Why WellFair Works Fair

The welfare debate has become confused and poisonous. We are firmly in the territory of “deserving” versus “undeserving” poor, when the real issue is affordability. As all advanced societies start to grapple with the challenge of how to run a peaceful, modern society within the confines of a low growth economy and within a sustainable budget, we need to develop a vision for how social security will work in that environment.

It is commonly recognised that the delta between income and the cost of living is the problem, but reducing the cost of living is virtually never discussed as an option to solve this problem. This is a blind spot obscuring the key to sustainable and affordable human society.

Solving the welfare conundrum has been a central mission of LIFE. So here we will review what we are really seeking to achieve with welfare, what has gone wrong, and how we can reach our objectives.

What is the point of mutual social support?

Mutual support is the recognition of the most fundamental aspect of human society: the solidarity that honours and encourages every individual’s contribution, not because that is noble, because it is essential to our success. Mutual support is an evolutionary choice we made eons ago and which cannot be reversed today. That choice was to maintain diversity within our large groups, so that we can make better choices when confronted with difficult problems.
It is neither a right nor a gift, it is an unconditional contract for mutual success, free of coercion on either party. Mutual support is not supplicant to the acquiescence of the rich, nor is it dependent on moral suation of the poor.

Getting Real

We must start with reality: we cannot afford our current system of welfare benefits. Even if we close every tax loophole, increase taxes on those who earn the most, and clawback as much corporate tax as we possibly can, we will still be massively short.
For every increase in revenue that you can think of to make up for our current shortfall, there are twice as many additional needs that we have yet to recognise and live up to. We have a deficit in education and training, which not only affects our economy but also the health of our democracy; we have a deficit of community care to cope with the changing demographic balance in our society; we have a deficit of basic infrastructure for life support, including energy and transport; we have a significant nutritional deficit in our young; we are massively behind in the required program to increase the efficiency of our economy and our social infrastructure to make the necessary contributions for an environmentally stable future; and this is only a partial list.
So we must start with the reality that it is necessary to get more out of our current social support system for less monetary cost. To avoid this fact is to embark into meaningless fantasy.

Welfare is Not Insurance

Insurance is the central fallacy at the heart of the modern conception of welfare. The natural intention and objective of welfare is solidarity. Welfare’s expression as insurance is a perversion of the natural logic, and that dislocation necessitates its failure to deliver its intention. Insurance is a perfectly valid concept, but it is not welfare and we must not confuse the two if we expect to be able to deliver solidarity.
The only reason that welfare is phrased as insurance, is in an attempt to justify it within the fallacious context of capitalism envisioned as a social order. It is the “money myth” combined with the “individual ant” myth to create a aberration that serves no one. It is a perversion of natural form, dependent on exploitation to maintain its semblance of validity, because money cannot buy what we seek in solidarity, and there is never enough money generated by the economy, which is a child of our society, to pay for our mutual social security.

Low Pay v. Poverty

Poverty is a state of being distinct from low pay. Inadequate shelter, poor nutrition and disruption from basic life sustaining services, are the proper descriptors of poverty. Low pay is simply a measure of economic value. Poverty is caused by poorly organised society, and has little or nothing to do with pay. When we confuse monetary compensation with social poverty we fall under the spell of the money myth engendered by industrial capitalism, misequating money for value and unconsciously acquiescing to the myth that money is the primary determinant of value, nay even of the arbiter of human quality.

Survival v. Desire

Desire is a positive, self initiated, sustaining motivator that is importantly different than the baser survival need. In a society where it is plainly obvious that to be threatened by survival is a construct manufactured by the system of organisation, because there is evidently sufficient resource to lift everyone out of survival mode, that motivation is saturated with negative, demeaning and oppressive energy. Workfare, and all of the compulsatory barriers to the provision of mutual support, promote and establish this negative atmosphere which serves the opposite cause as mutual support should be designed to engender. It is almost impossible to conceive of a human that lacks desires beyond basic survival. We need to have no fear that someone who is provided with the bare necessities of life will not find their own internal motivation to contribute sufficiently that they are rewarded with the means to satisfy their desires.

