Give, Don’t Govern

This week, children may learn about that greedy man, Ebenezer Scrooge. Scrooge is selfish until ghosts scare him into thinking about others’ well-being, not just his own.

Good for the ghosts.

But the way Scrooge addresses others’ needs matters.

Today’s advocates of equality, compassion, increased spending on education, health care, etc., say “we care” but demand that government do the work.

Controlling other people with the power of government doesn’t prove you care.

If you want to help the poor, clean the environment, improve the arts. Great! Please do.

But if you are compassionate, then you’ll spend your own money on your vision. You will volunteer your work and encourage others to volunteer theirs, by charity or commerce. You don’t force others to do what you think is best.

But government is not voluntary.

Government has no money of its own. Whatever it gives away, it first must take from others through taxes.

If you vote for redistribution of wealth, welfare benefits, new Medicare spending or free education, you can tell yourself you’re “generous.”

But you’re not. You’re just forcing others to pay for programs you think might help.

That’s not generosity. That’s control. The more programs you demand, the more controlling you are.

In fact, you are worse than greedy old Ebenezer Scrooge.

With Scrooge, people have a choice. They can work for Scrooge or quit. They can do business with someone else.

Governments don’t offer us choice. Governments say: “Comply or we will lock you up. Pay taxes and we will decide whom to help. No one may escape the master plan.”

Why, then, do people react to big government ideas as if they’re generous instead of scary?

Because most people don’t think clearly about what it means to tell government to use force against their fellow citizens. They think about society the way their ancestors did.

“Our minds evolved tens of thousands of years ago, when we lived in small groups of 50-200 people,” says editor Marian Tupy. “We would kill game, bring it back, share it.”

The idea of everyone getting an equal share still makes us feel warm and cozy.

Some of you may feel that coziness this week, sharing a Christmas meal. Great. But remember that if you decide that society’s resources should be redistributed, that’s much more complex than passing meat around a family table.

Seizing control of a big society’s resources has unforeseen consequences — ripple effects that are hard to predict.

Back in the cave, you stood a pretty good chance of noticing which hungry relative needed a bigger share of meat. In the tribe, that sort of central planning worked well enough.

It doesn’t work as well once the tribe numbers thousands or millions of people. No tribal elder knows enough to plan so many different people’s lives.

Today’s politicians, for instance, don’t know how many workers will be laid off if they raise taxes on Walmart.

They don’t know what innovation will never happen if they cap CEOs’ salaries.

They don’t know how much wealth creation will be lost if they tax investors’ money in order to fund another government program.

Government’s built-in ignorance explains how it can spend trillions on failed poverty programs, and then respond to the failure by demanding more funds to continue the same programs.

You stand a better chance of getting good results if you do real charity, close to home, where you can keep an eye on it — and without coercing anyone else to do things your way.

We can invent new ways to give to each other. Philanthropy evolves, much the way markets do, harnessing new technologies and social networks that span the globe.

Innovative ideas, like microlending, start in one kitchen. If they work, they grow.

By contrast, government grows even when it doesn’t work. It bosses people around even when it’s not really helping them.

Big hearts are a good thing. Big government is no substitute for them.

13 thoughts on “Give, Don’t Govern

  1. Excellent …. All high school and college grads should have to read this out loud to receive a diploma !

  2. I find it interesting that Houston, Texas has one of the highest number of non-profit organizations for major cities despite little regulation, no zoning, etc. In fact, in low regulation, Texas, you find people founding non-profits to solve problems, instead of Government, simply because the people can better control a non-profit than government.

  3. Excellent analysis. Less taxes & more charities please! Allow me to suggest a worthy charity: Buckner Border Ministries.

  4. This the best analysis in a concise brief well written piece which exactly defines the problems most responsible for the mess the world is in. Government that governs least is always the best form of governance.

  5. People turn to their governments for help because they’re the next best thing to God.

  6. This is excellent. Thank you. Reminds me of when I was campaigning for a conservative candidate and going door-to-door. The person I was speaking who was a Democrat who asked me who was going to take care of our homeless and the poor with many needs? I responded with, I’m supposed to do that and you’re supposed to do that.

    Surprisingly, he didn’t agree.

