Rejecting Known Truths

BlackEconomics.org®

Why do humans reject truths that are very well known? Perhaps it is because of “self-preservation is the first law of nature” principles. However, the just-given response reflects duality. When considering it systematically, we discover that certain “self-preservation” principles/actions can prove to be not self-preserving at all. For example, if one ignites a forest fire to drive away ferocious attack animals to preserve life and limb, but the fire morphs into a “wildfire” that destroys an area exceeding many days travel, then one has preserved oneself temporarily, but will meet one’s demise seeking life-preserving water and food.

On a very important truth that is well known to us, consider “gifts” or “transfers”—especially “charity” or certain “social benefits” that are extended to the needy directly by governments or their surrogates—mainly nonprofit institutions serving households. Why do citizens agree that governments should engage in such gift giving or transfers of social benefits?

Below, we present selected reasons citizens should reconsider and potentially decide to disagree with such arrangements. After covering this short list of reasons accompanied by brief explanatory notes, we take up the actual cause of our acquiescing to governments engaging in such “benevolence,” which when properly viewed is not benevolence at all. Rather, it is another tool that enables yet another subtle form of subjugation that is “authorized by the people” when they use their ballots to elect officials, who say they are doing the people’s bidding.i

Selected reasons why we should consider rejecting much of public gift giving:

1. According to many religious traditions, humans were given the greatest possible gift (life on paradisical planet Earth), declared to be the keepers of the gift (the Holy Qur’an uses the phrase “vicegerents of creation,” while the Torah orders Earth’s initial inhabitants to “dress and keep it”) with the task of preserving it. An important question to consider is: Why do humans act in so many ways to destroy this precious gift? Scientists continue to confirm without doubt that humans’ failures to account for (i.e., to ignore) our contributions to Earth’s environmental degradation does not cause that degradation to cease. Yet we have in political circles opposing views: “Acknowledgers” and “Deniers.” The point is that humans were extended a precious gift that was designed to provide for all our needs. But even the Creator (Elohim, Jehovah, Yahweh, God, or Allah) mandated a very tight association between this precious gift to humans with a requirement that work be performed in exchange. Note that given the bounty available on the Earth, not much work was required. All that was required was using energy to take what was readily available for consumption, and then to give back what was necessary to ensure that what was taken would be replenished/replaced and available for future taking: All of this is outlined succinctly in a small volume entitled “Takeconomics.”ii
2. In the Judeo-Christian-Islamic Holy Books, humans were commanded to move, live, and have their being by: “The sweat of their brow” (Genesis 3:19).iii In other words work is a fundamental requirement in the physical world that we inhabit. A failure to move and act (all working of some nature) guarantees the onset of death.
3. While the adage, “Give one a fish and they will eat for day, but if one teaches one to fish, they will possess the tools to eat for a lifetime,” may be misconstrued to be of Biblical origin, it does not appear in the Bible. Rather, according to Google’s AI (artificial intelligence) Gemini Bot, the saying appears to have originated with the late 19th and early 20th century British author Anne Isalbella Ritchie. Irrespective of its origin, the lesson is clear: Do not extend a gift that can only be consumed to meet a need. Rather, provide knowledge that can be used to produce into perpetuity that which is required for consumption.
4. Are you familiar with the “Shirtsleeves-to-shirtsleeves” in three generations admonition? It relates that one without wealth, but with a drive to obtain it, may begin life in shirt (short) sleeves and work diligently to achieve wealth. That one’s descendants (the second generation) may have observed the wealth-building effort and may maintain the pace of wealth building; and they may rise to a state of wearing only long-sleeved silk shirts. However, the follow-on (third) generation may lose their inherited wealth because they did not observe the wealth building process; they lived freely in the luxury afforded by the two previous generations, but did not value it; and being unfamiliar with the process of obtaining and maintaining wealth, they may return to a non-wealthy state characterized by shirt sleeves—maybe even short sleeves. Here again, the takeaway point is that “working to achieve” serves as a sound principle for life.
5. Residential landlords may explain to housing regulators or to law courts that higher spending levels to improve conditions within somewhat dilapidated but inhabitable housing is preposterous because such spending is wasteful and inefficient. The landlord may say: “Such spending is unwarranted because renters/tenants make little-to-no effort to preserve their environment; they do not own the property and have little-to-no motivation to upkeep the property.” While factors beyond “ownership” are relevant, this scenario makes clear potential positive spillovers from “ownership.” But to own, one must either possess existing wealth or work to earn income that can be transformed into wealth in the form of residential property ownership. Again, we see a very beneficial aspect of enabling and promoting work as opposed to offering US Department of Housing and Urban Development “Section 8 Housing” vouchers that can be redeemed in the form of access to a residential rental property.
6. We label from memory our hearing or reading of a “mini-story” (the source of which we do not recall) entitled: “The Big Bird Principle.” The story is that there were famine-like conditions in a Northeastern Afrikan nation. Aid workers from a non-Afrikan nation were sent to help the Afrikan nation recover from the famine by assisting with the training and planting of new, drought-resistant seeds. The aid workers were assigned to a village, and they recruited villagers for training that provided information about the proper methods and procedures for planting the new, drought-resistant seeds. Village women and children participated vigorously in training, but men did not participate. After some time, the aid workers decided that the men should explain why they were not participating in the training. One day after training in the field, the aid workers visited a village tree under which village men had gathered and were seated. Upon reaching the men under the tree, the aid workers enquired of the men concerning their absence from the training. Standing there and looking down at the village men, the aid workers asked:

