Mises Institute: How Countries Fall into the Welfare Trap

https://mises.org/wire/how-countries-fall-welfare-trap

“A dangerous side effect of this fall into a downward spiral is that the anti-capitalistic attitude in the population increases, since for most citizens, the causal links are difficult to recognize…The longer a country remains stuck in the trap, the harder it is to get out. To overcome the vicious cycle, the insight must take hold that an excessive welfare state erodes productivity.”

2 thoughts on “Mises Institute: How Countries Fall into the Welfare Trap

  1. The assumption is that capitalism is at odds with an economy that can also provide a baseline standard of living, affordable and accessible healthcare and education.

    That is false. Simply put the incentive to innovate should be wealth and not to avoid starvation.

    The right to property is important, but not necessarily paramount. For example, patents and copyrights are not indefinite.

    There is a benefit to being entrepreneurial in a nation free of corruption, with a healthy and well educated workforce and minimal to no poverty. And that benefit is not free.

    There are many nations with high standards of living, good healthcare, old age security and with very favorable conditions for innovation and starting businesses. And those businesses compete in the world market quite well. The Nordic countries are the most obvious examples.

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    1. RE: “The assumption is that capitalism is at odds with an economy that can also provide a baseline standard of living, affordable and accessible healthcare and education.”

      I don’t see how you find that assumption in the Mises piece, so I don’t know what you are claiming is false.

      The article holds that the welfare state breaks the natural linkage between productivity and general prosperity. If you mean to argue that it doesn’t, you’ll have to show how non-productive people contribute to general prosperity while remaining non-productive.

      I submit that the challenge before you is impossible.

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