Sunday, November 01, 2009

International welfare state logical if.....

you believe in the welfare state at all.

One of the latest little "hands in the air" scandals to hit Britain is the news about the 38,000 children in Poland receiving British child benefits because their parents are working in the UK.

The EU of course means that all European citizens are, well, European citizens. British, Irish, Polish, Italian, Portuguese, Greek, Romanian or French, you are all entitled to live, work and claim health, education and welfare in whatever country you are in. So if you live and work in the UK, you can claim benefits for children that may be located elsewhere in the EU, at the UK rate. Now the vice versa would apply as well, but good luck to a Brit working in Poland and getting Polish benefits for their children (if there are any), because they will, understandably, be much lower.

The welfare state concept is based on the idea that we are all our "brothers' keepers", so that people who are in need of income assistance (or income at all) get it from the state, paid for compulsorily by you. Of course take it further and it is based on there being an unwritten, unconscious and unagreed obligation. Your very existence means you must pay for others to survive, and their very existence and poverty means they are "entitled" to welfare.

So the question comes, if it is good enough within border, why not internationally? After all Polish children are far more needy than most British children. Why stop there, why not have a global welfare state where taxes are taken from those with the ability to each according to their needs (you know where THAT came from don't you?)?

Isn't anything else racist, xenophobic and morally wrong? After all, if the welfare state is moral, it must surely be moral internationally. Couldn't those on the left argue that such trans-border poverty is "racist"?

The answer of course is no. It isn't moral to maintain the welfare state. It isn't moral to force people to pay others to have an income. The answer to Britain's dilemma of paying the welfare state of others is to phase out its own.

It could start by telling the EU it is eliminating payments to other countries, and then all new migrants are told they will never have a claim on welfare, in exchange for exemption from the PAYGO tax otherwise known as "national insurance". From then starts the long weaning process off of the welfare state, which will see support for the poor move from compulsion to choice, from the state to the private voluntary sector. However, nobody dare even talk of such a thing in the UK today.


Peter said...


I enjoy your stuff :)

I'm reading more and more about Libertarianism, however I'm still on training wheels.

One question: if we do cut off welfare, won't people turn to crime instead? Won't our streets become more dangerous? What happens to those who can't feed themselves for a few days?

Libertyscott said...

Peter: What needs to be done is a package. That means the first steps become freezing the growth of the welfare state, simple steps like immigrants being ineligible to claim it, eliminating inflation adjustment, eliminating extra benefits if someone on welfare breeds. At the same time the ridiculous recirculated welfare such as Working for Families should go in exchange for tax cuts.

What you have left is unemployment, DPB, sickness and invalids benefits (national superannuation is another ballgame).

New applicants for these can be abolished in exchange for significant tax cuts, and people can take out unemployment and sickness insurance. The DPB would be addressed by creating legal liability on both parents to pay for the children.

Of course some wont do any of this, some wont be able to, in which case with substantially lower taxes, charity can exist to help people. Indeed, those who claim to care should care directly.

In exchange for all this, some radical tax measures can be taken. Having an income tax free threshold of NZ$15k would make a big difference, along with a flat tax on top. It would be positive for the economy, generating employment, but all of this would take several years.

Those remaining on benefits would disappear by attrition, invalids beneficiaries (who face long term inability to work) could have annuities bought through the proceeds of privatisation. Of course the minimum wage would have to go as well.

Now the details can all vary, but the principle is essentially this:
- Reduce eligibility
- Encourage insurance and self provision for emergencies
- Drastically reduce taxation
- Encourage development of charities to take over functions of emergency support.

The answer to what happens to those who can't feed themselves is this - they can ask for help. In an environment of high tax and a welfare state those who ask will often be given the attitude of "I've paid enough for the likes of you". Without it, I expect most people would quite benevolently give.

Peter said...

Many thanks LS.

This feels right, although I do wonder if charity would then become too conditional i.e. the biggest charity organisations might be places like the Destiny Church on recruitment drives.

Still, there is no perfect world or solution.