Welfare or Work or a Combination?
Throughout economic and political history there have been
ideas, suggestions, even occasionally (usually Opposition) policies that tried
to combine the idea of welfare and work. But in general these two ‘Ws’ have
been seen as binaries – implacably opposed. Most recently, partly under the
pressure of recession, debt and the need to cut public spending, but also, beginning
before the Credit Crunch, in response to public doubts about the size and scope
of welfare dependency, governments have tried to encourage people into work and
off reliance on benefits. This of course rests on the assumption that people on
benefits are there because they don’t have the ability (or sometimes the will)
to gain and keep a job – an assumption that is not necessarily correct, since
availability of jobs varies enormously from one area of the country to another
and not everyone is able or willing to move long distances in search of work,
not least because they are aware that those who do relocate sometimes find that
the job fails to materialise or ends quickly, leaving them without social
support networks and possibly struggling with higher living costs in more
affluent localities. However, there is little doubt in most people’s minds that
Welfare needs reform, and many see the Coalition’s efforts as a step in the
right direction. That said, I personally know some decent and potentially hardworking
people in the rural south-west (where work is somewhat scarce) who are
deserving of their benefits since their unemployed status has endured through
no fault of their own, though at the same time I long for them to find suitable
work.
So, is
there a way of combining people’s need (and in most cases desire) for work with
a safety net that both ensures no one starves or is in real need (homeless or
in rags as a result of poverty, for example – a strange idea to us now in this
country but all too common a century ago), and
prevents people from depending on welfare? Well, curiously enough, I wonder
whether we should revisit the system that was used by Eastern bloc communist
governments such as that in Poland between 1945 and 1989. Here everyone was
guaranteed a job and therefore an income, but this doesn’t mean that all jobs
were paid the same or had equal status. It merely ensured that there was no
unemployment. Welfare also existed in the form of State provided benefits, but command
economies such as these have had a (deservedly) bad press since such economies
almost universally failed by the 1980s, which is part of the reason for their
political demise. However, I think it is worth unpacking the different economic
structures and looking at them individually, since their failure may be because
of their production values rather than because of their employment policies. (These
thoughts were sparked in part, by the way, by reading the chapter on ‘Communism
and Consumerism’ in Brian Porter-Szücs’ forthcoming book Poland in the Modern World: Beyond Martyrdom, published by Wiley
Blackwell – though the author merely describes and analyses the Polish economy
during the communist years; I don’t wish to imply that he would agree with my
ideas at all!)
In an
Eastern bloc country such as Poland the emphasis was on the supply side of the
economy – industrial production was geared round producing a certain quantity
of goods according to quotas, with the idea of selling these in the export
market and generating income for national investment. There was no guarantee
that these goods would sell, and to a supply-side economy of this kind, that didn’t
seem important – at least, not to those who were producing the goods. (Of
course, in the end it was important
because without sales there was no money to continue investment and production,
and the economy got into debt.) But what if there had been efforts to produce what was wanted by consumers, to
advertise, to encourage some kind of demand-side economy to develop alongside
the full employment commitment? Would this inevitably lead to a full-blown
capitalist model where firms respond only to demand and employment becomes
reliant on demand and growth continuing, where inflation is the major problem
for consumers? It’s impossible to know for sure, but I think it is at least
feasible that one could have both a full-employment (but no welfare payments)
system where everyone is guaranteed a job somewhere, even if it is low paid and
carrying out community-service type jobs (one unemployed man of my acquaintance
says he would be more than willing to carry out such jobs and be paid to do so,
but he is not allowed because these are set aside for convicts). It is then up
to the workers to look for a better-paid and more rewarding job if they can
find one.
This is, I
suppose, quite close to the idea that people should work for their benefits,
but it may be that this is resisted because of the way it is seen and
interpreted. If there were no benefits, only jobs, perhaps this mindset (which
it seems to me is unhelpful) would change. Why, after all, should anyone think
that he or she is entitled to payment just because he/she exists, except as a
safety net to prevent destitution? And if there is another way to prevent
destitution and have a job (which is
in itself so much better than sitting around doing nothing, both in terms of
wasted labour and in terms of self-esteem for the unemployed person), surely
this is a win-win situation against which only ideological objections can be
made? I’m not suggesting we should adopt communist economic principles – it is
clear that they do not work, quite apart from the fact that they are associated
with totalitarianism – but that doesn’t mean that it isn’t worth considering some ideas that such Eastern bloc command
economies had.
The other
way to come at this problem may be through the idea of a Basic Payment received
by everyone, set at a level that the country can afford, and untaxed (i.e. an
individual right or entitlement), on top of which people may (and most are
expected to) take a job paid at whatever rate their skills and qualifications
merit. In such a system there are no welfare benefits, but no attempt at
equality either. So far as I am aware, no country has yet implemented such a
system, but the idea comes round occasionally, generally from fairly left-wing
sources. It too has its merits, but since we have had no chance to assess it
economically, it remains in the realm of blue-sky thinking. I haven’t seen it
costed, but I suspect it would be very expensive, because unlike the
full-employment model, the Basic Payment has no intrinsic labour value. Some
people might simply choose not to work (as
some do, sadly, under the current UK Welfare system, in spite of the Coalition’s
efforts to change this), even though that meant they would have little spending
power. Of the two, I think the full-employment scenario has more mileage, though
no doubt it would have its disadvantages, like most things!
I would
welcome some comments on these ideas – I’m still not sure who reads this blog
(though I’m told that some people do …). You can leave a comment here, or on my
website, www.janeanstey.co.uk. If they have any merit, perhaps it would be good
to spark a wider debate. Now who would want to take this up, I wonder? Ed
Miliband (Old Labour used to like the idea of full employment), Nick Clegg (the
fairness of the Basic Payment might appeal) or David Cameron (surely the
Conservatives would like the idea of everyone having to work for a living)?
