spending my time doing something which, at least in my case, I hope helps to deliver what my agency delivers. If I could earn a living by sitting on my balcony sipping coffee, eating cake, and soaking up the sunshine, well obviously I would choose that option. But in reality there are very few jobs that offer everything that we hope and dream of, at least not all of the time.
So back to my original question, is helping others, helping? or just making us feel better?
I think that we should be encouraged to help others, given tax breaks, awards, pats on the back, whatever. But I am probably leaning more toward it being an opt in system. On the other hand, some form of minimum social welfare net does appear appropriate to me, maybe a taxation system that taxes all people equally, rather than targeting those who have more on the assumption that they should pay more. There appear to be many benefits actually to flat taxes, see, http://suite101.com/article/economic-advantages-of-a-flat-tax-a263516
So why did you write this blog Capt? Because as usual, my mind was stimulated by a lively discussion with a close friend of mine, in which she quoted the views of her rampant capitalist son, which as usual, once I got over my moral outrage and feelings of intellectual inadequacy, prompted me to think.
And was this Capitalist Wunderkind wrong? Well he is, as my friend herself freely admits, a rampant capitalist. In the past I would have argued passionately against him, debated violently and vehemently, this is assuming my friend (who is no economist) quoted correctly, but what she say on reflection had some merit.
Have you changed your views? Well yes, but only slightly. I think that maybe a flat tax system, rather than current system which penalises the wealthy, could have some merit. That maybe people shouldn’t have an expectation that the system will provide, yes we should help those in need, but we should also help them to move back into the labour market, and not foster a culture of dependence. I’m not saying that some people will ever be able to make a full income from the market, but every dollar that can be earned is one less dollar that needs to be taxed and paid via social welfare.
Yep, give generously to charity, you may need it one day!
But I’m remain committed to the benefits of charity, we should all be encouraged to do as much as possible.
Will all this charity result in a world without greed? Well no, I would agree with Friedman it won’t, but maybe society isn’t as broken as I thought. I also agree with Friedman that ‘the system’ can’t really fully address or change social attitudes, or individuals behaviour. But if we can make it a positive and supported thing, educate our young about charity, maybe just maybe we can make this world a better place without assuming that taxing the hell out of people is the only solution.
And I’m with Mr wunderkind, we should have police, prisons, courts, and some regulations, because the world IS NOT a perfect place, full of perfect people. So we can’t rely on the market to enforce the expected minimum in moral standards, to me justice is the place of governments and laws.
Capt. Savage
(Ever changing, ever-growing, and that’s just my waistline and my fat head)
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