Simon Duffy

Thoughts, Bemusements & Arguments

Tag: Beveridge

Is a Pro-Community Welfare State Possible?

In the space of a few days I’ve been lucky enough to be part of two workshops where we explored the question of how to narrow the gap between public services (the official welfare state) and the community. Each event was inspiring, with stories of exciting innovations that demonstrate the power of community action and the ability of the state, sometimes with a little help, to act as an agent for positive social change. There is a clear appetite for a new settlement, a new kind of pro-community welfare state, one which works in harmony with its citizens, not against them.

Now I know that for many fellow campaigners against the UK’s austerity policies even to discuss these ideas is to move dangerously close to the Big Society Bullshit that has been used as a screen by Government to disguise more than six years of cuts, stigma and increasing inequality. Some believe that the old welfare state was just fine, and that we must go back to the 1945 system; others recognise that all was not perfect, but think that any criticism of the old system, at this time, just provides dangerous ammunition for the new barbarians.

I certainly have some sympathy with both positions. The old welfare system had many virtues which we have lost sight of, including a much greater faith in the ability of officials in the welfare system to make sensible decisions, at a local level. Much of this freedom and flexibility has disappeared as Whitehall has taken over the ‘management’ of the welfare state. I also recognise that the Coalition Government did a brilliant job of covering its tracks. For every vicious cut they imposed there was some wacky new programme (usually funded by the Cabinet Office) that was used to grab headlines and scatter glitter over gaping wounds. We live in a cynical age.

But I don’t think we can hold back from considering some of the fundamental flaws in how the welfare state has evolved over the past few decades. It is particularly important to consider some of the deeper factors, which are much harder to see, but which not only damage the welfare state but also enable the Big Society Bullshit to gain credibility.

The best lies are wrapped around a small nugget of truth, and repeated lies cannot be defeated unless you can share some deeper, stronger and more hopeful truth.

To begin with I think it’s important to remember why we need the welfare state. The welfare state is a compensatory mechanisms that helps us deal with two kinds of inequality: inequality of wealth (income and assets) and inequality of need (disability, illness and age). The more equal a society is in wealth then the less you need systems of benefits, taxes and social housing to rebalance things. However, even if wealth were equal you would still need to deal with the fact that some people will also need further help which they cannot get on their own.

Now it is important to note that this second problem is also linked to how willing people are to do what is right without payment. Inequality of need is no problem in a community that naturally organises itself to meet those extra needs; however in a society where doctors, nurses and social workers want to be paid, and to be paid well, for using expert skills then inequality of need will also require additional welfare systems to ensure these important additional needs are also met.

So the purpose of the welfare state is to compensate, not just for inequality, but also for the insecurity that comes from knowing that you might have needs, and that nobody will be willing to help you meet them without payment.

Now, in the way of a thought experiment, let us imagine that you are the ruler of a community that already has a welfare state; and now imagine that (for some strange reason) you want to destroy the welfare system, but in a way that people won’t notice. Here are some strategies you could use:

  1. Forget about the importance of inequality, spend less on making the poor less poor, but spend more on services instead. In this way public spending will remain high, but inequality will grow. This is what the UK has done, spending about 50% less on poverty now than it did in 1977. In this way, fundamental needs will grow but the system will appear unable to help them. This helps to undermine the whole system.
  2. Encourage inequality within public services themselves. The Chief Executive of the NHS is paid about £200,000 – 50 times more than the poorest 10% of UK citizens who live on about £4,000 per year. Charity chiefs can earn similar amounts (e.g. £175,000 for the CEO of Mencap). In this way the public and charitable sectors can create the inequality that they are supposed to be there to solve.
  3. Make the poor poorer through hidden taxes. For instance the poorest 10% pay 50% of their income in taxes, meaning that their real income is closer to £2,000 per year (about £40 per week). In this way the poor are tricked into paying the salaries of those who should be helping them.
  4. Then create extra taxes, just for those people who have higher needs. This is called means-testing or charging, and it means that if you have a disability you will only get support if you are very poor or if you are prepared to pay the high ‘disability taxes’ imposed by the adult social care system. For this reason many people opt out of the welfare state and start to believe that that the system only exists for ‘them’ (the poorest, the most unworthy). At the same time the poor have to make themselves even poorer just in order to get vital services.
  5. Associate the welfare state with stigma, control and a sense of unworthiness; in this way people will not want to support it, use it or value it. Spending public money on campaigns which suggest people on benefits might be “benefit thieves” has been a highly successful means of spreading fear and mistrust through the general public. Today people believe benefit fraud is rife, whereas it is actually statistically insignificant.
  6. Pretend that public services are inadequate and will be better managed by private sector companies. This has the double benefit of reducing people’s sense of control and faith in the system, while adding to the inherent inequality of public services (frontline workers salaries are pushed down, profits are sucked out, yet senior public officials can now earn more as ‘commissioners’ rather than providers).
  7. Talk about the need for communities to take back control, for citizens to be empowered and then dismantle any of the remaining systems of support. And here we are today – Big Society Bullshit.

