As the cost of social welfare increases, so does agitation on the part of the "haves" to do something about those "useless eaters," as the Nazis termed those who consumed without producing. Unfortunately, as the propertylessness of the great mass of people increases, and ordinary folks become dependent on the State as the presumed source of all that is good — "the sole intercessor available to the poor," as one deluded enthusiast gushed — there is less and less incentive to do anything other than agitate for higher fixed wages, benefits, and State entitlements. As Goetz Briefs explained,
It is a fact that large groups of workers today have no objection to raise against propertylessness — provided their jobs are secure, their wages sufficient, and provisions are made through social insurance for old age and unemployment. To meet these requirements the economic system has had to shoulder increasing burdens and to put up with an increasing amount of social legislation, which, of course, implies additional regimentation. As long as the risks of a propertyless, dependent life were private affairs of the worker, it paid to transform work more and more into wage work. Now, however, since the concomitant costs of this process are gradually being made public costs to be carried through taxes levied upon business and the general public, it is becoming questionable whether or not the aforementioned process was always as economical as it seemed to be. (Goetz Briefs, The Proletariat. McGraw-Hill Book Company, Inc., 1937, 273-274.)
But wait! There's more! Briefs analyzed the situation from within the past savings paradigm. That did not change the fundamentals of his analysis, but it did prevent him from developing a viable proposal to counter the increasing proletarization of the great mass of people.
The past savings framework also prevented Briefs from seeing that it is not simply a question of increasing taxes, but of mortgaging the future for generations as the State generates multiple claims ("creates money") on marketable goods and services that get consumed, while the claims remain, debauching the currency through inflation and discouraging productivity activity.
What we end up with is something that approximates current economic conditions very closely: an "economy" that seems to run for the benefit of speculators and gamblers, disappearing jobs, a mounting national debt, and people who have been forced into a "condition of dependency" (a euphemism for slavery) on the State are left helpless as the State heads into bankruptcy.
The situation can be turned around, and very quickly at that, with the adoption of a Capital Homestead Act and an aggressive program of expanded capital ownership. The question that comes to mind, however, is whether the increasing numbers of State dependents will be willing to forgo their increasingly shaky "security" for the reasonable chance to acquire a capital stake large enough to generate an income sufficient to meet ordinary living expenses.
We think so. We hope we're right. If you want to test this hypothesis yourself, come to the annual rally outside the Federal Reserve on Friday, April 15 and show your colors.