 So the the kind of argument that's usually given is that if we don't have something like social security and Medicare The the elderly will starve in the streets now. There's an interesting test case for this What happens when people don't have old-age welfare programs and it's called America for every year until 1935 which by the way if you can do the math is longer than we've had social security since 1935 Now did the elderly starve in the streets and it turns out that amazingly no Amazingly people figured out a way to live without handouts for over a hundred years and they It's pretty fantastic when you think about it They were very entrepreneurial in their whole approach to life And so I'm just gonna go through some of the mechanisms that they took in order to not as they say starve in the streets So first of all people worked And it's kind of funny today where we think of like ah works a real burden But actually the people pushing for a welfare state complained for many years because the elderly those darn people refused to retire The fact is that they found their lives more meaning for more meaningful more valuable more enjoyable with work than without it and they saved I Who has a savings of more than 0% if you do your you are the 1% because most Americans don't People at that era saved between 1 8th and 1 9th of their income Which is I mean that's impressive Credit obviously is you know if you if you couldn't support yourself various forms of credit were available Turning to friends family community Informal ways of helping people the number one does anybody know what the number one thing people did so first of all before industrialization before People were really dealing with retirement. What was the number one retirement plan anybody know Close that comes later. The first retirement plan was actually death We worked and then you died and then you didn't have a retirement plan But now we have industrialization people are living longer and yeah, that's exactly what they did the number one thing People did as they lived with their kids and When you think about it social security is in effect like an indirect way of us all taking care of other people's grandparents Like it's in effect the government wheels over somebody else's grandma shoves her into our lawn and says here you watch her for a while But no what most people did is that they took care of their own parents if they needed it There were also things called mutual aid societies now Anybody heard of like an elk's lodge or a moose lodge or something? I'd love to see these re-emerged They're kind of cool but these are in effect the descendants of mutual aid societies and these were Community groups in effect where you would pay your monthly membership due and you would be entitled to certain kinds of then support from the club and It might be things like unemployment insurance It might be things like private health care you'd have a lodge doctor you could see or it could be a retirement thing They had often very they had retirement homes where if you couldn't support yourself You would go and you'd be able to stay at the the Society's retirement lodge and finally there was charity private charity which in this era was abundant again, we're talking about pre-1935 and People per capita were giving more to charity then than they did today And so what were the results of this was it was it people starving in the streets? No, the fact is that What was happening with immigration where people fleeing the shores of America trying to get away from this wretched area? Where people were starving the streets and going to those countries that had? welfare programs Anybody know what was going on with immigration at this time? This is the biggest wave of immigration to America Indeed the people pushing for welfare state programs, which they started doing really in the 1880s model after Bismarck's Germany. They said well, we don't have to worry about old people in America They're doing just fine. We have to worry about poor people So they spent 30 years trying to create welfare programs for poor people and then they realized oh Americans Don't care about poor people. Let's focus on old people because most of us one day aspire to being old So let's let's do that and then they eventually succeed in 1935 as we talked about but the the best statistics we have in terms of what's going on then and we don't have great statistics So take these with a bit grain of salt But the best ones we have tell us that by 1935 Only 8% of the elderly need any form of formal charity whether it's private or whether it's the kind of miniscule government-level programs going on and what I'm showing here is I want us to Remember what's going on historically So I'm talking about 8% of the elderly need any kind of formal help And you can extend this line back to infinity But basically for hundreds and hundreds and thousands and thousands of years human beings have been living just above subsistence We're dealing with a time frame right here where Capitalism economic freedom has only started to enrich us and already people are productive and smart enough So that only 8% need any sort of formal Assistance in order to achieve economic security So for thinking about economic security then the bottom line is that Clearly a welfare state is not necessary and Indeed it undermines our economic security by giving the government the power to take away as much of our Economic resources as it decides is in the public good But now let's turn to the biggie Watkins I want to help people You're being a jerk who's just talking about the cost. What about the benefit to these people who need help? What I want to stress and the major point I want to make about this is that whether or not you want to help people is Totally irrelevant to whether or not there should be a welfare state Totally irrelevant First of all we've seen people are helping people immensely during this time Most people don't need help the vast majority of us are able to support ourselves throughout our lifetime including old age But those who did the vast majority are being helped privately voluntarily. You're able to help the people that you care about Yeah Sure So the the question is how do we compare the help available today versus before the welfare state? if we just compare the amount of giving As a percent of GDP it was today It's about 1.5 percent that number might not be exactly right But it's in the ballpark 1.5 percent of GDP goes to charity then it was over 2 percent Something close to two and a half percent. So a vast great a vastly greater percentage is going in that way It's more difficult once you start comparing. Well, how do we count the welfare state? Does that count as some kind of percent of giving or something like that? But the bottom line is that it