Welfare Shouls not Be Abolished

I am impressed with Pro's arguments. Before responding to them, I want to make my core Con-Welfare arguments. I will explain the basic justifications for free market policies and I won't have time to apply them to all of Pro's objections in this post, but I will respond in later rounds. The first argument will be entirely verbal, but I plan on citing case studies later as well. Before I continue, I want to make sure we both agree on what welfare is. Welfare: Mandatory taxation on the general population to fund limited payments to the poor, the disabled, the unemployed and/or the elderly in the form of money, health care coverage, food assistance or other limited assistance. --BASIC JUSTIFICATIONS for a FREE MARKET-- Society is made of individuals making decisions, for their own perceived benefit. (By perceived benefit, I'm including their own desire to help others as well as their desire to help themselves.) Every action they take is an attempt to improve their lives and the lives of other people they care for. They can make mistakes and make themselves worse off, but in general they know their own desires best, and are uniquely positioned to select what actions to take in life. Every day people choose to go to school, go to work, start a business, work on a project, take time off, or participate in society in some way. Everybody chooses different things, because they value different things differently. When you buy something, you and the seller disagree on it's value. The seller believes it is worth less than the price, you think it is worth more. In the same way, some people value free time, or they dislike working at one job or another, more or less than others. All value is subjective, and the valuation of anything can only be determined by a person choosing a specific quantity of something over a specific quantity of another. With that in mind, the purpose of a marketplace is to allow people to come together who disagree about the value of items and exchange them for what they think is more valuable. In any market, the core price is determined by supply and demand, in the absence of any external influence. What I mean by supply and demand is the preferences of the people to consume vs. the preferences of the people to not produce. If you could chose between consuming a good and losing the money of the market price, your valuation is a signal to the producers. If you would rather have the disutility of production along with the utility of the money raised from sale, your valuation of the cost of production can signal to the market, and if in a big enough proportion, lower the price. In both cases, the production and consumption by the producers and consumers is compared with the second best thing they could be doing with their time or money. The consumers might have done something else or worked less, or the producers might have taken time off or made something else. Instead, they selected to produce and consume over all other options, and therefore were all better off. Again they can make mistakes, but because these outcomes result from their own actions, they are closest to the actual desires and improvements in life that the producers and consumers. I will justify this further if need be, otherwise I will assume Pro accepts it as a useful foundation of economics. --BASIC ARGUMENTS AGAINST WELFARE-- Welfare is marked by an intervention in the income market. Most of the time we talk about the market of other things like labor in terms of money, but it is perfectly possible to talk about money in terms of labor. Both are valuable, scarce things we own and trade. In the market of income in terms of labor, what is basically happening with welfare is the government is establishing a price control, and it has the same effect as any other price control, but it's not a control of the price of goods in terms of money, it is a control of the price of money in terms of labor. The government mandates that everyone receives a living wage, through unemployment benefits or food stamps or other payments, regardless of how much labor they pay. Thus, the price of money in terms of labor has an artificially low maximum price: zero. People can get a limited amount of money or money equivalent when they qualify for assistance. This offer is not available to everyone, but it's impact is felt all through the labor market. When people chose to get a job, start a business, or whatever they do, they are deciding which choice will improve their lives. Different people have different desires, but all act upon their desires. When the option exists to receive unemployment benefits/welfare programs/food stamps exist, then people will compare that/those option(s) to what their current or possible situations are. In the absence of welfare programs, they would compare their other activities to having all time off and receiving no compensation, but instead they are comparing their other activities to having full time off and receiving limited payments. As a result, some people could work in the economy but decide they would be better off not experiencing the disutility of working along with the positive utility of welfare payments (minus the payment they would get with a job, skilled or not). They are comparing this possibility with working in the economy being paid similarly to the welfare program. I am not just saying they need to get off their bums and get a job. There are real reasons why unemployment is so high, and it is very difficult to find work. I would argue that unemployment is caused by government intervention, but that's a separate issue. The effect of welfare affects the valuation of the workers to work, and their supply schedule for labor. Now, they will work only for higher wages, and or will work less. The aggregate supply schedule for labor, of all workers in the economy, will have to match up with the same demand schedule for labor, so the price of labor will rise and the amount of labor bought will fall. When the amount of labor bought decreases, fewer things can be produced. Fewer clothes, fewer raw materials, fewer computers, fewer everything. This impoverishes everyone, because if the market has less to sell, the price of everything will go up, because it all requires labor. The economy will be unable to support as many businesses, some will fail, and workers will consolidate as the capital structure is contracted and fewer things are made for everyone. --CRIME-- Like all other decisions, the choice to commit crime is a rational decisions based on a person's varying desires. Many desires are at play here and must be compared with alternatives. First and foremost is the demand for money and what one is willing to do to get it. Another thing is the supply of criminal tools, such as weapons, street knowledge, etc. One of the most important is the utility of crime itself. Some people actually have a basic desire to hurt people. Others have a basic, irreducible desire to respect others. These desires are all balanced with alternatives by individuals when deciding to commit any crime. So what does welfare do? On a purely economic level, it does reduce the demand for money among the poor. It does not touch any of the two other desires. But it also increases the demand to hold money among the taxpayers, who are always the larger group. Furthermore, as a whole, as I have shown, it impoverishes society by pushing marginal workers out of the labor market and the economy produces less, and there are fewer manufactured goods for all, and therefore the aggregate demand to hold money will be higher, and in total will make people more desperate. This is not by itself proof crime will increase with welfare. The demand to hold money is variable among people and incomes so it is possible crime will decrease, but on a basic level it does not guarantee crime will go down. I would like to thanks Pro for his insights and I await his further response.