Tuesday, March 13, 2012

Great minds, and all that...

Back in December, the wife wrote the following in a short post musing on the Welfare State...
Seriously? No, seriously?

Just cut out the middleman and let rich people sponsor a poor person. There would be less waste in the long run, jobs for council workers (the OKCupids of wealth patronage!), and a powerful social impact.

After all, why give your money to charity when you can give it to your own impecunious client?

... and today, Blue Eyes posts one of his increasingly infrequent missives.
I’ve got an idea.

Instead of running an entitlement-based welfare system where Parliament decides the rules and then makes up taxes to pay for it, how about a sponsorship system. The system should match up contributors and recipients in, say, a local area and provide information for the sponsor. The sponsor would get to see how the people he/she is funding are getting on and the sponsored might be encouraged to persuade the sponsor that he/she is getting value for money. Sponsors might even want to give advice to their mentorees to help them get on in life.

Those wanting to receive money from benefactors should have to provide certain information in return for their money: what is the money going on, how are the children getting on at school, how is the job hunt going?

If all this sounds quite intrusive to you then that is the idea. It’s about time the relatively small number of people who pay for the huge all-encompassing welfare machine got a little bit of influence on it.

Sounds good to me.

One of the biggest problems with the Welfare State is that the recipients truly believe that their money comes to them—not as charity, nor as pay-outs on insurance payments that they have made—but as of right.

Which, of course, partially it is. The idea that one should be ashamed of living off the hard work of others has long gone; similarly, as politicians have sought to bribe ever larger and more biddable swathes of the electorate, the idea that one should first have to pay into the system in order to get anything out of it has become similarly redundant*.

Long-time readers will know that I consider the National Insurance Act of 1911 to be—as viewed over the long term—one of the stupidest and most evil acts ever passed by a British government. (Had it remained as it was intended—that is, buying Friendly Society memberships for those who could absolutely not afford them—then its consequences might have been mitigated.)

As it turns out, that Act simply started the rot.

Because the doling out of subsequent monies to those who have never paid a penny into the system—and which often rewards them for doing the most perverse things, such as having myriad children which they can neither afford nor properly care for—must be some of the wilful, stupidest and downright evil acts in history. Especially, I say again, the bit about encouraging them to have children.

So, as an alternative to simply stopping these payments overnight, perhaps we should consider Blue Eyes's and Bella's proposals...

* Unless, of course, you do actually pay in—in which case you must prove you have done so in order to get a brass farthing of your insurance. Especially if you are freelance.


JuliaM said...

Who wants a job in the Department of Making Up Bland And Fictional Letters To Sponsors, then?


Suboptimal Planet said...

"If all this sounds quite intrusive to you then that is the idea."

Hmm. So is this "system" to "match up contributors and recipients" voluntary or compulsory?

Are rich people going to be required to sacrifice their time as well as their money?

If there's any element of compulsion to this system, it sounds worse than the status quo.

As Mark Wadsworth said over at Behind Blue Eyes, "There’s a good sponsorship system which works for most of us, it’s called giving people a job and paying them to do it."

The Stigler said...


Exactly! That's what happened with African charities. Someone came up with the idea of directly sponsoring a child and people liked the idea because they could see their money making a difference.

Then the charities worked out that they could just stick the money in a pot, make up some letters and spend it on whatever they pleased.

Incidentally, Kiva peddles the same fiction about charity microfinance.

Kevin Hughes said...

Thing is though, until the elastic paper "political" monetary system comes crashing down, the powers that be will continue to promise freebies for all, and everyone loves free stuff, don't they?

RAB said...

Don't mess about with intemediaries, this scheme was up and running just before the First World War, and you could have real time scrutiny too.

It was called employing servants. Three meals a day, bed and board, often a job for life, and all for a little light cleaning and cooking ;-)

Blue Eyes said...

DK thanks for the link and apologies to Mrs DK for not having seen her post before now.

In reply to the point about employment being a better solution to poverty than welfare well yes of course it is. Unfortunately even in the good ol' days before the state gave a shit there was still unemployment for one reason or another. Even in the days when the rich employed armies of the poor to act as servants etc. there were still people starving in the street.

Welfare is in itself a second*-best system.

* or third, or fourth, etc.

Clearly there would be difficulties in implementing my scheme, such as would the "donors" want to spend time working out who to sponsor or not?

I think enough people would want to know where their money is going. Perhaps the "donors" who couldn't be bothered to get involved would end up with the less deserving of hand-outs? Who knows exactly, it was just an idea, not a White Paper. Since when did blog posts have to read like Parliamentary Bills?

farmland investment in Australia said...

Some great points. In this day and age its all about "rights" and nothing about responsibility!

Alan Douglas said...

A definition of "Proletarian" I once saw: The lowest of the 9 classes of Roman citizen, those whose only value to the statewas their children.

Seems that that NI act of 1911, rather than the communist revolution of 1917, was the true "Dictatorship of the Propetariat".

Alan Douglas

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Anonymous said...

I rather like the idea of exploiting people's altruistic nature to sponsor a poor person. However, I think the critical issue with the welfare state at the moment is its definition of "poverty" (less than 60% of median income I believe). Given that at any time around one quarter of the UK is in "relative poverty" the whole concept is ridiculous. If someone is genuinely starving I will buy them food, but if they have spent all of their "income" on cigarettes, beer and Xbox games then I will have no sympathy whatsoever.

To me, we should adopt a similar definition of poverty to other countries - not one which enables people on the "welfare state" to have more disposable income and a higher quality of life than those who work hard for a living.