From a recent Heritage release:

This annual study by The Heritage Foundation analyzes federal assistance programs for everything from housing, health care, and food stamps to college tuition and retirement assistance. And there are some alarming numbers indeed.

• An estimated one in five Americans now receives aid from the federal government. That translates into more than 67.3 million Americans who rely on federal dollars for their way of life.
• Additionally, the amount the average American receives in federal benefits jumped to $32,748 in 2010; this surpassed the average working American’s disposable personal income of $32,446.
• At the same time, the federal taxpayer base continues to shrink, with nearly half of the U.S. population not paying any federal income taxes.

Is this a vision of President Obama’s doctrine of fairness and economic equality? Our democratic government is at risk when there are more Americans who are wedded to the federal government— either by subsistence or employment check—than federal taxpayers to pay for the rampant spending.

The inquisitive will ask: What happens when a large majority are dependent upon their government for sustenance? Can this succeed in the apparent aim of fostering well-being? Is there a moral effect to this condition? From the chapter, The Moral Effect of the State:

In the wake of this decade’s financial crisis, the conclusion that must be met with is that government intervention, while being aimed at providing support and indemnity for the economic system, rather debilitated firms and individuals from making sound decisions and thrust them into riskier behavior. Government welfare may accomplish what it intends, but in doing so it degrades the people’s judgment and makes them more dependent on the state. Ultimately, the result is a populace which is less and less capable and intent on taking care of itself. All they can do or are willing to do is simply take what is given to them. The people become victims, parasites that have no trace of industry about them.

The upshot is what might be called a plague of parasitism. Self-sufficiency is no longer viable, and the only reasonable way to make a living is by mooching off the toil of others. As former lawyer and activist Roger Conner put it, “The temptation now is for people who have problems that they can cope with great effort be convinced to give in and wallow in their fate as a victim.” No longer does one have to produce goods and services and assume responsibility to earn a living—as long as government is bailing businesses and people out, it is actually economically foolish to pursue the American Dream. The new American Dream is to live on the dole and strike it rich with a lucky grant or bailout. “It makes people think, ‘I’d be a chump if I did otherwise’,” Conner said. “ ‘If I take responsibility for what I do and what happens to me, I’m a fool.’ ”

In his Logic of Collective Action, American economist Mancur Olson showed that this parasitism is just the natural consequence of any condition in which individuals lose their sovereignty amid ever-expanding groups. Considering the difference between small groups, such as a family or community, and large groups, such as those that make up modern nation-states, Olson showed how the temptation to sit back and let others do essential work grows more prominent the bigger the group becomes. This is true even when the members of the group are of the same mindset and share common interests.

To use a basic illustration, regard two communities, one small and one large, which are both in need of a road to connect them to a highway. In the first community, of let’s say five persons, all the individuals in the group have the same interest in building the road and, it can be assumed, will work with the others to construct it, whether by actually performing the labor or trading their share of that labor for other goods or services. They realize that if they do not participate, they will likely not be included in the benefits—either the road will not be built, or the others will somehow exclude them from its use. Since the population is so small, such exclusionary measures are feasible and quite reasonable. Thus, in a small group, it can be assumed that the members will be motivated to work together to reach shared aims.

Notice, however, when considering the larger hypothetical community of 100 individuals. Suddenly, the rationale shifts. First of all, the amount of work needed to organize and distribute the labor grows exponentially. Even if the road will be the same size and require the same amount of work to build, the overall work increases because there are more people involved. Moreover, the chances that one of the citizens could slip through the cracks without doing any work increases. If 5 or 10 of the 100 are adamant about building the road, they will build it even if the other 90 or 95 don’t do anything, and most likely will have no problems sneaking on and using the road. In that case, those others end up getting a road for nothing. This incentive alone makes it economical to ‘free ride’ on the work of others.

At the same time, the motivation for proponents of the road diminishes for this same reason. The more free riders in a community there are, the more work the productive sector must put out, and, ultimately, the less return they will see on their investment. Their drive to construct the road also diminishes to the extent that the road is never truly considered.

This principle can be summed up by the dichotomy of concentrated benefits and diffuse costs—in large groups, benefits can be concentrated while costs can easily be spread out among everyone. It can be seen in everyday occurrences: A litterer benefits to some great extent by throwing trash on the ground because he can get rid of a cumbersome belonging; on the other hand, the typical citizen must pay only a small price since the litter takes up such a small portion of his panorama, and to have it cleaned costs each citizen a slight fraction of a janitor’s salary. In this light, it would seem, it pays to litter and just let someone else pick up the trash—it pays to be a parasite.

