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December 4, 2006
The welfare state is a key issue around which political conflict swirls between conservatives, liberals and social democrats. The welfare system has been criticized for encouraging welfare dependency and dysfunction. Since welfare supported families where the adults had children without marrying or working, it was bound to create more of such families. The conclusion that is then drawn, usually in the US, is that welfare should be abolished.
In his critique of neoliberalism Kevin Rudd never tackled this thrust of neo-liberalism. Rudd was content to stay with defending social capital, the family and the complex set of social relationships based on reciprocity, trust and civic commitment. He did not address the classical liberal--what is now called libertarian--- desire for small or limited government
What is sometimes proposed is a guaranteed income replacing the entire welfare state. It is argued that all public and means-tested benefits--would be replaced by a single grant to be given annually to all adults, from age twenty-one to the end of their lives. The amount would be indexed to rise with inflation. The grant would guarantee support for those who are unable to succeed even if they work. For those who worked, the benefit would be reduced. This feature aligns the plan with the "negative income tax," first proposed by Milton Friedman and adopted by US liberal welfare reformers in the 1960s and 1970s. The negative income tax gives the poor a grant and then deducted from it half of any earnings, to preserve some incentive to work.
This neo-liberal attack on the welfare state expresses the libertarians desire for smaller government. The thrust is less to overcome the dysfunctions behind poverty, and more to restore the small-government society of the nineteenth century. Then there were no government social programs. The poor were taken care of by churches and other voluntary bodies. It is presupposed that voluntary effort would once again arise to minister to the poor, because government agencies would no longer do so. A much more individualist and dynamic society would emerge than exists today, where politicians like Kevin Rudd find that social capital is withering.
Conservatives, in contrast, have accepted that, at least in antipoverty policy, promoting good behavior must come ahead of smaller government.Thus in the welfare to work reforms the state is used to promote individual responsibility to re-enter the market.
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The problem with adopting 'welfare as income' models is that:
a) they are inflationary
b) they will fail to cover groups of individuals who have greater needs, i.e those who have chronic health problems, poor education etc.
Surely we have been down this road before? Social resources (free health care, education etc) provide a much more reliable saftey net.