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
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  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.