Monday, November 5, 2012

My Personal Case Against Charity and Welfare

[This article originally appeared on the blog on September 11, 2012]

As another US presidential election gets into high gear, the narrative of the “brother’s keeper” that Barack Obama brought forth at his first major speech in 2004 (12:50) is beginning to dominate the debate. Dr. Gary North recently explained how this is a mischaracterization of the biblical story of Abel and Cane, where in fact the implied answer to the question “Am I my brother’s keeper?” is in the negative. The facts of this story notwithstanding, the idea that the citizens of a society (city, province/state, or country) ought to be coerced to be each others’ “brother-keeper” has prevailed quite strongly even in the classically liberal (individualistic) society of the United States of America, even among those representatives of the political Right. Now, I see this whole philosophy as an extension of the old Judeo-Christian socialist (the original Marxists) approach to be fruitful and multiply, thereby throwing reason to the wind in the name of this godly command. This idea is supported by false premises which suggest that individuals cannot create wealth—rather that wealth must be gifted them by the State, or stolen from the meek; and that the rich keep getting richer while the poor get poorer. Unsurprisingly, since it stems from religion, at the bottom of this quasi-economic theorizing is a sort of mysticism which attributes god-like capabilities to governments that allow them to create wealth out of thin air.
While many an academic paper have been written in the effort to refute these popular fallacies, they remain popular still. Rather than add yet another paper on the theory of the matter, I feel that giving a practical example of how things really work might be more helpful. As what I am about to unfold is in essence a biographical story of a portion of my life, I embark on this task with reluctance. I seek neither sympathy, nor proverbial pats on my back. I simply wish to prove the proponents of the welfare state wrong.

I shall begin the story with my family’s arrival in Canada at the turn of the 21st Century. As indicated in the “Author Spotlight” section, my family was exiled from our native homeland in the year 2000. My brother landed in Alberta in the Fall of 2000 as a university student; my parents in Ontario in December of the same year; I had spent that school year in Florida, as an exchange student, and arrived in Ontario in May of 2001. The details as to what caused our exile are rather irrelevant to the point of this article, so they shall remain omitted. The following facts, however, are: in fleeing to safety, my family was forced to leave behind all our worldly possessions—except for a handful of suitcases of old clothes and some petty cash to pay for the trip to Canada; both of my parents were about to turn 50 in the near future, and spoke no English (or French); my brother and I spoke English, but were 20 and 17 years old respectively; none of us had Canadian experience; apart from one family, we knew nobody in Canada.

According to the theories propagated by Mr. Obama and his ilk, my family was doomed. At this point our only hope would have been provided by the Canadian State which would have had to intervene and supply us with jobs, start-up capital, housing, education, healthcare, tutorials on integrating into Canadian society, provide us with friends, etc. Yet, the facts of the matter were wholly different. The Canadian State only provided us with obstacles, such as requirements to obtain “legal status” in the country—which meant the waste months of workable time as well as several tens of thousands of dollars over the next five years in Immigration and Refugee Board procedures; ineligibility to work for the majority of our first year as a result of not having work permits; the Healthcare system which produces doctor shortages deprived a member of my family of a timely visit to a specialist when it was desperately needed; the red tape and regulation related spending surrounding drivers’ licenses and vehicle registration forced us to waste money that could have been otherwise spent on building capital, in satisfying bureaucratic requirements; etc.

Having arrived in Canada virtually penniless, it was imperative for my family to start working as soon as possible. Having arrived in Canada without a work permit from the Canadian Government, getting a job was not an option. For the first few months my parents stayed with a friend, but all hospitality has its limits. During that time, my dad was able to get his G2 driver’s license—he was treated as a novice, despite having been a driver in Europe for close to 30 years. In the Spring of 2001 my parents spent the last $600 dollars they had brought with them from the Old Country in purchasing our friend’s 1989 Chevy Vandura and moved out. They spent the next two nights sleeping in the back of the van. Neither of them had a job at this point, due to the fact that their IRB applications had not yet reached the stage where they could become eligible for a SIN, with which they could apply for work permits. Following the State’s prescription, getting a job was at this point at least some months away.

Of course, the reason why my family was exiled from our native country is our dissent with statism. While breaking Canadian laws would have meant deportation for my family back to Macedonia, taking government welfare was never an option. So a third option was necessary. While my parents spent their first two nights away from our friend’s house sleeping in the Vandura, they spent the days collecting garbage. It was a specific sort of garbage: wooden pallets used to transport goods on. You see, once a store receives goods on top of a pallet, that pallet becomes nothing more than a nuisance to it. Stores struggled with their pallet problem for years—until the 1990’s when pallet recycling started becoming a widespread business practice. Those who were in on it early on were able to make generous profits, while serving both stores which would otherwise had to pay the garbage collectors to get rid of them, and providing producers cheaper alternatives in the way of pallets. By the early 2000’s the industry had become quite wide spread, and was starting to get competitive in the large metropolitan areas, though it was still underdeveloped in the outer edges. The established pallet recyclers were doing a good job of servicing large factories and distribution centers which shipped truckloads at a time; but they could not find profitable ways to serve stores and small companies which dealt with a handful of pallets weekly. Thus, the need for independent pallet pickers developed—a need that my dad saw as the perfect opportunity for himself.

