How Welfarism Has Led to Britain's Troubles; A. LeJeune

What worries me when I look westward across the Atlantic is not that there is too little welfar ism in America but that there is starting to be too much. In all sorts of ways I see America head ed downthe sam_e19_adBritain has already traveled, and I long to shout, "Go back, go back, before it's too late!" Britain's present sad plight, of which devaluation and the govern ment's austerity package are only the latest and most spectacular aspect, has not been caused sole ly, perhaps not even directly, by Mr. Lejeune is a British journalist. This article is reprinted here by special permission from The National Observer of January 29, 1968. her welfare policies. But welfar ism, the attitude of mind that en genders and is engendered by a welfare state (and this is some thing quite different from the genuine welfare of individuals), has certainly been a major factor. It is no coincidence that Brit ain's three devaluations - "this disastrous treble," as the London Times described them - have taken place under Britain's three Labor governments, under governments, that is, which started out with welfarism as their chief aim.

Self-Generating Demand The progress of the welfare state was, admittedly, not much slo,ved down, let alone reversed, by the intervening Conservative administrations. And this, too, was no coincidence. Welfarism, once it gets into a nation's blood stream, is self-generating. The demand for 277 278 THE FREEMAN May it increases as people become more dependent, both financially and psychologically, on services from the state and less capable of pro viding for themselves. There may even be a point of no return, after which a majority of voters, their independence erod ed by inflation and taxation, really do have more to gain from an in crease in welfare benefits than from a marginal decrease in taxes. The politicians inevitably respond by bidding against each other with promises of bigger and more wide spread benefits. The Conservatives in Britain repudiate with horror any sugges tion that they might want to dis mantle the welfare state. They fought the 1964 election on a plat form that would have entailed even more government spending than the socialists offered. Recent events have sobered them a bit, but it remains to be seen whether they can really refrain from welfarism when the next election campaign begins.

Each advance of the welfare state takes another bite out of in dividualliberty, for the essence of welfarism is that people's money is taxed away from them, redis tributed, and spent in ways they would not have chosen for them selves. Otherwise there would be no point in it. What is happening to British education makes a. bleak example. The universities, having allowed themselves to become almost wholly dependent on state finance, are just waking up to the fact that their freedom has disappeared; they have to conform to the gov ernment's plans, whether they like them or not. But, compared with the gram nlar schools, universities are lucky. Twentyfive years ago most of Britain's ancient grammar schools (secondary schools that prepare students for universities) accepted an offer of complete financial maintenance and agreed, in re turn, that a majority of their gov ernors should be political appoint ees.

Now, in its pursuit of socialist equality, the Labor government has decreed that the grammar schools shall be abolished alto gether, and neither the original governors nor the parents have any means of resisting.

1968 HOW WELFARISM HAS LED TO BRITAIN'S TROUBLES 279 The Trap Clicks Shut This is the characteristic pat tern of state benevolence. The state assumes responsibility for providing something that individ uals want - education, or medical care, or transport; it picks up the tab, it doles out grants. Since the state has no money of its own, the cost has to be met through taxes, thus rendering individuals less capable of providing these things for themselves. Then the govern ment says: "Since this is public money, we must decide how it should be spent, and who should get it, and we are entitled in re turn to expect obedience to what we consider the public interest." So the socialist trap clicks shut. The theory of welfarism is that people prefer security to freedom, and perhaps they do. But in the long run - and, as developments in Britain show, it may not be a very long run - the security of fered by a welfare state can be more vulnerable than the security offered by private savings in the bank. The individual has lost any chance of control over his own future.

Even if the welfare state man ages to avoid economic disaster, the normal standard of its social services is more likely to be at least slightly squalid than affluent. However much welfarism the vot ers may demand, they will always be reluctant to pay taxes high enough to produce services as good as individuals would be willing to buy for themselves. The National Health Service in Britain is grossly undercapital ized, and always will be unless new money can be brought in, not through taxes, but directly from those who use it. The prescription charges that have now been re imposed are too small to make much difference. If fees, even quite small fees, were paid by people who could afford them, not only would more much-needed money be available for equipment and research and to prevent the drain of doctors to America, but there would also be a far healthier relationship between doctors and patients.

