Since this essay was first presented at the historic Chautauqua Institution in 1995, the federal government has grown in size and scope. Today Congress spends nearly $4 trillion, the federal share of GDP has risen to 25 percent, and the U.S. debt exceeds $12 trillion. Washington has bailed out financial, insurance, and automobile firms while also taking control of the mortgage market. We are now more dependent on government for our health care, pensions, and future than ever before.

Politicians thrive on using other people’s money and promising free lunches. The growth of government has politicized life and weakened the nation’s moral fabric. Government intervention—in the economy, the community, and society—has increased the payoff from political action and reduced the scope of private action. People have become more dependent on the State and have sacrificed freedom for a false sense of security.

One cannot blame government for all of society’s ills, but there is no doubt that economic and social legislation, especially since the mid-1960s, has had a negative impact on individual responsibility. Individuals lose their moral bearing when they become dependent on government. Subsidies, bailouts, and other aspects of the “nanny state” socialize risk and reduce individual accountability. The internal moral compass that normally guides individual behavior will no longer function when the State undermines incentives for moral conduct and blurs the distinction between right and wrong.

More government spending is not the answer to our social, economic, or cultural problems. The task is not to reinvent government or to give politics meaning; the task is to limit government and revitalize civil society. Government meddling will only make matters worse.

If we want to help the disadvantaged, we do not do so by making poverty pay, restricting markets, prohibiting educational freedom, discouraging thrift, and sending the message that the principal function of government is to take care of us. We do so by eliminating social engineering and all kinds of welfare, cultivating free markets, and returning to our moral heritage.

At the beginning of the twentieth century there was no welfare state as we know it. Fraternal and religious organizations flourished. Total government spending was less than 10 percent of GDP, and the federal government’s powers were limited.

Immigrants were faced with material poverty, true, but they were not wretched. There was a certain moral order in everyday life, which began in the home and spread to the outside community. Baltimore’s Polish immigrants provide a good example. Like other immigrants, they arrived with virtually nothing except the desire to work hard and to live in a free country. Their ethos of liberty and responsibility is evident in a 1907 housing report describing the Polish community in Fells Point:

A remembered Saturday evening inspection of five apartments in a house [on] Thames Street, with their whitened floors and shining cook stoves, with the dishes gleaming on the neatly ordered shelves, the piles of clean clothing laid out for Sunday, and the general atmosphere of preparation for the Sabbath, suggested standards that would not have disgraced a Puritan housekeeper.

Yet, according to the report, a typical Polish home consisted “of a crowded one- or two-room apartment, occupied by six or eight people, and located two floors above the common water supply.”

Even though wages were low, Polish Americans sacrificed to save and pooled their resources to help each other by founding building and loan associations, as Linda Shopes noted in The Baltimore Book. By 1929, 60 percent of Polish families were homeowners—without any government assistance.

Dependent Not Self-Reliant

Today, after spending billions of dollars on anti-poverty programs since the mid-1960s, Baltimore and other American cities are struggling for survival. Self-reliance has given way to dependence and a loss of respect for persons and property.

The inner-city landscape is cluttered with crime-infested public housing and public schools that are mostly dreadful, dangerous, and amoral—where one learns more about survival than virtue. And the way to survive is not to take responsibility for one’s own life and family—which government intervention makes more difficult through occupational licensing, the minimum wage, and other impediments to self-help—but to vote for politicians who have the power to keep the welfare checks rolling.

Dysfunctional behavior now seems almost normal as people are shot daily and births out of wedlock are common. (The replacement of Aid to Families with Dependent Children with Temporary Assistance to Needy Families, as a result of the welfare reform during the Clinton administration, was a bipartisan recognition of the perverse incentives under AFDC. ) In addition to the moral decay, high tax rates and regulatory overkill have driven businesses and taxpayers out of the city and slowed economic development. It’s not a pretty picture.

In sum, the growth of government and the rise of the “transfer society” have undermined the work ethic and substituted an ethos of dependence for an ethos of liberty and responsibility. Virtue and civil society have suffered in the process, as has economic progress.

The Founding Fathers recognized that the nature of government is force, and they sought to limit its use to the protection of life, liberty, and property. Markets, both formal and informal, could then be relied on to bring about economic prosperity and social harmony.

In a free society the relationship between the individual and the State is simple. Thomas Jefferson said it well: “Man is not made for the State but the State for man, and it derives its just powers from the consent of the governed.” The fact that the Founders never fully realized their principles should not divert attention from the importance of those principles for a free society and for safeguarding the dignity of all people.

From a classical-liberal perspective, the primary functions of government are to secure “the blessings of liberty” and “establish justice”—not by mandating outcomes, but by setting minimum standards of just conduct and leaving individuals free to pursue their own values within the law. The “sum of good government,” wrote Jefferson, is to “restrain men from injuring one another,” to “leave them . . . free to regulate their own pursuits of industry and improvement,” and to “not take from the mouth of labor the bread it has earned.”

The Jeffersonian philosophy of good government was widely shared in nineteenth-century America. Indeed, Jeffersonian democracy became embodied in what John O’Sullivan, editor of the United States Magazine and Democratic Review, called the “voluntary principle” or the “principle of freedom.” In 1837 he wrote, “The best government is that which governs least . . . . [Government] should be confined to the administration of justice, for the protection of the natural equal rights of the citizen, and the preservation of the social order. In all other respects, the voluntary principle, the principle of freedom . . . affords the true golden rule.”

During the nineteenth century most Americans took it for granted that the federal government has no constitutional authority to engage in public charity (to legislate forced transfers to help some individuals at the expense of others). It was generally understood that the powers of the federal government are delegated, enumerated, and therefore limited, and that there is no explicit authority for the welfare state. From a classical-liberal, or market-liberal, perspective, then, the role of government is not to “do good at the taxpayers’ expense,” but “to prevent harm.”

The general-welfare clause of the Constitution cannot be used to justify the welfare state. That clause simply states that the federal government, in exercising its enumerated powers, should exercise them to “promote the general welfare,” not to promote particular interests. The clause was never meant to be an open invitation to expand government far beyond its primary role of night watchman.

Yet “Progressives” who sought to use government to do good (with other people’s money) overtook the vision of limited government. “Public charity” gradually became the norm. Unlike private charity, however, government transfers always involve coercion or the threat of force. Doing good with other people’s money without their consent is not a virtue but a vice—or, rather, a crime.

The transformation of the framers’ constitutional vision began with the Progressive Era, accelerated with the New Deal, and mushroomed with the Great Society’s war on poverty, which created new entitlements and enshrined welfare rights. Today, more than half the federal budget is spent on entitlements—the largest being Social Security, Medicare, and Medicaid. The newly passed health insurance legislation will add fuel to the fire of the welfare state. The $100 trillion in unfunded liabilities in Social Security and Medicare will place a heavy burden on future generations.

Freedom from Responsibility

During the transition from limited government to the welfare state, freedom has come to mean freedom from responsibility. Such freedom, however, is not true freedom but a form of tyranny, which creates moral and social chaos.

