21 November 2008

Welfare - There Is Common Ground.

Some on the Right argue that the welfare state is the cause of social deprivation and the only solution is the abolition of the welfare state. The time before 1940 when poverty was endemic and the welfare state virtually non-existent is casually ignored by such ideologues.

But as Jenni Russell points out in today's Guardian - there is common ground for us on the left with even these right-wingers. Indeed she argues that it is essential that we on the left do not simply turn down a parallel (but differnt) ideological cul-de-sac. We cannot simply wish away or...
ignore the perversities of the welfare state, just as right-wingers are wrong to think the welfare state is the problem.

Me and right-wing bloggers like Devil's Kitchen and Mark Wadsworth generally agree on little, but we can still agree on a universal citizen's basic income (CBI), a land value tax or even that the minimum wage can destroy (some) jobs (although in the absence of a CBI it is still preferable) and that welfare can provide perverse incentives to idleness that help no-one.

Where me and right-wingers can find common ground is a belief in the most efficient system. The welfare state does not create poverty, as is proved by the extent of poverty pre-19th century and also current poverty in the developing world.

The welfare state is not wrong, it is just inefficient. There are some people encouraged into idleness by it with dire effects both for their lives and for taxpayers pockets and also some who need and deserve help but are ignored by the welfare system. The solution is a totally radical overhaul NOT abolition. We have to dare upset vested interests, but this does not mean a reduction in the amount of help the state provides.

As a society we can all work out together what a 'decent' level of income is - generally when we get together and discuss this we can work out what income is needed to live a reasonable life without being excluded from society and it is usually an ammount that society could afford if only in the top 20-40% of earners were willing to forgo just a little of their income - some thinktanks have produced figures on this - Joseph Rowntree Trust is one that comes to mind. Once we arrive at this figure - we have to decide that no full time job should pay less than this - and neither should people on benefit receive less (a universal citizen's income).

The tricky part is deciding what level of idleness we can accept and how much more than benefits a full time job needs to pay to make benefits unattractive. Whatever happens there will still be some idleness - but in terms of economic efficiency, lowered healthcare costs and lowered crime, the results (I would argue) might pleasantly surprise those on the right.


  1. Agreed, with the caveat that DK is totally 100% anti-Land Value Tax (despite he is a tenant and so wouldn't pay it).

    Further, thee, he and me (and millions of others) would also appear to agree on legalising/regulating drugs, prostituion and are towards the rabidly atheist end of the scale.

  2. MK, I can imagine that DK would be against LVT - thanks for correcting me. I suppose he would argue that tenants would pay LVT through increased rent. But not as regressive as council tax.

    Yep, agree with you both on legalising drugs and the idiocy of religion. Imagine we also agree on the importance of freedom of speech. Not so sure on prostitution - criminalising the prostitute is definitely wrong - but measures should be in place to discourage pimps and punters, I think.

  3. NH, OK, neither of us are in favour of prostitution, AFAIAC, it is question of how best to mitigate the negative aspects.

    As an aside, have you taken part in my Fun Online Poll?

  4. Actually, LVT (more properly called "community collection of rent") cannot be shifted to tenants who are already paying market rates. If a normal commodity is taxed, producers can make less and make more of something else, but not so with land or other unimproved natural resources -- the supply of them is fixed, and so the only question is, "Who gets the rent, the private landlord or society as a whole?"

  5. The problem with the welfare state isn’t that it deters people from working, it is the lack of jobs that deters people from working. At the end of the second War, full employment was not some kind of goal or some kind of achievement, it was considered the norm. If you had said to any politician in the 1950s that unemployment around two million would be ‘acceptable’ or a ‘price worth paying’, you would have been thought of as mad.

    We are now running a completely different economic philosophy now. When the welfare state was introduced, it was supposed to tide people over when jobs were scarce or when people were between jobs. The rules have changed.

    Not only is unemployment part of the economic scenery. It is considered (by Labour as well as the Tories) to be an integral part of the economy. Unemployment is as much as an economic tool as interest or exchange rates. We have seen millions of jobs ‘outsourced’ or ‘relocated’ over the last twenty years. So, given that unemployment is a permanent feature of the economy, is it any wonder that there are people who form a permanent layer of unemployment?

    The surplus of labour and ‘Globalisation’ has been responsible for redrawing the labour market.

    We now see the fruits of that shift. The rise of employment agencies has seen the re-introduction of many of the horrors of an exploitable workforce. The by passing of employment laws, the re-introduction of an underclass of casualised, transient, de-unionised, non contracted de-regulated workforce. I have heard of instances were employees are expected to ‘provide’ (i.e. buy from the agency) personal protective equipment and ‘volunteer’ to opt out of the working time directive, and ‘volunteer’ to pay an ‘administration fees’ to be eligible for wages.

    The above are the very things that the labour party were brought into existence to fight against. The most sickening irony of all of the above and the return to the pre-labour Victorian values, is the above is done in the name of ‘modernisation’!