Christmas, the holiday celebrating the birth of Christ, is indeed a joyous time. Ironically, it began as an exercise in political extortion. The Roman rulers of the time are best understood as sedentary bandits. They provided order and some security from roving bandits in exchange for taxes levied and collected. A census was required to accomplish this extraction of revenue. Mary and Joseph traveled to Bethlehem, their town of origin, to be counted and taxed.

Whatever our religion, it is likely we know the outline of the story that follows. One core admonition throughout, and one common to Judaism and all divisions of Christianity, is some version of the Golden Rule. Essentially, we are admonished to care about and foster the wellbeing of others, not only kith but also unknown others.

As the pathologies of the welfare state become ever more difficult to ignore, more people seek understanding of the ethical and economic implications and nuances of honoring this directive. There are three fundamental approaches to its implementation. They are voluntary charity, redistribution through governmental power, and institutions designed or evolved to cause individuals to act as though they care about unknown others.

The first is obvious and readily understandable. We see the Salvation Army bell ringers outside our grocery stores each Christmas gently and cheerfully reminding us to give for those in need. Services the Sunday before Christmas at the Bozeman Methodist Church and the ninth annual Community Sing of Handel’s Messiah, and surely services elsewhere, included special offerings for Love INC. This is an organization that helps the homeless and others in need. The power and effectiveness of such voluntary contributions are remarkable indeed, especially in towns like Bozeman where a sense of community and civic virtue infuse local culture.

The success of Eagle Mount, Heart of the Valley animal shelter, Warriors and Quiet Waters, and a host of other not-for-profits all testify to the power of good intentions well marshaled by dedicated social entrepreneurs and generously sustained by volunteers. I find these among the organizations meriting financial end-of-year support. I hope you’ll join me in giving it to them as well as our churches of choice.

As Alexis de Tocqueville observed in the 1830s, Americans demonstrate a remarkable ability to self organize to achieve social objectives. By any measure the generosity of Americans is really quite remarkable, especially when compared with that of nations in which the culture assumes dependence on political welfare.

Only regulations and intrusive, greedy government are likely to throttle these instincts. Alas, this is a real risk even as we watch European welfare states implode. The law of unintended consequences is impossible to break but difficult to learn, especially by intellectuals wedded to political solutions.

Alas, in sum, positive governmental programs promoted to relieve problems normally, but not always, compound them. Rent control destroys low-income housing, minimum wage laws raise unemployment, ethanol mandates cause ecological and economic damage while further corrupting politicians. These are all predictable consequences of employing coercion to achieve cooperation.

The last mentioned means of caring for others involves institutional design. This is by far the most difficult for most people to appreciate and understand. Given that most people are predominantly self-interested, the key task for enhancing wellbeing is to have arrangements that give individuals the information and incentives to act as though they care about others.

This means that people face incentives to create value and hence generate economic progress. The oft well intended but naïve alternative uses politics to redistribute wealth and preferential opportunities. Everywhere and at all times this promotes corruption and venality.

Adherence to a few relatively simple principles is more effective and ethically superior. The main ones are clear, respected, and enforced property rights; exchange based on willing consent not force; and decisions made under the rule of law not by access to political power. These plus voluntary charity foster the religions’ Golden Rule while promoting peace, prosperity, and good will.