Now, let me be clear: he did not invent independent pallet picking, it was already an established practice; though rarely as a full time profession. In many ways this is not different from aluminum or cardboard pickers and the like. Also since he was receiving finders’ fees, and not wages, he was technically not breaking the law. This was crucial. As I noted before, my father spoke practically no English whatsoever. The government vision sees people like him taking English for Speakers of Other Languages, paid for by taxpayers, before integrating into the workforce. My parents saw this as a waste of time. Even with the very little knowledge of English, they were able to go through the phone book and locate pallet recyclers that bought pallets from street vendors. Uneasiness is the drive for human action indeed. It took my parents less than a week to get the money together to rent an apartment. The Vandura lasted less than a month; but by then we could afford a $3,000 1990 Ford F-150; which in turn lasted for a year, at which point we upgraded to a 1990 Ford F-350 flatbed.

We settled in the Niagara Region precisely because pallet picking was underdeveloped in that area. There was no need of generosity, just the need for freedom from harassment from taxpayer-paid-racketeers to hold back competition. While we deprived many a hobby pickers from the additional income of a few hundred dollars per year, we provided valuable service to countless businesses in the Region by taking away their refuse; while on the other hand we helped the pallet recyclers that we dealt with grow and create new jobs.

At no stage did we receive government assistance, yet we thrived. We started out penniless and homeless. When I say homeless, I mean to say that not only did we have no house; we also had no house wares like furniture, kitchen utensils, or beds. Yet, it did not matter: within weeks of my parents leaving our friend’s house, we were starting to build a home of our own, and a business to boot. All that was necessary was our own effort. I grant that policy makers considered my household to be living under the line of poverty for the majority of our first four or five years in Canada, but there was hardly any pleasure, not to speak of necessities, that we deprived ourselves of during that time—despite the fact that one member of my family required expensive medical treatments all along the way.

Now, I don’t tell this story to many people. So, when I find myself in an argument over the socialization of society, I’m always amazed at what people that have never been downtrodden think happens to you if you are. They are only able to see the false construct of “the vicious circle of poverty.” Since I’ve been living a more or less middle class lifestyle for the most of my time in Canada, people just assume I have a “normal” background and see me as a propagator of cruelty when I speak against charity in general, and government welfare in particular. When I disclose my family’s early experience in Canada, I either get a concession from the person I’m debating, or else I get the inexplicable comment of: “Well, yeah, but you guys are different.” This comment has without exception left me baffled on every occasion that I’ve heard it, as there is nothing ostensibly different about the members of my family from anybody else in society. We all have the same number of limbs, eyes and ears as the average person. No member of my family graduated from university (or college); no member of my family possesses a special skill whatsoever. Indeed, the sort of work we have done for the past dozen years has been that of unskilled laborers. The only difference I can think of is the fact that my family takes responsibility for itself and expects no handouts. Perhaps if more families took the same approach, all of us would not be wasting our lives in the Great Recession.

Weighing In On The Entrepreneur Debate
Over the past few months Austrian economists Peter G. Klein and Israel Kirtzner have opened up a debate over the nature of the entrepreneur. In the last week or so, Economic Policy Journal’s editor Robert Wenzel having taken Mr. Kirzner’s side, has escalated the debate by zeroing in on what he sees as the shortsightedness of Mr. Klein’s argument in that “there are no objective profit opportunities to be alert to.” Having given the example of how my family got started in Canada, I believe that I can offer an example to support Mr. Wenzel’s argument. According to Klein, an entrepreneur is only he who takes a risk. Kirzner and Wenzel’s view is that while risk is often present in entrepreneurial undertakings, it is not a defining characteristic of entrepreneurship. To them the crucial characteristic of the entrepreneur is his alertness to opportunity.

As I noted above, when my father started out as a pallet picker the practice was already established, thus he took no risk of inventing a new process in the recycling of wooden pallets. Before he took on the risk of going out to waste his time, money on fuel, etc. on collecting pallets, he made no charge phone calls by which he ensured himself of a market for the product he did not yet have. He found the market in the pallet recyclers who paid finders’ fees for pallets delivered to their premises; while the product was easily found for free on street curbs and behind mini-malls. So, when he actually went out and collected pallets he did it with no risk at all. My dad simply saw an opportunity in the many pallets around town which no one bothered to collect. The same can be said, say, of house cleaning businesses, poop-scoopers, etc., where the sort of work to be done is generally considered to be “beneath one’s level.”

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