increases significantly. It basically was double as a percent of what people are actually taking home the so the major fact though is then If we're talking about is it good to help people do I want to help people it's irrelevant the way I like to think about is this So imagine that you Are in the situation not where you want to help somebody, but you're in need of help Let's say you need an operation that you can't afford So you go over to your neighbor's house and you knock on the door and you say One of two things one is hey, I need an operation. I can't afford it Would you please help me fair enough? The other one is hey, I need an operation. You owe me What the welfare state is about and this is kind of the key point I want to stress The welfare state is not an issue of I want to help people that welfare state is an issue of people are in need and that Imposes a debt on everybody else. It's an entitlement Under the welfare state logic now, I've asked thousands of people How would you behave if you were in that situation and I've never met a person's yeah I would regard myself as entitled to somebody's help, you know, he might want to send his kid to school He might want to pay off his mortgage, but darn he owes me first and foremost But that's what the entitlement state says that's what the whole welfare state is built around It's the idea of you are entitled if you're in need regardless of its source Regardless of other people's hopes dreams priorities and rights They owe you because you're in need so the Often what will happen When anybody challenges the welfare state is that you're the jerk who wants to throw Grandma off a cliff right you want to take away her handouts You're gonna throw her off a cliff and I think the bottom line here is that The exact opposite is the truth So first of all the idea that not giving somebody handouts is the equivalent of throwing them off a cliff I mean, that's like saying if a thief came to your house and was like hey give me your wallet And you said no you're throwing him off a cliff because how is he gonna buy his Doritos? No, the truth is the exact opposite. It's young people today by the welfare state who are being thrown off a cliff 205 trillion dollars Already you're working a month and a half without pay and once it gets to two three four months That is what it means to be thrown off a cliff That is what it means to be detracted from actually achieving the things that you want to achieve in this world Who knows who Russell Brand is? Often I speak to older audiences and they have no clue and this story just goes poop. So I guess over a year ago. I went and I was supposed to do Russell show brand X and We were supposed to debate the issue of self-interest But after the show is talking to him and I was telling him about this whole problem and I saying look He's kind of a socialist so I was saying look the welfare state is treating young people as servants and These debt numbers are gonna turn people into actual servants and he looked at me thoughtfully which was quite an achievement and he said Isn't that the point and he's right the whole point of the welfare state is to force you to serve other people And so there's a reason that nobody blinks the numbers I gave you this is not some secret theory that I've unearthed from the archives of like Don Watkins conspiracy theory everybody in Washington knows this Everybody in Washington will admit it except for people like Elizabeth Warren who are basically debt deniers who say oh Let's increase Social Security, but setting that aside This is this is a well-known problem problem But they don't blink an eye because the whole idea is that you should be serving others You shouldn't be so focused on your happiness You guys are in this room to what learn to be healthier learn to be more fit learn to get better relationships learned That is selfish you guys should not be focused on that You should be focused on serving others and the welfare state it's gonna make you and So that's the deeper meaning of the debt draft is It's making you do exactly what the welfare state says you should do which is be a servant I mean basically what the welfare state does is it divides us into a cast of burdens and resources We're burdens when we receive handouts right and then we're resources were in a position to pay for other people's handouts Now that is a really really awful way to view human beings in my view In my view and I think this was the founders view which is that you have a right to exist for your own sake You have a right to come into this room and try to make the best of your life Even if those guys out there are not making the best of their lives The whole idea that you have to serve others and subjugate yourself to them is a really ignoble view of human relationships Each of us should be free to make the most of our own lives So how do we get this so wrong if what I'm saying is right Then how is it common sense? How is it conventional wisdom that the welfare state is a great Achievement and so I want to say a few words about this before we wrap up We're taking a different look of something that we've been diving into in the last couple of years now We have Don Watkins right here How social security is sabotaging the land of self-reliance bring it on home By the way, if you can do the math is longer than we've had social security since 1935 Now did the elderly starve in the streets and it turns out that amazingly no amazingly people figured out a way to live without handouts for over a hundred years and they It's pretty fantastic when you think about it They were very entrepreneurial in their whole approach to life And so I'm just gonna go through some of the mechanisms that they took in order to not as they say starve in the streets So first of all people worked It's kind of funny today where we think of like ah works a real burden But actually the people pushing for a welfare state complained for many years because the elderly those darn people refused to retire The fact is that they found their lives more meaningful more meaningful more valuable more enjoyable with work Than without it. So the first reason I think is what I call the collectivist premise and This is looking at the welfare of the group rather than the well-being of the individual and says what's good for quote? society as a whole How should we distribute society's resources in a fair way? I think the better way The more rational way to think about political issues is to focus on the individual And I think if you think about what's good for the individual you come to a very different conclusion So the two essentials in my judgment of what makes us happy and successful life And I think this came through in all the talks today is Thought and effort. This is Isaac Newton and Steve Jobs. It's You