Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals

by Tyler Cowen

a well-constructed welfare state can distribute education and nutrition more widely. The individuals supported by this state are not only better off, but they are more likely to be productive and pay taxes, and they are less likely to overturn public order. Other benefits of redistribution stem from political improvements. Social welfare programs can buy the loyalties of special interest groups and decrease feelings of desperation, both of which can help cement social order. Furthermore, social welfare programs make many citizens feel better about their state, again boosting public order as well as political consensus and stability.1 These factors rationalize some investments in a welfare state—and yes, we should describe them as investments—and thus support some wealth redistribution. Furthermore, they suggest an appropriate nature and scope for such redistribution, namely that we try to enhance sustainable economic growth. Past some margin, an overly generous level of wealth transfer harms economic growth. Many people end up working less, or working less hard, and the associated higher tax rates discourage entrepreneurship and can lead to economic stasis. Furthermore, if it is standard procedure to approach government for a handout, that will induce too much rent-seeking, dependency, corruption, and eventually fiscal imbalances and perhaps even insolvency or a financial crisis. Alternatively, excess or poorly conceived welfare expenditures may create urban cultures of de...