The proper response to a gift, even a gift of charity, is gratitude. People who feel gratitude also wish to express it. The easiest way is to give in one's turn. By giving you pass on and amplify the goodwill that you received. Thus it is that, in America, where the tradition of giving is very much alive, and the state has not yet extinguished the desire or the need for it, people give to their old school, to their university, to the hospital that cured them, to the local rescue service that saved them, and to the veterans who fought for them. They give without seeking or expecting recognition, but simply because gratitude is expressed through giving.
However, the state is taking over many of the functions that were previously performed by charities -- not least education, health care, and the relief of poverty. And the state deals on impersonal and equal terms with its citizens. It has no favorites, and it is governed by the rules -- anything else is received by the citizens as an injustice. Hence charity is replaced by justice as the ruling principle upon which social benefits are distributed. But while charity deals in gifts, justice deals in rights. And when you receive what is yours by right you don't feel grateful. Hence people who receive their education and health care from the state are less inclined to give to schools and hospitals in their turn -- something that is borne out vividly by the figures concerning charitable giving. The spirit of gratitude retreats from the social experience, and in countries like France and Germany, where civil society is penetrated at every level by the state, people give little or nothing to charity, and regard gifts with suspicion, as attempts to privatize what should be a matter of public and impartial concern.
When gifts are replaced by rights, so is gratitude replaced by claims. And claims breed resentment. Since you are queuing on equal terms with the competition, you will begin to think of the special conditions that entitle you to a greater, a speedier, or a more effective share. You will be always one step from the official complaint, the court action, the press interview, and the snarling reproach against Them, the ones who owed you this right and also withheld it. That is the way European society is going, and American society may one day follow it. Agape, the contagious gentleness between people, survives only where there is a habit of giving. Take away gift, and agape gives way to the attitude that Nietzsche called ressentiment, the vigilant envy of others, and the desire to take from them what I but not they have a right to.
Scruton is correct in may ways. I am in favor of private, interpersonal charity whenever possible, and certainly don't want to go the way of a European welfare state. My view is that we are to act and give first as individuals and families, and then through the communities and institutions we participate in visibly and regularly. Only as a last resort should charity be replaced with centralized government (tax, legal) policies.
Without a visible connection between the giver and the recipient, there is an incredibly important breakdown in human relationships. The giver loses the ability to see the benefits of their the gifts to others and also loses the ability to receive (perhaps selfish) satisfaction for their action. Likewise, the recipient loses the ability to see that their gifts come from the hands of fellow humans, the goodwill and/or sacrifice that entails, and the responsibility and "do right" action it inspires. Diminishing the tangible nature of charity and gratitude produce not only the mistrust and resentment the author outlines, but perhaps most importantly, personal accountability, which can give way to abuse and mismanagement not imaginable on a more personal scale.
Having voiced my agreement with Scruton's writing, I will now try to clarify my position and maybe make a case for the other side of the coin so to speak, lest I be confused for agreeing with everything his essay may imply.
Charity and grace are incredibly important because inequality is a part of the human condition, and countless individuals find themselves in tragic and unfortunate situations through no choice of their own, be it an earthquake, or cancer, or being born in a deplorable environment or to less than ideal parents. This is where the role of charity is so vital, as those more fortunate act out of empathy and concern for the well-being of others, and for their community/society/humanity as a whole, in order to give others the gift of hope, care, or opportunity.
On the flip side of the equation, there are many who find themselves the beneficiary of (at least relatively) wealthy families, advanced economic societies, social institutions, even abundant natural resources that they had no role in creating or determining. Of course, we all make choices as to how we respond and/or take advantage of the situations we find our selves in, but there is no denying that the "playing field" is anything but level. This is important in the Christian worldview, as we are instructed to recognize that all a person's circumstances, abilities, and possessions are gifts from God.
That brings me to my main "BUT" to Scrotun's essay. It is not a rebuttal, but a recognition of a point of tension that the author does not address.
Our society is not only filled with wide diversity and inequality, it is also inextricably interconnected. At least part of the pay Bank CEOs receive come from the overdraft fees of their poorest customers struggling to put food on their tables. At least part of the money made by the management and shareholders of energy companies come from cutting corners on things such as environmental and worker safety (see W. Virginia, water quality, and the recent mine accident). In these cases, it is the poor, the unfortunate, and the environment who are unwittingly or unwillingly the givers to the more privileged, and once again, due to the diminishment of interpersonal relationships, the result is same: ingratitude, entitlement, resentment, false claims, and lack of personal accountability.
Justice is very important.
Those with money and power have a much easier time in making their interests heard and acted upon than those on the opposite end of the socio-political spectrum. In this respect I disagree with the author that "the state deals on impersonal and equal terms with its citizens. It has no favorites, and it is governed by the rules." It is the role of justice, and this includes but is not limited to the government variety, to make account where trust, accountability, and reciprocity fail, especially with respect to those without the voice, means, or ability to do so for themselves.