In previous posts (here and here), I wrote about my personal views regarding the best ways to help the poor. In a nutshell, I favor private philanthropy or charity over the welfare state. Some of the reasons are:
- The welfare state imposes certain costs on the economy, thereby damaging the prospects of the future poor.
- Closeness and affinity imply a greater ability to help. And he or she who can do more, should do more (can implies ought). Citizens are better placed than the government to help poor people in their community/family because they better understand the needs.
- Spontaneous mutual assistance fosters community spirit. Allowing poverty reduction to take place at the level of citizens’ relationships will strengthen feelings of belonging.
When all this fails – as it often will – and only when this fails, can a state intervene and can the welfare mechanisms and redistribution systems based on taxation begin to operate (these merely enforce deficient private philanthropy).
However, some claim that the welfare state crowds out private charity. If you don’t care about private charity and want a government monopoly on care for the poor, you won’t mind if there is crowding out. And if you don’t care about private charity or about government assistance to the poor, you won’t mind either. But I guess most people agree with me that both charity and the government have a part to play (although they may not agree with my chosen priorities). So it’s good to see that
government welfare programs [do not] appear to displace an equivalent amount of private charity. Private giving does not vary inversely with the size of government programs and there is little evidence for a “crowding out” effect. Many private charities, in fact, rely on government funding to some extent. Private charitable giving to the poor, defined in narrow terms, runs in the range of $10 to $15 billion a year [in the U.S.], and few observers believe that this sum is capable of significant augmentation in the short run, regardless of government policy. Tyler Cowen (source)
More posts in this series are here.