ParisTampaBlog

According to Guy Sorman, in a recent piece in the City Journal, the member states of the European Union at the time of the Union’s creation held fast to free market principles, believing then that responsible governance by their members should be in accordance with these principles.

Perhaps this was true at the time of the Union’s creation, I don’t know. (Actually, the Union was “created” over a period of some 50 ears, and is still a work in progress.) But I’ll assume that Sorman’s statement is accurate and that at the “start” belief in the free market and adherence to its principles was widespread among the members.

Is this no longer the case? Sorman says it’s not, and that in this regard things have changed, radically changed. Instead, of adherence to free markets all the Union members, even those of the right, have created, perhaps without always knowing what they were doing, gigantic welfare states, inspired not by a belief in economic freedom but by socialist ideology.

So that there be no misunderstanding, where there often is in regard to the meaning of the word, Sorman tells us what he means by socialism. In his view this means “the unlimited growth of the welfare state, along with the accumulation of entitlements and jobs protected by the state.”

Now most of us would agree that under this definition the present member states of the European Union, as well as many others, including the United States, are, in fact, “welfare” states.

And in as much as a given administration is growing the size of the government, and the size of the entitlement portion of the budget, such as what went on under President Bush, and is now going on under President Obama (and probably under every previous president, although under some more than others) both these men might understandably be called socialists.

But, and this is important to keep in mind, the difference between a welfare socialist (say a Roosevelt or Johnson) and a free market “capitalist” (say a Nixon or Reagan) is one of degree, not of kind. In respect to welfare socialism these men are all closer than apart. Also, their followers ought not now to be battling with the followers of their opponents over differences of degree, and they should certainly not be calling one another names.

What our country desperately needs is, first, for everyone on both sides of the left-right or welfare-free market divide, for everyone to agree that governments are (and have always been) in the business of welfare, the bottom line of which is simply helping people who for whatever reason are not able to help themselves.

Furthermore, this state of affairs is not going away, especially since welfare is probably the most legitimate form of government there is, after the police and fire departments and other such. Some degree of welfare, accompanied by a growing central government, is here to stay, and we should accept this and move on.

Second, and just as important, what the country needs, is agreement among opponents, belonging to different groups on the left-right spectrum, that welfare socialism is not possible without having, simultaneously, a flourishing free market, one that is growing the country’s, and the government’s, wealth.

And furthermore, just as we support the efforts of government to ease the lives of people, especially those who can’t do for themselves, we ought to no less get squarely behind the efforts of individual entrepreneurs to establish and grow their businesses, thereby generating new wealth and permitting governments to even be in the business of welfare.

For otherwise, as we’re seeing in Greece and other members of the European Union, and to some extent in California and in other nearly bankrupt states, the welfare governments will come crashing down as liabilities far outnumber available assets.

For governments, having no wealth creating powers themselves, will quickly find that they are unable to meet their own obligations, other than perhaps temporarily by additional taxes. Temporarily because tax revenues, like everything, else depend on new wealth creation in the private sector, and private sector wealth, is of course, the only source of new wealth there is.

In the not too distant past there were governments that saw themselves as being wealth creators. They believed that with the means of production in their hands there was no reason they couldn’t create new wealth. Of course they failed miserably, as evidenced by the many examples of the former members of the now defunct Soviet Union.

So the big question that the developed countries of the western world is now facing, that which Sorman is writing about, is whether the expansion of the ubiquitous welfare state will slow down and in the process lower its sites from still more target benefits and entitlements.

Will they undergo a reality check, reality being what they’re able to do with the means at hand, while all the time being sure that any additional benefits they might be considering, let alone those already on the books, will not ask more of the wealth producing entrepreneurs and businesses than these latter can possibly provide.

And given the present fiscally irresponsible leadership in the Western world things do not look good in this regard. In Europe and in America leaders are still talking more about what governments can do for the people, than what the people will have to do for themselves, and what they will have to do without, if they would grow, and not simply spend until there is no more, their country’s wealth.

This entry was posted on July 5, 2010 at 2:04 pm and is filed under Political Science. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site.