The modern liberal’s vision of government is based on a twisted understanding of rights and justice—an understanding that clashes with the principle of freedom inherent in the higher law of the Constitution. Welfare rights, or entitlements, are “imperfect rights,” or pseudo-rights; they can be exercised only by violating what legal scholars call the “perfect right” to private property. Rights to welfare—whether to food stamps, public housing, health care, or business subsidies—create a legal obligation to help others. In contrast, the right to property, understood in the Lockean sense, merely obligates individuals to refrain from taking what is not theirs. For the modern liberal, justice refers to “social (or distributive) justice”—an amorphous term, subject to all sorts of abuse if made the goal of public policy, as F. A. Hayek has aptly noted in The Constitution of Liberty and other writings. As a norm for action, the concept of “social justice” leads to uncertainty and competition for government favors. The result is bigger government and corruption. The cost of the pursuit of social justice is the loss of freedom. Instead of creating certainty by limiting the range of government actions under a just rule of law, the modern “liberal” State has produced discord. Indeed, when the role of government is to do good with other people’s money, there is no end to the mischief government can cause.

Many Americans seem to have lost sight of the idea that the role of government is not to instill values but to protect those rights that are consistent with a society of free and responsible individuals. Everyone has a right to pursue happiness, but no one has the right to do so by depriving others of their liberty and their property.

When democracy overreaches, there is no end to the demands on the public purse, and the power of government grows. The Founding Fathers sought to create a republic with limited government, not an unlimited democracy in which the “winners” are allowed to impose their will and vision of the good society on everyone else. In such a system politics becomes a fight of all against all, like the Hobbesian jungle, and nearly everyone is a net loser as taxes rise, deficits soar, and economic growth slows.

Bankrupt in Every Way

Most voters recognize that the welfare state is inefficient and has a built-in incentive to perpetuate poverty. It should be common sense that when government promises something for nothing, demand will grow and so will the welfare state. That has clearly been the case with health care spending under Medicaid and Medicare—and it will be the case with Obamacare. For all the money spent on fighting poverty since 1965, the official poverty rate has remained roughly the same, about 14 percent. Government waste is only part of the problem; the welfare state is also intellectually, morally, and constitutionally bankrupt.

Intellectually bankrupt. It is intellectually bankrupt because increasing the scope of market exchange, not welfare, is the viable way to alleviate poverty. The best way to help the poor is not by redistributing income but by generating economic growth and removing impediments to self-help and mutual aid. Poverty rates fell more before the war on poverty when economic growth was higher.

The failure of communism shows that any attenuation of private property rights weakens markets and reduces choice. Individual welfare is lowered as a result. The welfare state has attenuated private property rights and weakened the social fabric. When people look to government to provide retirement income, health care, mortgage guarantees, and various business subsidies, private initiative gives way to collectivist thinking. Economic decisions become politicized, and people lean more and more on government.

Morally bankrupt. In addition to being inefficient and intellectually bankrupt, the welfare state is morally bankrupt. In a free society people are entitled to what they own, not to what others own. Yet under the pretense of morality politicians and advocacy groups have created rights out of thin air. The rights to education, health care, housing, a minimum wage, and other “necessities” are now deemed sacrosanct. Politicians have become the high priests of the new State religion of welfare rights and self-proclaimed “benefactors” of humanity. If there is a problem—any problem—Congress is there to solve it, regardless of whether the Constitution gives it the power to do so.

The truth is, “the emperor has no clothes.” Politicians pretend to do good, but they do so through coercion not consent. Politicians put on their moral garb, but there is really nothing there. Government benevolence, in reality, is a naked taking. Public charity is forced charity, or what the great French liberal Frédéric Bastiat called “legal plunder.”

Constitutionally bankrupt. The welfare state is also constitutionally bankrupt; it has no basis in the framers’ constitution of liberty. By changing the role of government from a limited one of protecting persons and property to an unlimited one of achieving “social justice,” Congress, the courts, and presidents have broken their oaths to uphold the Constitution.

In contrast Congressman Davy Crockett, who was elected in 1827, told his colleagues, “We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right to appropriate a dollar of the public money.”

Polls show that most Americans distrust government and that more young people believe in UFOs than in the future of Social Security. Those sentiments express a growing skepticism about the modern welfare state. President Obama’s election does not mean most Americans have abandoned the principles of the Constitution and are in a rush to move toward a socialist state. What can be done to meet the challenge of safeguarding freedom?

What Can Be Done

First and foremost, we need to expose the intellectual, constitutional, and moral bankruptcy of the welfare state. We need to change the way we think about government and restore an ethos of liberty and responsibility. The political process will then be ready to begin rolling back the welfare state.

Although Americans have grown accustomed to the welfare state, its disappearance would strengthen the nation’s moral fabric and reinvigorate civil society. We should end the parasitic State—not because we want to harm the poor, but because we want to help them help themselves.

The federal government has become bloated and unable to perform even its rudimentary functions. It is awash with debt and is endangering America’s future. The collapse of communism and the failure of socialism should have been warning enough that it is time to change direction.

It is time to limit the size and scope of government and to get the State out of the business of charity. Private virtue, responsibility, and benevolence can then grow naturally along with civil society—just as they did more than 150 years ago when Alexis de Tocqueville wrote in his classic Democracy in America:

When an American asks for the cooperation of his fellow citizens it is seldom refused, and I have often seen it afforded spontaneously and with great good will. . . . If some great and sudden calamity befalls a family, the purses of a thousand strangers are at once willingly opened, and small but numerous donations pour in to relieve their distress.

The role of government in a free society is not to legislate morality—an impossible and dangerous goal—or even to “empower people”; the role of government is to allow people the freedom to grow into responsible citizens and to exercise their inalienable rights.

The modern liberal’s idea of “good government” has divorced freedom from responsibility and created a false sense of morality. Good intentions have led to bad policy. The moral state of the union can be improved by following two simple rules: “Do no harm” and “Do good at your own expense.” Those rules are perfectly consistent in the private moral universe. It is only when the second rule is replaced by “Do good at the expense of others” that social harmony turns into discord as interest groups compete for scarce resources at the public trough.

These questions are fundamental to human life. In this essay we discuss some ways societies have organized themselves and consider the consequences of such efforts. This allows us to conclude that a society based on secure private property rights, trade, and the division of labor is not only economically efficient, it is morally superior to all other types of organization.

The Welfare State

Let us first consider the welfare state. In theory it aims to use government force to redistribute property in order to achieve a more equal consumption of economic goods. Advocates of this manner of social organization argue that it is based on the ideal of charity. However, this cannot be so since the logical implication of this form of organization is not the promotion of charity but the promotion of theft. Genuine charity involves the voluntary sacrifice of the giver. When the force of government is employed to redistribute property, there is no voluntarism in it. Rather, there is only forced sacrifice, which is the essence of theft.

Fundamentally, the welfare state is a type of social organization in which some people subsist off the fruits of other people’s labor by the use or threat of force. There are three ways to enjoy the fruits of others’ labor. The first is to receive legitimate charity. In this case, the producer has voluntarily parted with his product for the benefit of someone else. The second means is through voluntary exchange. In this case someone must make an attractive offer of something desired by the producer. The third method is to use violence or the threat thereof to appropriate the product. This form of getting what you want is especially pernicious when it is perpetrated by government, for then the victim has little recourse. (Fraud is a subtle form of theft—that is, of obtaining someone else’s product on terms other than those he would agree to.)

Theft and fraud cannot be logical foundations for economic behavior because they suffer from the fallacy of composition. It is possible for a single individual to prosper as a looter, and indeed it may be possible for many people to prosper as a robber band. However, it is impossible for everyone to prosper as thieves since all thieves must have someone to steal from. The problem with thieves is that they do not produce anything, and if everyone is a thief then there is nothing to steal.

For this reason the welfare state rests on a very sandy foundation. It assumes there will always be something that can be looted from a productive class. Moreover, it assumes the productive class will continue to produce valuable goods and services even as they are being victimized. Pay-as-you-go entitlement programs like Social Security and Medicare are built on this shaky assumption. It relies on the notion that future generations will rise to meet the claims of older generations. In other words, to use Ayn Rand’s metaphor, the welfare state assumes that the harder it presses down on Atlas’s shoulders, the harder Atlas will work to hold the world aloft.

