I had a discussion with a friend the other day, about the safety net and the conflation of society with government. It was prompted by my recent blog post Capitalism Needs Poverty, wherein I refuted the title’s premise and asserted instead that “socialism breeds poverty.”

In that exchange, I offered this story about how private efforts address need and poverty. My friend half-jokingly responded “guy made a lot of money, gives it away. capitalism breeds guilt.”

It’s an odd assertion, especially in the context of government wealth redistribution. I suggested that the person who shares his own wealth with the poor is a better citizen than the person who forcibly gives someone else’s wealth to the poor. Hold onto that for a moment.

The story, which I first saw on Facebook, drew an interesting response. One commenter asserted:

Act of charity? Yes? Smart move? Not so much. There was no discernment here. The common theme was layaways at Walmart. I’m sure some of the beneficiaries are truly needed and some of their layaway items were truly needed. But some of the recipients are probably overdrawn on their credit due to poor choices and questionable borrowing decisions. Further, this helps big box retailer Walmart but not mom and pop stores living month to month and with a backlog of layaways.

Boiled down, the commenter’s assertions are inefficiency and moral hazard. Not everyone who got helped really needed it, and by extension the neediest didn’t get as helped as they could, and that includes the mom-and-pop retailers (no mention that those mom and pops aren’t doing as well because Wal Mart’s cheaper prices serve the poor better). And, some who’ve made bad choices have had the consequences of those choices absolved.

Fine, whatever. Tyler Perry and Glenn Beck and whoever else engaged in this bit of holiday cheer didn’t maximize or optimize the charitable use of their wealth, and charity does indeed sometimes land in the laps of those who don’t warrant it.

Nothing changes the reality of their good citizenship, of the demonstration of their caring for their fellows.

Contrast this with those who, instead, believe that their voting for and supporting politicians who tax some simply to give to others is moral and charitable and noble of purpose (here I exclude my friend, because I know he walks the walk). While there are indeed people who reach deep into their own pockets while also asserting that others should be forced to do so, many don’t. Many feel that the safety net should be primarily or even solely a government enterprise. This includes Bernie Sanders, who, back in his days as mayor of Burlington, VT, overtly stated that he didn’t believe in charities, and that social programs should be run solely by government.

David Mamet famously observed that socialism is the abdication of responsibility, and the abdication of caring for the needy to government bureaucrats using other people’s money is as blatant an example of this observation as you’ll find. Yet, it is these selfsame socialist abdicators from whom you will hear demands that corporations be better citizens, that corporations have obligations to their communities and not just to their shareholders, and that corporate profits are the Devil.

Thing is – just about everyone who’s become wealthy in the private sector (I deliberately exclude politicians and ex-politicians here, because they trade in influence-peddling, not wealth-creation) has had some involvement with that legal construct known as the “corporation,” and all the charitable outlays from these wealthy folks is corporate-spawn. Charity comes from profits, from the positive difference between revenues and expenditures. So does investment and innovation, and therefore so does economic growth. In other words, profits produce better citizens.

But, even if you reject that idea, even if you believe that the rich are selfish and greedy and that therefore we need government to take from them in order to care for the needy, the question remains: In the words of the great Milton Friedman, where are we to find these angels?

It is without doubt that people are more careful with their own money than they are with other people’s money (OPM). It is also without doubt that the history of government is a history of self-interest, greed, profligacy, and waste. The amount of money that our government wastes, misuses, and abuses is staggering, and the existence of vast amounts of OPM is a gilded invitation to all those who see opportunity for self-benefit, even when undeserving.

Why, then, would we expect government officials to be better citizens than people in the private sector? They’re just as human and just as subject to the vagaries of human nature. And, because they’re working with OPM, not their own, they’ve far less to lose and far less reason to be prudent.

This is the unaddressed problem of all forms of socialism – the dismissal of the fact that the people socialism’s adherents would put in charge are no better than the people they distrust. There’s no reason to believe they’d be better citizens if given control over others’ wealth. There’s ample reason to believe they’d be worse.

Peter Venetoklis

About Peter Venetoklis

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.


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