If you are looking for a single statement that defines the essence of the modern welfare state, look no further than Secretary of Energy Steven Chu's defense of the administration's efforts to ban incandescent light bulbs. "We are taking away a choice that continues to let people waste their own money," Chu said, quite satisfied with government's efforts to protect Americans from their own choices.
Contrast this with Milton Friedman's view that
those of us who believe in freedom must believe also in the freedom of individuals to make their own mistakes. If a man knowingly prefers to live for today, to use his resources for current enjoyment, deliberately choosing a penurious old age, by what right do we prevent him from doing so? We may argue with him, seek to persuade him that he is wrong, but are we entitled to use coercion to prevent him from doing what he chooses to do? Is there not always the possibility that he is right and we are wrong? Humility is the distinguishing characteristic of the believer in freedom, arrogance of the paternalist.
For too long, both liberals and too many conservatives have attempted to impose on people the government's standards of what is best for them rather than leaving them to their own decisions, merely because those decisions may be mistaken. That is the real legacy of the welfare state as expanded by President Obama and as it has been practiced on a bipartisan basis for the last half century or more: We are, quite simply, less free.
In some cases, the restrictions on liberty are tangible and easily seen. As the economy becomes more and more socialized, so too do the consequences of individuals' behavior. This, in turn, creates an incentive for the state to control that behavior. After all, if individual decisions impose a collective cost, it is only rational for those bearing that cost to demand input on those decisions. Thus, the nanny state seeks to restrict all manner of private consensual activity, whether it is eating fast foods and smoking or having consensual sex or driving without a seat belt.
But there are other equally important, if less obvious, ways that the welfare state restricts liberty. Government-run health-care systems, for example, impose a minimum amount that you must spend on health care, either through taxes or through insurance mandates, as with the Patient Protection and Affordable Care Act. They determine which medical conditions and eventualities you must insure against, even if you would prefer not to cover such conditions. Thus, they turn individual moral decisions, such as whether to buy insurance that covers abortion, contraception, or drug-abuse treatment, into political questions. And in some government-run systems they deny people the right to purchase the health care they want even with their own money.
By the same token, government-run anti-poverty programs limit your ability to support the charity of your choice. Money you pay in taxes to support government charity is money that you cannot donate to private charity. Yet the charitable activities chosen by the government may not be the ones that you would have chosen, or even the ones most needed. Indeed, the government's charitable decisions are likely to be driven by politics, favoring those constituencies with the greatest voting power or those causes that capture the public imagination because they are on television or in the newspapers.
Government-run schools automatically pit the values of one group of parents against the values of other groups. How many textbook controversies or debates about what to teach about homosexuality, whether students may pray, or phonics versus whole language could be avoided if parents could choose the school their child attended?
Social Security may or may not be a Ponzi scheme, but it prevents people — especially poor people — from saving and investing for their own retirement in ways that would allow them to build real, inheritable wealth.
Beyond the programs themselves, there is the simple fact that every dollar that the welfare state consumes to pay for itself is one fewer dollar that individuals have to spend the way that they want to, however that may be. As the French economist Frederic Bastiat put it in his parable of the shopkeeper with the broken window, "He would, perhaps, have replaced his old shoes, or added another book to his library." Or to put it in today's context, he might have purchased health care, saved for his retirement, or donated to charity. He might have started a business and hired workers. Or he might have spent it entirely on pleasure or frivolities. He might even have bought energy-inefficient light bulbs.
Whatever he might have done, he is now deprived of that choice. He is, in fact, less free.
Once paternalism is accepted in principle, there is no limit to the actions that government may take in controlling our lives and restricting liberty. The ultimate result, as Friedman writes, is "dictatorship, benevolent and maybe majoritarian, but dictatorship nonetheless."
As we debate the ever-expanding welfare state and all its consequences — joblessness, a crushing debt burden on our children and grandchildren, and the loss of opportunity for the neediest among us — let us not forget the other casualty of big government: freedom.