As an alternative, people can live as the beneficiaries of charity, but this too is unsustainable. There are certainly legitimate cases in which charity and gift-giving are appropriate, such as when someone suffers some unforeseeable calamity or when someone wishes to promote the interests of his friends and family members. When people get married or begin their families, for example, gifts are often very helpful and much appreciated. There are limits, however, to our charitable impulses, limits to our ability to discern need, and limits to our ability to feed others before we feed ourselves. In addition, it should be noted that the purpose of true charity is to promote the independence of the recipient. In this regard, charity is a noble, benevolent institution that is quite appropriate to a society of free, responsible, flourishing people.

But even charity can be carried too far. When someone expects to enjoy his bread by the sweat of another’s brow, he becomes what Rand called a moocher. Such a person claims the right to the fruits of others’ labor solely on the basis of his alleged need. He seeks to make himself dependent on someone else’s labor and is not interested in his own independence.

Mooching too is unsustainable because it presupposes that something has been produced. Therefore, we cannot all expect to live this way. Mooching as such provides no way for goods to be produced and in fact encourages the wasteful use of resources. If someone wishes to depend entirely on the kindness of strangers, he or she must invest in ways to elicit that kindness. In his 2007 book, Discover Your Inner Economist, Tyler Cowen points out tragic examples of places in India where people fight over begging turf or actually pay to have limbs amputated in order to increase their begging income. To borrow the terminology of William J. Baumol, these are exercises in destructive entrepreneurship. They create no new value; instead, they destroy value in an effort to appear more dependent and helpless so as to effectively attract the sympathies of others.

This has implications for how we understand what is known as paternalism. As we have already seen, proper charity treats people with dignity and directs them toward independence rather than dependence. Examples from fatherhood (or motherhood) are appropriate. The right goal for a father is not to give his children everything they want or to see that they are blissfully happy all the time. Rather his goal is to help his children flourish as independent, responsible people in an imperfect world. At every stage in their development, he is trying to help them achieve new levels of independence. When a young adult is capable of interacting socially through the process of voluntary exchange—thereby increasing his own range of opportunities by increasing opportunities for others—then the parenting has been a success. In other words, proper human life includes production and exchange. While there are cases when such autonomy cannot be achieved due to severe disability, nevertheless, the affirmation of human dignity and independence remains the goal as far as it can be achieved.

Production, Autarky, and Trade

Another way to acquire wealth is to produce it yourself and ask your neighbors for nothing; however, total individual autarky is impossible in its logical limit. There is no such thing as an autonomous, self-made person in a market economy, and people are social creatures not because of disposition only but out of necessity. It is not a psychological propensity to truck and barter that leads us to exchange, but a praxeological truth regarding the vast increase in productivity that arises from specialization, division of labor, and division of knowledge.

Leonard E. Read’s classic example showed that no single individual knows how to make something as simple as a pencil. This fundamental insight applies to a vast range of goods. Any kind of existence greater than that of the lowest animals requires exchange, and as exchanges increase, so too do the division of labor and division of knowledge.

Even before Adam Smith, economic thinkers had been well aware that trade creates wealth by making us more productive. We argue, however, that this is only part of the story. The criticism of homo economicus as an autistic and antisocial maximizer of pecuniary profit to the exclusion of all else is simplistic and naive. The economic person cannot take care of himself without taking care of others; indeed, the person who wishes to maximize his own profit can only do so by thinking constantly and deeply about the needs and wants of others. To be sure, homo economicus does not have to care about the people with whom he interacts in a deep moral sense. But this does not stop him from caring about them in a practical sense.

The Bible enjoins us to feed the hungry and clothe the naked, among other charitable endeavors. We do this most effectively through the market process. Indeed, the very act of buying low and selling high moves resources to areas where they are more valuable. While the entrepreneur does not have to know about the people he serves, he can only expand his own set of opportunities by creating opportunities for them.

In a lecture at the 2009 Austrian Scholars Conference at the Ludwig von Mises Institute, Rabbi Daniel Lapin made this point explicitly by considering the economic and social function of peddlers, people who would go through towns buying and selling. The good peddler was better off when he left town, but he only found himself in this happy circumstance by making the townsfolk better off as well. To borrow Lapin’s example, a peddler might show up at a house and ask if the residents had anything they were willing to sell. Suppose for a moment that they said yes and pointed to an old table with a wobbly leg that they were planning to throw away. The peddler might offer to buy it for $5, which they would gladly accept. They would now be better off by $5. At this point the peddler could repair the table and find another family that was planning to buy a similar table for $20. If the peddler offered to sell them the repaired table for $15, they would find themselves better off. And so it goes: With every transaction the peddler makes people better off and enables them to feed and clothe themselves. In a word, the peddler makes a direct contribution to their ability to flourish.

Of all the ways for societies to organize themselves, the free market is the only system that is simultaneously sustainable, prosperous, and conducive to human flourishing. We cannot live together as a community of thieves, nor could we sustain ourselves as a community of beggars, moochers, or wards of charity. Further, anything that can be properly defined as a human existence must necessarily rely on specialization, trade, and division of labor. This has the happy consequence of maximizing our ability to do well and do good by our neighbors. When we focus our attention on production and trade, we necessarily feed the hungry and clothe the naked because self-interest properly understood requires a degree of focus on the wants and needs of others that is conspicuously absent from other forms of social organization. To adapt a phrase from Harvard economist Claudia Goldin, life in the pre-market world was nasty, brutish, and short. In the world of free enterprise, life is long, healthy, and rich.

It was not always this way. Up until the 1930s the Supreme Court ruled unconstitutional many state, local, and congressional acts. Among them: minimum-wage laws, licensure laws, and much of FDR’s New Deal legislation.

President James Madison vetoed a public-works bill, saying, “Having considered the bill this day presented to me . . . which sets apart and pledges funds ‘for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,’ I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution. . . .”

In vetoing a bill for charity relief, President Grover Cleveland said, “I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.”

President Franklin Pierce’s 1854 veto of a measure to help the mentally ill read, “I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

That Was Then, This Is Now

For the better part of a century Congress, the president, and the Supreme Court have run roughshod over the constitutional limitations placed on them, using the pretense that their actions are constitutional under the General Welfare Clause or the Commerce Clause. Public complicity or ignorance allows them to get away with it. Wickard v. Filburn, a 1942 Supreme Court case, is a particularly egregious use of the Commerce Clause. Filburn was charged with exceeding his wheat acreage allotment in violation of the Agricultural Adjustment Act (AAA). He argued that since the wheat he grew was for his own consumption and not involved in interstate commerce, the AAA didn’t apply to him. The Court disagreed, saying that since Filburn grew wheat for his own use, he would not be buying it in the market; therefore his actions did affect interstate commerce. That ruling made it possible for Congress to escape just about every limit placed on it by the Constitution. With such reasoning there is absolutely nothing anyone can do that does not, in one way or another, affect interstate commerce and therefore give Congress the grounds to regulate it.

By permitting Congress to regulate so much of our lives under the Commerce Clause, the Supreme Court has changed the federal government from one of limited and enumerated powers to one with few exceptions to its power.

This vision in part provides the case for Congress to control our health care system. Some supporters of mandated health insurance assert that such a mandate lies within the power of Congress to regulate interstate commerce. Others have argued that the General Welfare Clause bestows that power. Yet others have pointed out that most states require car insurance, every challenge to which has failed.

