On the poor, functions of govt

The poor shall always be with you,” said the great Galilean (Mark 15: 7) who many say is their Saviour and gate to God.

Is there anybody in Palestine who sympathised with and loved the poor more than Jesus Christ?

Perhaps, but some politicians have a paternalistic approach to problems facing the poor.

This approach will do the poor more harm than good.

When we scrutinise the national budget, we should not exclusively look at the present needs of the poor, but their future concerns as well.

It is not the duty of government to spoon feed able-bodied people.

In the budget, we should look at what tool government has put in place to enable the poor participate in the socioeconomic development of the country.

The budget time is not the harvest time. It is the time to distribute resources for production of goods and services.

Give three men tools. The first one should take a hoe, the second a plough and the third, a tractor and tell them to plough a field with a promise that they will have a share in the harvest according to their productivity.

Naturally, their output will differ, so will their rewards.

The question, therefore, is what means has the budget provided to empower the poor?

Paternalism was a basis of the Russian Communism, whose slogan was “Not everyone to earn according to his ability or contribution, but everyone according to his needs”.

Excessive social welfare services deprived people of the sense of self-reliance.

Great sages of history such as Benjamin Franklin have said again and again there is no gain without pain.

To expect the Ministry of Finance in a poor country to devise a painless budget is being naive.

The good things in life do not just come like manna from heaven.

They come to only those people who made sacrifices and abstained for temporary gratification.

It is time that those who speak for their political parties or constituencies realise the functions of a government. Otherwise, they will be demanding from government what is not within the purview of its functions.

These days, a government performs the following functions:

1. Improve economic efficiency

The economic system under which we live recognises the crucial role that the private sector can contribute to the wealth of the nation. But if left to themselves, entrepreneurs can create more harm than good. Adam Smith’s ‘invisible hand’ must be supported by government’s ‘visible hand’.

Where there is perfect competition, sellers will supply goods at prices most buyers can afford. But for most sellers, these prices are too low to make items instant millionaires. What happens in the marketplace is that cartels and gentlemen’s agreements are struck; indeed, monopolies emerge to reduce the supply of goods and force prices to rise. The duty of government in such situations is to neutralise unethical business.

Unregulated factories tend to pollute the air with their fumes and wastes from their plants spoil rivers.

Besides, they provide minimum safety to their workers. A government has to work like a referee between employers and employees.

Leaning too much towards the industry at the expense of workers stifles their incentives; hence, reducing productivity. Workers are entitled to a fair share of what they produce.

Business people risk capital so as to earn profits. If government measures in favour of the workers weaken the profitability of the company, the entrepreneur will pull out and go elsewhere. Foreign direct investors, when investigating opportunities for their capital in a particular country try to find out what laws exist concerning labour. If the investors feel the laws are business unfriendly, they will seek opportunities in another country.

It is a government function to provide an atmosphere that is conducive to optimum business investment.

2. Reducing economic inequality

When we hear of revolts in certain countries absolute poverty is not the cause. Rather it is the injustice that is inherent inequality. A sensible person will not begrudge a hardworking man the bigger harvest that he reaps. Hardworking and frugal people deserve to become millionaires.

The reality is that some people live in luxury because they have inherited wealth from their parents. Such people do not deserve all that wealth. A government taxes inherited wealth and spends the proceeds on social welfare for the less well-off.

Some people prospered because they got government contracts by underhand means.

Privileged positions generate resentment and grievances on the part of those who suffer expulsion.

The function of government is to redistribute the national wealth and do away with glaring inequalities.

Individuals who earn super salaries pay super taxes while the lowly-paid are exempted from direct taxes, the unemployed are given unemployment allowances. Those who are old and poor are kept in homes where they end their lives as descend people should.