Infernal Ramblings
A Malaysian Perspective on Politics, Society and Economics

Charity is Not Enough

Written by johnleemk on 12:30:27 pm Jun 12, 2007.

Nobody likes to be accused of hating the poor. For many opponents of government-funded social nets, education, healthcare, etc., a common refrain is that they don't hate the poor — they just don't want the government to make them help the poor.

Instead, they argue, charities are what's best for the poor. Not incorrectly, they point out that these are often more successful than government programmes for aiding the needy.

However, there is a basic flaw in this argument. If charity works so well, then why are there so many people on the streets and without equal opportunities, even in states with welfare systems? (In The Undercover Economist, Tim Harford of the Financial Times asserts that 25,000 elderly people die in Britain every year simply because they can't afford to keep warm during winter.)

Basically what these people are saying is not "give me liberty and life" or even "give me liberty or give me death", but "give me liberty or give someone else death".

Now, you can argue that that is a reasonable stand to take — that the right to determine one's expenditures is sacrosanct and supersedes all else, even the right to life. (Not to mention the right to have an equal opportunity to pursue happiness, as the American Declaration of Independence poignantly proclaims.)

But I think most people would realise that it's ridiculous to adopt such a position. Certainly, there is no such right, because taxation has been recognised by all but a handful of kooks.

Once you look at poverty and inequality of opportunity as something similar to the economic problem of the tragedy of the commons — a negative externality — you realise that good economics actually demands some government intervention in weaving social nets.

Of course, how the government does this is a whole different matter. For example, I think it might be more sensible for the government to fund charities rather than directly attack poverty and inequality — something the Austrian management guru Peter Drucker thought would occur.

Another fine idea might be to give people no choice but to fund anti-poverty efforts, but to give them the choice of how to do so. Some people mighr prefer to donate to the Red Cross, others to a local soup kitchen; choice works in a market system, so there's no reason we can't have the same thing here. (It would certainly address the concern of Milton Friedman, who worried that the government was profligate in spending because it wasn't spending its own money — when individuals spend their own money on poverty, it's a whole different ball game.)

Whatever way we choose, the charity of individuals cannot be depended upon. Capitalism thrives on people's greed, and that is both its greatest strength and its greatest weakness.

You might valiantly proclaim "give me liberty, or give someone else death!" but I think your position is logically untenable. When an individual dies, that individual's death and all the economic potential it carries is an indirect loss to society — it only stands to reason that society fight death. Perhaps preventing all mortality is excessive, but there is no reason there should be people starving on the streets or working in sweatshops instead of studying.

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Infernal Ramblings is a Malaysian website focusing on current events and sociopolitical issues. Its articles run the gamut from economics to society to education.

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