The term “general welfare,” found in the introduction to the enumerated powers of Article I, Section 8, was never intended to extend Congress’s power to regulate, tax, and spend. James Madison, the acknowledged father of our Constitution, said, in a letter to Edmund Pendleton, “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one subject to particular exceptions.” He virtually repeated himself in a letter to James Robertson: “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” Thomas Jefferson, in a letter to Albert Gallatin, said, “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.”

What about mandatory car insurance? To operate a motor vehicle one must obtain permission from the state, a driver’s license. One who engages in that licensed activity must comply with the conditions of the licensing body, which can include, among other things, being old enough, passing a driver’s test, and purchasing auto insurance. The driver simply agrees to the conditions. Auto insurance is a special requirement, not a general one like Congress’s mandate that everybody sign a contract with a health insurer or face fines and/or imprisonment.

What about the penalty Congress proposes for companies and individuals who refuse to provide or buy health insurance? This is unconstitutional on its face. Article I, Section 8, giving Congress the power “To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” is for the purpose of raising revenue to pay for the enumerated responsibilities of Congress. It was not written for the purpose of permitting Congress to punish those who did not establish congressionally mandated contracts.

Madison, in arguing for ratification of the Constitution, wrote Federalist 45, titled “Alleged Danger From the Powers of the Union to the State Governments Considered.” He explained, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

That vision is completely the opposite of what exists today. One wonders, what constitution did our congressmen and President swear to uphold and defend?

Consider this cogent observation from a source that may surprise you: “The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is in violation of the traditions of America.”

Those were not the words of a nineteenth-century president. They came from the lips of our 32nd chief executive, Franklin Delano Roosevelt, in his state of the union address on January 4, 1935. A moment later he declared, “The Federal Government must and shall quit this business of relief.”

We all know that it didn’t. Indeed, thirty years later Lyndon Johnson would take “this business of relief” to new and expensive heights in an official “War on Poverty.” Another 30 years and more than $5 trillion in federal welfare later, a Democratic president in 1996 would sign a bill into law that ended the federal entitlement to welfare. As Ronald Reagan observed long before it dawned on Bill Clinton, “We fought a war on poverty, and poverty won.”

What Reagan instinctively knew, Bill Clinton finally admitted, FDR preached but didn’t practice, and Barack Obama seems unwilling to learn is that government checks come with some nasty strings attached. They encourage idleness and irresponsibility, blunt personal initiative, break up families, produce intergenerational dependency and hopelessness, cost taxpayers a fortune, and yield harmful cultural pathologies that may take generations to cure.

The failure of the dole was so complete that one journalist more than a decade ago posed a question to which just about everybody knows the answer and the lesson it implies. “Ask yourself,” wrote John Fund of the Wall Street Journal, “If you had a financial windfall and wanted to help the poor, would you even think about giving time or a check to the government?”

The Anti-Poverty Nonprogram

Welfare statists dismiss the men who held the presidency during the nineteenth century as heartless and uncaring. Even during the depressions of the 1830s and the 1890s, Presidents Martin Van Buren and Grover Cleveland never proposed that Washington, D.C., extend its reach to the relief of private distress broadly speaking, and they opposed even the smallest suggestions of that kind. Now our compassionate government in Washington dispenses trillions of dollars not just to individuals but to companies as well (especially large, politically well-connected ones).

Let me underscore that when I speak of government “welfare” and its awful consequences, I do not mean only the checks for Grandma. I mean checks for Goldman Sachs and General Motors too.

For the most part, the presidents of the 1800s did mount a war on poverty—the most comprehensive and effective ever mounted by any central government in world history. It just didn’t have a gimmicky name like “Great Society,” nor did it have a public-relations office and elitist poverty conferences at expensive seaside resorts. It wasn’t offered in the form of subsidies to business and sold as a “stimulus” for us all. If you could have pressed them for a name, most if not all of those early chief executives might well have said their anti-poverty program was, in a word, liberty. This word meant things like self-reliance, hard work, entrepreneurship, the institutions of civil society, a strong and free economy, and government confined to its constitutional role as protector of liberty.

And what a poverty program liberty proved to be! In spite of a horrendous civil war, half a dozen economic downturns, and wave after wave of impoverished immigrants, America progressed from near-universal poverty at the start of the nineteenth century to within reach of the world’s highest per capita income a hundred years later. The poverty that remained stood out like the proverbial sore thumb because it was now the exception instead of the rule. In the absence of stultifying government welfare programs, our free and self-reliant citizenry spawned so many private, distress-relieving initiatives that American generosity became one of the marvels of the world.

Most Americans once understood these essential verities: Government has nothing to give anybody except what it first takes from somebody (that includes health care), and a government big enough to give the people everything they want is big enough to take away everything they’ve got.

In his first inaugural address Jefferson gave us a splendid summation of what government should do.  It did not describe welfare programs but rather, “A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

A similar view was held by James Madison, a key figure in the construction of the Constitution, a prime defender of it in the Federalist Papers, and our fourth president. “Charity,” said Madison, “is no part of the legislative duty of the government.”

Jefferson, Madison, and almost all of the succeeding twenty presidents of the nineteenth century were constrained by this view of the federal government, and most of them were happy to comply with it. When doing so, they were faithful to their charge. They were true poverty fighters, because they knew that if liberty were not preserved, poverty would be the least of our troubles.

Meanwhile, the poor of virtually every other nation on the planet were poor because of what governments were doing to them, often in the name of doing something for them: taxing and regulating them into penury, seizing their property and businesses, persecuting them for their faith, torturing and killing them because they held views different from those in power, and squandering their resources on official luxury, mindless warfare, and wasteful boondoggles. America was about government not doing such things to people—and that one fact was, all by itself, a powerfully effective anti-poverty, pro-prosperity program.

So here we are in the year 2010 burdened with an administration eager to toss time-tested wisdom and experience to the wind. It asks Americans to flee from their heritage and sign up for a nanny state drowning in red ink and broken promises.

We have a lot of work to do (or, more appropriately, to undo).

The market is a complex order. A thief needs only violence to get rich; a cattle trader needs more things, such as order and justice; in other words, an environment where transactions can be safely completed. The market does not obey “the law of the jungle”—just the opposite: The law of the jungle prevails where there are no markets. Peaceful exchange with secure property rights is more productive than widespread robbery, but many criticize the rich regardless of the path they followed to opulence, as if they all had achieved their wealth illicitly. Apparently, George Bernard Shaw’s fallacious quotation still rules the day: “I am a gentleman: I live by robbing the poor.”

The most common way to make a fortune in a free market is organizing a successful company. How can this company succeed and pay handsome salaries? In a free market there is only one answer: by making something consumers appreciate. Under such circumstances, the businessman’s wealth is linked to the social utility of his labor, a utility proved by consumers who buy because they too benefit from the deal.

Of course, one can always make money breaking the law, as thieves and swindlers do. And there is also another method that, while unjust, does not always appear that way: to become rich by avoiding competition or gaining other privileges that only the state can grant.

Monopolies and protectionism exemplify these strategies. Both became the enemies of classical liberals, who argued in favor of the free market and against the privileged groups that injured the majority of the population by imposing high prices and limiting the ability to choose.

Alongside the state’s expansion during the past century, opportunities to profit from using the state to avoid competition have proliferated. Through the apparatus of government, lobbying groups have obtained power over their markets, subsidies, and every other kind of anticompetitive protection.