   “Why do you all not come for training? You do know that if you learn how to use these new, drought-resistant seeds properly, then you and your village can avoid hunger, pain, and suffering that typically accompanies droughts? How are you going to respond, or what will you do when the next drought occurs, and you have not learned to use the new, drought-resistant seeds properly?”

   One of the men, who had been drinking coffee, looked up slowly, paused for a moment, and spoke softly saying: “Big bird will come.”

   The aid workers were perplexed by the statement and sought further elaboration. With respect, one of the younger men under the tree glanced at the man, who had provided the initial response, to receive approval to explain further. After receiving a nod from his elder, the young man responded to the aid workers.

   “By ‘Big bird will come,’ our elder meant that when the next drought occurs, just as in the current case, food aid giving nations and organizations will send ample food supplies via your huge airplanes that appear as big birds. So why should we train to plant the seeds? Then we will have too much food that might be wasted. Our culture abhors food wastage.”

   And so again we see what may become the “unintended” consequences of giving to one in need that which can only be consumed, as opposed to providing knowledge concerning how to produce to meet consumption requirements.
    

7. Scholars from the “Public Choice” field (Viginia Schools) of economics, including Economics Nobel (Sveriges Riksbank Prize) Laureate, Prof. James Buchanan, and Professors Walter Williams, Charles Rowley, Robert Tollison, Jennifer Roback, and others often hastened to remind voter-taxpayer-citizens to be very cautious of those (politicians or others), who come bearing “free” gifts. These scholars would clarify by repeating a well-known economic adage that “there is no such thing as ‘free’ lunch.” In other words, almost all that is offered “free of charge” comes with “strings attached.” The strings may entail some form of assessment or payment for the “free” good or service provided, or they may involve some undesired cost in cash or in kind being imposed. In part, these scholars’ concerns were that, if the public approves or accepts such “free” transfers or social benefits, then “rent seeking,” “free-riding,” or some other inefficient economic phenomenon will enter the “free gift” scenario; thereby, rendering it not only “not free,” but also imposing more payments or costs than would have been imposed otherwise if the goods and/or services had been provided to intended recipient in a market place at a price—preferably to be paid by the recipients of the goods and/or services.

The foregoing seven concepts, principles, sayings, adages, phenomena, and “mini-stories,” highlight that so many fundamental aspects of what we know stare us in the face and speak loudly into our ears: “Do not extend a free gift that can only be consumed to meet a need. Alternatively, provide the wherewithal (mainly knowledge) that can be leveraged by the needy to meet their own future—if not immediate—requirements.”

Unfortunately, in both the public and private sectors, self-interested agents (oligarchs, plutocrats, entrepreneurs, and/or politicians) coerce bureaucrats and voter-taxpayer-citizens to agree to adopt the view that human needs are not being met because of market failures (not enough economic growth, not enough employment in specific fields or industries, not enough trained personnel, etc.), which justifies direct intervention by government or its surrogates (public non-market enterprises or private sector nonprofit institutions serving households). What these agents fail to explain is that they propose the intervention not out of the goodness of their hearts, but because they stand to inure to themselves benefits directly or indirectly after agreement is reached and the goods and services are extended to meet needs. Moreover, one incident of successful coercion motivates more such efforts, which may produce an upsurge in wealth and power for certain agents that enable positions of power that motivate efforts to shift the entire social and governance system away from democracy, equality, and ethical principles and toward less favorable and oppressive outcomes for all but the very elite.

Agreement to undertake such action typically focuses narrowly on the cost of providing the goods and services in current and future periods and seldom entails considering the entire need causation–to-resolution labyrinth. Consideration of this labyrinth may be viewed as too cumbersome and imprecise. Yet, the clear evidence using even SWAG (scientific wild ass guess) estimates are often consistent with the Rev. Jesse Jackson’s long-held contention that society should invest more on the front side of life and reap the benefits later instead of incurring even higher costs on the back side of life because front-side of life investments were not made.

