Pauperism, etc.

Pauperism, etc.

For good reason, Alexis de Tocqueville is considered among the greatest and most perceptive observers of the grand experiment launched by the American Founders in 1776.  Before he made a name as the chronicler of “Democracy in America,” however, Tocqueville made a trip to the mother country, England, to examine the operation of democracy in that great land.  In 1833 – two years before the publication of the first volume of his American magnum opus – Tocqueville traveled to England to study the impact of the previous year’s Reform Act.  Specifically, he was interested in the effect on the nation of vastly expanded suffrage, which had been the centerpiece of that law.

In England, he found a people and a nation in the throes of social unrest, unrest that would spread to grip the entirety of Europe within a decade.  While the general consensus attributed much of that unrest to the newly expanded suffrage, through his discussions with various political figures and observers, Tocqueville settled on a different culprit, the nation’s “poor laws.”

Starting in the early 1530s, King Henry VIII and his advisers began the formal separation of the Church of England from Rome and the consolidation of political and religious authority under the English crown.  In time, this process necessitated the closing or destruction of Catholic monasteries and religious orders, which had been the source of most private charity in the country, most of the services provided to the poor and indigent to help them cope with the difficulties of late-medieval life.  In response, various forms of public charity were instituted (or enhanced) on an informal basis, as needed, throughout the remainder of the century.  In 1597 and 1601, Queen Elizabeth I formalized these laws with the Poor Relief Acts, thereby creating the first official welfare state in the world.

Two hundred years later, most of England’s political and economic elites agreed that the poor laws needed to be reformed, although there was little consensus about how best to do so.  What had begun as an act of decency and the recognition that large institutions can play a significant role in ameliorating temporal human suffering had become a social and economic mess, paradoxically pitting the poor against the very rich whose wealth and resources were consumed to aid them in their need.

Against this backdrop, Tocqueville examined England’s Poor Laws, studying their impacts on the poor, on the rich, and on the whole of society.  He drew several conclusions that, over time, have proven exceptionally shrewd and even prophetic.  While governments continue to ignore or deny Tocqueville’s observations, the veracity of his deductions remains largely unassailable.

To be clear, Tocqueville noted that some concession from the rich to the poor through the state – which he termed “public charity” – was unavoidable.  Even in 19th-century England, it was clear that private charity was inadequate to address all the addressable needs of society as a whole.  Public charity would always be perilous and less than ideal, but it inarguably had a role in the modern state.

Additionally, Tocqueville noted that the spirit in which public charity was conceived and employed was quite noble and generous.  “At first glance,” he wrote, “there is no idea that seems more beautiful and grander than that of public charity.”  It appeared, at least superficially, that public charity could provide the best of all possible worlds, satisfying society’s most desperate concerns in a fair and honorable way: “At the same time that it assures the rich the enjoyment of their wealth, society guarantees the poor against the excessive misery.  It asks some to give of their surplus in order to allow others basic necessities.  This is certainly a moving and elevating sight….”

As is often the case, however, in this instance, reality turned out to be much different than the theory.  Because the giving and the receiving are made compulsory, the beauty and grandeur are fleeting.  Tocqueville wrote that private charity – the willing act of man providing for his fellow man, sharing voluntarily from his wealth to enable and empower his less fortunate neighbor – “establishes valuable ties between the rich and the poor,” a “deed [that] itself involves the giver in the fate of the one whose poverty he has chosen to alleviate.”  Moreover, Tocqueville noted, “the latter . . . feels inspired by gratitude.”

Compulsory “giving,” by contrast, severs those bonds and serves only to “inflame society’s sores”:

The law strips the man of wealth of a part of his surplus without consulting him, and he sees the poor man only as a greedy stranger invited by the legislator to share his wealth.  The poor man, on the other hand, feels no gratitude for a benefit that no one can refuse him and that could not satisfy him in any case . . . . Far from uniting these two rival nations, who have existed since the beginning of the world and who are called the rich and the poor, into a single people, it breaks the only link which could be established between them.  It ranges each one under a banner, tallies them, and, bringing them face to face, prepares them for combat.

In essence, then, the conclusion Tocqueville draws from the English Poor Laws is that compulsory, institutionalized altruism, while sounding noble and representing a real human desire for benevolence, actually causes significant harm.  It wrecks the spirit of gratitude in those benefitting from the “altruism.”  It fosters bitterness and resentment among those whose property is used to enable the compulsory altruism.  And, perhaps most importantly, it damages the entire, previously functional system.

As President Biden moves, yet again, to “forgive” student loan debt, it is worth keeping in mind Tocqueville’s admonitions.  There is no real “forgiveness” in this process, merely a transfer of wealth from taxpayers to debtors.  It is yet another instance of public charity, with all that entails.

You will note that throughout the Biden presidency, as he has “forgiven” student loan debt in dribs and drabs (of several billion dollars apiece) there has been no expression of gratitude to taxpayers from the recipients of their largesse, no voluntary recognition of the taxpayers’ generosity, only frustration and bitterness from working men and women who forewent student loans and higher education and are now, in part, required to pay to support those who chose to do otherwise.  It is precisely as Tocqueville foretold.

It is also worth keeping in mind the warning issued by James Madison about the damage that would be done to the people and the nation from a system of taxation that was applied unequally.  For the most part, the Founders found the notion of a tax levied inconsistently to be so outside of the realm of serious consideration for a government dedicated to liberty that they almost never even mentioned the idea.  It is broached only once, in Federalist #10, and then only tangentially, as part of a broader discussion of the importance of preventing certain factions of society from acting in concert to “carry into effect schemes of oppression” against others.  Still, Madison wrote:

The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice.   Every shilling with which they overburden the inferior number, is a shilling saved to their own pockets.

So many of the problems in our society today – in a society ruled by a government that is primarily interested in redistributive policies – could have been avoided if we had bothered to heed the warnings of Tocqueville and Madison.  Because of the expanse of redistributive policy, “public charity” today means far more than welfare and does damage to the fabric of our communities in far greater significance than either of these two seers could have imagined.

One imagines that government of, by, and for the people cannot long survive under such conditions.

Stephen Soukup
Stephen Soukup
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Steve Soukup is the Vice President and Publisher of The Political Forum, an “independent research provider” that delivers research and consulting services to the institutional investment community, with an emphasis on economic, social, political, and geopolitical events that are likely to have an impact on the financial markets in the United States and abroad.