Blocking market activity breaks the connection between social needs and the supply of goods and services aimed at satisfying them. But it may turn out to be profitable: Fortunes have originated in anti-competitive privileges bestowed by political power or made possible by its regulations. In such cases it is fair to distrust the wealthy.

Often, however, no distinction is made when it comes to criticizing rich people. They all appear reproachable, and few dispute the need to impose on them specific burdens and progressive tax scales aimed at dealing with the “problem” of inequality. The state must force-fit all of us into a Procrustean bed.

Internal Robin Hood Service

Many thus would have the state play Robin Hood, robbing from the rich (no matter how they got the money) and giving to the poor. I do not dispute that this legend is open to several interpretations, including a plausible libertarian one. Robin Hood can be seen as an enemy of tyranny and the abuse of law, a friend of the people, a man who robbed tax collectors and privileged aristocrats, returning the money to the victimized peasants. This is a very appealing version of the story. My objection, however, is directed exclusively at the danger of casting the modern state in the powerful image of a hero seeking redress and justice. It uses this image to legitimize its vast distribution operations and to show its supposed liberality.

The notion of the state playing Robin Hood has two weaknesses. First, there is no way to prove that if the authorities take a dollar by force from a rich person and give it to a poor person, the collective happiness increases. As Anthony de Jasay says, the only way to solve the problem of comparisons between individuals is for the state to impose its preferences on the community. The outcome of these operations, in the words of Bertrand de Jouvenel, is not a redistribution of income from rich to poor but from everyone to the state.

The second weakness in the state-as-Robin-Hood argument is that it only works if the treasury is small. The state in the days of Robin of Locksley was limited, but when it takes on modern proportions, no matter what Barack Obama may say, it can no longer finance itself only by taking money from the very rich, who are by definition a minority. The state might pretend to do this, but in practice its only financing option is to take money from everyone.

One of the main arguments for the growth of the modern state is the fight against inequality. Some claim that without the state’s intervention, human beings would abandon the poor to their own devices and charity would prove both insufficient and insulting.

The allegation that, without the state’s helping hand, people would ignore their fellow human beings in poverty can’t stand even a cursory analysis. From the dawn of civilization, examples to the contrary abound. Voracious tax increases have not managed to extinguish the humanitarian impulse.

Charity is a noble and deep human feeling. Why is it dismissed and devalued? Why is it deemed humiliating, while state aid is viewed as a display of compassion?

Virtue Requires Liberty

Helping our fellow man and political distribution are very different actions. Let us take as an example the noble conduct of the Good Samaritan, a beautiful portrait of humanitarianism. A basic assumption—in truth, an essential element—of the parable is liberty. The Good Samaritan’s virtue stems from the fact that he acts voluntarily; if a centurion forced him to help the poor Jew, beaten and abandoned in the road, the parable would have made no sense. Virtue, in effect, demands liberty.

In this example, we see the demoralizing effect of state expansion. Many nongovernmental organizations, particularly in Europe, do not ask citizens to freely and voluntarily hand over a fraction of their income. Instead, they ask the state to extract sums from taxpayers’ pockets. Amazingly, the sacrifice of liberty and responsibility on the altar of political power is praised, while providing free and voluntary aid to one’s fellow man is dismissed as humiliating charity.

The fact is that where markets are permitted to work, fewer people need economic assistance of any kind. The centuries since Adam Smith wrote The Wealth of Nations have provided ample evidence to support his message: Free trade and security in one’s rights are the pillars on which individuals can improve their condition. Despite this, many people criticize the market economy and allege that it encourages marginalization. It is common to read statistics showing great poverty and accusations that market-oriented countries like the United States are infernos of inequality.

Not Condemned to Poverty

The problem with such statistics is that they are based on surveys that fail to track the same people through time. Thus they cannot provide the most important piece of information: Are the poor condemned to poverty or are they able to rise out of it? The statistics, in short, rarely measure social mobility. But when they do, they show that the poor have large possibilities of escaping the lowest percentile of income distribution. It is in fact more probable that a very poor person in America will climb to the highest income rung than that he will remain in poverty. One could argue that the data indicate mobility but not improvement, given that there is always a poorest 20 percent. Incomes in an advancing society like the United States, however, are not constant but rather are increasing—despite pervasive government interference—and this, not welfare, offers everyone the opportunity and the incentive to progress.

State-Sanctioned Inequality

Socialists and interventionists of all parties have reluctantly ended up accepting the market, but they claim government intervention is necessary to tackle inequality. However, inequality is only objectionable if there is a lack of competition and freedom. The modern state’s onerous and inefficient distributive structures, ostensibly built to wipe out inequality, have had perverse effects and a demoralizing impact on society, pushing different groups to fight over public favors. It is an out-of-control process in which, as the German liberal Ludwig Erhard said, everyone puts his hand in the pocket of everyone else.

The clamor from interventionists against inequality morphs into a clamor for a larger and larger state. This path leads to the loss of liberty and a distortion of both democracy and justice. It distorts democracy because, by attempting to solve inequality, it removes limits to power and expands the field of state action. It distorts justice because the only way to solve inequality politically is for the state to have the power to treat individuals unequally. Thus the struggle to eliminate inequality ends up destroying the most important form of equality for an open society: equality before the law.

The Inca Empire emerged out of a small tribe in the Peruvian mountains in the twelfth and thirteenth centuries. The fourteenth and especially the fifteenth and early sixteenth centuries saw their expansion into a great imperial power with control over a territory that ran along the west coast of South America and included much of present-day Peru, Ecuador, Bolivia, Chile, and parts of Argentina and Colombia. The Incas were brought down in the 1530s by the Spanish conquest under the leadership of Francisco Pizarro.

The Incas ruled through a cruel and pervasive system of command and control over everyday life. Baudin explained:

Every socialist system must rest upon a powerful bureaucratic administration. In the Inca Empire, as soon as a province was conquered, its population would be organized on a hierarchical basis, and the [imperial] officials would immediately set to work. . . . They were in general in charge of the preparation of the statistical tables, the requisitioning of the supplies and provisions needed by their group [over whom they ruled] (seeds, staple foods, wool, etc.), the distribution of the production of the products obtained, the solicitation of assistance and relief in case of need, the supervision of the conduct of their inferiors, and the rendering of complete reports and accounts to their superiors. These operations were facilitated by the fact that those under their supervision were obliged to admit them to their homes at any moment, and allow them to inspect everything in their homes, down to the cooking utensils, and even to eat with the doors open. . . .

The Inca bureaucracy cast its net over all those that it ruled and soon transformed them into docile and obedient subjects through a “slow and gradual absorption of the individual into the state . . . until it brought about the loss of personality. Man was made for the state, and not the state for the man,” Baudin said. The Incas tried to banish “the two great causes of popular disaffection, poverty and idleness. . . . But by the same token, they dried up the two springs of progress, initiative and provident concern for the future.” The Inca government did all the thinking and planning for their subjects, with the result that there was a “stagnation of commerce . . . lack of vitality and the absence of originality in the arts, dogmatism in science, and the rareness of even the simplest inventions.”

This inertia was fostered through the institutions of the welfare state. “As for the provident concern for the future,” Baudin asked, “how could that have been developed among a people whose public granaries were crammed with provisions and whose public officials were authorized to distribute them in case of need? There was never a need to think beyond the necessities of the moment.”