Some of you this may think that this is an unduly critical view of public policy over the past 40 years or so; others may think this is simply a restatement of what many others have been arguing for some time – “It’s the workings of capitalism; it’s the ideology of neoliberalism.”

So I’ll end by considering the question of motivation. Who wants to destroy the welfare state and why?

I asked you to consider how you would destroy the welfare state from within. But personally I find it difficult to believe that most of the politicians and the civil servants responsible for the welfare state have really been trying to destroy the welfare state. (But I may be being naive). In my experience (most of) our rulers want to do the right thing, but they do not understand the systems they control and act in order to gain short-term political advantage. Rationality and wisdom is harder to attain in a position of power.

Nor do I think that, for most of this period, greed and corruption by commercial companies has been the biggest factor in the destruction of the welfare state (although I think things have now changed, and it is certainly a significant factor today).

However I do think that shallow thinking has played its part; but I think that state socialism has been nearly as damaging as the kind of narrow economic liberalism that has now been relabelled as ‘neoliberalism’. It we think of people as merely animals, seeking selfish material benefit, then our thinking about the demands of justice and the organisation of society will be utterly inadequate.

So what are the real driving forces that continue to undermine the welfare state? Here are five poisons that I believe are eating away at the welfare state from within. I do not think they are the only corrosive factors at work, but I think they are important internal factors which should be given more attention as we try to think our way out of our current problems:

1. Centralisation – The more that decisions are taken centrally then the fewer the people involved in those decision, the easier corruption and the easier it is for powerful groups to get advantage over less powerful groups. Elites speak to elites, and after dinner comes the contracts, or the increased salaries for senior staff.

2. Meritocracy – The more hierarchical and the less democratic a society then the easier it is for its rulers to believe that they deserve their power, the money (that they award themselves) and their many other privileges. Meritocracy has always been the ideology of aristocracies – ‘we rule because we are the best’. The fact that the best are now the likes of Donald Trump, rather than the landed gentry, is merely a matter of detail.

3. Inequality – The welfare state exists because of inequality, but progressively it has treated inequality as an unavoidable fact, not as a problem that it was designed to tackle. Inequality make the poorest, not just poor, but weak and demoralised. Inequality makes the rich complacent and heartless. Today the welfare state not only fails to respond to poverty, it makes the problem worse by creating new kinds inequalities within public services themselves.

4. Insecurity – The ongoing dilemma for the welfare state, one that can be witnessed in the writings of Beveridge, Marshall and its other early designers, is the fear that the welfare state will give people too much security and encourage laziness or undue dependence. For this reason income security (unlike health security) has always been viciously means-tested. Strangely, as economic insecurity continues to grow in our increasingly global and technological economy, the state now works to increase this sense of insecurity through damaging changes to the benefits system. This toxic insecurity means that if people are unable to find paid work they are then punished if they volunteer or act like a citizen. The need to keep the poorest under control and feeling insecure eats away at the legitimacy of the system and further enables paternalism or bullying.

5. Individualism – The welfare state has been built around a highly individualised conception of the citizen. Family, friendship and community disappear in its gaze; instead bureaucratically defined solutions are offered to mere individuals. There is no role for collaboration, solidarity or cooperation in the modern welfare state, because all of those things move the centre of power towards community and treat the person as a citizen, not as a unit. Atomised we are weak – and that is how the system seems to want us.

The irony is that creating a good welfare state, or at least a much better welfare state, is quite possible. There is nothing inevitable about the ongoing decline of the welfare state. But in order to reverse the current decline we will need to think much harder about the real and underlying problems built into the current system itself.

Some of these problems cannot be solved by ‘policy’ (encouraging our rulers to have better ideas). The solutions we really need are constitutional, they require rethinking the fundamental structures of our democracy and our society. Unless we are prepared to do that thinking and begin advocating for more fundamental changes the legacy we were handed by our grandparents and great-grandparents will wither and die on our watch.

