A Very Old Racket

A Very Old Racket 

By Lawrence W. Reed 

The fans of the welfare state often claim that “it’s for the people” or, to prey on our sympathies with greater effect, “it’s for the children.” If you’re watching the reports about billions in welfare fraud in Minnesota, your skepticism is excusable.

Personally, I never thought the welfare state was primarily about the poor or the children or the elderly or the fill-in-the-blank constituency. I always smelled a rat. Why? For several reasons: 1) It operates as a vote-buying program promoted by self-serving politicians; 2) When overwhelming evidence points to welfare causing intergenerational dependence, undermining the work ethic, and breaking families apart, those politicians support it anyway; 3) Raising legitimate questions about it gets you labeled “insensitive,” “mean-spirited,” “xenophobic” and “racist”—reliable signs that somebody wants you off the trail.

Far from being a hallmark of caring and compassion, the welfare state has become (and maybe always was) just another racket. Power and money for its promoters is what it’s all about. If it wasn’t, those promoters would be donating their own resources to either charitable groups or to the federal departments that dispense benefits. Upon examination, it often turns out that they are among the least generous people in society.

Who in their right mind would choose to help the deserving by voluntarily sending their money to the government? Not even Democrats do that. The “Donations” line in the federal budget is microscopically puny.

Moreover, the welfare state is focused on the here-and-now. Its advocates rarely consider future consequences. (See my October 5, 2025 article titled, Selective Sustainability). Remember also that we’re not just talking about subsides or benefits for a few individuals; we’re talking about any entity, including businesses and labor unions, that gets goodies from government at other people’s expense.

So, when did the welfare state racket start? The blame for its modern form usually goes to German chancellor Otto von Bismarck in the 1880s. But we know that one of the reasons ancient Rome ruined its economy and currency and went belly-up centuries before was its costly welfare state. (See listings at the bottom of this article.)

Historians generally posit that the Roman welfare state appeared in the last century of the old Republic, beginning with grain subsidies in 123 B.C. But the racket is even older than that, by at least 300 years.

In his monumental History of Rome, the historian Livy tells of a wealthy Roman grain merchant named Spurius Maelius who, amidst a famine in 439 B.C., bought up and doled out generous quantities of wheat and corn to bribe his fellow citizens. For what purpose? Livy lays it bare: “a hope of attaining regal power.”

Livy sneered at Maelius’ real motive (calling him “monstrous,” “criminal” and “nefarious”), and claimed that the man

…had supposed that a people victorious over all their neighbors could be cajoled into servitude by throwing them a morsel of food; so that a person the state could scarcely digest as a Senator it should tolerate as king.

In a 2023 article, How the Roman Republic Dealt with Demagogue Spurius Maelius, Eli Merritt cites the British historian Thomas Gordon: “[T]he seeming benevolence of Maelius in feeding the hungry was known by the Senate to be ‘an ambitious bribe to catch the hearts of the multitude, in order to seize their liberties.’”

The Senate ordered the arrest of Maelius to prevent him from seizing power. In the melee that followed, Maelius was killed. To send a message to other potential vote-buying usurpers, the Senate demolished his home and confiscated his property. It’s safe to assume that if the scheme had worked, Maelius as ruler would have kept the mob happy with public funds instead of his own. But the republic was saved and an early attempt at a welfare state was nipped in the bud.

Three centuries later, when the government grain dole commenced, many Romans were more interested in “free stuff” than in keeping their liberties. They welcomed into power men of low character like that of Spurius Maelius.

If you promise to rob Peter to pay Paul, you can usually count on the support of Paul, at least in the short run. The problem, of course, piles up in the long run, which is easy to ignore if you can pass it on to future generations.

For additional information, see:

Otto von Bismarck: The Man Behind the Modern Welfare State by Lawrence W. Reed

The Jig is Up by Lawrence W. Reed

How the Roman Republic Dealt with Demagogue Spurius Maelius by Eli Merritt

The Generous Rise and Authoritarian Crash of Spurius Maelius by C. Keith Hansley

The History of Rome, Book IV, Chapter 16, by Livy

Poor Relief in Ancient Rome by Henry Hazlitt

The Slow-Motion Financial Suicide of the Roman Empire by Lawrence W. Reed and Marc Hyden

Selective Sustainability by Lawrence W. Reed

Warnings from the Wise about the Welfare State by Lawrence W. Reed

Animals We Can Learn From by Lawrence W. Reed