The evidence of this appears in Table 1, which presents statistics from two perspectives on public (Federal, State, and Local government) sector spending on non-Social Security and Supplemental Security Income and Medicare and Medicaid Social Benefit spending programs. The top panel of the table (lines 1 and 2) present data on Social Benefit spending from BEA’s National Income and Product Account (NIPA) Table 3.12, while the lower panel of the table presents statistics on similar spending that is estimated not on a “type of expenditure” basis, but on “functional” expenditure basis from NIPA Table 3.15.5.

The periods for which statistics are presented are not arbitrary. They represent periods for which statistics are complete (there are no empty cells in the tables). What is striking in both the upper and lower panels of Table 1 are the magnitudes of the “Total Change over the Period,” and the “Annual Average Percentage Change” for spending and for the US population. Specifically, for the top panel the total change over the period of nearly $800 billion is required for less than a 125 million increase in the population. Similarly, for the table’s lower panel, a total change of over $630 billion is required to meet new requirements for a less than 140 million increase in the population. Also, the annual average percentage increases in spending over the periods covered seem troubling when compared with the annual average increases in the population. Notably, the expenditure statistics are in nominal terms; i.e., they are not adjusted for inflation. However, the nearly 6.5 percent annual average increase in spending appears to represent a significant real increase (≥ ~ 2.0 percent) because annual average inflation as reported by the Bureau of Labor Statistics for its Consumer Price Index for All Urban Consumers (CPIU) over the two periods was 3.8 percent (upper panel) and 4.7 percent (lower panel), respectfully.

It seems logical and realistic that a significant proportion of the increases in Social Benefit spending presented in Table 1 could have been avoided had some of the latter costs been shifted toward earlier periods to develop capacity and methods for eliminating and/or reducing these needs early on so that there would be significantly lower levels of spending requirements in latter periods; thereby, generating significant public saving during the latter periods.

What we continue to see in so many places that we explore is that Joseph Schumpter’s theory concerning “Creative Destruction” carries the day.v Economic growth is very important to the U.S. because “America’s business is doing business.” It does not matter that more “good” business could be done if the nation’s public and private sector leadership would engage in improved planning efforts that would engender the type of saving just discussed—or lower levels of required tax revenue. At the same time, the realization should arise that such saving could have enabled more productive, beneficial, and economically efficient spending that could have improved outcomes and wellbeing for a larger portion of the nation’s population. The reality is that with all the experts and technology, the nation is “still not there yet.” An important reason why we are “not there” is because economic elites are exceptionally gifted at selling untruths that cause us to reject known truths.

B Robinson
©090625

End Notes
i The status quo does not necessarily signal finality. Consider Brooks Robinson (2022). “A Purer Democracy under Cyber Governance: Future Implications for Black America’s Political Economy.” BlackEconomics.org: Honolulu. https://www.blackeconomics.org/BEAP/apdbape.pdf. (Ret. 082325)
ii See Brooks Robinson (2018). “Takeconomics: A Counterintuitive Perspective.” BlackEconomics.org: Honolulu. https://www.blackeconomics.org/BEAP/Takeconomics.pdf. (Re. 082325)
iii We ignore altogether the “negative” impetus or motive for why this so-called “curse” is said to be placed on man/woman. It is important to note that unlike the Islamic Religion, the Judaic and Christian Religions introduce prospective adherents to their religion by emphasizing early on in their texts that man/woman are sinful and unworthy creatures who must be redeemed. A seemingly much more favorable, logical, even scientific perspective inherent in Islam is that all humans are born innocent, pure, and highly in tune with nature: i.e., they are primed to act in alignment with Allah’s (God’s) creation and will—a state that is expected to be exhibited by Muslims. It is only the social environment into which humans are introduced that cause these pieces of clay to be molded into either peaceful, loving, or righteous souls, or transforms them into non-peaceful, non-loving, and evil souls.
iv The red superscript symbols on line 1 and 3 of Table 1 are explained as follows:
*—These statistics represent selected “Government Social Benefits” (alternatively referred to as transfer payments) from line 1 of NIPA Table 3.12 less lines: 5 (Federal Social Security); 6 (Federal Medicaid); 23 (Federal Supplemental Security Income (SSI)); 33 (State Medicaid); 36 (State SSI); and 43 (Social Benefits paid to the “Rest of the World.” (Ret. from DOC, BEA: 082725)
+—These statistics represent selected components of Government Expenditures (consumption and capital spending) by Function that appear in NIPA Table 3.15.5. Selected components include: Prisons (line 11); Other economic affairs (line 19); Housing and Community Services (line 26); Recreation and Culture (line 28); and Income Security (line 35 – lines 37 and 39). The latter component includes the following subcomponents: Disability payments; welfare and social services payments; and “other” payments. We believe that these subcomponents represent opportunities for government to not transfer funds to support individuals’ consumption, but to prepare these voters-taxpayers-citizens to meet their consumption demand through work or other efforts. (Ret. from DOC, BEA: 082825)
v Joseph Schumpeter (1942). Capitalism, Socialism, and Democracy. New York. Harper: Harper and Brothers.