Fair Work

Absent the need to work to survive, every person is freed to work according to their desire and for whatever they consider to be sufficient compensation as to motivate them to contribute their skills, time and labour. Low pay may be indicative of the value of their contribution in economic measure, it may be an expression of their empathic contribution to a cause or to right a wrong, but it will never be a coercive contract that bends the person against their will.
Let us confine ourselves, for a moment, to the vision of an employer whose sole objective is to seek the labour of others at the lowest possible economic cost. Which of the following strategies is more likely to minimise the potential damage to society that might be caused by this employer’s pursuit? The first strategy is the one we use today, in which we create a regulatory framework defining not only the minimum monetary compensation, but also the contractual nature of the employment relationship. In the second strategy we simply ensure that no member of society is required to take the job offered by that employer. Which of those is likely to be more effective? Which of those pays greater homage to both the nobility of humanity and the role of commerce in human society? The former is fraught with coercion and a multitude of administration, the latter is simple and requires no oversight.

Universality: the antidote to insidious means testing

The “benefits trap” has always been an Achilles Heal in the benefits system. There is always a point where individuals are forced to calculate the additional benefit of a marginal increase in compensation versus the loss in benefits that increase would trigger.
Services, on the other hand, can be happily delivered without means testing because the additional benefit to the recipient is always a social benefit to all. Public services are more efficient than private procurement, and so any use reduces our overall costs and increases our overall efficiency. High income individuals using community kitchens or public bus services are a contribution to the public good, and increase social cohesion.
The “trap” is removed and every individual is always better off engaging in every marginal contribution.
There’s no stigma in the use of the services because they are available to all.

Fair to All

Then there is the matter of fairness to society, which can be best expressed as delivering the greatest value for the burden that is accepted in taxation. The value in this case can be measured as the degree to which the security of the whole society is enhanced, and the extent to which individual citizens are enabled to make their best contributions. Surely the fairness of a system of communal mutual support must be equally measured in its effectiveness to the contributors who make such a system possible, as it is measured by the quality of the support it provides.
Universal services deliver greater value at lower cost, making them fairer to both contributors and recipients.

Delivering Value and Dignity

Support provided as services delivers twice the quantity of support as is possible by distributing cash to recipients for them to acquire the same support, and the quality of the support can be as least as good if not better. Economies of scale enable the doubling of provision for the same monetary cost. And communal inclusion in the design and delivery of the services can sustain the quality of the services at a higher level than commercial providers are required to meet to satisfy their marketplace.
There is no intrinsic reason why socially delivered support services should be less particular or of lower quality, anymore than there is any intrinsic reason why individually purchased support should be more tailored or of higher quality – both outcomes are dependent on a wide array of factors.
The primarily difference is that in taking responsibility for delivering the support services, the society takes responsibility for the duty of care towards the contributors to the system, and maintains both control and responsibility for the performance of that duty.

WellFair

LIFE has determined that the only affordable path forward, that is correctly aligned with the objective of mutual social support, is to convert the benefits system into a universal services system. This is the only long-term, sustainable system of mutual social support that is fair to all participants. We use the term “WellFair” to refer to this universal services system as a whole.

The central premise of WellFair is that when the bare necessities of life are freely available, our society and economy are transformed. They are transformed in a multitude of positive ways that belies the simplicity of its delivery. It enhances our social fabric, brings sanity to our finances, and smoothes the path to environmental balance. It achieves all this because it follows the natural contours of human social evolution.

The Benefits of WellFair

Increases the standard of life for the ordinary person.

By guaranteeing that every person, irrespective of their income, is afforded decent shelter, good nutrition, and access to transport, education, health and care, information, and the legal framework to support their citizenship in our democracy, the standard of life of every person is enhanced. And the minimum standard of life for every citizen in underwritten.

Lets people want to work.

With WellFair the incentive to work (to contribute) is dependent on desire instead of survival. All work is voluntarily performed.

Increases the bargaining power of labour.

Providing guaranteed access to basic life supporting services means that no one is required to take a job just to survive.
This dramatically changes the balance of power between the provider and the employer of labour. The employer must offer sufficient compensation and a sufficiently attractive work environment to attract the provider’s services.
This benefit alone is the most liberating and empowering change in social structure since the beginning of the industrial revolution.

Reduces basic labour rates, lowering costs across the economy.

