Volume 4 - From Cradle to Grave
Since the Depression years of the 1930s, there has been almost continuous
expansion of governmental efforts to provide for people's welfare.
First, there was a tremendous expansion of public works. The Social
Security Act followed close behind. Soon other efforts extended governmental
activities in all areas of the welfare sector. Growth of governmental
welfare activity continued unabated, and today it has reached truly
staggering proportions. Travelling in both Britain and the U.S., Milton
Friedman points out that though many government welfare programs are
well intentioned, they tend to have pernicious side effects. In Dr.
Friedman's view, perhaps the most serious shortcoming of governmental
welfare activities is their tendency to strip away individual independence
and dignity. This is because bureaucrats in welfare agencies are placed
in positions of tremendous power over welfare recipients, exercising
great influence over their lives. Because people never spend someone
else's money as carefully as they spend their own, inefficiency, waste,
abuse, theft, and corruption are inevitable. In addition, welfare
programs tend to be self-perpetuating because they destroy work incentives.
Indeed, it is often in the welfare recipients' best interests to remain
unemployed. Dr. Friedman suggests a negative income tax as a way of
helping the poor. The government would pay money to people falling
below a certain income level. As they obtained jobs and earned money,
they would continue to receive some payments from the government until
their outside income reached a certain ceiling. This system would
make people better off who sought work and earned income. This contrasts
with many of today's programs where one dollar earned means nearly
one dollar lost in welfare payments.