Foreign Aid and the International Welfare State

          WHEN I first sat down to type up this article, I was a bit confused on the manner in which I should begin. This has happened once or twice before. While something usually comes to me, the best remedy – which I am going to be using now – is to simply jump right into the main idea. No introductory dilly-dallying.

          Both welfare and foreign aid have been hot topics in recent years. The ever-leftward Democrats have been calling for welfarist initiatives such as Medicare-for-All and outright expansions of the welfare state. The Trump administration was defined by a platform bitterly opposed to international aid, which lead to the usual squealing of “nativism” and (somehow) “fascism”. To a certain extent, it seems as if most political commentators and the citizenry see these two topics as distinct; welfare is domestic policy, foreign aid is foreign policy. However, what I want to propose in this article is that these two concepts are overlapping and are intended to supply the same effect.

          First, we should analyze welfare. The [surface-level] sentiments behind welfare were best expressed by President Lyndon B. Johnson, the indisputable father of the American welfare state, in his 1964 speech at Ohio University:

“And with your courage and with your compassion and your desire, we will build the Great Society. It is a Society where no child will go unfed, and no youngster will go unschooled. Where no man who wants work will fail to find it. Where no citizen will be barred from any door because of his birthplace or his color or his church. Where peace and security is common among neighbors and possible among nations.”

          From this ideology would sprout Medicare, Medicaid, the Economic Opportunity Act, and various other programs during the 1960s. Between 1960 and 1975, U.S. government spending increased from ~$1 trillion to ~$1.5 trillion. Between 1955 and 1976 there was a similar spike in the number of welfare recipients, from 2.2 million to 11.5 million (Rothbard 2006, p. 176). As of 2021 over 59 million Americans are now monthly recipients of these government handouts.

          However, what is the true nature of this ideology? What really lies behind the supposedly humanitarian convictions of the welfare state? I believe the true purpose is shown by what the arch-welfarist himself, LBJ, once said in private: “I’ll have them n*****s voting Democratic for two hundred years” (Kessler 1996, p. 33). It was strictly a political ploy, along with civil rights (the immediate context of the above quote). It was a desire to enslave the political sensibilities of the American public, and enslaved them it has!

          The complete and utter failure of Johnson’s “War on Poverty” has been pointed out and lambasted by scores of economists who know better (namely from the laissez-faire Austrian and Chicago schools). The best in-depth treatments of welfarism are Henry Hazlitt’s Man vs. The Welfare State and George Guilder’s Wealth and Poverty (new rev. ed.), and a noteworthy appendix is Thomas Sowell’s Wealth, Poverty, and Politics (2nd ed.). The most balanced, empirical, and economically sensible conclusion regarding welfarism is phrased excellently by Theodor Geisel:

“The three words that best describe you are as follows, and I quote, ‘Stink, stank, stunk’!”

          Welfare is and always will be an abysmal failure. Why? So many reasons! I will try to be detailed yet brief overall. These discussions have the chance of carrying on indefinitely.

          I wish to bring your attention to the mouse utopia experiments of the 1960s, conducted by ethologist John B. Calhoun. These experiments can prove very enlightening for one researching welfarism. In this experiment:

“Calhoun enclosed four pairs of mice in a 9 x 4.5-foot metal pen complete with water dispensers, tunnels, food bins and nesting boxes. He provided all the food and water they needed and ensured that no predator could gain access. It was a mouse utopia.”

          Calhoun created the perfect environment. The mice had nothing to worry about, not predators nor nature. However, as the experiments carried on, Calhoun began collecting data and making observations that he realized had implications that carried over into the realm of humans. As he said, “I shall largely speak of mice, but my thoughts are on man.”

          Calhoun’s little vermin utopia started off very well. There was consistent population growth and the surface-level appearance of stability. However, after nearly two years, things began going bad. The population of the utopia began declining rapidly, continuing until the mice went extinct. Calhoun noted that the change in the utopia’s behavior occurred on day 315, when a large number of anomalies began presenting themselves in the mice, such as:

• Females abandoning their young.
• Males no longer defending their territory.
• Both sexes becoming more violent and aggressive.
• Deviant social and sexual behavior.

Since the supply of basic necessities came freely and easily, combined with zero threats from any predators, the mice never had to acquire resources on their own, they never had to use or display any basic survival skills. As a result, young mice never observed such actions and never learned them. The life skills necessary for survival faded away. As Jan Kubań, a Polish biocybernetician (that sounds fun), explains, “Utopia (when one has everything, at any moment, for no expenditure) declines responsibility, effectiveness and awareness of social dependence, and finally, as Dr Calhoun's study showed, leads to self-extinction.”

The Calhoun experiments show that, fundamentally, welfare is a terrible idea. The applicability of the Calhoun experiments to men is realistic, I must also mention, because it deals with very basic natural instincts which are home to both men and beast, rather than the more complex features of man (sentience, introspection, etc.); the laboratory rat exists as a stand-in for a reason. Ultimately, welfare decays one’s nature, making them deadened to their instincts and survival skills, leading to an overall degeneration.

Welfare is also a logistical/bureaucratic nightmare. A good volume of research has proven that private charity, in comparison to public welfare, is far more effective in alleviating poverty. This disparity in efficiency is derived from two points:

1. Public welfare is a given; it will always appear in a recipient’s mailbox when expected. Private charity is not a given and might not come through. This gives a recipient of charity incentive to become self-sufficient, rather than dependent.
2. Public welfare is overwhelmingly spent on administrative/bureaucratic needs. Seven out of every ten dollars given to public welfare is used on the welfare bureaucracy itself, with the remaining three going to actually aiding the poor. The statistics are flipped for private charity.

