There is a profound contrast between the effects of foreign aid and of voluntary private investment: foreign aid goes from government to government. It is therefore almost inevitably statist and socialistic.

You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.

The only real cure for poverty is production.

Once the premise is accepted that poverty is never the fault of the poor but the fault of 'society,' or of 'the capitalist system, then there is no definable limit to be set on relief, and the politicians who want to be elected or reelected will compete with each other in proposing new 'welfare' programs to fill some hitherto 'unmet need.'

Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.

A hundred welfare programs, spending more and more billions, lead to chronic budget deficits, which lead to increased paper-money issues, which lead to higher prices.

The army of relief and other subsidy recipients will continue to grow, and the solvency of the government will become increasingly un tenable, as long as part of the population can vote to force the other part to support it.