Theft vs. Welfare: Efficiency

A few months back I suggested that welfare be replaced with theft. Actually an Anglican bishop suggested it. But I liked the idea. It got me thinking: how efficient are these two systems as methods of delivering undeserved wealth to the poor?

Welfare has the noticeable disadvantage of bureaucracy. This stems from silly ideas like having different brackets of welfare depending on perceived necessity and so there are food stamps, housing, subsidies, all manner of complicated structures. It's clearly more expensive than a flat benefits system of giving nothing at all. Okay that's obvious, but whatever benefits are handed out, the rating system makes it more expensive.

Theft doesn't have this problem. It's individually-driven and free of government bureaucracy. That means low cost to run it.

There are problems with this free-market solution.

Presumably the poor have similar consumer demands as the employed. If they were significantly different, in a rational way, they would be in the cheaper direction and so they'd be comparatively less poor; but clearly that isn't the case. Maybe poor people like more expensive goods; and this has actually been proven if you look up studies on conspicuous consumption and income levels. Basically poor people try to be flashy to stand out. But this isn't applicable since those are poor people with money trying to stand out from their welfare peers. They are not the target demographic here.

If the poor want similar products as normal consumers, this would seem to create a perfect situation: they will steal what is most readily resupplied due to the high demand and quick supply movement. This also means they steal those items which are presumably profitable enough that the losses can be offset. I doubt it would work out this well. Instead stores would attempt to minimize theft by not carrying those items which are most easily or commonly stolen, creating a sort of counter-market force; with demand causing reduced supply. This also means they'd carry less of what consumers want, ruining business and consumer satisfaction, driving them to less desirable products and therefore to less mutually profitable exchanges.

In effect, welfare can be considered a government program to negate the harm that the poor would otherwise cause to the free market. While the taxation is bad, creating an active counter-market force is possibly much worse. In this regard, taxation and welfare may be the less damaging than theft and therefore more efficient.

There is another problem though: The rise in theft will inevitably lead to a rise in demand for policing. That means another cost. Even worse, this means direct conflict between the poor and society, leading to violence which is the worst possible condition for an functioning economy.

It appears that welfare is a more efficient system than giving nothing at all.