Our Welfare System is Doing Nothing for Social Mobility, Nothing for Growth

The architect of Britain's modern welfare system, Ernst Bevin, once remarked in an interview that not only did he dislike the phrase but that in fact he believed in no such thing as a welfare state. For the sick and the elderly full provision must be made but of the unemployed Bevin argued that only the bare minimum to 'keep body and soul together' should be provided.

The architect of Britain's modern welfare system, Ernst Bevin, once remarked in an interview that not only did he dislike the phrase but that in fact he believed in no such thing as a welfare state. For the sick and the elderly full provision must be made but of the unemployed Bevin argued that only the bare minimum to 'keep body and soul together' should be provided.

Today we have moved far away from this stringently prudent attitude and however much our political leaders pay lip service to the notion of combating welfare dependency, in practice British society operates a system that does little to effectively discourage it. The upshot of this is that we have reached a point where welfare has been estimated to be consuming between a third and a half of public expenditure.

Such a large scale redistribution of resources has required a huge bureaucratic apparatus to administer these vast operations and that same bureaucracy has in turn become a powerful lobby within government to ensure the continual expansion of the programmes from which it derives its power and influence. Yet we can hardly consider it normal or sustainable for a society to consist of 25 million people working to support another 10 million who are perfectly capable of working but who do not.

It has been further noted that welfare, and the payment of unemployment benefits in particular, is impeding our ability to adequately reduce our national deficit. Indeed, it is an increasingly popular argument to claim that austerity is hurting growth and in turn causing the very unemployment that pushes up the welfare costs that increase the national debt. Yet those who rely on this argument often fail to acknowledge the role that excessive welfare and welfare dependency itself has on stunting economic growth and the work incentives necessary for growth. Indeed, with 4.15 million migrant workers inside the UK it becomes apparent that our high unemployment is not a simple question of there not being enough jobs, but rather we have been importing a large working class to do the work that many British people refuse to.

The Left in Britain has no way of accounting for the phenomenon of today's welfare dependency culture and yet as far back as 1835 Alexis De Tocqueville was grappling with this subject when he noted that it was the wealthiest country in the world (England) that had the greatest problem of pauperism. Ultimately Tocqueville would conclude that it was pauper relief, or welfare, that was sustaining poverty. For as Tocqueville explained human nature provided only two incentives to work: survival and self-improvement. However, it transpired that with the first incentive met by welfare many people were found to be lacking the second.

This exposes the simple and familiar reality that when welfare becomes generous enough to compete with low wages many at the bottom of society make the quite rational decision that they would rather be paid to do nothing than be paid very slightly more to do work they find no interest, pleasure or meaning in. This is why the government's legislation to cap the amount that any one household could claim from welfare was so important and why it was so vexing that Church of England Bishops sort to block the legislation in the Lords on such short sighted grounds.

What the Bishop's were doing in making the arguments that they did was to take part in a process that has seen the continuous redefining of the word 'poverty' so that over the decades the term has become completely relative. It was this same relativisation of poverty was particularly apparent in the recent UNICEF report claiming that Britain had a child poverty rate of 20% while France and Germany allegedly have double such levels. But on further inspection it becomes apparent that many of UNICEF's criteria for poverty come closer to what most would simply understand as bad parenting as opposed to genuine material deprivation.

In making poverty relative those who do so pursue a far reaching political objective. By defining as poor anyone who isn't rich, even if they are comparatively far better off than most people in the recent past have ever been, then logically you create a situation whereby the only way to eradicate poverty is through the enforcement of a radical egalitarianism. Since egalitarianism demands that everyone receives the same outcomes regardless of their different inputs it follows that welfare and wealth redistribution should ultimately be total, even if the society that this creates is much less prosperous and much less free than the alternative.

In reality our extensive welfare system has done little to close the wealth gap or lift people up the social ladder but seems instead to have created a large permanent underclass held down by welfare dependency. In this respect Irving Kristol characterised welfare perceptively when he referred to it as 'the best of intentions, the worst of results'. These unintended results have ranged drastically from the disaster that was the Le Corbusian experiments in social housing to explosion in social breakdown experienced most profoundly at the bottom of society over the last 40 years. With the role of breadwinner taken by the State welfare has made viable and even incentivised a mass fatherlessness that appears to only perpetuate further poverty, dependency and moral chaos in ephemeral domestic arrangements that struggle to resemble the family.

It is also worthy of note that Kristol and Daniel Patrick Moynihan, writing in the mid-60s, observed a connection between the explosion in welfare at the same time as the increasing social unrest and waves of violent rioting that were being witnessed in some of America's poorest neighbourhoods. Following the 2011 London riots some also suggested a causal link between the welfare dependency and the social breakdown of the city's underclass and this eruption of violence and lawlessness. Yet left leaning liberals resorted to their old arguments about poverty as the cause of crime with little consideration for the fact that there might be something profoundly dehumanising about acquitting these people of responsibility by suggesting they lacked all control over their own actions.

This notion that poverty is cyclical and that people are trapped in it until the benevolent State and its extensive social programmes lift people out of it has the potential to leave societies in a paralysis that prevents people from bettering themselves and moving forward both individually and collectively. For as Theodore Dalrymple so aptly pointed out, if poverty was really based on such economic determinism then not only would other much poorer societies, such as those in the far-east, never have emerged from poverty but furthermore all humankind would still be living in caves.

An economy that has the necessary incentives for individuals to work and be productive naturally inclines itself towards growth whereas the society that believes it can pay large sections of its population not to work inevitably impairs itself. By cutting back the all encompassing nature of welfare system and rolling back the size of the public sector the government could create the conditions for the level of tax cuts required for the private sector to make the kind of investment needed in our economy and national infrastructure to bring about real growth, rather than the illusion of growth created by vast levels of government borrowing.

More importantly the cuts to welfare that would mean large numbers of people would no longer be paid by the taxes of those who work to remain unemployed would in turn allow for the private sector growth in the areas where these same people could seek genuine employment. It is a favourable benefit that the independence of self-sufficiency gives to people both their freedom and sense of dignity, but over and above this is the plain reality that governments cannot shelter people from the basic truth that if man wants to live in this world then he must sustain himself in it.


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