Subsidies For Ghosts; O.W. Cooley

When those towns began to get ~~ghostly," should the state or federal government have stepped in and pro vided funds to finance the people to go on living there? Should Colorado have subsidized Cripple Creek so that it could have retained the 50,000 people who lived there at the beginning of the century, instead of shrink ing to its present 2,500? What would have been the fate of such communities under the modem "share the wealth" idea of federal and state aid? More and more we share the wealth through govern ment taxation and distribution. The federal government distributes some of its tax revenue for roads, for hospitals, for welfare, for airports, for power dams, and for a dozen other purposes. Every state govemment taxes its citizens and distributes money to local communities for schools. [269 ] In Indiana, for example, 40 per cent of the cost of the public schools is funneled through the state treasury.

This is done on the ground that the people of one locality are poorer than those of another and so are not able to maintain as high a standard of public services. Therefore, it is held, the people as a whole should be taxed according to ability to pay and the revenue dis tributed in proportion to need. Without going into the ethics of this forced redistribu tion, what of its economics? Who benefits from these "grants in aid"? Does the total productivity of the people rise, or fall-or remain the same? A Matter of Resourcefulness Whether the people of a community appear to be wealthy or poor depends upon their resourcefulness in developing and using those things available to them. A person's wealth is one measure of his capacity to use his resources. And the same holds for a community: Its wealth is the product of ingenuity and effort applied to resources. It is a person's right, if he chooses, to measure his wealth by the size of his family. But that family may seem poor by usual economic standards. Likewise, a community may grow faster in population than in the development of other resources, thus being a poor com munity by some standards.

Whether the poor.community is overpopulated by rea son of a lack of· natural resources or a lack of human [270] resourcefulness is not the issue here. If the presumed objective is to overcome the relative overpopulation of a community, there must either be an exodus of people or a further development of their own resources. If the people of an overpopulated community are sub sidized with grants from the outside, regardless of the purpose for which the money might have been intended, they will not be encouraged to move to greener pastures or to develop the resources of their own area; for in either case, they stand to lose the subsidy. Thus they are subsidized in partial idleness in their old economic rut, and the nation is poorer for lack of the wealth which they might otherwise produce. The people of the subsidized community are partially dependent, with a vested inter est in idleness and ineffiCiency.

The nation has areas of declining population. A min ing community in Pennsylvania, for example, lost 14.6 per cent of its population in the decade of the 1940's. People are leaving some of these areas in search of better opportunities elsewhere. This is not to be deplored. If the nation were to pay these people to stay put, it would lose doubly,flrst, the cost of the subsidy,. and second, the lack of the greater production which these people could produce elsewhere. Ghost towns are far less burdensome to society than are subsidized communities. [271 ] IMPERIAL CHINESE WELFARE STATE IT IS a curious fact that the greater part of those social theories which have lately thrown the public mind of France into a ferment, and which are represented as the sublime results of the progress of human reason, are but exploded Chinese utopias which agitated the Celestial Empire centuries ago. In the eleventh century of our era, the Chinese nation, under the dynasty of Song, presented a spectacle nearly analogous to that seen in Europe, and France especially, of late years. The great and knotty questions of social and political economy filled all minds and split into parties every class of society. The nation was divided into two furious parties; pamphlets, libels, inflammatory writings of all kinds were daily flung profusely to the multitude, who devoured them with avidity.