January 18, 2023

Watching the old film The Bounty, I was struck by the depiction of the horrors of Captain Bligh’s authority — and the charming face of the mutineers, especially Lt. Fletcher Christian, played by a young Mel Gibson.  Taking the historical tale as a starting point, the film transforms events of the past into the controlling myth of our present: the overriding virtue of compassion and self-gratification.  Ours is an age in which the “easy way out” is always the right way out.

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Compassion is a wonderful quality, but not in every situation.  It is not good to be compassionate during war, or preparation for war.  Or in business dealings.  Or in education and training (to paraphrase T.S. Eliot, no student should ever be denied the right to fail).  Or in government in general.

For a government to be compassionate, it must obtain the necessary revenue to fund that compassion.  To do so in a meaningful way, government needs, at a minimum, for these purposes alone, somewhere between twenty and thirty percent of its citizens’ income, the amount claimed in Europe and Canada for welfare-associated spending.  And this on top of what is needed for routine operations of government: policing, courts, military, infrastructure, and public education.

In welfare states like France, with its marginal rate of 55.4%, affluent citizens are forced to hand over more than half of their earnings.  The more successful one is, the more one is taxed.  At one point, the French government discussed imposing a marginal rate of 100% or more, taxing not just all of one’s earnings but seizing one’s capital as well.  As a result, many successful individuals such as actor Gerard Dépardieux left the country.  High European tax rates are one of the reasons why Monaco is home to so many wealthy individuals, including dozens of billionaires and celebrities such as Novak Djokovic and Björn Borg.

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The U.S. is not there yet, but it is well on its way to becoming a European-style welfare state.  Welfare states operate by seizing the income of their citizens.  It is a mistake to think there are no victims in this process, or to think that the burden is just on what progressives like to call “the rich.”

Still, the wealthy have a way out: they can pass along the cost of higher taxes to those who use their products and services.  In inflationary times, companies increase prices to maintain earnings, and those earnings are shared by investors.  Ironically, the lower income groups are harmed by higher taxes on the rich, since those taxes are passed along in the form of higher prices.  The more “compassionate” government becomes, the more it harms the poor.

It is also possible for the wealthy to flee high-tax countries or states, and here again the burden falls on the poor.  Deprived of the investment capital of the wealthy and the expert services of the upper-middle class, the standard of living in high-tax regions declines.  Absent the means of production, shortages and wait times increase.  Again the burden of taxation falls on the poor, the very ones that “compassionate” countries like France and states like California purportedly attempt to help.

There is an additional problem with compassionate government.  When government collects and redistributes half of a society’s GDP, a great deal gets lost in fraud, inefficiency, and harmful programs.  A program like Job Corps, which has been rated a failure every year for decades, was funded at $1.7 billion in FY2021.  According to a Heritage Fund report, “[c]osting $25,000 per participant over an average participation period of eight months, the program is a waste of taxpayers’ dollars.”

Every “compassionate” government program ends up stealing from the poor in terms of the goods and services it deprives them of.  According to the GAO, when government creates a program to assist the poor, “[a] significant portion of these funds cover administrative costs rather than direct benefits and services.”  But as Heritage points out, “[t]he true cost of welfare or aid to the poor is largely unknown because the spending is fragmented into myriad programs.” When federal grants are sent to the states, and from the states to cities, from cities to local charities, from charities to the poor, very little of the original revenue reaches those who were supposed to be helped.

This is not to say that one should not be compassionate, but compassion should be expressed through private charities.  In some cases, but hardly all, private charities do a better job than government in helping the needy.  (According to Consumer Reports, Catholic Relief Services and Boys and Girls Clubs of America are efficient, while a number of others are not.)