(This policy bulletin is an extract from On some unintended consequences of the welfare state, published by the Free Market Foundation.)
The corrective state proclaims a general and exclusive competence and responsibility for most social developments. By animating their expectations it sensitises and periodically inspires population members to pursue new demands (usually at the pace of democratic elections). As people conclude that the ‘omnipotent government’1 will take care of them from the cradle to the grave, eliminating social evils makes them even more sensitive to remaining imperfections. In turn, their rising sensitivity steadily calls for more complex state responsibilities.
If equal starting positions are not achieved in spite of all social programs and interventions, cultural frameworks must be adapted as unequal opportunities are considered ‘unjust’. Yet if we treat unequal people equally we will unintentionally put them into unequal positions. This means the only way to put unequal persons into equal positions, would be to treat them unequally. This regretfully leads to the assumption that if inequalities prevail somebody must be guilty, so government is called to action to ease inequalities by punishing the privileged through introducing confiscatory or progressive taxation systems.2 Assuming that being unequal is unjust, people are encouraged to step up their demands to get even with their peers. As a result, the state is forced to provide more comprehensive health care, more national parks, bigger public universities, expanded day-care centres and more affordable housing. Starting from this principle, state interventions will eventually penetrate the whole of society, making it impossible to identify any political or cultural limit for welfare projects. If significant inequalities are assumed to be finally eliminated, smaller inequalities will quickly become a public nuisance. By creating a more comfortable environment, the welfare state increases its citizens’ sensitivity for inequalities, and long-accepted conditions will grow unacceptable.
Changing people’s morality3 makes them demand additional government projects. The implementation of equal opportunities calls for a lot of state interventions.
The paradox that enjoyment of personal freedom requires collective institutions
Individual freedom encourages people to complete their emancipation and develop their personalities. The processes of individualization create a favourable environment for unlimited personal freedom, for being left alone, as well as for unrestricted democratic systems. At the same time, however, these processes dissolve almost all social connections. Family bonds are loosened and naturally-evolved living conditions in communities, small towns and regions rapidly vanish. As the homogeneous background in agricultural, aristocratic, bourgeois or proletarian environments dissolves before our eyes, we witness the erosion of the family as the all-important core of any social integration. But without the functioning family nucleus, which among many other purposes serves as the decisive meeting place for family members, the necessary altruistic care will no longer be provided.4
Owing to the excessive tax burden, it is not unusual that both parents are forced to work in order to provide for a decent living and an adequate lifestyle. As a result, small children are kept in public or private day-care centres and schoolchildren are mostly viewed as a burden when they return from school earlier than mid-afternoon.
Affluent societies may be inclined to fulfil most rational desires of their members, but these developments require collective welfare institutions to take over the former “household production”. But this is not a matter of incentives alone. Today’s dominant icon, the skilled, highly specialized, and dynamic urban individual, is no longer suited for activities such as caring, nursing or raising children in a meaningful way. Today’s successful personality is chiefly shaped by rationally calculatingegocentrismfed by the imperatives of the prevailing system. People tend to transfer their own burden to public budgets because they think such a move can improve their own financial situation. For many, at least, it seems the best way to recover from the state what they conceive as their entitlement. In countries with less-developed welfare systems people have to work harder and earn more money to buy services in the open market. If, however, in the process of individualization only a few groups and communities are left that are able to provide the necessary services, the individualized society has to built up more collective institutions – hospitals, kindergartens, foster homes, schools and retirement centres – to take over these essential functions of small groups.
A dense, interdependent and interwoven bureaucratic system with its forces of rationalization still leaves some leeway for free individualistic behaviour, whereby extravagant and egotistic people can spontaneously develop some sort of split self. But advanced societies are becoming morerationaland more hedonisticat the same time. On the one hand we want to achieve social conditions of total relaxation, permanent well-being and an everlasting condition of happiness. Modern welfare societies are thus characterized by emotional arousal, showing a tendency to rid themselves of any annoying obligations that would unavoidably prevent one’s emancipation and impede the everyday life of their members.
On the other hand, acting spontaneously today requires smoothly-working collective institutions which remove many of these impediments from our shoulders as routine obligations are transferred to the welfare state or other comparable providers. Nobody is willing and able to take care of the elderly and needy members of society anymore, so they will be put into a subsidized retirement centre. And because of the existence of many caring institutions we experience strong culturalsupport for spontaneous and even deviant life styles.5 Here again is a paradoxical combination of tendencies: rising hedonism, spontaneity and living for the moment, versus rising demands for more security and dependability.
Our freedom and independent lifestyles, the virtues of spontaneity, and our high mobility depend increasingly on collective institutions and require collective planning. Although we appreciate individualisticemancipation, itnevertheless seems to be instrumental in breaking down private welfare services such as education for the young and care for the sick, old, and poor.
Source: This Occasional Paper, originally presented at the Mont Pelérin Society (MPS) Regional Meeting in Bratislava in September 2001, was first published in April 2003 by The Free Market Foundation.