Who will take care of poor people in a free society?

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by Quinton on May 1st, 2016

What do we do about poor people in a free society? Without a government, how do we know that poor people will not starve to death? How will people who are unable to work be taken care of? What do we do with less fortunate people?

 Filed under: Society, People & Culture, Poor

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Quinton: Let's start with a quote from
Sun, 05/01/2016 - 09:59

Let's start with a quote from Ludwig von Mises that really reminds us of just how good markets really are. We often times take markets for granted.

"Then there are people who assert that something must be wrong with the social sciences because social conditions are unsatisfactory. The natural sciences have achieved amazing results in the last two or three hundred years, and the practical utilization of these results has succeeded in improving the general standard of living to an unprecedented extent. But, say these critics, the social sciences have utterly failed in the task of rendering social conditions more satisfactory. They have not stamped out misery and starvation, economic crises and unemployment, war and tyranny. They are sterile and have contributed nothing to the promotion of happiness and human welfare.

These grumblers do not realize that the tremendous progress of technological methods of production and the resulting increase in wealth and welfare were feasible only through the pursuit of those liberal policies which were the practical application of the teachings of economics. It was the ideas of the classical economists that removed the checks imposed by age-old laws, customs, and prejudices upon technological improvement and freed the genius of reformers and innovators from the straitjackets of the guilds, government tutelage, and social pressure of various kinds. It was they that reduced the prestige of conquerors and expropriators and demonstrated the social benefits derived from business activity. None of the great modern inventions would have been put to use if the mentality of the precapitalistic era had not been thoroughly demolished by the economists. What is commonly called the "industrial revolution" was an offspring of the ideological revolution brought about by the doctrines of the economists. The economists exploded the old tenets: that it is unfair and unjust to outdo a competitor by producing better and cheaper goods; that it is iniquitous to deviate from the traditional methods of production; that machines are an evil because they bring about unemployment; that it is one of the tasks of civil government to prevent efficient businessmen from getting rich and to protect the less efficient against the competition of the more efficient; that to restrict the freedom of entrepreneurs by government compulsion or by coercion on the part of other social powers is an appropriate means to promote a nation's well-being. British political economy and French Physiocracy were the pacemakers of modern capitalism. It is they that made possible the progress of the applied natural sciences that has heaped benefits upon the masses."

Ludwig von Mises

That's a really powerful quote that we need to just let sink in for a little bit. Mises is explaining how free markets have improved the standard of living greatly. It wasn't until free markets that we had an industrial revolution. If we never had free markets I wouldn't be typing on this computer right now. If we never had free markets who knows if we would even be harnessing electricity right now. Without markets who knows if we would have indoor plumbing, or heating and cooling. We definitely would not have cars and airplanes for transportation. We wouldn't have mobile phones. We wouldn't have cheap housing. And we especially wouldn't have cheap food.

Poor people today live better than kings just 200 years ago. Poor people are living better lives than the rich and elite of 200 years ago. If we have free markets 200 years into the future then the current people we call poor will easily live better than the rich of today. This is what markets do. And the standard of living of poor people is raised greater in a free market than in any other system. So if you truly care about poor people then you must care about free markets.

This is obvious to anyone that looks at other countries. The more free a society is, the less poor people there are. Free markets destroy poverty. South Korea is a great example of this. All you have to do is compare North Korea to South Korea. A little over 50 years ago there was a split into North and South Korea. South Korea went the free market route while North Korea did not. South Korea is the most developed country in East Asia. North Korea is one of the poorest countries in the world. North Korea is centrally planned while South Korea is a Constitutional Republic. South Korea is much closer to a free society than North Korea. Out of a total population of approximately 22 million, somewhere between 240,000 and 3,500,000 North Koreans died from starvation or hunger-related illness between 1993 and 2000. So what about the poor you ask?

We also need to differentiate between relative poverty and absolute poverty. Relative poverty doesn't change across different economic system throughout the world. In an a more free economy like the United States being poor means that you may have a lower quality car, a smaller home, less technology and less ability to travel than rich people. But it is a temporary condition that can change based on choices people make. To be poor in a less free economy like North Korea or many parts of Africa, is to face starvation and diseases on a daily basis. It is a permanent condition that you can't really change. So poor people in free societies are moreso there by choice and have the ability to change that. Poor people in less free societies don't have much they can do. The system traps them and takes away their freedom of choice. When most people talk about poverty they are usually talking about relative poverty in places like America, where poor people in America live way better than poor people in other countries like Africa and North Korea.

Why is immigration talked about so much in rich countries but not in poor countries? Why do America and Europe have immigrants coming in, but not places like Africa, the Middle East and North Korea? It's because people would rather be poor in a more free society than poor in a less free society. So people understand that being poor is relative, and being poor in America is better than being poor in some other country with less freedom.

People also have a false notion of what rich and poor really is. They incorrectly think that there is an equilibrium between rich people and poor people. They think that in order for somebody else to become rich somebody else must become poor. When people see a rich person in America they think that they are rich because they exploited a poor person. But that's not how it works, not even close. When rich people become rich, other people don't become poor. Rich people provide products and services that all people need and choose to buy. When a rich person becomes rich a poor person also becomes less poor because they are able to now voluntarily get that product that makes their life better. And the more rich people there are producing products the cheaper these products will be for poor people. So when rich people become rich they are not exploiting poor people, they are serving poor people and making their lives better for cheaper. This is why poor people in countries like America have access to things that poor people in other countries like North Korea don't have access to.

