The Economics of Compassion
In a business deal, each member should benefit. If the seller gains, and the buyer loses in the business deal, the buyer will not be able to maintain himself as a stable participant, and eventually, the system will collapse because there will be a deficit of buyers, and the seller will eventually have no one to sell to. If the buyer profits, and the seller loses in the business deal, the seller will no longer be able to participate, and the system will collapse as well. As such, an economic system works best when all participants are able to benefit, and therefore must be mutually supportive. And because a functioning economic system needs to be mutually supportive, it also grows exponentially with the amount of economic participation. For instance, when someone buys a piece of leatherwork from my business, I am not the only one benefiting. My leather wholesaler makes a profit off it is, as do the farmers who sell them the hides. The companies I buy my dyes and hardware from also profit, and so does Etsy and my web host of the sale is though the internet, or so does the faire that is hosting my booth if in person. And at each stop along the way, a tiny bit is taken out by the government to pay for programs. Now this is a simplified example, but the more consumers there are actively taking part in an economic system, the more the economic system grows as a whole, and the more everyone benefits together.
This is where the compassionate aid programs actually turn out to benefit society, because as we help those who are having difficulties, we empower them to participate in the system, and the money does come back to us indirectly. For instance, the USDA has reported that for every dollar spent on food stamps, we see $1.82 in economic growth, which makes the food stamp program akin to a loan program with 82% interest back on the loan. (Imagine what it would be like if we requested that much back on the bailout program). In Public welfare programs, over 50% of households are off welfare within 2 years, and over 80% are off the program with in 5 years, meaning that within those time frames, the recipients who leave the program are able to get jobs, and contribute to and help grow the local economic system, and in doing so, pay back the moneys they have received. When it comes to immigration policy, most economics experts don’t see a financial/resource drain in either legal or illegal immigration (Alan O. Sykes, The Welfare Economics of Immigration Law: A Theoretical Survey with an Analysis of U.S. Policy, in Justice in Immigration1995., http://www.nytimes.com/2006/07/09/magazine/09IMM.html?pagewanted=1&_r=1&adxnnl=1&adxnnlx=1274428812-kA6t1BNQCiy47d0kGkWWSA) and in reference to illegal immigration specifically see it as either neutral or even beneficial to the local economy as 90% of earned immigrant income gets reinvested into the local economy, promoting economic growth. Ultimately, a system that allows for compassionate aid may initially require the direct input from community members through such things as tax funded programs, but because these programs produce economic participants, that input returns through the economic growth.
From here, you can expand on this idea of economic complexity to show the economic benefits of other ideas and programs. Lets look at, for example, drug abuse. Today, we regularly penalize drug abuse, leading to the arrest of users, drug screening for the basis of hiring and firing employees, and there is even a push to make welfare recipients get mandatory drug testing. The problem with this mentality, from this discussed economic mindset, is that it ultimately leads to incarceration, or poverty and starvation, which then creates a situation where the person is prevented from becoming an economic participant, and, in the case of incarceration, costing the state tens of thousands per year. Now, if we switched from the penalization model to a treatment or even prevention model, then we cannot only drastically reduce the costs of incarceration, but we can empower individuals to become viable economic participants. To understand how this is possible we must first look at the causes of substance abuse. Normally, substance abuse disorders are attributed to a form of moral weakness in our culture, an idea that stems from the fact that the cultural elites use intoxicating substances recreationally, and because of this, abusing the substance becomes a sign of lack of self-control. What this attributional model ignores is that intoxicating substances often have a medicinal origin, and that much of substance abuse is really a form of self-medication. Drug use is symptomatic of many DSM disorders, such as depression, anxiety, and PTSD. In surveys of individuals at drug treatment facilities, 70% had a history of trauma exposure as children. Or, as one former crack addict and felon once stated in a presentation:
“I started drinking when I was 9, because I found it made me care less and feel less dirty about what those men my mother entertained did to me at night…”
If we redefine the substance abuse as a symptom, and not a moral failing, we then see we have causal element we can treat. And after investing in the treatment, we can have productive economic participants, instead of incarcerated individuals excluded from participation. To take this back a step farther, if we focus on programs of prevention, we can prevent the conditions that lead to the substance abuse. Home visitation social work programs designed at assisting impoverished and overwhelmed families have shown to cut child physical and sexual abuse rates in half, resulting in the reduction of traumatized individuals in the community, and then resulting in fewer individuals who became substance abusers.
