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Source link: http://archive.mises.org/6879/redistribution-vs-charity/

Redistribution vs. Charity

July 20, 2007 by

It is a commonplace, for libertarians at least, that coercive redistribution cuts into charity by reducing the funds available for charitable giving. But Arthur C. Brooks, in his book Who Really Cares, points to another effect of redistribution on giving… To be precise, an effect of a belief in redistribution. From an interview with Brooks in the Acton Institute’s Religion & Liberty:

…the belief that the role of government is to provide for needs—that belief in and of itself suppresses charitable giving. Ask somebody, “do you think the government should do more to redistribute income?” People who strongly disagree with that give twelve times more money a year to charity than the people who strongly agree with that. You virtually never see differences that are that big. Even when you correct for income and age and education, there are big differences that persist between [those two] groups.


Dan July 20, 2007 at 12:59 pm

I once heard the absurd assertion that reducing taxes would reduce charitable giving because people would not be able to get tax deductions on their donations. A lot of people try to convince themselves that the state is the progenitor of all moral actions.

Keith July 21, 2007 at 8:04 pm

Why is measuring the amount of money given to charity used as a measure of “good”?

Patrick July 23, 2007 at 3:07 am

What’s so surprising about the fact that people who believe more in charity than in state welfare gives more to charity, and vice versa?

David July 23, 2007 at 10:54 am

This doesnt surprise me at all. Those who believe that its governments responsibility to provide charity are also those who believe that either

thats where their tax money should go and they have no further charitable obligation themselves,

they themselves are beneficiaries of ‘redistribution’ and naturally would like to see it increased. Who wouldn’t pass up a free lunch?.

conversely, those who dont believe its governments responsibility are those who have higher incomes. This is inferreed from the implication that they

- dont like paying taxes, and
- dont benefit themselves.

And, of course, they prefer to fund the causes they themselves find worthy, rather than leave it to bureaucrats and electioneers to allocate their charity dollars.

ONe of the regrettable aspects of the 20th century ( aside from the hijacking of the term ‘liberal’ by the soft left), was the unhealthy association between bona fide liberalism, sorry, libertarianism, and the so-called ‘right wing’ that today has hardened into insular, neocon statism. This did the Libertarian cause no favours, and it still carries the stain. in the eyes of the uninitiated. And hence often often painted by lefty detractors as being ‘ruthless’, ‘callous’, ‘heartless’ etc, these words being viewed as the simple synonyms of ‘self-interest’. Hence, the argument goes, because peolple are selfish, government and tax is needed to compel them to channel resources to ‘worthy’ social causes. etc etc.

In fact this is not at all true, as this finding clearly shows. You see, many, if not most libertarians are indeed compassionate people ( just like many lefties) who recognise that there are others less fortunate than themselves in terms of a hundred diffrent circumstances. ‘self interest’ does not mean ‘ I look after no 1 and the rest be damned’. It means ‘I deploy my efforts and resources the way I see fit’. And that may very well include , say, charitable donations to NGOs supporting, say, the cerebrally palsied in one case, or the SPCA in another case. Its a matter of choice.

And this sort of compassionate bent is never really given the credit it deserves.

there are innumerable causes out there worthy of charitable support. The problem is that they all compete against one another for funding, whether from from voluntary donations or government grants.

I submit that in a properly free market, with no tax regime and no government funding of charity, we would see the emergence of hundreds, thousands of NGOs, some large, some small, some one-man operations, all staffed and funded by people with real passion and feeling for the particular causes they believe are worthwhile. Such a charity market would collectively achieve 100 times more alleviation of suffering, on one-tenth of the funding, as compared to the orthodox government welfare-spend and result. (in any country, the principle holds). And it’s a fair bet that the causes that attract the most funding and effort in such a milieu will turn out to be exactrly those most needing it.

thjis area of free choice is all too often ignored in most economics texts because we usually focus on exchange and trade, and too often get tarred with the Gordon Gekko brush. But the thought processes leading a person to allocate some of his income to a worthy ( in his eyes) cause, is no less an economic action, no less a human action, than any bilateral marketplace trade. Theres room for lots more work in this area, because the central plank in the left/democratic/new liberal support base is the erroneous notion that people are inherently selfish and have to be compelled to be compassioinate. Erroneous it may be, but that notion runs very deep indeed.

lester July 23, 2007 at 2:44 pm

there is no worse place to panhandle than cambridge, massachusetts. one of the richest, most liberal neighborhoods on earth.

Anthony July 23, 2007 at 6:00 pm

“I submit that in a properly free market, with no tax regime and no government funding of charity, we would see the emergence of hundreds, thousands of NGOs, some large, some small, some one-man operations, all staffed and funded by people with real passion and feeling for the particular causes they believe are worthwhile. ”

Indeed. Heard of the phenomenon of philanthrocapitalism? I expect it to surge in a truly free society.

Lester, probably because those idiot liberals think the poor should be benefitting from the welfare the former so ardently clamour for, and therefore think the latter are being disingenuous – when in fact, it is often because of that very “welfare” assistance that the destitute are in such a position to begin with.

TLWP Sam July 24, 2007 at 10:09 am

‘Tis interesting in the welfare vs charity equation is to compare actual allocation of ‘welfare/charity’ money that is really intended for the poor. How many much of welfare/charity is really self-redistribution? It has been pointed out that the ’5 trillion’ dollars fought on the war on poverty in the U.S.A. is really more like 700 billion dollars when you count only the welfare that the poor can access. Similarly, how much charity actually goes to the poor or is it a general pooling of resources by the community for the community? The nett money of what is genuine welfare for the poor compared with geniune charity for the poor would be most interesting.

Jackson Frandsen April 14, 2010 at 8:45 pm

Here is a quote from Aurthor Brooks speech at BYU. You can get a free copy at http://speeches.byu.edu . His talk literally changed my life. It is one of the reasons why I come to Mises to listen and read.

“In 1906 Rockefeller went on to tell a newspaper reporter for the New York American: ‘I believe the power to make money is a gift from God . . . to be developed and used to the best of our ability for the good of mankind’ (to William Hoster, quoted in Jules Abels, The Rockefeller Billions: The Story of the World’s Most Stupendous Fortune [New York: Macmillan, 1965], 279–80).

What Rockefeller meant was this: He believed that he made money because he was charged with helping others with his money, and he honestly believed (as he wrote at other times) that if he stopped giving his money and giving it in the right way, then God would take his money away.”…

Specifically, here’s what I found. If you have two families that are exactly identical—in other words, same religion, same race, same number of kids, same town, same level of education, and everything’s the same—except that one family gives a hundred dollars more to charity than the second family, then the giving family will earn on average $375 more in income than the nongiving family—and that’s statistically attributable to the gift.”

From:” Why Giving Matters ” by Brooks, Arthur

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