In addition, the Inca welfare state undermined the motive for charity and any personal sense of responsibility for family or community:

But what is even more serious is that the substitution of the state for the individual in the economic domain destroyed the spirit of charity. The native Peruvian, expecting the state to do everything, no longer had to concern himself with his fellow man and had to come to his aid only if required by law. The members of a community were compelled to work on the land for the benefit of those who were incapacitated; but when this task had been performed, they were free from all further obligation. They had to help their neighbors if ordered to do so by their chiefs, but they were obliged to do nothing on their own initiative. That is why, by the time of the Spanish conquest, the most elementary humanitarian feelings were in danger of disappearing entirely.

Life was also reduced to a joyless existence of uniformity, security, and order that was imposed and guaranteed by the Inca bureaucracy. Baudin tried to answer the question: Was the average person happy under the rule of the Incan kings?

He labored contently for a master whom he held to be divine. He had only to obey, without going to the trouble of thinking. If his horizon was limited, he was unaware of it, since he knew no other; and if he could not raise himself socially, he in no way suffered on that account, for he did not conceive that such a rise was possible. His life followed its peaceful course, its monotony broken by periodic holiday festivals and by such events as marriages, military service, and compulsory labor service, all in strict accordance with regulations. The Indian had his joys and sorrows at fixed dates. Only illness and death persisted in escaping government regulation. It was a negative kind of happiness, with a few adversities and a few great joys. The empire produced what D’Argenson called the “menagerie of happy men”. . . . In the Inca state only the members of the ruling class and more especially the chief, could live a full life; outside of him and his family, men were no longer men, but cogs in the economic machine or figures in the official statistics.

In our own time the plague of bureaucracy has been no different. Those who man the bureaucratic agencies supervise and oversee many, if not most, of our economic affairs from the processes of production to the stage at which we actually use the goods that are manufactured. They pry into and then proceed to regulate our personal and family affairs. They take responsibility for our welfare and our happiness, and try to guard us against all the trials and tribulations of everyday life. They watch over our schooling, care for us when we are ill, find work for us if we are unemployed, and pay us when we are without a job. They are concerned with our mental health, and police what we ingest. They take an interest in the things we read and the amusements and leisure activities we indulge in.

Our Freedom Weakened

One freedom after another has been incrementally abridged, weakened, and then taken away with the bureaucracy now responsible for what had previously been in the domain of the individual. But in this, too, the process has been no different from what occurred under the Incas. Louis Baudin pointed out that “The poison [of growing bureaucratic paternalism] was not given to the Indians in massive doses that would have provoked a reaction, but was administered drop by drop, until it brought about the loss of personality. . . . And whoever has formed the habit of passive obedience ends by being no longer able to act for himself and comes to love the yoke that is laid upon him. Nothing is easier than to obey a master who is perhaps exacting, but who rules over all the details of life, assures one’s daily bread, and makes it possible to banish all concern from the mind.”

In fact, the human spirit is not as easily and permanently broken as the Incas believed they had succeeded in doing in their empire centuries ago. There is something also inside the individual that cherishes self-expression and retains the wish to be free. This inner force, if awakened, assures that liberty will never be completely extinguished.

In my October 2005 column, “When the Supreme Court Stopped Economic Fascism in America,” I remarked in passing that “Much of the urban youth of America were rounded up and sent off to national forests for regimentation and mock military-style drilling as part of the Civilian Conservation Corps (CCC).” A reader has reminded me that young men participated voluntarily and were not compelled to join, as my phrasing suggested.

My dad carefully sifted through the various catalogs he received, trying to determine what mix of saplings he wanted to purchase. While I was away at graduate school and, later, working, he planted a number of different types of trees: apples of various flavors; persimmons suitable to midwestern winters; even Asian pears. Each spring and summer he sprayed the growing crop to ward off the blights and pests that love to infest what people desire to consume.

Spring in Iowa is often quite wet. (Anyone who remembers the Great Flood of ’93 can attest to that.) But as many in similar climates pronounce with grave wisdom, wait a day or two and the weather will change. One summer after my father had purchased a new apple tree, the plentiful rain that visited earlier in the season vanished into the nether world. Wherever that precipitation fell, it did not fall on central Iowa.

Not wanting to see his investment or his time go to waste, my dad set up the drip hose around the latest addition to his horticultural flock. With the extra attention he devoted to the tree, he hoped it would survive long enough to produce fruit. As the mini-drought progressed, the lush grass surrounding the trees faded and dried. Undeterred, the newbie apple continued to sprout new leaves and retain its verdant color.

All appeared to be going well.

As is commonplace in the wide plains of tornado country, a thunderstorm mounded high one night. The dry spell suffered a modest break with the arrival of lightning and rain and wind. While any rain was welcomed, the amount that reached the ground barely made a dent in the deficit.

The morning after the blow, my dad went out to inspect the orchard. To his considerable dismay, the young tree he had lavished such effort on had tumbled to the ground, its foliage already shriveling on the branches.

Only after observing the flattened tree stretched out in the dormant grass, its long, stringy roots dripping clumps of dirt, did my father realize his mistake. He had kept the drip hose delivering a constant supply of life-sustaining water to help the delicate plant settle into its new abode, a transition that many plants do not handle well. In doing so, he had, indeed, assisted the tree in retaining its leaves and growing throughout its young existence.

But with that steady drip-drip of plentiful water nourishing it, the apple tree had extended its roots horizontally to follow the easy path of the water spreading through the topsoil. The other trees — some not much larger than the latest arrival — had not been quite so pampered and protected from the drought afflicting Iowa that summer. While they, too, had experienced the same fierce winds as the tree selected for special notice, they had, without exception, survived the strong gusts whipping their branches and straining their trunks.

Since they had never experienced the same caretaking as the youngster, the other fruit trees had driven their roots down, not out, until they reached the deeper levels of moisture that had burned out of the shallower dirt. Some of their leaves had indeed suffered as a result of their redirected efforts. Much of their fruit, too, proved to be smaller and less lush. But they had withstood the stresses of the storm and survived to the dawn, ruffled by the unpleasant conditions, yes, but literally unbowed.

Would that more parents and politicians and all the rest learn the lessons of this unfortunate set of circumstances and alter their behavior while there is yet time.

The impulse to shelter that which we hold dear is natural enough. Most of us gain no pleasure witnessing the hardships of those we love. Beyond that, the afflictions of strangers often remind us that misery and bad times may visit any of us. The future is a book we can never read until we hold its covers in our hands.

The Wish to Help

Parents want to spare their children real and imagined troubles. Compassionate people hear stories of heartbreak and empathetically wish to assist—somehow—those enduring life’s woes. Politicians—some at least—truly believe they can and should help the needy and the unfortunate. But often the best thing such well-intentioned folks can do for those struggling with life’s challenges is to refrain from doing so.

While of course context is critical in reaching a proper decision not to act, many parents do their offspring no favors by insisting on keeping the world at bay. Whether the negative event is the teasing and name-calling endemic to childhood; exposure to such supposed wickedness as the word “gun,” let alone the real objects; taking tumbles on bikes; climbing tall trees; watching the evening news; grieving over a dead pet; reading upsetting books or viewing challenging movies, children surrounded by metaphorical walls will be at a loss when those artificial barriers are breached, as they inevitably will be.

The intellectual and emotional foundations required to exist in the world must—if a person is to succeed as a whole and undamaged individual—come from within. Parents who do not allow—let alone encourage—their children to send roots wandering through the dry soil toward more secure resources are actually damaging their ability to weather and withstand the unpredictable.

Citizens and politicians who seek to soften the problems associated with foolish, ignorant, or regrettable choices and actions are, likewise, only contributing to the potential destruction of those they hope to support. At best, those efforts weaken people’s ability to discover how to handle bad consequences.

