Monday, 7 March 2016

Why the Welfare State is a Fraud - Part 1

(From the archives - September 26th, 2006. This is another three-parter)

Part 1

In 1942, in the depths of war, William Beveridge authored a report. There were already state schemes in Britain for pensions, health and unemployment insurance. What Beveridge proposed to do was bring these all together into one giant, all-encompassing combine – the welfare state.

Many people liked Beveridge's ideas. They liked the idea of a safety net to prevent them becoming poor. They liked the idea of financial security in their old age. They must have thought they were getting something for nothing. But they didn't stop to think about the long-term costs. They didn't think about the burden they would be storing up for people in the future.

Labour politicians, spying a chance to get themselves power, jumped on Beveridge's scheme. Worn out by war, the people were conned. They voted for it in droves. So, the British welfare state was born.

By 1948, most of the welfare-state proposals had been implemented. Although some thinkers, even Beveridge himself, were already starting to worry what kind of monster he had sired. Since then, many other countries have set up state welfare systems, following the British model more or less closely.

In Britain at least, it isn't just pensions, health and unemployment insurance that are provided by government, and financed through taxation. There is subsidized housing. There is "free" education. Even bus services are subsidized. The whole system is like a giant whirlpool, in which some of the money taken from us through taxation is eventually returned to us in one form or another – but a lot of it just disappears.

So, what effect has the welfare state had on our lives? Today, after almost sixty years, has it ended poverty? Has it made us all better off? Has it provided us with financial security in our old age?

The answer to the first question is clear. The welfare state hasn't ended poverty. Far from it. It has, so the sociologists tell us, created an underclass. With no desire to work for a living, and in many cases with criminal tendencies, the underclass are unemployed, unemployable and dependent on the state for their very existence.

And it is not just in Britain that welfare has failed to end poverty. I quote from a recent article by Michael D. Tanner of the Cato Institute about welfare in the USA:

"Despite this government largesse, 37 million Americans continue to live in poverty. In fact, despite nearly $9 trillion in total welfare spending since Lyndon Johnson declared War on Poverty in 1964, the poverty rate is perilously close to where it was when we began, more than 40 years ago.”

There is worse. Fifty years ago, one working parent could support a family. Now, it takes two – and even two incomes are often not enough. Buying a home, too, has become an increasing strain for working people. How can it be that, despite the enormous advances we have made in technology in fifty years, and despite the fact that many people work harder than ever, overall we are worse off, not better?

There is yet worse. Unless there is radical change, most people now in their 50s or younger will never get pensions sufficient to live on. If we save, our savings will become worthless the next time the politicians debauch the currency, as they did in the 1970s. If we don't save, there will be nothing left in the pot for us, no matter how much we have put in. The so-called compact between the generations, which was supposed to assure us of pensions, has failed.

The confiscatory tax burden on us has risen steeply in the last half century. Both direct aid indirect taxes have gone up and up. And the yield from these taxes is used now for purposes way beyond pensions, health and unemployment insurance, even beyond "free" education and subsidized housing. Many of these purposes bring no conceivable benefit at all to those who pay the costs. For example, it was recently revealed that a quarter of the "council tax" we pay in England – supposedly for roads, parks, police and the like – actually goes on pensions for state employees.

And those in power are for ever looking for new excuses to take our resources away from us. For example, new "green" taxes, or empowering themselves to confiscate our homes if we leave them empty for more than a few months.

Claiming to represent "the community,” the politicians, national and local, use money taken from us to seek popularity. A recent proposal to offer people regular "health MOT checks" is a good example of this. The politicians encourage people to clamour for the benefits they offer, while not thinking about the costs, or about who will be expected to pay them. And increasingly, what is taken from us is used on dubious schemes that provide for no-one's needs, but merely reward political correctness, such as grants to install solar heating.

The re-distributive welfare state has also caused moral decay. Many people now show no shame about taking as much as they possibly can from the trough, even if they don't either need or deserve it. If I don't take it, they say, someone else will. It is not surprising that, if people are encouraged to behave badly like this, you get a bad society. And the virtues of independence and self-help have been all but forgotten.

We have also lost what I call the passive sanction. When people behave in a way we don't like, we should be able, non-aggressively, to tell them so. We should be able to choose the severity of our sanction as the situation demands, from the raised eyebrow right up to outright ostracism. We should certainly have the right to deny financial help to those that behave badly towards us. But the welfare state has taken this right away from us.

And it is not just in Britain that there are problems like these. I quote Tanner again: "Government welfare programs have torn at the social fabric of the country and been a significant factor in increasing out-of-wedlock births with all of their attendant problems. They have weakened the work ethic and contributed to rising crime rates. Most tragically of all, the pathologies they engender have been passed on from parent to child, from generation to generation."

However, some have greatly benefited from the welfare state. It has given the politicians a chance to appear generous and compassionate, while all the time spending other people's money. And it has brought about an enormous increase in bureaucracy, with the arrogance, incompetence and waste that go with it. Those in control of the welfare state, and those that have found nice little niches in it, have done very well out of it, thank you. At our expense, of course – at the expense of the real working people.

No comments: