Hello and welcome to Money Markets and more with me Dominic Frisby.
Today I'm talking to you from Quito in Ecuardor.
there's the fantastic view in the background.
I'm at the house of an artist called Oswaldo Guayasamín - ther's his houe.
He passed away in 1999.
It’s now a museum.
It’s such a splendid spot that I thought I should do a video for you so I got this
out of the archives of my blog
And today’s piece is called
The Way We Help People Does Not Help People
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the
help given enables the receiver to become self- sufficient.
But our systems of state charity - aka welfare - have too frequently had the opposite effect:
they have actually created dependency.
It is time to re-think the way we help people.
I suggest something that may be heinous to some, but it’s this: welfare would be more
effective, more varied, more widespread and affordable if there were no state involvement.
People instinctively think that without a welfare state, the poor and needy would not
be looked after.
At such an unacceptable prospect, people then become fervent in their defence of state welfare
systems.
You can see the passion people feel about this erupting all over the Twitter and the
blogosphere.
Before we start, I want you to get your head around one thought - suggesting that the welfare
system is not working and that we should do away with it is not the same as suggesting
the poor and needy should not be looked after.
Not at all - in fact, quite the opposite.
The provision of care is a delicate, complicated and unpredictable process.
Sometimes money might help the recipient towards self-sufficiency, but sometimes not.
Giving money might lead to a temporary lessening of suffering, but often it can lead to greater
dependency and less self-reliance.
Sometimes something local is required, sometimes something practical, sometimes something psychological
or emotional, sometimes something specific to the individual's circumstances - sometimes
what's needed is a proverbial kick up the backside.
Different circumstances require different forms of care.
The dignity of the recipient also needs to be considered.
It can be demeaning to receive charity.
On occasion anonymity might be required - but on other occasions it might not be.
How on earth can anyone hope to design a top-down, one-size-fits-all, system of state welfare
that can meet all these varying needs consistently over time?
Then there is the matter of the giver.
He or she must also be considered.
Compassion, care and the giving of charity and care are essential human functions - they
are a part of human nature.
People need to give as much as they need to receive.
You just need to see the pleasure children get from giving as evidence of this.
Even perhaps the most ruthless, murderous drug-trafficker that ever drew breath, Pablo
Escobar, was a prolific giver.
He built houses, churches and schools in his native city of Medellin on a scale unmatched
by the Colombian government.
In the charitable process, the giver has needs too.
Sometimes the giver wants to be anonymous - sometimes they want recognition.
Sometimes he or she likes to be involved with the recipient in some way, sometimes not.
But, in the process of state care, the giver's needs are not even considered.
Taxes are taken and that is it.
We are given no real say in how the money we have earned is spent, bar a vote of dubious
effect every five years.
Often the giver is morally opposed to what his taxes are being spent on!
The forced giving that is taxation actually destroys the altruistic satisfaction that
people get from giving voluntarily.
To help others and to share with them is part of humanity.
But, in a world in which government is responsible for the care of the poor and needy, that compassion
is removed from life.
As a result, the state now has a near monopoly on compassion!
In fact it is even more bizarrely specific than that: the pro-large-welfare-state left
wing has the monopoly on compassion.
Anyone who doesn't agree with the concept of a large, generous welfare state is deemed
heartless and selfish.
While you have to pay the government through tax to provide welfare (or heathcare or education)
your ability to provide any of these things for yourself or your family is reduced, because
you have less money.
After taxes are taken from you, you often you can't then afford to pay for your children's
school, your doctor, your hospital, your home, or your charity to others - so you find yourself
depending on state help in some way.
And so more and more people, in some way or other, are caught in the ever-growing dependency
net.
What's more, if the state is providing care to the needy, you are then absolved of the
responsibility to do so.
Meanwhile, government welfare, as well as being inflexible, is expensive for.
The large organizations, such as the NHS or the DWP, through which care is administered
can be inefficient and wasteful.
Worse yet, they are be prone to corruption and rent-seeking (people gaming the system
in some way).
If you look at food, clothing or technology - essential human needs that, largely, are
not supplied by the state - we have, over the last thirty of forty years, seen dramatic
falls in price and dramatic improvement in quality.
Competition has driven costs lower.
Yet welfare has not experienced the same improvements.
Why not?
Because, thanks to the state's near monopoly, there is no competition.
The idea of competition in welfare is offensive to many.
But we need it if we are to improve quality and lower costs.
The greatest expense in our lives is not, as many believe, your house or your children's
education, it is in fact government.
But imagine a world with minimal state.
Suddenly that expense is removed.
Without the cost of the state, we have more capital to spend and invest.
People are empowered.
Our ability to help others is increased.
In a world with no state, what's more, suddenly our responsibility to help others is also
increased.
If the state is not helping people, you must.
Simultaneously, thanks to competition, the help we want to offer is cheaper and better
in quality - organizations are competing with each other to offer better help at a lower
price.
The result will be more affordable welfare, more widespread and diverse welfare, more
flexible welfare that can provide for specific needs, more effective welfare, more onus to
provide welfare - ultimately, better welfare.
Without a welfare state the poor and needy won't be looked after, you say?
I suggest they will be - to a much higher standard than they are today.
Thanks very much for watching.
I’ll be back with another video very soon.
Please subscribe to the channel please subscribe to my Substack
and if you are in or around London on November
24, wearing my comedy hat, I’m doing a gig with the Gilets Jaunes - that’s my band
at Crazy Coqs in Piccadilly Circus underneath Brasserie Zedel.
It’s a fantastic venue for this kind of thing.
It’s going to be a great night.
Please come on down.