It is a common cliché of socialist thinking; the concept that government funding and subsidies are nothing to worry about, so long as the rights and liberties of its people are not harmed in the process. There are several reasons that this fallacy couldn’t be further from the truth. One may argue that the government simply exists to serve its people and that no harm is possibly being done by seemingly free government handouts. When some basic common sense principles are applied, however, these points do not hold water.

Viewing this situation from a different perspective may assist in clearing up confusion by those left wondering how “free money” is in any way harmful with respect to rights. Let us suppose that a parent were to give their child a sum of perhaps $50 to spend. The child quickly determines what they want to spend the money on, but then a dilemma arises: the parent, who has authority over both the child and the way said child spends the money received from said parent, must first impose guidelines as to the conditions under which the money is spent. These may include, but are not limited to, where and on what the money is spent. Thus, this free handout limits the power of what initially seemed to be simply a good thing.

The same principle can be applied to government subsidies. It is a similar concept really; when the state issues monetary handouts to its people, we cannot simply view this as free money. The state never fails to impose specific restrictions on exactly how the money is to be spent. The important consideration to make here is that this is understandable, based upon the analogy of the parent and the child. The child who has received free money from their parent cannot simply go and spend it anywhere with reckless abandon; this may lead to negative results. The child may spend the money irresponsibly, or worse yet, they may manage to land themselves in trouble. No right-minded parent would allow this to occur. Parents maintain authority over their children and any responsible parent would do what they can to prevent any sort of negative outcomes resulting from the money.

It is apparent that the government maintaining control over its handouts is not illogical; no one is going to throw millions or billions of dollars around with no specific designation for the money. Thus, we can conclude that the only way to eliminate this excessive government control of funds is to completely eliminate the root cause; that is, the subsidies themselves.

Free market libertarian thinkers believe that limited state power is preferable to a large government. While the latter can seemingly impose major positive sanctions which initially appear beneficial, its power can result in equally major negative sanctions. The state is funded by taxpayer money; government handouts are therefore nothing more than the redistribution of wealth, or as Bastiat famously put it, legalized plunder. He himself stated that such laws which grant the state unnecessary power, enabling it to impose positive sanctions like “free money,” should be abolished. 🔹