Because rates of pay become entirely voluntary, and are effectively subsidised by the universal services provided as part of WellFair, basic labour rates will be voluntarily reduced across the entire economy.
This voluntary reduction in labour rates reduces the cost of delivering the universal services themselves. And it reduces basic labour rates across all businesses and sectors of the economy at the same time.

Lower the barriers to investment.

Because labour is a very significant portion of the cost of making investments in our infrastructure, voluntarily reduced basic labour rates have a knock-on impact on the cost of delivering these investments.
Increasing the availability of social housing, increasing the efficiency of our housing stock, improving our transport infrastructure, and developing better digital access, are all investments whose costs will be lower with WellFair.

Promotes small business and micro-economic activity generally.

Because the bare necessities of life are provided as part of our social service infrastructure, small businesses and individual entrepreneurs are liberated to engage in economic activities that would otherwise be considered marginal, and below the level of compensation necessary to justify them in a benefits system.
A vast array of very small activities, that may generate very small economic returns, become entirely worthwhile. Chief amongst these will be caring and artistic contributions that will greatly enhance the quality of our society, and which currently remain undone because they do not generate sufficient economic return.
The actualisation of the notions in “big society” and “coproduction” is dependent on the liberation of just such microeconomic contributions.

De-financialises the economy.

By ensure that social security is provided, WellFair then allows the Bank of England to properly recognise losses as well gains in the banking sector, removing the moral hazard of implicit guarantees for large financial institutions.
Pensions continue to be important, but they are not the sole thing standing in the way of old age destitution. This frees the financial market to operate properly and recognise risk.

Gets the UK to fiscal balance faster, and more sustainably.

WellFair is more efficient than a benefits system, delivering more support at lower cost in relatively short order. A short-term increase in investment in the infrastructure for the services (2 to 4 years) is more than repaid over the medium term (5 to 7 years) by increases in efficiency due to community-based delivery, and by the reduction in labour rates overall.
Once our social support system has been converted to WellFair services and mated to an income tax system dedicated to covering the costs of WellFair, automatic stabilisers are in effect that control the long term costs of social support. Everyone benefits from the WellFair  services, and everyone contributes to the system, so thereafter democratic forces can maintain the balance between them. “Well Fair for all, Paid fair by all.”

Reduces environmental impact starting immediately, by increasing efficiency.

Positive environmental impacts kick in very quickly, with increased use of publicly provided services such as public transport.
The single most important environmental efficiency objective for the UK must be an increase in the thermal efficiency of our housing stock, and implementing that infrastructure improvement is directly affected by the overall reduction in labour rates.

Increases cohesion.

Effectively guaranteeing a minimum standard of life to every citizen increases the cohesion of our society by creating a floor below which no citizen can fall.
The universal nature of WellFair services means that every citizen benefits in some way from them. The extent of the use of the services is dependent on each individual’s ability to acquire alternatives, rather than the administration of means testing.

Reduces benefit tourism.

Given that the WellFair system includes no cash benefits, and is delivered exclusively as a set of universal services, primarily in the community to legal residents and citizens, the incentive for parasitic access to our welfare system is reduced.

Creates a more joyful society.

A society full of individual citizens whose bare necessities of life are guaranteed, and who are freed to engage in those activities that most suit their ability to contribute, is a vastly more joyful society in which to live.

This entry was posted in budget, economics, Key Article, problems, WellFair and tagged . Bookmark the permalink.

4 Responses to Why WellFair Works Fair

  1. UK LIFE says:

    JRF comment on means-testing and sanctions as poor drivers .http://www.jrf.org.uk/media-centre/response-dwp-welfare-sanctions-statistics 

    Like

  2. UK LIFE says:

    LIFE WellFair policy recommended (pretty much word for word) by All Party Parlimentary Inquiry into Hunger and Food Poverty in Britain.http://foodpovertyinquiry.orgWww.uklife.org/WellFair 

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  3. Pingback: First new economic model in 100 years | LIFE : Proper Change

  4. uklifeadmin says:

    Hugo Dixon chimes in on living sustainably, and the fact that we don’t have a good model for how to do that yet. http://www.breakingviews.com/hugo-dixon-can-we-have-a-good-life-without-growth?/21177316.article

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