Why Social Liberalism Does Not Make Sense

I don't consider social liberalism or welfare state liberalism very sensible but prefer libertarianism. Surely I support social liberalism in the sense of an ideology supporting social liberties as all liberals do. Social liberalism in the sense of a welfare state, however, requires so wide a concentration of power to the state that I believe it to harm more than benefit.

Social liberalism could be at least in the short term be beneficial to some due to its income transfers but  in the long term a welfare state slows down economic growth so much that it is more harmful. In the long term, economic growth decides the future of poverty - the faster the economic growth, the less poverty. A welfare state slows down economic growth because it is financed by taxes taken from the productive and because it encourages leisure. No way of organizing a welfare state has been invented that would not passivate. Also a basic income, a negative income tax or a social account passivates. Also at its best a welfare state passivates.

In practice a welfare state is difficult to even organize so that it would just transfer income to the poor. A welfare state requires concentration of power to the state, which has so far always lead to quite insane politics. Interest group politics leads, according to public choice theory, easily to capture by small special interest groups, then they get themselves unreasonable benefits at the expense of the majority. This happens therefore also in a quite democratic welfare state.

The absurdities of the welfare state can be explained to a large extent by the history of its ideas, which are shared by social liberalism. At the end of the 19th century, socialists and conservatives agreed on that capitalism is unfair and that reforms or even a revolution are needed. Social liberalism was born from that same feeling. Social liberals, however, saw that the concept of liberalism had to be renewed according to the new atmosphere of ideologies.

• 
  Adam Smith
• 
  Thomas Jefferson

True, already many classical liberals supported some kind of welfare state. For example Adam Smith and Thomas Jefferson supported state subsidy to education. The fallacies of social liberalism were thus not quite new but occurred to a smaller extent already in classical liberalism. It is understandable that in the era of classical liberalism economics had not developed enough and that there was not as much bad experience accumulated of public education. Social liberalism according to its own view diverges from classical liberalism by supporting wider state involvement in the economy.

Social liberalism could be salvaged by combining it with panarchism or the right to secede from the state freely, or tax freedom, when social expenses would be financed voluntarily. Then a welfare state would work like an insurance company or mutual aid association and its actions would no longer be reproachable. It is, however, questionable, whether such can be called a state anymore. To the hallmarks of a state belong, according to many definitions, compulsion and taxation.

Dictatorship of the Proletariat is Not Social Justice

The welfare state is based on John Rawls's A Theory of Justice, which is actually a theory of the dictatorship of the proletariat, as it prescribes that only the worst off matter. Methinks, the dictatorship of the proletariat is wrong because also other people than the proletarians matter. Originally the dictatorship of the proletariat was a concept of socialism. The welfare state has a lot in common with socialism. Both the welfare state and socialism seek to improve the lot of the badly off at the expense of the well-off. Pursuing the dictatorship of the proletariat does not improve the lot of even the badly off because it is impossible to implement and is in fact a dictatorship over the proletariat, which the socialists oppose.Even if you don't support John Rawls's theory, the welfare state is a dictatorship anyway because it is based on the state's dictation. Maybe behind the welfare state, a democracy, too, is a dictatorship of the majority because there is no unanimity. The welfare state's ability to create well-being is very questionable since it creates disutility with its dictation. A unanimous decision creates well-being more likely than a divided one does because unanimity guarantees all consider the decision to be advantageous.The purpose of the welfare state, social justice is thus not very social. The word "social" comes from the Latin word "socius", which means a comrade. Dictation is not social because you don't dictate to a comrade but take his will into account, so the welfare state is not social and is therefore unable to carry out social justice. According to Arrow's paradox, democracy is unable to take the will of all into account. Even a democratic welfare state is thus in reality a dictatorship. The social justice of a welfare state is, therefore,  verbal magic, which seeks to appeal to social and justice, but in reality is not them.