The same is true of education. Even nominal fee-paying would greatly increase parents' interest in their children's schooling, as well as helping to raise the stand ard of state schools nearer to that of private schools. A Need for Private Spending People ought surely to be en couraged to spend money on their children's education, on health, on providing for their old age, thus both helping themselves and re lieving the burden on the services the state must provide for those in need. But welfarists actually 280 THE FREEMAN May disapprove of money being spent in this way. Private doctoring and private schools are constantly at tacked by the socialists in Britain as selfish and antisocial. And, if a man accumulates wealth for his old age, he becomes a capitalist and therefore wicked. The roots of welfarism lie in a feeling that the advantage enjoyed by the wise virgins over the fool ish virgins is unfair, and should be corrected by the community.

The wise virgins must therefore be taxed for the benefit of the foolish ones, and, if even this isn't enough to produce equality, the wise virgins must be prevented from flaunting the superior fruits of their wisdom - or their luck. Whatever its philosophic attrac tions, this is clearly a recipe for economic disaster. Some of the beneficiaries of Britain's welfare state find it more profitable to live on state handouts than to work; but these layabouts are not the real problem. The problem lies in the crushing disincentive welfar ism imposes on ordinary people. Working-class families, which perhaps in previous generations had little opportunity to save and invest money, could now afford to do so, but see no point in it. The welfare state will look after them on a rainy day, and savers seem to enjoy no significant advantage over spenders. The middle classes, for whom thrift was a traditional virtue, have been ground between the millstones of inflation and tax ation: inflation caused partly by the reckless public and private spending that welfarism has pro voked, and taxation levied partly to pay for the welf are services and partly, on purely political grounds, to handicap the wise vir gins. So all but the most deter mined savers and investors have lost heart.

The penal effect of taxation has blunted the urge to work hard at all levels, from top management to the factory floor. People are simply not prepared to sacrifice leisure or to take risks. Incentives Blunted It has become completely im possible for companies to provide adequate incentives for their sen ior executives. And this ceiling, imposed by progressive taxation on the salaries of men at the top, 1968 HOW WELFARISM HAS LED TO BRITAIN'S TROUBLES 281 depresses remuneration, and there fore incentives, throughout the whole salary structure. And, at the same time, the business itself is clogged and weighed down with taxes. So hypnotized are they by their own ideology that the socialists remain willfully oblivious of this result of their policies. Since they are prevented, both by the phi losophy and by the consequences of welfarism, from providing gen uine personal incentives, they fall back on vain exhortations to work harder and the implausible argu ment that "collective consump tion" is as attractive a goal as individual consumption. When these exhortations fail to elicit the desired response, they are sur prised and pained.

The Labor government has been heartened during the past grim weeks by the initiative of five typists in a London suburban of fice who volunteered to work an extra half hour a day "in order to help Britain." The story was splashed by sentimental news papers with a fanfare of praise and a glare of publicity. Prince Philip and Harold Wilson sent messages of congratulation. Bishops and schoolmasters said how splendid it was. A few other groups of workers (though not very many) followed the typists' example, "I'm Backing Britain" badges sprouted like mushrooms, and some pathetic school children, old-age pensioners, and Pakistani immigrants sent donations to the chancellor of the exchequer. Enoch Powell, the former Con servative cabinet minister and, it often seems, almost the last sur viving champion of free enter prise, said that the campaign's motto ought to be "Help Brain wash Britain." He was shouted down for his pains, but he was quite right. Without realizing it, those five well-meaning but in genuous typists have shown very clearly what lies at the end of the welfarist road - the collapse of the normal relationship between work and reward, of the system whereby the community is en riched by the efforts of individuals working to earn wealth for them selves and their families.

Welfarism turns everybody into a state pensioner. People's atti tudes, ambitions, even their vir tues, shrink to those of pensioners. I have seen this happen in Britain, and am infinitely saddened by it. Perhaps the process is reversible. I hope so, though the historical precedents are not encouraging. Meanwhile, I do not want to see the same thing happen in America. ~ CLARENCE B. CARSON f1£uglnub 3. POLITICAL FOUNDATIONS OF LIBERTY ENGLAND'S RISE to a greatness which flowered in the nineteenth century was preceded by an order of developments, an order which can be summarized in this way: constitutional-the laying of the political foundations for liberty; intellectual - the development of ideas and spread of beliefs which supported liberty; and moral - re ligious developments which pro vided the drive and discipline for constructive achievement. The royal navy, which was to be the power symbol of greatness, had begun to playa leading role on the high seas by the latter part of the Dr. Carson, Professor of American History at Grove City College, Pennsylvania, will be remembered for his earlier FREEMAN series, The Fateful Turn, The American Tradition, and The Fli~ht from Reality.