  7. The United States experimented with high taxes, regulations, and big government between 1933 and 1981. During that time the top tax rate was as between 70% and 94%. For example in 1952 the top tax rate was 92% on incomes over $2,579,708 (Head of household, constant 2013 dollars). This did put a cap on income so that CEO’s made about $2 million a year in today’s dollars. Contrary to what John Stossel would like you to believe, there was no detrimental effect on innovation. Productivity grew at a rate of 2.4% per year between 1947 and 1981. Then Reagan cut taxes and regulations, and productivity growth from 1981 to 2019 has been 1.9% per year. This indicates no innovation increase due to tax and regulation cuts.
    Hewlett-Packard, Microsoft, Apple, and Oracle were all founded when the top tax rate was high. High tax rates did not stop them. There was no shortage of people willing to be CEO at that low pay, just like there is no shortage now of people willing to be the CEO of foreign corporations that pay their CEO’s a lot less than in the USA.
    There was plenty of wealth creation going on when taxes were high, but it was the creation of middle class wealth. The American middle class became the largest and wealthiest middle class in world history when taxes were high. That’s what actually happened when the government seized control of a big society’s resources. The free market didn’t create American middle class wealth, Franklin Roosevelt’s New Deal did. Since Reagan cut taxes, wages have stagnated as nearly all economic growth has gone to the top 1%. When taxes are low and there is no cap on top incomes, top incomes become so high there is no money left for anyone else. There is nothing new about this. It has always been this way.
    John Stossel mentioned poverty. OK, that’s a good topic. The poverty rate was 70% in 1933 and dropped to 11.1% in 1973. This happened while the top tax rate was high. (1973 is the year that Nixon’s wage controls put a stop to American wage growth.) Now, after 38 years of relatively low taxes and regulations, the poverty rate is 11.8%. Reaganomics did not help the poverty rate. (The poverty rate in 1900, when there was no income tax, was 80%).
    John Stossel doesn’t know how many people would be laid off if Walmart’s taxes are raised. I don’t either, but I do know that the unemployment rate from 1948 to 1981 averaged 5.3% (high taxes) and from 1981 to 2018 it was 6.3% (low taxes). Tax cuts and deregulation did not cut the unemployment rate. The recent corporate tax cuts did not result in more hiring (total job growth in Obama’s last 35 months was 7.87 million, compared to Trumps first 35 month total of 6.81 million). Since the only thing corporations did was increase share repurchases, a tax hike would likely result in less share repurchases and nothing else.
    I can remember back in the ‘60s and ‘70s when Los Angeles smog was so bad it would cause burning lungs and eyes. It was painful on some days to go outside. Then the EPA and the California Air Resources Board stepped in and required auto manufactures to install smog control on their cars. The manufacturers fought it every step of the way, claiming that it couldn’t be done or that it would be too expensive.
    Now, 50 years later, the air in Los Angeles is much better even though there are a lot more cars. The “free market” did not clean the air, government regulation did. Diesel manufactures were not required to control their emissions so they did not, until 2007 when the government finally made them do it. This indicates that without regulation gasoline car manufacturers wouldn’t have done anything either.
    It’s the same story with seat belts and air bags. The free market didn’t make them happen, government regulation did.
    A pair of Harvard scientists have estimated that Trump’s EPA deregulations will kill about 80,000 Americans over the next 10 years. Pollution kills people, but corporations consider that a good tradeoff for the profit they will make by dumping their toxic waste in our air and water.
    Tax cuts and deregulation did not deliver economic growth (real GDP per capita growth was 2.1% per year from 1947 to 1981 and 1.7% per year from 1981 to 2016). There has been no trickle down (Census data shows wage stagnation since 1973). It didn’t help the stock market (S&P 500 total return was 11.3% per year from 1945-1980 and 10.8% from 1981-2018). It did divert trillions of dollars from the workers to the top 0.1%. That’s the real purpose of Supply Side Economics, or the “conservative movement”, or Libertarianism. It is to redistribute wealth upward to their rich sponsors.

  8. In my area, a densly populated community on Long Island, there is a one woman run food bank whom I choose to donate my money. She is efficient with her distribution of food, clothing and even gift cards to supermarkets. She vets each family in need and helps them in any way she can with whatever funds she receives from others in our area. I’m thankful she makes the time to do this when I know I cannot.

    It’s the small organizations who prove to be reliable and trustworthy. These are traits seldomly atrributed to even the most upstanding politician. It is frustrating to be forced to give our government so much money for this purpose, knowing that they waste so much.

  9. Regulators hate Facebook’s proposed “Libra” currency. They may kill it. But they can’t kill Bitcoin so easily. It’s politically correct to say men and women are mentally the same, but Stossel lays out science that says otherwise.

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