No. Suffering is not noble. Suffering is merely a fact of life that must be acknowledged and dealt with. Most of us would decry the abrupt thrusting of zoo-raised animals into the wilderness to fend for themselves. People deserve at least as much consideration.

Though some would call those of us who hold this philosophy “selfish” or meanspirited or thoughtless or any of the other terms designed to intimidate us into acceding to their plans for cradle-to-grave care, the very behavior they condemn reflects our respect for the lives, the minds, the dignity of our fellow human beings.

Whether in the form of well-meaning laws or regulations, of generous loans or grants, or of the million and one legal mandates that endeavor to end hurtful discrimination or hatred or racism, doting too much on the “weak,” catering too much to the “helpless,” or favoring too much those viewed as “victims” will accomplish little other than to create people who are weak or helpless or victims.

There is a time to water that tree.

And there is a time simply to walk away.

Whatever the motivations of the administration, the trip brought the partisans of American engagement in Africa out into the media spotlight. The president had thrown a bone to the foreign-aid community with his surprising endorsement of a $3 billion-a-year package of AIDS-fighting measures for Africa in his State of the Union address. Far from sated with this forced donation from U.S. taxpayers, the international aid bureaucracies have finally gotten a taste of red meat, and they want more.

How much more? One of the most notable calls for aid for Africa that emerged from this time was “A Rich Nation, a Poor Continent,” an op-ed by economist Jeffrey Sachs in the New York Times. Sachs sketches the truly terrible conditions in which many Africans live: life expectancy “is less than 50 years in most of Africa, and less than 40 years in some of the AIDS-ravaged countries. Until the pandemics of AIDS, tuberculosis, malaria and other killer diseases are brought under control in Africa, economic development and political stability will remain crippled.”

Having been a counselor on conversion to capitalism to ex-communist governments (most notably Russia), Sachs is now director of a sustainable-development center called “The Earth Institute” at Columbia University. He is also an adviser to UN Secretary General Kofi Annan. He has become a leading opponent of the free market and a cheerleader for foreign aid. His thinking seems to follow this general line: Capitalism and technology are good things, but any real progress in the world calls for international governmental solutions. In the case of epidemic disease in Africa, Sachs’s preferred solution is massive funding for the Geneva-based “Global Fund to Fight AIDS, Tuberculosis and Malaria,” to the tune of up to $8 billion per year from the United States alone.

An aunt of mine who was an unreconstructed New Dealer used to say to me: “The problem with the poor is that they don’t have money.” This seems to be Sachs’s view of the needy in Africa: the only thing that keeps them sick is a lack of medicine, and they only lack medicine because they are poor. Sachs puts it this way: “If rich countries contributed a total of around $25 billion per year [to fight disease in the Third World], the increased investments in disease prevention and treatment could prevent around eight million deaths each year in poor countries throughout the world.”

My aunt was right that the poor lack money. Any poor person could be made richer—at least temporarily—by a handout. And Sachs is right that in African countries where AIDS runs rampant, the sick lack medicines and too many don’t practice safe sex. Enough medicine and education could have a real impact, extending lives and encouraging people to act more prudently.

But Sachs is wrong to think that Africa’s problems are essentially medical or financial. He is wrong to emphasize charity at the expense of focusing on the real needs of Africa: rational culture, justice, and capitalism. And he, along with the Bush administration, is wrong to think that wealthy countries or wealthy people bear a responsibility for the health or welfare of others to whom they are unconnected by any significant ties.

My aunt ignored the fact that lasting poverty has roots in culture and incentives. Handouts don’t eliminate poverty; too often they help entrench the habits that perpetuate poverty. For his part, Sachs ignores the fact that Africa’s crisis has roots in gangster politics, irrationalism, and collectivism. No African country ranks among the 35 freest in the world, as objectively measured in Economic Freedom of the World 2002. In fact, several countries in Africa are among those with the least economic freedom and the most capricious legal environment. These include Zimbabwe, Guinea-Bissau, and both Congos. It is no accident that these are some of the poorest and most miserable countries in the world. It is misgovernment—not AIDS or any other disease—that has ruined these countries. When Sachs urges support for the Global Fund, he is calling, in effect, for the support of a new hyper-bureaucracy of foreign-aid experts and for open-ended support of the very regimes that are to blame for Africa’s crisis. It precisely to accommodate corrupt and ineffective regimes that the Global Fund is at pains to describe itself as a funding supplement to existing government programs.

A Matter of Morality

Ultimately the case here is moral. Sachs wants the top 400 earners in the United States to give up 10 percent of their income to the Global Fund. He argues “our world is dangerously out of kilter when a few hundred people in the United States command more income than 166 million people in Africa.”

The world is out of kilter, but not in the way Sachs means. Americans who have earned great wealth through their productivity are not vultures who prey on the poor. The world’s poor are generally poor or sick or hungry for reasons that have nothing do with the businesses that make Americans rich. In fact, having nothing to do with American-style capitalism tends to keep people poor, and it is corrupt, intrusive governments that keep them out of contact with the free market. (It is no accident that some of the best health care in Africa is that provided by big corporations for their local employees.) What is out of kilter is the political culture of Africa, not the fact that Americans and other mostly free people can acquire or possess great wealth.

There is nothing wrong with people giving some of their money away to help others. But when they do so, be they richer or poorer, they should make sure that they are really helping those in need, and not just throwing good money after bad into the pit of cultural and political corruption. The rich certainly do not owe the world an apology for what they have, and they are not responsible for all the terrible problems that people find themselves in. The health situation in Africa is a terrible shame. But the shame is not America’s.

—William Thomas
wthomas@objectivistcenter.org
Senior Fellow for Objectivist Studies
The Objectivist Center
Poughkeepsie, New York

Johnson was born in poverty in North Carolina in 1808 and moved to Greenville, Tennessee, as a teenager when he heard the town needed a tailor. He established a strong business there and at age 26 won election to the state legislature, where he spent several terms. He strongly supported fellow Tennessean Andrew Jackson (president 1829–1837), and eventually won election to the U.S. House and Senate. In Congress, Johnson became a constitutional watchdog on federal spending and special subsidies to favored groups. The protective tariff he called “a system of humbug,” and he wanted entrepreneurs, not the federal government, to build the nation’s canals and railroads. He often tried to get a law passed for across-the-board pay cuts for federal employees, whom he resented because they lived comfortably in Washington from the tax dollars of hard-working artisans, farmers, and laborers.

Charity, Johnson argued, begins with people, not government. This issue came up when he ran for governor of Tennessee in 1853. Gustavus Henry, the Whig candidate, attacked Johnson vigorously in a public debate for voting against a bill to give federal aid to Ireland. The severe potato famine, Henry insisted, called for American help. Johnson responded that people, not government, had the responsibility of helping their fellow men in need. Any politician could be generous with other people’s money, which was forcibly collected in taxes. He then took from his pocket a receipt for the $50 he had sent to the hungry Irish. “How much did you give, sir?” he challenged Henry, who had given nothing. The audience, according to the Memphis Appeal, gave Johnson “prolonged and deafening applause.” Such adherence to the Constitution, Johnson believed, helped him narrowly win the governor’s chair that year.

When the Civil War began, Governor Johnson left Tennessee rather than break with the union. That loyalty endeared him to President Lincoln, who asked the Democrat Johnson to be his vice-presidential candidate in the 1864 election. The Lincoln-Johnson campaign won, and when Lincoln was assassinated Johnson became president for four turbulent years.

