Two Pictures that Perfectly Capture the Rise and Fall of the Welfare State
July 15, 2011 by Dan Mitchell
In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding in the wagon begins to outnumber the number of people pulling the wagon.
To be more specific, if more than 50 percent of the population is dependent on government (employed in the bureaucracy, living off welfare, receiving pensions, etc), it becomes rather difficult to form a coalition to fix the mess. This may explain why Greek politicians have resisted significant reforms, even though the nation faces a fiscal death spiral.
But you don’t need me to explain this relationship. One of our Cato interns, Silvia Morandotti, used her artistic skills to create two images (click pictures for better resolution) that show what a welfare state looks like when it first begins and what it eventually becomes.
These images are remarkably accurate. The welfare state starts with small programs targeted at a handful of genuinely needy people. But as politicians figure out the electoral benefits of expanding programs and people figure out the that they can let others work on their behalf, the ratio of producers to consumers begins to worsen.
Eventually, even though the moochers and looters should realize that it is not in their interest to over-burden the people pulling the wagon, the entire system breaks down.
Then things get really interesting. Small nations such as Greece can rely on permanent bailouts from bigger countries and the IMF, but sooner or later, as larger nations begin to go bankrupt, that approach won’t be feasible.
I often conclude my speeches by joking with the audience that it’s time to stock up on canned goods, bottled water, and ammo. Many people, I’m finding, don’t think that line very funny.
To be more specific, if more than 50 percent of the population is dependent on government (employed in the bureaucracy, living off welfare, receiving pensions, etc), it becomes rather difficult to form a coalition to fix the mess. This may explain why Greek politicians have resisted significant reforms, even though the nation faces a fiscal death spiral.
But you don’t need me to explain this relationship. One of our Cato interns, Silvia Morandotti, used her artistic skills to create two images (click pictures for better resolution) that show what a welfare state looks like when it first begins and what it eventually becomes.
These images are remarkably accurate. The welfare state starts with small programs targeted at a handful of genuinely needy people. But as politicians figure out the electoral benefits of expanding programs and people figure out the that they can let others work on their behalf, the ratio of producers to consumers begins to worsen.
Eventually, even though the moochers and looters should realize that it is not in their interest to over-burden the people pulling the wagon, the entire system breaks down.
Then things get really interesting. Small nations such as Greece can rely on permanent bailouts from bigger countries and the IMF, but sooner or later, as larger nations begin to go bankrupt, that approach won’t be feasible.
I often conclude my speeches by joking with the audience that it’s time to stock up on canned goods, bottled water, and ammo. Many people, I’m finding, don’t think that line very funny.
Forced labour called "Workfare" in modern Britain 2012 - are we going back to the dark ages?
Unemployment in the UK, once described as a thing of the past, but yet again we're heading towards 1930s levels. Most new jobs are badly paid or part time.
Many who managed to substantially increase their wages in the 1980s have seen their dreams turn sour ever since
Mortgage debt, repossession, and the threat of slum-like temporary accommodation are a serious reality a direct result from the ConDem counter-reformation. Benefit claimants, those who are sick & disabled face eviction as a result of "Housing Benefit Cap"
The rich have got much richer, but in direct proportion poverty has returned with a vengeance. While the profits of banks, arms manufacturers, big monopolies and commodity speculators have soared - the price of food as soared as a direct result of capitalist speculators on the world stock markets seeking higher profits.
From Ramsay MacDonald to Jim Callaghan & Tony Blair from their first government to their last, the Labour Party has to all intents and purposes been indistinguishable from the Tories.
At home and abroad Labour was as loyal to the British state and its interests as the Tories. Labour broke strikes and sustained the status quo in Britain - Ed Miliband is already making it known regarding his views on "strikes".
We want a modern Labour Party with vision, a party based on democratic socialism.
Socialism is a system of production based on the actual human wants of society. Socialism has nothing to do with production for its own sake, capitalism is about : production for the sake of profit . Need Before Greed - is our call !
Socialism means using science and technology to liberate people, not to exploit them or make them redundant. Forced labour described as "Workfare" is exploitation - this weekend has seen excellent demonstrations up & down Britain demanding an alternative, we believe socialism is that "Alternative".
Those in work have to work harder and longer, many having to work until we drop. Socialism is the answer to and crises of capitalism.
Did anyone notice to language / tone of Ramsay MacDonald first ever Labour Prime Minister, in our video uploaded - the then Prime Minister of the day ???
We have been here before !
In 2012 : the European Union - EU Treaty on Stability, Coordination and Governance will condemn future generations to a permanent regime of austerity and unemployment.
The proposed treaty is designed to abrogate democracy in all European Union - EU member states and end any possibility of working people advancing alternatives to policies which maximise big business profits.
The people of Ireland will shortly have the opportunity to reject this new treaty in a referendum. We urged progressives, socialists and trade unionists across Europe to give every assistance to all those in Ireland defending their national sovereignty and battling to halt the EU-imposed austerity cuts and mass privatisation.
Privatisation is also the hallmark of our Con-Dem government', and its disastrous austerity policies follow the same EU guidelines and have already pushed Britain into a new recession with levels of unemployment not seen for two decades.
Respect For the Unemployed & Benefit Claimants declares support for militant, mass resistance to austerity and privatisation programmes. We urge our members & supporters including trades unions and the labour movement to mark Budget Day on March 21 with demands to end public sector cuts and invest massively in infrastructure and industry instead.
They point out that United States government support for a green retooling of the motor industry has already saved over a million jobs at the cost of only $24 billion -- far less than the cost of bailing out The Royal Bank of Scotland Group.
The fact that such support for industry would be illegal here under EU law only underlines the need for an urgent examination of alternative, democratically accountable structures for international economic cooperation and for Britain's withdrawal from the EU.
There can be no defence of our productive economy, no rebuilding of the public sector and no effective defence of the welfare state within the EU as constituted today..
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