Welfare: Redistribution or Contribution?

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It seems to me that the intricacies of the British welfare system have become so complex that we have stopped thinking about who and what exactly it is for. Is it a safety net or a means of redistributing wealth within our society? These days, politicians would never discuss this question in such politically bald terms, but if you turned back the clock 40 or so years and you would find no such shrinking violets. In some respects, I feel this is a shame. At least the old class warfare discussions were politically principled and had a touch of intellectual honesty about them. Today, it is almost as though politicians have mislaid their politics or conveniently forgotten them as they seek to confuse the floating voter. As a result, arguments about welfare become foggy either through dissembling, complex technical discussions or, worse, piecemeal and inefficient reforms which are largely advanced to court the voting approval of narrow interest groups. But in my view the lack of a clear vision about the purpose of welfare makes reform difficult as the lack of a strategic framework encourages ad-hoc and expensive changes that rarely achieve the intended purpose. It also encourages that modern scourge of government: political meddling in operational matters.

So where do I sit on this? Well if pushed, I would fall on the safety net side of the argument but with some provisos. Ha Ha, they shout, the old ram wants to pick on the poor and disadvantaged. Rename him, Ebenezer at once! But, actually, not at all. In my view, it is a measure of a peaceful, successful and humane society that we should help those that fall on hard times or become sick such that they are unable to support themselves. We will discuss religion (I don’t do it) in future posts but the texts of many religions nonetheless demonstrate that as a species we have long demonstrated an innate sense of compassion and consideration for our fellow beings even if it is not always put into practice (which I very much intend to return to).

It therefore seems that our basic instincts are to act compassionately, and I would certainly like to think that I live in a civilized society. Yet in my view that aspiration shouldn’t extend to using state spending as a means of redistributing wealth. That model has clearly been shown historically to fail. Look at the disasters in the former (and, increasingly, existing) Soviet Union or in Venezuela. At face value, state-manufactured equality sounds attractive but the principle always gets mismanaged and corrupted, the rich flee, the economy suffers and everyone gets poorer defeating the primary objective of the idea. No, to my mind welfare is a safety net, and it is certainly not a mechanism for making poor people better off. The best way of achieving improved living standards is to provide a framework that encourages individuals to compete through education and civil rights, and then to encourage innovation and individualism to allow people to achieve their maximum potential. Note though, that potential cannot be the same for everyone no matter how much we meddle or wish it otherwise. That is not a fact of politics, it is a fact of genetics and the way of the natural world. This is the key point that nobody will discuss because we don’t like the idea that we can’t control every individual’s outcome in life.

Having said all that, it doesn’t solely have to come down to the survival of the fittest, and we have it within our ability to set moral limits and achieve some kind of balance. If someone is ill with a life-threatening condition or something that would materially affect the quality of their life then I feel that we should find the cash to look after them. That shouldn’t extend to boob jobs, tattoo removal and varicose veins, though, and it doesn’t mean that a patient should get a free consultation with the GP just because they have a cold. The principle of self-reliance rather than collective-reliance should always come first and this should be applied as the first test. Its not just in health matters either; the same principle should apply to the benefits system. I really don’t like the way that some try to stigmatize those in receipt of benefits, and whilst generalizations may appeal to the Sun readership, it cuts no ice with me. That said, it is right that people should be encouraged to return to self-reliance and the only way of achieving this is by setting limits on the amount of collective aid that will be provided and by limiting the conditions that may prompt its delivery. The Coalition government recognized this, and in my view was quite right to point out that nobody on benefits should receive more than an average wage. Quite where the level should be set, however, is a serious matter for debate and I would be interested to hear views.

Lastly, we’ve talked about the need for balance in our welfare state, but before we get carried away by dealing in absolutes, let’s take a look at redistribution in terms of one of the less savoury aspects of capitalism. Twenty years ago I would have argued that the free market should run free and unencumbered. Certainly, it seems to provide the best framework for successful trading and commerce, and ordinarily this would benefit all. However, globalization, improved communications and porous borders have decreased the power of national governments and allowed unaccountable multinational corporations to trump elected officials. This has undermined our system of liberal democracy to such an extent that I do fear that we are in danger of a political retrenchment brought on by popular antipathy. I find it ironic that those who have benefited most from globalization have accumulated such wealth whilst exhibiting such little awareness of the wider world that they may have already endangered their own existence. By any measure, it just cannot be right that 1% of the world’s population owns 80% of the worlds wealth. That means that the benefits are not being shared out equally. Oh wait, you don’t mean redistribution, Old Ram? We thought you were against it?

Its a conundrum for sure. I instinctively feel that we should be wary of regulation yet as a very minimum, all corporations should be made to pay the tax due in the countries where they conduct their business. That doesn’t mean to say they should necessarily be taxed more because they are large, but it does mean they should pay their way. Its a question of balance again. I’m not sure of the answer to this one and it demonstrates the dangers of dealing in absolutes, but I’m sure if I eat some more hay and ruminate a little something will come to me. Over to you.

3 thoughts on “Welfare: Redistribution or Contribution?

  1. The 80% of wealth owned by 1% of the world’s population is heading towards 90% apparently. Thomas Piketty, the French left wing economist, explains this by the fact that wealth (capital) grows at a faster rate than economic growth – so the rich get richer, quicker than the rest. See here a summary:
    http://www.economist.com/blogs/economist-explains/2014/05/economist-explains
    His recipe is a global wealth tax, which is probably idealistic, but if the trend is correct, then we can expect to reach a point where civil disruption may start to occur, so some method of wealth distribution (eg via the tax system) is probably going to end up being put in place.

    • Hi blackandwhiteram, thanks very much for visiting my new site and being the first to comment. I agree entirely that the situation will eventually become untenable but it will require international action to resolve which is always difficult to achieve. Sadly, this may make a peaceful resolution difficult.

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