As president, Johnson was not a consistent devotee of liberty. He believed that blacks were not as capable as whites, and he was reluctant to give blacks full voting rights. But when the Thirteenth Amendment (abolishing slavery) became law, Johnson, as a strict constitutionalist, “fully recognized the obligation to protect and defend that class of our people whenever and wherever it shall become necessary, and to the full extent compatible with the Constitution of the United States.”

Johnson found himself caught in the middle. On one hand were southern racists, who passed Black Codes that denied basic civil liberties to former slaves. On the other were Radical Republicans who not only wanted full voting rights for blacks, but sometimes special privileges as well. For example, Republicans had set up the Freedmen’s Bureau during the war to help freed blacks get food, clothing, and other necessities of life. After the war, the Freedmen’s Bureau expanded its efforts to help blacks get land and education as well. In 1866 Congress voted to extend the life of the Freedmen’s Bureau and expand its scope.

Vetoes Bill

Johnson, however, vetoed the bill. In a nutshell, his view was this: Civil liberties for blacks, yes; special legislation, no. “In time of war,” Johnson said, “it was eminently proper that we should provide for those who were passing suddenly from a condition of bondage to a state of freedom. But this bill proposes to make the Freedmen’s Bureau . . . a permanent branch of the public administration, with its powers greatly enlarged.” These powers “in my opinion are not warranted by the Constitution.”

Johnson built his case around the provisions in the bill that put the government in the business of establishing schools for blacks and of taking land from plantation owners to give to former slaves without due process of law. On the first point, Johnson noted that Congress “has never founded schools for any class of our own people, not even for the orphans of those who have fallen in the defense of the Union, but has left the care of education to the much more competent and efficient control of the States, of communities, of private associations, and of individuals.”

The president hoped that blacks would be protected in their civil liberties and would thereby use their freedom to gain skills and work their way up in society. “The idea on which the slaves were assisted to freedom was that on becoming free they would be a self-sustaining population.” He added that “any legislation that shall imply that they are not expected to attain a self-sustaining condition must have a tendency injurious alike to their character and their prospects.”

Granted, Johnson was overly optimistic that his southern brethren would allow blacks sufficient civil liberties to compete for jobs and establish fair contracts. But, as in the earlier case of charity to the Irish, he believed that compassionate people, not a government program, were the solution to the problem. They would build the schools and train the newly freed slaves. He was ever faithful to the Constitution when he said that establishing schools was a state, not a federal, function and that the federal government should not favor “one class or color of our people more than another.”

Interestingly, Johnson’s vision of self-help for blacks somewhat paralleled that of black leader Booker T. Washington, who agreed that caring people, not bureaucrats at the Freedmen’s Bureau, needed to take the lead in promoting black education. In the spirit of Johnson’s veto of the Freedmen’s Bureau, Washington set up Tuskegee Institute, with help from whites, as a black-operated college. Blacks and whites also worked together to set up Fisk College and Meharry Medical College in Nashville. In fact, dozens of private black colleges were established in the years immediately after emancipation. Black literacy skyrocketed from 20 percent in 1870 to 83 percent in 1930, a period marred by forced segregation. That increased literacy was the tool that blacks used to win their struggle to have their rights recognized in the coming decades.

Andrew Johnson’s arguments are still cogent today. The Constitution does not guarantee special privileges for any class of citizens.

“It’s dreadful [Upjohn tells Carey] to think of that great poet alone. Why, he might die without a soul at hand.”

“I think he very probably will,” said Philip.

“How can you be so callous!”

“Why don’t you come and do your work here every day, and then you’d be near if he wanted anything?” asked Philip dryly.

“I? My dear fellow, I can only work in the surroundings I’m used to, and besides, I go out so much.”

In these few lines, Maugham portrays perfectly the sentiments of Enlightened People—the sort who travel the world to protest globalization, who rail mightily against corporate “greed,” and who hold candlelight vigils to show their opposition to capitalist oppression.

Upjohn is Enlightened. He sees that it would be wonderful if Cronshaw were attended to all day long. Therefore, he is vexed that Carey does not skip his classes and perform this service. But Upjohn himself grows indignant and excuse-ridden when Carey suggests that Upjohn sit with Cronshaw during the day.

How typical. Upjohn’s attitude is the same as that of those who indignantly and self-righteously demand that corporations, such as Nike, pay higher wages to their workers in underdeveloped countries. But other than to appease angry protesters, why should Nike or any other company pay wages that are above market rates?

Even to ask such a question today sounds callous, but let’s examine the matter more closely.

No corporation can long afford to pay workers wages that exceed the value that its workers produce. And outsiders simply cannot know the full set of benefits and costs a corporation confronts by hiring a worker. Merely comparing the monetary compensation of a worker in Malaysia to that of a seemingly similar worker in Michigan or Missouri tells you very little.

Perhaps the smaller salary paid to the Malaysian worker reflects the fact that he is much less productive than his American counterpart. If the Malaysian worker produces only one-tenth as much in a work week as the American worker, the company is not getting more profit from this worker than it gets from its American worker, even though the Malaysian is paid only one-tenth the salary of the American.

Or perhaps the investment risks in Malaysia are greater than in America, and it is only the availability of workers willing to work at lower wages that makes the investment attractive to begin with.

But let’s suppose (contrary to likely fact) that workers in Nike’s Malaysian factories, although paid only a tiny fraction of Western wage rates, are every bit as productive as similar workers in Western factories and that the investment risks in Malaysia are no higher than in any Western country. Further, let’s assume that Nike is so cash rich that it can easily afford to raise wages to well above Malaysian market rates. Is Nike unjustly exploiting its Malaysian workers by paying them the much-lower wages?

Insisting on Charity

Many Enlightened People answer yes. They assert that Nike should pay more. Perhaps. But let’s be perfectly clear about what these Enlightened People are insisting that Nike do: they are insisting that it make charitable contributions to its Malaysian workers. If an offer from Nike of a dollar an hour is sufficient to attract all the qualified Malaysian workers Nike needs for a particular job, any amount offered above that is an offer of charity.

While Nike ought to remain free to do that, the case for this particular form of charity is not as clear as it seems to Enlightened People. First, if Nike decides to give away some portion of its assets to charitable causes, it should probably give to people who are worse off than the relatively lucky ones working in its foreign factories. As poor as a Nike factory worker in Malaysia is compared to an American factory worker, the Malaysian employed by Nike surely is better off than the Rwandan or North Korean, who has no opportunity to work for a Western corporation.

Second, if Nike decides to focus its philanthropy on its own workers, it should do so openly—say, with cash handouts—rather than in the form of higher wages. If Nike extends charity to its workers by arbitrarily raising their wages, it distorts market signals. Other corporations seeking to build foreign factories might bypass Malaysia, mistaking the high wages that Nike pays for the prevailing wage rate for such work. Those Malaysians who would otherwise have found profitable employment in these new factories now will not do so.

Third—and here we see the core relevance of the Maugham quotation—it is astonishingly hypocritical for Westerners to demand that Nike arbitrarily raise the wages it pays to foreign workers. Rather than demand this, why don’t these carping Westerners extend this charity themselves? Like Nike, they’re free to do so. These self-righteous protesters are as hypocritical as Leonard Upjohn.

Because Maugham’s Philip Carey is already helping Cronshaw (by inviting him to share the apartment) it is especially galling that Upjohn—who has offered no help to the dying man—moralistically upbraids Carey for failing to do even more. All Upjohn cares to do is to heap uninformed scorn on someone who already is doing more for the downtrodden than he himself is willing to do. It’s a startling display of hypocrisy. And yet it is found not only in novels; it is also regrettably prominent in the real world.