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From Hoppe’s “Democracy: The God that Failed.”
The recognition of democracy as a machinery of popular wealth and income redistribution in conjunction with one of the most fundamental principles in all of economics that one will end up getting more of whatever it is that is being subsidized provides the key to understanding the present age.
How do we, as Catholics, give to others in a way that is not subsidizing the very poor lifestyle we are trying to get people out of?All redistribution, regardless of the criterion on which it is based, involves “taking” from the original owners and/ or producers (the “havers” of something) and “giving” to nonowners and nonproducers (the “nonhavers” of something). The incentive to be an original owner or producer of the thing in question is reduced, and the incentive to be a
non-owner and non-producer is raised. Accordingly, as a result of subsidizing individuals because they are poor, there will be more poverty. By subsidizing people because they are unemployed, more unemployment will be created. Supporting single mothers out of tax funds will lead to an increase in single motherhood, “illegitimacy,” and divorce. In outlawing child labor, income is transferred from families with children to childless persons (as a result of the legal restriction on the supply of labor, wage rates will rise). Accordingly, the birthrate will fall. On the other hand, by subsidizing the education of children, the opposite effect is created. Income is transferred from the childless and those with few children to those with many children. As a result the birthrate will increase. Yet then the value of children will again fall, and birthrates will decline as a result of the so-called social security system, for in subsidizing retirees (the old) out of taxes imposed on current income earners (the young), the institution of a family-the intergenerational bond between parents, grandparents, and children-is systematically weakened. The old need no longer rely on the assistance of their children if they have
made no provision for their own old age, and the young (with typically less accumulated wealth) must support the old (with typically more accumulated wealth) rather than the other way around, as is typical within families. Parents’ wish for children, and childrens’ wish for parents will decline, family breakups and dysfunctional families will increase, and provisionary action-saving and capital formation-will fall, while consumption rises.