ABSTRACT
Unfortunately, the growth of the State also leads to the undermining and, indeed, destruction, of many of the institutions on which civil society depends. These institutions deteriorate as the State establishes rival institutions of its own, and these new institutions undermine the mechanisms on which the older ones depend. A classic example is the undermining of charitable institutions by state supported welfare systems.25 Without State support, altruistic individuals have a strong incentive to support charities they consider worthwhile – charities to support the unemployed, unwed mothers, and so on. The delivery of this charitable support also tends to be efficient because the donors have strong incentives to vet those who ask for support and discourage bogus requests for assistance, and also to ensure that those who receive charity are weaned off it as soon as possible. However, at some point the State intervenes to establish some social assistance system – welfare, social security, unemployment insurance, or whatever. Those who were formerly recipients of charity are then told that they can now receive State support as a matter of right, and therefore have much less need of charity than they used to have. At the same time, donors no longer have the same incentive to provide. After all, they are now providing anyway through the tax system, and the earlier moral imperative – the concern that if they do not give, other people would go wanting – no longer applies. They therefore cut back on their giving, and charity gives way to taxpayer-funded support programmes. Similar stories can also be told of the displacement of private institutions that cater to education,26 health27 and other social needs,28 and of their replacement by newer public sector rivals.
