About two weeks ago, journalist and producer Kevin Stocklin published on site The Daily Signal (March 13, 2026) a devastating analysis of the 60 years of the “War on Poverty” in the USA. Stocklin reveals how an “investment” that today exceeds a trillion dollars per year failed miserably in its original purpose: instead of giving citizens a “footing” for autonomous advancement, the system limited itself to replacing labor income with subsidies, stifling social mobility and creating structural dependence.
This American chronicle is, in fact, the reflection in the rearview mirror of what Portugal has been experiencing, at least, in the last 25 years. Stocklin’s thesis is transposable to our reality with surgical precision: by trying to eradicate poverty through state transfers instead of productivity, we do not create any launching pad, but rather a “permanent underclass”. All minimally serious numbers demonstrate this.
The data from Pordata and INE are clear: without State intervention (including pensions), the poverty rate in Portugal would be 40.3%; with the “palliative” of transfers, the number drops to 15.4%. At first glance, it looks like a success. But this drop is a statistical illusion. What the numbers reveal is a society “implanted” in the State Budget: in taxes, which the (few) middle class pays, in consumption, rent for everyone, and in what for now can still be “withdrawn” from Europe, eternally seen as a piggy bank. The welfare governance model, predominant in the last quarter of a century, specialized in making poverty bearable, but never in making it avoidable.
The most glaring phenomenon of this era is the “working poor.” According to Pordata, around 10% of the employed population in Portugal lives below the poverty line. The nominal increase in the National Minimum Wage (SMN) — which rose by more than 80% in a decade — was “devoured” by an uncontrolled housing crisis and a suffocating fiscal effort.
I repeat, for those who didn’t understand above: even though Adam Smith warned that a nation’s wealth comes from production and freedom of exchange, in Portugal, wealth is often confiscated via indirect taxes and IRS to be redistributed in the form of survival “checks”.
The Portuguese fiscal effort (in the Frank Index) is one of the highest in Europe. We take resources from those who earn just above the minimum, preventing individual savings and investment. We have a political elite that believes that social justice is achieved by managing the dependence of others — especially because, simultaneously, this is a way of managing the electorate, that is, guaranteeing clientele to vote in the next election.
Worse! By creating a system in which a salary increase could mean the immediate loss of allowances or school support, a perverse trap was created for many in which moving up in life is not worth the risk of losing the State’s “network”.
While Portugal focused on the redistribution of little and micro-welfare, countries like Estonia and Lithuania focused on economic freedom. At the beginning of the century, emerging from the dark ages of vulture communism, they were significantly poorer than us. Today, they have surpassed them in GDP per capita and real purchasing power. Why? Because they lowered the tax burden on labor and attracted capital. In the East, poverty was combated with market wages, while in Portugal it was managed with state subsidies.
Adam Smith’s ethics presupposed that dignity came from the usefulness that each person brings to society, but the welfare model reversed this principle. Today, a huge portion of the Portuguese population depends on the “kindness” of those who draw up the State Budget. This is the “implanted population” that Thomas Sowell wrote about: citizens who, through structural necessity, become electoral hostages of the the state in which.
If we really want to fight poverty, we have to stop subsidizing it and start allowing people to create wealth. A country that thinks it is viable to have 40% of the population dependent on support to avoid being poor does not have a successful Social State — it is an economic system, at the very least, in moral bankruptcy. Not to mention in fact bankruptcy and without morals.
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