Again, this is why poor people in more free societies like America are doing much better than poor people in less free societies like Africa, the Middle East and North Korea. As more rich people continue to provide products and services to people, the increase in productivity and the innovation naturally increases the standard of living of the poorest person. In America you aren't absolute poor, you are relative poor. In places like Africa and the Middle East you are absolute poor.

Okay so that's the first part to understand. Free societies alleviate poverty more than any other type of society.

Let's talk about intelligence. There is a direct correlation to intelligence and income. People which greater intelligence make more money and are more rich. This is pretty obvious to most people. Smarter people are better problem solvers and able to innovate and create better products and services than less intelligent people. A free society would have more intelligent people than less free societies. Intelligent people champion freedom and choice. Less free people don't.

A free society won't have a government handing out freebies to people. And because of this, people who are unable to support themselves without the assistance of a State won't want to live in a free society. People who move to a country to exploit a welfare system will not move to a free society since there won't be a welfare system. In a free society there will be less problems like the ones America and Europe are facing where people move there to exploit the government handouts that they receive.

Now, governments are notoriously known for keeping people in poverty. This is what welfare does. When the government puts somebody on welfare they create incentives to keep people poor. When people are on welfare they lose the welfare if they make a certain amount of money. So people on welfare in America don't want to leave welfare because then they have to work and they lose the easy money. A free society wouldn't have a welfare system and people wouldn't become dependent on the State.

So governments already hurt poor people. The goal is to teach somebody how to fish. Government does not do this. Government gives people fish and the people keep coming back to the government each day. And every time the government gives people fish they are stealing these fish from other people. It creates a net loss and society as a whole becomes poorer. Rather than having poor people contribute to society they instead take from society.

Minimum wage also hurts poor people. If you are a young unskilled worker, or have some disability that only allows you to works 1/2 as much as a non-disabled person you will be rendered unemployed under a minimum wage system. The minimum wage doesn't ensure that everyone makes a minimum wage like so many people believe. All the minimum wage does is set the minimum price an employer can hire somebody at. If the minimum wage is $15/hr and a job is only worth $5 an hour then an employer can not hire the $5/hr worker and they go unemployed. More and more jobs get destroyed when the minimum wage increases. If $15/hr is a good minimum wage then wouldn't $50/hr be even better? The whole minimum wage system is an economic disaster that hurts the poor more than anyone. When the minimum wage is raised employers don't go from paying somebody $10/hr to $15/hr. They simply fire the $10/hr employee because they can't afford to pay them $15/hr. Poor people lose out with the minimum wage. A free society wouldn't have a minimum wage.

We know that the free market does things better than the government. This is a fact. So why then would we want the government to manage the well being of poor people? Why not let the market manage poor people? Because people don't care about poor people? Because we need a government to force other people to help poor people otherwise they won't? That's not true. Let me pull up a quote from Stefan Molyneux:

"'Oh no, without the government forcing people to be charitable, no one would lift a finger to help the poor, people are so selfish, they don't care etc. etc. etc.' This paradox cannot be unraveled this side of insanity. If a democratic government must force a selfish and unwilling populace to help the poor, then government programs do not reflect the will of the people, and democracy is a lie, and we must get rid of it – or at least stop pretending to vote. If democracy is not a lie, then existing government programs accurately represent the will of the majority, and thus the poor, the sick and the old will have nothing to fear from a stateless society – and will, for many reasons, be far better taken care of by private charity than government programs."

Stefan Molyneux

Okay so he is breaking it down very simply. If America is democratic then the way we vote in wanting to help poor people clearly shows that we do want to help poor people, and majority of people would indeed help poor people in a free society. If this isn't the case, and majority of people don't want the help poor people, then we have really big problems because America does not represent the wishes of the people.

So which is it? If America is a democracy and does represent majority of the people, then poor people will be taken care of in a free society. And in a free society poor people would be taken much greater care of than in a government society because a free society operates with free markets. Free markets are much better at doing anything than a centralized, controlled market.

If people were to find ways to do charity in a free market, it would be much, much better than the current State system of charity. In a government system, only about 20% of the actual funds go towards the service itself. In a free market the money would be much better spent. We already know this. Taxes is one of the worst ways to pay for something. People are much better at spending their own money privately than spending it publicly. Services offered privately are much higher quality, and cheaper than services offered publicly. So charity would be much better in a free society. It would focus on actually improving people and not keeping them dependent. Charity in a free society would teach people how to fish and not give them a fish. Disabled people and people who have a harder time working would be taken much better care of in a free society.

People would be richer in a free society because free markets provide better quality service for less money. People in a free society also wouldn't pay taxes that go towards overpriced, low value services. So people would have much more money to go around towards helping poor people in a free society. Taking care of poor people would be cheaper to do in a free society and people would have more money to do it. And above all this the standard of living for poor people in a free society would be much greater than a State system. The more free a society is the greater wealth poor people have.

So what about the poor you ask? What about poor people in a free society? Well, if you really care about poor people you would encourage more free societies. Math, science, logic and history all show that a free society is the best way to alleviate poverty and to help the poor. So if you really care about poor people you should support free societies. If you really care about poor people you should support the systems which most greatly alleviate poverty: free markets and free societies.

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