This section of the book is from the "Introduction To Public Finance" book, by Carl Copping Plehn.
In this chapter we shall consider the remaining three classes of expenditure. These are not so very closely akin, but have one point of similarity ; namely, that they are all for the particular benefit of individuals. The first, however, is not so treated by any nation, but is treated as though it were an expenditure for the benefit of all. The relief of indigence and the protectionof society against the insane and thecriminal, the care of the feeble-minded and otherwise defective classes, and the care of the sick are among the most costly and most discouraging features of public expenditure. In the United States the expenditure for pensions, charities, and gratuities amounted, in 1890, to $146,895,671, or nearly a million dollars more than that for educational purposes and the common schools. Generally even after the State has done all that it can be induced to do there is still room for private effort in the same direction. The expenditure by private persons and societies for exactly the same purposes is even larger than that of the government. So that this is undoubtedly the heaviest of all public expenditures. The relief of poverty has generally received more attention in treatises on Political Economy than in works on Public Finance. But it belongs very properly to the latter science. It is generally a local, rather than a national, expenditure, but on account of its vast size and economic importance has often received the attention of the central authorities, and is in many cases, at least partly, under their control. There is almost no expenditure that fails so signally to accomplish anything like permanent results. As frequently administered, poor relief has aggravated the very evils it has been intended to relieve. The words of Malthus are still true : " We have lavished enormous sums on the poor, which we have every reason to believe have constantly tended to aggravate their misery."1 Yet the expenditure is necessary, indeed imperative, and will be so as long as the present sentiments on the subject prevail, unless we can remove the causes. That this may be done by the extension of educational facilities, especially technical schools, is a frequent contention. The student of finance need not enter into the question of the causes nor of the cure of poverty. Indigence is there, and the State has assumed the duty of relieving it. The modern methods of relief are fast coming to be as economical and efficient as the conditions under which they are necessarily administered admit. Like war, this is a form of expenditure that shows little tangible result that can be measured in terms of money.
1 Essay, p. 438.
The general principle applied in the granting of continued assistance to the poor is that the cause of poverty to be relieved must be such that it cannot be removed by the candidates for assistance. In other cases, onlytemporary assistance is rendered Those who can help themselves are desired to do so. The four agencies which really work together toward the same end are the civil, the ecclesiastical, the associated, and the individual. These should all work harmoniously and should avoid duplication of work. The assisted persons should, so far as possible, be put under conditions which will enable them to help themselves to the limited extent that they are able. The repression of vagrancy and the punishment of wilful paupers, who are really able to support themselves but unwilling to do so, is left to the courts.
Although poor relief is mainly a local duty, Great Britain contributes £710,000 annually from the central treasury for "non-effective and charitable services " ; of this over £500,000 are for pensions. In the United States in 1890 public charities alone (not including pensions) cost $40,000,000 ; but this sum does not include the value of provisions, etc., raised on the poor-farms, or at the work-houses, of which no accurate estimate can be formed.
Very different from the older sort of poor relief is the institution of old-age pensions on the insurance plan. Such institutions, for example, as the German, for compulsory insurance may be made self-supporting and in time promise to relieve the State of a part of the burden of poor relief. If indigence is to be relieved by the State at all, such expenditure must be regarded as conferring a common benefit on all.
Modern society supports the insane and criminal classes at public cost. In this way the greatest possible saving is made. Indeed, the cost need not be nearly as great as it is.
To a large extent prisons can be made self-supporting. It is perfectly feasible by a proper division of the field between the different institutions to make the prisons, insane asylums, and the like entirely self-sustaining. Hard labour is frequently a part of the criminal's sentence, the less violent insane can be made to work, and something can be got, by proper supervision, from the feeble-minded and the paupers. By an exchange of products between the different institutions the necessary diversity can be obtained. There is little excuse for the too common uselessness of the labour imposed ; the tread-mill and oakum-picking of our older prison discipline ; the digging of unneeded ditches by the insane, etc. Exchange of products, too, avoids the danger of conflicts with the labour unions, which so often arise when a prison attempts to make a product for sale in the open market. This expenditure is very closely related to the one for the maintenance of internal peace and security. The burden falls mainly upon the finances of the central organ, or, in a federal State, upon those of the component commonwealths. The policy of isolating the defective classes, the insane and criminal, the deaf and dumb, the feeble-minded, and the like is an economy for society as a whole, and if it can be made to prevent the propagation of these weaknesses, is far-sighted.
Hospitals for the sick are imperative needs in the case of infectious diseases; they are great blessings and very desirable from the standpoint of expediency in all cases. The opposition so frequently manifested by private medical practitioners to public hospitals is a sufficient proof of their economy. Generally this is a local expenditure. Certain branches of the government, like the military and the naval, have generally found it necessary, on account of the large number of persons in their employ, to make provision by hospitals for the care of their own sick. The maintenance of quarantine stations for the isolation of persons coming from infected countries or districts is a national affair. Its cost may at times rise to a considerable amount. But there is no question as to its necessity and economy. In the United States there are arrangements for quarantine between the different States partly at the cost of the federal government and partly at that of the commonwealths.