Welfare Systems Inherently Fail

Poverty is a global problem which occurs because of ineffective resource allocation. Resources are not centrally located, nor can they be. A global allocation system is impossible because it lacks the ability to collect and allocate the resources. The attempt to properly allocate resources has led to the formation of societies. Societies in turn have created governments to act as gatekeepers and create an orderly resource allocation scheme. However, a local society (all governments are a form of local society) lacks sufficient resources within its jurisdiction to provide every resource to every member.

All resource allocation schemes are inherently flawed. Resources can never be properly allocated. As such, there will always be those who have and those that do not. No individual can overcome this. Therefore, individuals acting as a society have set up governments to act as resource gatekeepers. Governments can only attempt to alleviate resource inequity by passing regulations on what resources are available to its citizens and how they may be used. A government can directly control resources or indirectly control resources. Governments directly control resources which are within their territorial jurisdiction. So long as the resource is only available in their territorial jurisdiction, they have absolute control over its allocation. Governments have indirect control over resources outside of their territorial jurisdiction through trading of resources. To make the trading of resources easier, all governments have created a monetary system. The money one has in his hand has a value and can be traded for resources up to the value in hand.

I posit that governmental control of the monetary system is the primary cause of inequity in resource allocation. I further posit that there is no system available that can ever equitably allocate resources.

In order to have a monetary system, the paper bills must be backed by a resource of value. This resource must be held in the control of the government. It is, in essence, largely taken off the market. Additionally, those in power force everyone within the jurisdiction of the government to use this resource as the basis for the monetary system. The government, through its leaders has by force declared that anyone who wishes engage in commerce with those under and within that government’s jurisdiction must use their currency or an equivalent thereof (foreign monetary systems using a resource that the local government has agreed can be measured against their currency).

Since government controls the very resource used in the allocation of every other resource, there can only be a finite amount and each jurisdiction has the potential for an infinite number of citizens. Messing up the equation even further is the credit system. This system allows people to possess more monetary resources than actually exist. This creates debt. Government has also used credit to allocate resources. This creates one big messy monetary system which results in perpetual deficits.

Even if a government were to balance its budget, much of that balancing is a result of credit. The money does not really exist. The only way to get out of this mess is to scrap the credit system and even this is problematic. To do so, government must legislate a resource allocation scheme which only allows a finite amount of resources to an infinite amount of resource users. Additionally, governments must base this scheme on resources which it can control 100% with no exceptions. To do so, every single resource would have to be produced and made available within its territorial jurisdiction. This is a complete impossibility as well as a utopian dream.

Only a central government which has territorial jurisdiction over the entire globe could achieve such a thing. Given all of the variables which arise, it is impossible. Resources have different value to different people both on a global level and on a local level. More importantly, resources have different value on an individual person basis. In order for a central government to properly allocate all resources, some extravagant program would have to be designed to take into account every individual person’s vale of a resource.

Governments have attempted to do away with this problem by declaring a set value for all resources and only allowing allocation of this set value to each member of society. This system fails every time for many reasons, most notably because no government controls enough of any one resource to properly sustain itself for the long run.

Governments which attempt to allow the individual citizens to allocate the resources amongst themselves fail as well because any one person can attain more of a resource than another and withhold the resource. Thus, a person who obtains a lot of land resources controls how others use that land.

Free market systems tout the ingenuity of individuals as the saving grace of the system. Progress is made by those who create a new resource which can substitute for an already existing resource, thereby reallocating the wealth through supply and demand forces. This system is aided by laws which protect ideas and inventions such as copyright and patent laws. The problem with these laws is that they are government sanctioned monopolies on resources and thereby create resource inequity.

There will always be more resource seekers than resource owners. Hence, there is a finite amount of resources available to an infinite amount of people. There is a global resource pie with a finite amount of slices. Many claim that there is an infinite amount of resources, mankind need only discover it. The problem is not in the natural existence of resources, but in the allocation system. A resource is only created by a person or entity in control of the facilities and mechanisms to bring those resources to a useful state. Also, not every person or entity is capable of creating every resource it requires or desires.

A person requires food, but must grow the food in order to have it. This requires ownership of land. Ownership is a construction enforced by government or individual might. One could purchase food from a supplier with his resources but , again, this requires some form of resource ownership enforced by government or individual might.

Welfare systems make several determinations. Chief among them, they determine what resource requires reallocation (usually it is based on money) The system must then determine the minimum acceptable level an individual should have. The system must determine who has this resource and devise a program for the reallocation of this resource to those not in possession of the minimum level and must do so without placing others below the minimum.

Incidental to this system, by removing one resource from someone, the program will always cause a less amount of another resource to be available to that person. It is impossible to measure a minimum level of every resource, as such, all welfare systems cannot fix any problem without causing another problem in another resource allocation scheme.

Taxes are a resource allocation scheme. Governments then pass legislation which allocates this tax revenue to a welfare scheme. Any government program is a form of welfare. It is assisting someone in some way. Police assists a community, the army assist the nation, infrastructure supports those that use it. Governments have the impossible task of determining the proper allocation of resources to each welfare system. No agreement amongst total-citizenry will ever be made as to the proper allocation of resources to welfare programs. Most cannot agree what welfare programs are in the proper domain of government, if any.

What is the solution? There is no solution. People only act in their own interest. Society can only hope that the culmination of all those individual acts together result in a functional society. Functional societies are those where the majority can survive and perpetuate the society. Short of this, there is no solution.

Conservative theory calls for less government intrusion but must concede that some government intrusion is required. Even amongst conservatives there is disagreement on what is a proper government intrusion.

Liberal theory calls for more government intrusion but must concede that government cannot intrude on every aspect of life sufficiently enough. Even amongst liberals there is disagreement on what is the proper limit of government intrusion.

As such, all political parties argue that their prescribed platform is the best system and seek to get elected by the citizens. Hence, the Libertarian Party has a set platform and ideology as to what government should do. Individual Libertarians, however, disagree. A society basically only functions when the individuals garner a large enough majority of supporters (with the ability to enforce their support) to place a political party in control to implement its prescribed program. Therefore, society will never be able to perfectly allocate its resources and inequitable and inefficient allocation of resources will always exist.