When everyone thinks this way, of course, free riding becomes the standard and no one works for a living. As in Ayn Rand’s Atlas Shrugged, in which the productive citizens go on strike to escape the looting of their wealth, all that is left are looters trying to loot from other looters. It cannot last.

And so this mentality goes for all actions. Charity, good will, and prudent self-discipline are all put aside because society has assumed these responsibilities for its members. Helping out one’s fellow man becomes irrational and especially uneconomic. As Albert J. Nock pointed out in his seminal 1935 essay, Our Enemy, the State, a passerby on the street is less likely to give the beggar a quarter because, of course, the government has already taken the quarter from him with the intent of giving it to the homeless man. Helping out the beggar would amount to doubling one’s burden, a decision which no economizing individual can justify.

With regard to the government and society at large, the Welfare State is a great mechanism for the very purpose of privatizing gain and socializing costs, for providing freedom to its citizens without responsibility. The government privatizes gains as in the case of unemployment insurance, subsidies, and bailouts, and socializes costs through taxes and regulations. And so parasitism becomes the only economically sound course of action. Says Conner, “Where we’re headed is the notion that ‘I never have to insure myself, protect myself, take responsibility for myself, plan for myself, because there’ll always be someone there to pick up the pieces.’ ”

Whenever given the choice, one will always choose to exploit the public facility and preserve the personal. This is why we see public transportation, parks, and other infrastructure badly vandalized and permitted to fall into disrepair. It is also the reason why we see government programs running out of funds, going over budget, and still not getting the job done. Here we come back to the Tragedy of the Commons that has plagued civil society from time immemorial. When the benefits are realized on a personal plane and the risks are socialized, there is no incentive to conserve resources, to ensure the best deal, or otherwise act prudently—someone else will always pick up the tab.

Upon reflection of the parasite economy, it must be argued that Socialism, by nature, propagates the very culture it aims to remedy. Far from issuing a world of enlightened, benevolent citizens, Socialism creates a condition of opportunistic and grasping individuals, cold to the needs of others and focused entirely on their own material well-being. The state is more and more controlling, and the people are more and more needy. And so we arrive at the paradox that selflessness leads directly and absolutely to selfishness and greed.

In a parasitic economy, the only sound approach is to take advantage of the system and all that is handed out ‘for free’. The competition for that loot is as aggressive as it can be, and so the members of the society are left with a residual antipathy that is no less strict or exacting than the class war of Vulgar Capitalism. The more socialized a society is, the greater this tension becomes.

The extent of the struggle can best be seen in the documents of a time and place where outright Communism existed as the rule for more than half a century. That is, of course, in Soviet Russia. In a correspondence with her cousin Boris Pasternak, Russian writer and scholar Olga Friedenberg described her homeland by what she called ‘skloka’, a searing condition apparently unique to the Soviet experience. “Where ever you looked,” she wrote, “in all our institutions, in all our homes, skloka was brewing. Skloka is a phenomenon born of our social order, an entirely new term and concept, not to be translated into any language of the civilized world. It’s hard to define. It stands for base, trivial hostility, unconscionable spite, breeding petty intrigues, the vicious pitting of one clique against another. It thrives on calumny, informing, spying, scheming, slander, the igniting of base passions. Taut nerves and weakening morals allow one individual or group to rabidly hate another individual or group. Skloka is natural for people who have been incited to attack one another, who have been made bestial by desperation, who have been driven to the wall. Skloka is the Alpha and Omega of our politics. Skloka is our method.”

It is a matter of pure speculation whether the United States could arrive at such a place described by Ms. Friedenberg. If Schumpeter’s predictions are correct, the twenty-first century will see all Western nations follow Russia into entirely state-run juggernauts of their own. While we certainly face no Soviet brand of Socialism right now, the impulses that delivered Russia to those frightful circumstances are all present in our Western economy—they are, after all, ingrained in the roots of modern economics. Despite the recognized failure of Communism in the Soviet Union, the pressure remains, the mechanism which dominated the Soviets is more or less in place in Washington and other Western capitals, and the mentality which urged it has been gaining favor over the course of the past century.

Perhaps the most menacing trend in the modern state is the people’s increasing reliance on the government and its various programs. The bigger government becomes, the more it seems its citizens are incapable of performing even the most basic daily activities—the more regulations government lays down on walking, talking, eating, playing, working, teaching, learning, and so on, the less capable we are at performing these basic life functions. As we have seen, the kind of freedom sought in the twentieth century—that is, the positive kind of freedom, the kind that grants us material well-being and all of our necessities—has come only at the expense of the power of choice and thus all of our responsibility in the matter. An individual in our modern Welfare State may finally get all that he needs, but he has lost his individuality in the process; he lives, but carries on lifelessly.