Saturday, May 13, 2017

How social welfare is killing us

Andrew D Atkin:

Social welfare today is overwhelmingly a function of taking care of the elderly, and the young through schooling.

In terms of costs, the elderly are by far the biggest consumers of welfare, especially when you include public health costs.

But to make my point, let's look at two forms of welfare: Traditional and socialised.

Traditional welfare:

Take this scenario. Your elderly parents live close in a comfortable sleepout in your backyard, giving them and you your own space. You pay for their keep in terms of food and shelter and other everyday living costs.

Though you pay more in transparent costs, with this scenario you will find that you earn more and pay far less in tax, if this is how nearly every old person in your society is taken care of - excluding, of course, those small few who do not have family to help out so then the state would step in.

With this traditional (pre welfare state) form of welfare, the elderly are not left lonely or productively redundant. They naturally help out around your house, cleaning and cooking, and caring for grandchildren and maybe homeschooling them as well. They are expected to help out as they are accountable to the hand that feeds them, which is their adult children.

This kind of welfare is extremely efficient and does not lead to abuse, because the hand that receives is directly accountable to the hand that gives. Hence welfare is fairly and humanely rationalised.

Socialised welfare:

No need to spell this one out because we live in it today. Most retired people live expensive independent lives, because they voted for superannuation - a system of nationalised charity.

I don't know if the retired are generally happier for it, but as the hand that receives is interpersonally separated from the hand that gives, there is in turn no effective accountability with respect to the welfare process.

The truth is, the rationalisations to take a pension come easy when it's seen as just "government money" to the minds of the retired. And the fight-back to unaccountable charity becomes benign when the productive generations are mostly blind as to why they are struggling, when their costs are not directly transparent (note, governments don't post you emails on exactly where your tax money goes and comes from - they should!). Instead they simply watch the cost of living forever creep up and they never clearly understand why.


All the beatup we hear about in referring to unemployed people as "dole bludgers" is a red herring. The biggest so-called bludgers (and I don't think that's a fair word) by far are the retired who, without honest investigation, rationalise their beneficiary status by reminding us that they had to pay for the welfare of their parents generation, so their benefits are really just a tax rebate. But that's a silly argument, because the ratio between the producers and non-producers was far greater in their working day, because people died much earlier in times past. Leaving them with more inheritance than bills.

The cost of socialized welfare for the retired is now massive. The retired, broadly, have gone from being useful in the past to being a crippling burden. And it's been driven by the irrational expansion of socialised welfare which has now become almost impossible, politically, to reverse. Remember that democracy is not a function of justice - it's a function of the vote.

And the results are serious. Young people are struggling to breed, or breed at a healthy (young) time, due to the cost of a vast welfare system that simultaneously wastes human resources by leaving old people redundant. Which, I would argue, is an unnatural and stupid condition.

The situation of today is clearly not a 'natural' choice - it is not a response to market priorities. It's a perverted choice driven by the mass-subsidisation of welfare. It is undeniable social-engineering and I must say on an impressive scale.

But now that our fertility rates are collapsing, and parents are struggling, we need to revise what we're doing and how we are doing it. I would argue that the situation is getting out of control, so we need to look at our social systems at their core. We need to think further than just raising the retirement age by one or two measly years. We need real reform.

Is it time to rethink traditional welfare?

This is my podcast relating to this issue: