Orrin Woodward on LIFE & Leadership

Here is a fascinating article on a subject that all freedom loving people should read.  Independence is only maintained by an independent, responsible, and vigilant citizenry.  Think through these issues as the author, Robert Genetski shares them.  How can we, as a community, bring personal responsibility back into vogue?  We cannot demand for dependence on government and expect to remain independent for long.  If someone provides for your security, they do so at the price of your freedom.  As Patrick Henry said, “Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?”  I do not demand for security, but I do demand an equal opportunity in my country to sink or swim based upon my efforts and the content of my character.  Let no wealthy person forbid the poor from their opportunity, and let no government forbid the wealthy from their honestly gained wealth.  Equal opportunity, not equal results has always been the ideal for true freedom loving people!  A nation of dependents cannot expect to remain Independent!  Enjoy the article and please share your thoughts. God Bless, Orrin Woodward

 

Excerpted from A Nation of Millionaires, by Robert J. Genetski. Copies of this 168-page book were delivered in May 1997 to nearly 10,000 state and federal policy makers, journalists, think tank representatives, and Heartland friends and donors nationwide. Additional copies are available for $8.95 pre-paid from The Heartland Institute.

 

For two centuries, the United States has been a beacon of hope for the rest of the world. That hope is based on what was once a novel and untested idea: that citizens could successfully govern themselves. The United States has proven democracy so successful that it has become the only legitimate model of political organization. But democracy was only one part of the Founding Fathers’ unique experiment. They believed not only that individuals can be responsible for governing themselves . . . but also that individuals have a responsibility to provide for their own needs.

 

Government’s Duty

 

As viewed by the Founding Fathers, government has certain responsibilities. First and foremost is the obligation to provide an environment that enables individuals to achieve their highest potential, in terms of their contributions to society and in terms of the rewards they receive for those contributions. Creating this environment involves four things: low tax burdens, free markets, protection of property rights, and a stable currency with which to conduct business.

 

Low taxes make it easier for people to provide for their own needs by letting them keep their hard-earned income. Free markets help maximize output, and thus earnings, by providing vital information about the value of goods and services. Markets are free when government is limited and individuals are primarily responsible for their own needs. Property rights protect the accumulation of assets from confiscation. Without such rights, individuals would have little incentive to create wealth. A stable currency is needed to provide reliable information about transactions and to prevent government from usurping resources by devaluing the currency.

 

In recent decades, government has obviously failed in its obligation to provide an economic environment in which individuals can achieve independence and assume responsibility. High tax rates, the seemingly unconstrained growth in government, interference with markets, a withering away of property rights, and persistent inflation have placed substantial barriers in the way of achieving independence. As the ability of individuals to provide for their own needs is eroded, economic, moral, and cultural deterioration accelerate. If recent trends persist, insecurity, injustice, and crime will become even more pervasive.

 

Why People Behave As They Do

 

Behavior is shaped by three things: values, incentives, and information. An individual’s values are formed from the lessons provided by parents, teachers, friends, relatives, religious leaders, and even government. A government that is corrupt and immoral is certain to be a negative influence on its people. A judicial system that renders the concept of law meaningless by interpreting it to conform to the latest social theory hastens the erosion of moral values. When those charged with interpreting the law mold it to reflect their own preferences, they undermine respect for the law and promote lawlessness.

 

The inclination toward criminal activity can be overcome by a strong system of social and moral values. Still, the more society’s institutions reflect a lack of values, the greater the erosion is likely to be among its people. When a society adopts policies making it more difficult to respect moral values, it dilutes those values.

 

Behavior also is influenced by incentives. While individuals don’t always realize it, they often make decisions in response to economic pressures. For example, when an individual has little to lose, the potential gains from criminal activity seem relatively high and the penalties for getting caught appear relatively low. Applying such cost-benefit analysis to crime may seem crude, but it is both appropriate and accurate. The greater the rewards from an activity, and the lower its costs, the more people will tend to engage in it.

 

The commission of a crime can be a rational economic choice if the expected loss is minimal. If individuals have little income and assets to lose, and if their expected punishment is fairly mild, more of them can be expected to commit crimes. As taxes take a larger and larger bite out of people’s paychecks, the ability of lower-income workers to support themselves–not to mention their families–is undermined. As the rewards for legitimate work decline, the pressures for criminal activity become even greater.

 

On the opposite end of the income spectrum, it doesn’t make much sense for a millionaire to engage in criminal activity. Relative to his or her prospects in the legitimate economy, the potential benefits of crime are small. Moreover, the cost of getting caught is enormous: considerable lost income for time spent in court or in jail, lost assets for compensating the victims of the crime and paying court costs, and social rejection by family, friends, and the community at large.

 

This doesn’t mean that the rich are more virtuous than the poor. Many who are poor have the social and moral upbringing to avoid the temptations of criminal activity. By contrast, those who are rich and without principles do commit crimes, but they are seldom the random, violent crimes that have become commonplace in recent years. When individuals see themselves as being or becoming rich, they have strong incentives to avoid crime, particularly violent crime.

