The welfare state, many claim, is the crowning achievement of modern civilisation. Institutions of the state stand as guarantor of equality of opportunity and provide a safety net for those who are unable to take advantage hereof. It is supposed to provide for us in old age or ill health and be a social safety net should we fall on hard times. The principles presented by Sir William Beveridge in his famous 1942 report was supposed to allow for the abolition of want, disease, ignorance, squalor and idleness. But everywhere it has been tried, the welfare state has morphed into something far more overarching than what was the original visions put forward by people like Beveridge, who believed in a contributary model which would preserve personal responsibility and self-sufficiency. Today, large swathes of the population are financially dependent on the state. More than 20 million Brits collect some kind of benefit. More than half of households are defined by the Office for National Statistics as being in net dependency, receiving more in benefits (including benefits in kind) than they pay in taxes. This was not what Beveridge imagined. In most western welfare states the state gobbles up half of GDP and far from being a safety net used as a last resort, entitled citizens have become lifelong clients of the state.
The welfare model suffers from a fatal flaw: over time, welfare as a right is bound to erode personal responsibility and self-sufficiency. The mutual self-interest that drives successful capitalist societies is replaced by clientelism and dependency. Something for something is replaced by something for nothing. But instead of acknowledging the flaws in the model, generations of politicians have expanded the remit and reach of the state.
The main accusation of the welfare state is that it has failed in its purpose to abolish the poverty, want and squalor that had characterised all societies before the dawn of the capitalist era. Today, though poverty is not as widespread as some would have us believe, vast social spending has not only failed to eradicate deprivation, it has locked parts of the population in dependency, far removed from the vision of social mobility and fulfilment of potential that free education and social provisions was supposed to deliver. Housing estates are filled with alienated ‘poor’ who tick boxes at the job centre as a substitute for a job, teaching their children in the process that accepting welfare is a perfectly honourable way of life. In the absence of role models illustrating the virtues of self-reliance, discipline and self-respect suffers. The result is sink-estates with multi-generational welfare dependency.
Today, the modern welfare state has become an end in itself. A large majority of voters subscribe to the idea that we have to have a welfare state, without questioning if it has delivered what it was designed to provide. Most politicians subscribe to the idea that increased spending and regulation will cure the ills that spending and regulation has failed to tackle in the past. But it is the model itself that has failed. The state has destroyed proper incentives, both among its welfare clients and in the provision of services. People have been robbed of personal responsibility and tax financed monopolies operate beyond the disciplining forces of the free market. Both are reduced to asking for larger handouts as the solution to any and all problems. At this point it should be clear that only a total abandonment on the welfare model can repair the damage done to the very fabric of society. Service provisions should be privatised and social programmes should be dismantled and replaced with private insurance. A society which establishes the wrong incentives is bound to fail in the long run. Sooner or later, even the most fervent proponents of the welfare state will have to face this inevitability.