Keeping Money Fresh – The Ideas of Malcolm Henry

Nothing that could be got from the heart of the earth could have been put to better purposes than the silver the king’s miners got for him. There were people in the country who, when it came into their hands, degraded it by locking it up in a chest, and then it grew diseased and was called mammon, and bred all sorts of quarrels; but when first it left the king’s hands it never made any but friends, and the air of the world kept it clean. 

From the Princess and the Goblin by George MacDonald

I’ve just watched a brilliant film my Malcolm Henry on the creation of money and the case it creates for a basic (or citizen’s) income.

http://youtu.be/gue9Q6wgdjQ

I won’t summarise the argument he makes, other than to say that – like MacDonald – he distinguishes two kinds of money (a) the money in circulation in the productive economy which the air of the world keeps clean and (b) the money in savings or gambling which has become diseased. Henry then argues that we are locked into a toxic relationship with the latter; while a system of taxation for savings plus citizen’s income restores a healthy pattern of productive recirculation.

I do not know exactly whether this is the perfect solution to our problems; but it sounds compelling and intriguing to me. I will think more on this – and buy his book.

But it does strike me that in order to shift our thinking about social justice and to achieve a saner and fairer world we will need a new kind of economics. Henry seems to be doing exactly the right thing – offering us a way of picturing our situation which is true to our real challenges:

We are wealthy, but income is distributed unfairly; we are productive, but locked in debt.

It is worth remembering that the welfare state was partly the child of Beveridge – who designed some of its basic institutions – but it was also partly the child of Keynes – whose economic theory provided government with the confidence to act as the agent of growth. Today, while Beveridge and Keynes both have much to teach us, we re also suffering from the some of the limitations implicit in their models. In particular the Keynes-Beveridge welfare state tried to offer security of income through security of employment – but this model looks out-dated today.

Security is necessary, but the security we need must come from each other and not be linked to working as an ’employee’. Eventually we will find that freedom and security can be reconciled in a new economic framework.

So a big thank you to Malcolm Henry – a great innovator in the new economics we need!

How Do We Defend the Welfare State?

The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

William Beveridge, Social Insurance and Allied Services, p. 6

If we are just interested in defending an existing social institution then we do not need to limit ourselves to any one justification or line of defence. Often it is helpful to have more than one argument, particularly as you will need to find common ground with people with whom you may not agree about everything. You may believe that your justification is the best or the only true justification, but this is not helpful as a defence of the welfare state if most people can’t see the truth of your justification.

For instance, the UK welfare state was largely developed by William Beveridge. But when Beveridge was making the case for his reforms he did not rely on any narrow moral or political theory, rather he tried to outline the central problems for which the welfare state was a solution. These were the the Five Giants: Want, Disease, Ignorance, Squalor and Idleness.

Rhetorically, evil can be much more helpful than good. For we can all quickly agree that something like the Five Giants are bad and agree that we will attack them. However we may find that we all define what is good in rather different ways. So while we may agree on the need to attack an evil we may have very different ideas about how to avoid an evil and what we should do instead.

So, from a design point of view, only knowing what you want to avoid is also something of a weakness. If we do not know what the welfare state is for – not just what it is against – then it can be rather hard to design it or defend it. We may find that we are so divided by our different conceptions of the good that we no longer agree on what it is we are fighting for.

In fact I think this is our current predicament. Sometimes critics of the welfare state seem to be against the welfare state, but it often turns out that they are really offering different visions of the welfare state. They still want to attack the Five Giants but they are arguing for different ways of attacking them. This does not make them right, nor does it make their arguments any less dangerous, but it means we are living at a time when it is no longer good enough to simply argue that any proposed policy change is a ‘threat to the welfare state’. Simplistic defences of the welfare state as ‘an obviously good thing’ have become far too weak.

It is no longer good enough to point – however truthfully – that a policy is an attack on the welfare state. The welfare state’s legitimacy has been weakened too much by decades of bad policy-making by Left and Right. Too many people are now convinced that the problems with the welfare state are so grave that they will allow government to fiddle with or undermine it – to their hearts content.

We will have to rethink our approach. We will have to develop a more positive account of what we are defending – one that can unite a wide range of different perspectives – but one that is specific enough to create a real challenge to the great erosion of rights we see today.

This is what the Campaign for a Fair Society is trying to do and why we have published a dynamic Manifesto for a Fair Society setting out key principles – as well as detailed proposals. It is also why we are going to invite anyone who has their own ideas to share those ideas with us. Its early days for this project – but if you think you could help I’d love to hear from you.

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