 

Policies that Promote Dependency

 

Government policies that promote dependency seriously undermine values and incentives. These policies encourage irresponsible behavior by providing misleading information about its consequences. The influence of such policies extends well beyond the welfare population. Collectively, they have produced a nation of individuals dependent on government.

 

Policies that foster dependency permeate almost every aspect of our lives: retirement, health care, the legal system, welfare, and, perhaps most importantly, education. Instead of encouraging individuals to accept responsibility for their lives and their decisions, government policies discourage such behavior.

 

As government takes on more responsibility for the problems of its citizens, individuals feel less responsibility to provide for themselves. Moreover, their ability to do so is significantly reduced. Each time government is called on to fulfill a need, there is a cost. The more needs government attempts to fulfill, the higher the costs. Since individuals are the ones who pay for government programs, they are inevitably left with fewer resources to fulfill their own needs.

 

It is instructive to realize what has happened to the typical family’s income over time. The most meaningful way to measure income is after taxes and after inflation. This measure is called real spendable earnings. It measures the amount of money a family has available to live on. The federal government used to calculate a similar figure, but it stopped doing so sometime around 1980 because the trend was so depressing.

 

Despite the lack of official figures, it is possible to estimate the trend in after-tax family income. Consider the “typical family,” one whose yearly income is right in the middle of all families (that is, there are as many families earning more as earning less). After-tax income trends can be plotted for several types of families: two-income families, single-parent families, etc. Since cultural changes and financial hardships led many families to shift to two wage earners in recent decades (thus making it difficult to plot income trends over a long period of time), it is most useful to focus on the typical family where only the husband works.

 

In today’s dollars, that family earned after-tax income of $31,000 in 1972, but just $26,000 in 1993. In that 21-year period, the family’s after-tax take-home pay fell by 16 percent. As government has taken a progressively greater share of family income, families are left with less money for their basic needs, and they are made more dependent on government.

 

Dependency may be appropriate for young children. But as they grow and mature, even children must be given more responsibility. If they are not, they remain dependent upon their parents and never become responsible adults.

 

Similarly, a nation where a significant portion of the population behaves as dependents can never be a great nation. It can be only a nation of individuals who have failed to attain maturity and independence; a nation of individuals who will insist on blaming others for their problems; a nation of individuals who constantly look to government, as a child looks to a parent, to solve its problems.

 

In the United States, government increasingly has taken on the role of parent. Unfortunately, it has done a miserable job with its “children.” Almost without fail, government has hindered the development of independence and maturity. Politicians have developed programs to “solve” the problems of their needy constituents, instead of providing the tools and assistance to enable individuals to solve their own problems.

 

Social Security

 

Our current system of Social Security gives government the power to decide how much of an “allowance” retirees should receive and how they must behave to receive it. Those who choose to work past the normal retirement age can be punished with lower allowances. Spouses who never worked may be rewarded with greater benefits than those who worked full-time. Single persons who die upon reaching retirement age have all of their allowance taken away.

 

By creating a class of dependent retirees, Social Security has led to resentment, indignity, and a sense of frustration and betrayal. It has caused retirees to form political pressure groups to defend what they have earned and what they thought they had been promised. Born of a program based on dependency, these political groups tend to act like children. They insist that their immediate demands be met and ignore the longer-term implications of maintaining the present system. Like children, these groups often refuse even to listen to any suggestions for altering the system.

 

Welfare

 

The tendency of government programs to create dependents extends most destructively to the current system of welfare. Unlike retirees, who have already lived productive, independent lives, welfare recipients have their lives and the lives of their children influenced by the policies of dependency. At virtually every turn, the present welfare system works to keep those who are poor from overcoming their condition. Any of the poor who decide to work and accumulate assets face the prospect of losing food stamps, housing allowances, educational grants, and a host of other potential benefits.

 

Instead of providing the poor with the means to solve their problems, government welfare programs aim at solving their problems for them. By penalizing constructive behavior such as thrift, deferred gratification, or the exercising of foresight regarding the future, the present system makes it extremely difficult for the poor to gain true independence.

 

Health Care

 

For many at the lower end of the income scale, the health care system creates a major incentive against legitimate work and accumulating assets. Those individuals who have few assets and little income, or those who are in prison, can receive unlimited free or nearly free treatment for serious illnesses under various government programs. Those who work hard for a living must pay heavily for the same services.

 

The public education system, legal system, and regulatory system also create dependency. Through them, government is called upon to educate children, ensure that the injured receive compensation, and restore or maintain the environment. All are important objectives. But a healthy society is one that provides the institutional arrangements necessary to help people solve their own problems.

 

A Nation of Dependents

 

Over the past several decades, a cycle of dependency has been created. Government policies have eroded the responsibility of individuals to provide for their own well-being, and taxation has severely limited their financial ability to do so. Government policies have replaced a nation of free, independent individuals with a nation of individuals dependent on government.

 

A nation of dependents can be neither great nor prosperous. To reverse the deterioration in today’s society, we must fundamentally change government policies. Our efforts must be aimed at the heart of the problem, changing incentives and information to reinforce each individual’s responsibility for shaping his or her own life.