Now, it should be noted that this does not mean a completely socialist state or non-discretionary welfare spending is warranted either. How money is spent is just as important as how much is spent, and money that is not directed properly can serve to aggravate problems. However, this does show that spending to aid others is neither a drain, nor an act of naïve wishful thinking, but rather an important tool to economic stimulation.
This is where the compassionate aid programs actually turn out to benefit society, because as we help those who are having difficulties, we empower them to participate in the system, and the money does come back to us indirectly. For instance, the USDA has reported that for every dollar spent on food stamps, we see $1.82 in economic growth, which makes the food stamp program akin to a loan program with 82% interest back on the loan. (Imagine what it would be like if we requested that much back on the bailout program). In Public welfare programs, over 50% of households are off welfare within 2 years, and over 80% are off the program with in 5 years, meaning that within those time frames, the recipients who leave the program are able to get jobs, and contribute to and help grow the local economic system, and in doing so, pay back the moneys they have received. When it comes to immigration policy, most economics experts don’t see a financial/resource drain in either legal or illegal immigration (Alan O. Sykes, The Welfare Economics of Immigration Law: A Theoretical Survey with an Analysis of U.S. Policy, in Justice in Immigration1995., http://www.nytimes.com/2006/07/09/magazine/09IMM.html?pagewanted=1&_r=1&adxnnl=1&adxnnlx=1274428812-kA6t1BNQCiy47d0kGkWWSA) and in reference to illegal immigration specifically see it as either neutral or even beneficial to the local economy as 90% of earned immigrant income gets reinvested into the local economy, promoting economic growth. Ultimately, a system that allows for compassionate aid may initially require the direct input from community members through such things as tax funded programs, but because these programs produce economic participants, that input returns through the economic growth.
From here, you can expand on this idea of economic complexity to show the economic benefits of other ideas and programs. Lets look at, for example, drug abuse. Today, we regularly penalize drug abuse, leading to the arrest of users, drug screening for the basis of hiring and firing employees, and there is even a push to make welfare recipients get mandatory drug testing. The problem with this mentality, from this discussed economic mindset, is that it ultimately leads to incarceration, or poverty and starvation, which then creates a situation where the person is prevented from becoming an economic participant, and, in the case of incarceration, costing the state tens of thousands per year. Now, if we switched from the penalization model to a treatment or even prevention model, then we cannot only drastically reduce the costs of incarceration, but we can empower individuals to become viable economic participants. To understand how this is possible we must first look at the causes of substance abuse. Normally, substance abuse disorders are attributed to a form of moral weakness in our culture, an idea that stems from the fact that the cultural elites use intoxicating substances recreationally, and because of this, abusing the substance becomes a sign of lack of self-control. What this attributional model ignores is that intoxicating substances often have a medicinal origin, and that much of substance abuse is really a form of self-medication. Drug use is symptomatic of many DSM disorders, such as depression, anxiety, and PTSD. In surveys of individuals at drug treatment facilities, 70% had a history of trauma exposure as children. Or, as one former crack addict and felon once stated in a presentation:
“I started drinking when I was 9, because I found it made me care less and feel less dirty about what those men my mother entertained did to me at night…”
If we redefine the substance abuse as a symptom, and not a moral failing, we then see we have causal element we can treat. And after investing in the treatment, we can have productive economic participants, instead of incarcerated individuals excluded from participation. To take this back a step farther, if we focus on programs of prevention, we can prevent the conditions that lead to the substance abuse. Home visitation social work programs designed at assisting impoverished and overwhelmed families have shown to cut child physical and sexual abuse rates in half, resulting in the reduction of traumatized individuals in the community, and then resulting in fewer individuals who became substance abusers.
Now, it should be noted that this does not mean a completely socialist state or non-discretionary welfare spending is warranted either. How money is spent is just as important as how much is spent, and money that is not directed properly can serve to aggravate problems. However, this does show that spending to aid others is neither a drain, nor an act of naïve wishful thinking, but rather an important tool to economic stimulation.