“Old age, ill health, the bringing up of children and interruption of earnings, these are contingencies of life to be paid for out of one’s income, and for which adults can be expected to provide by saving or insurance. In many Western countries provision for these contingencies has come to be taken over largely by the State. Because the provision cannot be adjusted to the widely varying circumstances of individuals and families, it is apt to be both expensive and unsatisfactory. Such provision is necessarily financed by taxation. As a result many people’s post-tax income becomes like pocket-money,which is not required for major necessities and hazards of life because these are paid for by taxes largely levied on themselves. This policy treats adults as if they were children. Adults manage incomes; children receive pocket-money. The redistribution of responsibilities implied in the operation of the welfare state means the reduction of the status of adults to that of children.
“There is a further result of large scale redistribution of responsibility between the agents of the state and private individuals, a result which acts as anomolous [Bauer’s preferred word for utterly idiotic] and even ominous force for perpetuating and extending this policy. Prudent people, even if poor, can normally provide for the contingencies of life by saving and insurance, but only if the value of money remains reasonably stable. They are unable to do so when this condition does not hold. Heavy state spending on welfare in various ways promotes the erosion of the value of money, a risk against which many people cannot protect themselves, certainly not by saving and insurance. The difficulty, or impossibility of protecting themselves effectively leads them to accept or to demand that tax-financed provision for these contingencies should be maintained or extended, even if this is recognized to be unsatisfactory.”
Ponder this. What he is noting is both that welfare states infantilize people, by design, and also that Keynesian policies, through the inflation they tend to provoke, tend to make the little lambs cling yet more tightly to their mothers teat, out of necessity.
Always, the increase in dependence, through policies enacted through people who are themselves economic parasites.