It is that first point, dependence, which we should also focus on. Like in the mouse experiments we looked at, welfare doesn’t improve people, it simply placates them. As many have said, “Welfare subsidizes idleness, not improvement.” Indeed, in light of the COVID-19 pandemic and trillion-dollar government handouts, nearly 2 million people (see also) refused to return to work. Why? They were getting better paid by the government than private employers subject to all sorts of regulations and public health diktats could!

Welfarism is simply a disastrous concept. It will not and has not worked. While the pundits/intellectuals of leftism adore exemplorum gratia like Norway or Finland for the potential feasibility of the nanny state, the appeal to these countries are based upon generalizations, misinterpretations, and the superficially cheery veneer of these societies. These countries are not good case studies in welfarism.

Now understanding that public national welfare is a net negative, we can turn our discussion to international/foreign aid. It is my argument that international aid is built upon the same exact superficial premises (faux humanitarianism) and hidden desires (political enslavement) as public welfare. The liberal and internationalist Brookings Institution published the book Organizing U.S. Foreign Aid in 2005 and states outright that foreign aid is primarily to fulfill humanitarian and altruistic purposes, formally designated “development” which is achieved through ensuring the alleviation of poverty, the delivery of education, the maintenance of healthcare, etc. (Lancaster and Van Dusen 2005, pp. 4-5).

These are the same exact services that public welfare provides. The services are the same and the sources are the same (taxpayer dollars filtered through government agencies). These are government-funded handouts given to alleviate the socioeconomic burdens of a particular community; international aid is simply more large-scale than welfare. The use of international aid schemes in politically enslaving poor countries is outlined in chapter six of G. Edward Griffin’s The Creature from Jekyll Island, “Building the New World Order” (Griffin 2010, pp. 107-132), and more comprehensively in John Perkins’ Confessions of an Economic Hitman (see Perkins 2004).

The countries targeted by international aid schemes are usually vulnerable, typically in an economic sense, i.e., poor. Being poor, they can only put out so much money, and desire taking in so much money. Once in a while, a Western financier will come along and offer billions to the poor country, but these are billions that they will have to pay back. Eagerness for the economic relief trumps rational contemplation, and in a blink of an eye the country finds itself indebted in the 10- or 11-digit range. Panama is an enlightening case study of this:

“At the time of the Torrijos-backed coup in 1968, Panama’s total official overseas debt stood at a manageable and, by world standards, modest $167 million. Under Torrijos, indebtedness has skyrocketed nearly one thousand percent to a massive $1.5 billion. Debt-service ratio now consumes an estimated 39 percent of the entire Panamanian budget… What it appears we really have here is not just aid to a tinhorn dictator in the form of new subsidies and canal revenues the treaties would give to the Torrijos regime, but a bailout of a number of banks which should have known better than to invest in Panama and, in any event, should not escape responsibility for having done so.” (Crane 1978, pp. 64, 68; quoted in Griffin 2010, p. 115)

          Indeed, the negative impact of international welfare has been realized since the 1960s. This is thanks to the works of Peter Bauer, a Hungarian-British economist who studied the economies of developing countries, such as in his book West African Trade (Bauer 1963). What Bauer observed was that there was a very high demand for jobs in the region – for example, a tobacco factory in Nigeria fired two clerks and, without publicizing the vacancies, received dozens of applicants (Bauer 1963, p. 19) – but wages were being kept at very high levels, preventing West African companies from keeping up with the demand for employment (Bauer 1963, p. 18). Four decades after Bauer the same situation was seen in South Africa, as The New York Times reported, “In other developing countries, legions of unskilled workers have kept down labor costs. But South Africa’s leaders, vowing not to let their nation become the West’s sweatshop, heeded the demands of politically powerful labor unions for new protections and benefits.”

Let us not act like international aid is merely a neocolonial scheme of the evil Westerners, as certain leftists and Arab nationalists would have you believe. While the West engages in this, so do the two other major superpowers in the World. Russia most clearly dabbles in this international welfare scheme by helping build up Syria, which it is only doing to gain access to the Mediterranean. Similarly, China is well-known for pouring billions into Asian and African countries in order to win them over via economic dependence. Then, when we consider a shadowy elite secretly unites all these seemingly rivalrous countries, we realize that this is all part of the same scheme to enslave the World and put it under a singular politico-economic order; a master puppeteer can animate several puppets at once.

          So, just like how in America a welfare state was set up to acquire the political loyalty of the masses (having “them n*****s voting Democratic for two hundred years”), it seems very clear that the international welfare state – operating through the International Monetary Fund, World Bank, USAID, and other IGOs – has been set up for much of the same purposes (having them poor nations voting globalist for two hundred years). Foreign aid keeps corrupt elites corrupt, but drains the common rabble of their souls. It is international bribery.

 

 

BIBLIOGRAPHY

• Bauer, Peter T., West African Trade: A Study of Competition, Oligopoly and Monopoly in a Changing Economy (London, UK: Routledge & Kegan Paul, 1963).
• Craine, Philip M., Surrender in Panama: The Case Against the Treaty (Ottawa, IL: Caroline House Books, 1978).
• Griffin, G. Edward, The Creature from Jekyll Island: A Second Look at the Federal Reserve (5th ed.; Westlake Village, CA: American Media, Inc., 2010).
• Lancaster, Carol J., and Ann Van Dusen, Organizing U.S. Foreign Aid: Confronting the Challenges of the Twenty-First Century (Washington, D.C.: Brookings Institution Press, 2005).
• Perkins, John, Confessions of an Economic Hitman (San Francisco, CA: Berrett-Koehler Publishers, 2004).
• Rothbard, Murray N., For a New Liberty: The Libertarian Manifesto (2nd ed.; Auburn, AL: Ludwig von Mises Institute, 2006).