@technomancy I think that this assumes society is in a morally homogeneous state. There are many people who do good for others to no great monetary benefit of their own (or at the very least, minimize profits), from Goodwill and the Salvation Army to Saint Jude's Children's Hospital.
If anything, a welfare/nanny state deincentivizes the private sector from helping the needy because "the government'll take care of them", despite the fact that the government is woefully inept at this sort of thing in comparison to the private sector. (compare the VA to Saint Jude's, and 401ks to Social Security).
I do think a safety net is necessary, but it should not support people who don't really need it.
@technomancy After all, how do you keep a demographic group down? It ain't by giving them jobs, it's by giving them welfare benefits. (You see this in the black community.)