Government Welfare and the Common Good

I stumbled across the following statement on Facebook the other day:

"Conservatives want to help poor & needy by taking responsibility & freely choosing to help. Progressives want to help by abrogating responsibility to Govt & letting them take money & redistribute it."

No doubt this is intended as a generalisation: clearly some progressives engage in charitable giving, and some conservatives do not.

But the premise itself intrigued me. Is private aid more effective than government welfare? This question is always relevant for democratic citizens. We regularly elect representatives who sit somewhere on a continuum in the role of government in supporting the poor.

 I thought I'd crunch some numbers around what it would take for private charity to replace the role of government welfare.

Let's look at current charitable giving for starters:

"An estimated 14.9 million Australian adults (80.8%) gave in total $12.5 billion to charities and NFP organisations over 12 months in 2015-16. The average donation was $764.08 and median donation $200." 

By contrast:

"In 2016–17, the Australian Government estimates that it will spend around $158.6 billion on social security and welfare, and around $191.8 billion in 2019–20."

That is a massive gap. Using these past figures, it's a $146.1 billion gap.

However, it also needs to be factored in that much charitable/ NFP giving in Australia goes to education (universities, school building funds etc.), overseas aid, hospitals, cancer and other medical research, religion, the arts, animal welfare, guide dogs - not only poverty relief in Australia. In reality, only 1 in 8 dollars of individual donations go to community and welfare services in Australia. So voluntary giving would have to increase by another massive margin (if the proportion of giving to different causes were to stay the same) to make up for the loss of government welfare support. 

Making the dubious assumption the current proportion of giving to different causes remained the same, for private giving to replace government welfare (2015 - 16 figures), it would have to increase to $158.6 billion x 8 =$1 268.8 billion! Subtracting existing giving from this figure gives us the value of $1256.3 billion, the amount of increased giving required to match government spending. This is a hundred-fold increase on current giving levels.

However, around half the cost of running NFPs and charities is spent on staff, including marketers, CRM systems, managers, accountants and so on. This is in contrast to the relative efficiency of government IT systems that transfer money directly to the bank accounts of welfare recipients. As such, a doubling of the figure is needed to manage private charity overheads. (This takes us to $2 513.6 billion of private giving required).

Meanwhile, the proportion of Australians who give anything at all is declining.

Historical perspectives can be helpful when evaluating the merits of any system. This excellent Atlantic article outlines how US governments have had a long-term role in alleviating poverty. It explains the failures of private charity that led to the evolution of modern government welfare.

Obviously some assumptions made in my calculations are tenuous. However, the raw figures highlight the impracticality of depending on goodwill rather than taxation to provide for society's most vulnerable.

So how did the conservative view stated at the start of this article gain traction?

That is a complex issue, but the Heritage Foundation was one highly significant influence.  It had strong links to the Moral Majority from the outset, with Paul Weyrich as a key influence in both, and its ideas have permeated some conservative religious communities. The Heritage Foundation helped to provide the blueprint for Reaganism, making the simplistic and self-interested argument Government welfare doesn't work because we still have poor people. (Note the same argument could be made around private welfare historically).

The intent of the conservative view is sincere and sound convincing at first glance. But conservatives (of all people!) should be willing to acknowledge human self-interest - and indeed, human sinfulness.

The numbers don't lie. Government welfare is for the common good. 

The government stepping out of the welfare space would unleash a kind of dog-eat-dog hell, where begging, violence, theft, or illegal prostitution would be unleashed for people to keep themselves and their children alive. 

President Truman noted in 1946:

I like the campaign slogan this year: Everybody Gives, Everybody Benefits. It marks a significant change in our thinking about the word “charity.” Today our contributions to the Community Chest are not alms given by the wealthy few to the poor. This Government, through its public welfare program, has long since accepted its responsibility to see that no citizen need face hunger, unemployment, or a destitute old age. The word “charity” has regained its old, true meaning—that of good will toward one’s fellowman; of brotherhood, of mutual help, of love.

I like that too, Mr Truman.