The welfare state is suffering from the same problem as most branches of socialism: it seeks to social by antisocial and authoritarian state means. In socialism, by means of verbal magic they try to create an impression that the socialist state is a prerequisite for social, even though in reality they are incompatible. Socialism and the welfare state spring from a sense of injustice and the illusion that a rational planned economy is to achieve a fairer society. Socialism is based, like the welfare state, on a false belief that a free market economy is antisocial and unfair. It is a misconception because it is wrong to regard past inequities of mixed economies as inevitable characteristics of a free market economy. Socialism is not a rational ideology because it accuses a free market economy of injustices without rational reasons. A lot that feels unjust of course happens in the world but opposition to a free market economy does not follow logically from that. Socialism is based on an emotional surge that something needs to be done, but that deed is not rationally argued.In reality, a free market economy is social just as Gary Chartier has pointed out. A free market economy respects human bodily autonomy, private property and freedom of contract, i.e. it is social. Violation of those fundamental rights is antisocial and, therefore, the welfare state is antisocial. A free market economy is therefore just since by means of social behavior, justice in a society can be achieved. A precondition of social justice is that no one is deprived of rights. When everyone's rights to freedom are respected in legislation, income gaps are not unnecessarily imposed by politics and, therefore, the need for income transfers is reduced. The welfare state requires a centralization of power to the state, so the state will increase income inequality by preventing economic activity unequally. One of the main reasons to support a welfare state is the misconception that in a free market economy income inequalities would be at least as large as they are now. Anyway, a free market economy would have income transfers such as insurance, mutual aid and charity. Support for the welfare state is often based on a misunderstanding that in a free market economy, there would be no income transfers or that charity would be the only income transfer.

State Fundamentalism is a Real Problem

George Soros argued that market fundamentalism is now more of a threat to an open society than any totalitarian ideology. Calling a social democratic strong, in practice authoritarian, state an open society is very questionable, although Soros' role model Karl Popper certainly was guilty of it, too. A social democratic state is quite a closed system, where the political elite maintains power firmly in its hands. George  Soros's amateur economics does not contain any credible argument that his proposed social democratic world government work even as well as the current or a free market economy.

Similar claims are made by Joseph Stiglitz. They are united by a staunch believe in a socialist state's superiority and contempt for supporters of a free market. They do not, however, offer convincing evidence for their faith. Joseph Stiglitz has found a number of market imperfections during his academic career but then he makes an unjustified leap of faith to the superiority of a socialist state. Market imperfections do not prove that the state would work even as perfectly. The end of the 2000s' recession has increased support for socialism but problems of a mixed economy are not a rational justification of socialism. Dogmatic socialist Stiglitz thinks all the problems of a mixed economy are caused by a free market economy and that the socialist state should be able to solve all the problems. Socialists make that kind of mistake typically. 

Nick Hanauer did not even bother to try to make an argument scientifically, but resorts to calling libertarians most extreme individualists, misrepresenting their views and comparing them to communists. In that he is not alone but the fallacy of moderation is common. He does not realize that a libertarian free society would be communitarian but without a forced communitarianism. He assumes, without any rational justification, that the current state is the right solution and just needs fine-tuning. Most people are conservatives who follow the leader, so the only thing the political elite needs to do is to drive the state to their desired condition, no matter how crazy, and their popularity is assured. It is lame to compare libertarians to communists and then defend half-communism against a free market economy. 

Market fundamentalism in itself is a pejorative term. The social democratic ideology and socialism in general are largely based on emotion and not science. Scientific socialism is based on an emotional condemnation of capitalism and then it is concluded that it should be replaced by something else although there is no information about what should be built to replace it. Socialists have managed marketing well, but their product has remained weak. From the point of view of marketing psychology, the enemy image building has been very successful when preaching their own product has at least recently succeeded less well because of bad experiences. Still, most people continue to accept the basic premises of socialism that capitalism cannot deliver security but there is a need for significant government intervention in the economy.State fundamentalism is a much worse problem than market fundamentalism. The fundamentalisms of socialism and the green movement have reached the states of official ideologies and also the official science. Climate science is not worthwhile as a career if one does not wholeheartedly support the official position of the government. The same also applies to the social sciences. Both ideologies seek to present themselves as sciences but defend themselves by means of a fundamentalist faith. The dissidents are labeled as denialists or market fundamentalists. This is a phenomenon similar to the science of the Soviet Union in which scientific socialism was the official truth.