not one speaker on the left seemed to connect the issue of poverty alleviation with the solution of wealth creation. Failing to address the issue of where wealth comes from–the zero-sum mindset here is pervasive–they have yet to learn the basic lesson that Adam Smith tried to explain two and a half centuries ago. He explained that wealth comes from the expansion of the division of labor, trade, innovation, and a flourishing commercial society. The dramatic decline in poverty around the world over the last 20 years comes not from more welfare but from expanding markets.
In my concluding remarks, I drew attention to the complex political dynamics between welfare and diverse population groups living under the same regime. People genuinely resent having their money taken and transferred to groups with which they feel no integral relationship. The welfare state, then, ends up exacerbating religious, racial, gender, and language conflicts, giving rise to populist movements that trend fascist. The advocates of the welfare state bear some responsibility for the rise of authoritarianism around the world.
Source: The Welfare State Should Be Abolished