Friday Graph: Is Welfare Wrecking British Society?

Today’s graph is produced courtesy of British journalist and author James Bartholomew, from his award-winning, influential book The Welfare State We’re In.

Marshalling a vast array of evidence, the book examines the British welfare state, its well-intentioned origins and its unintended impacts on the character and quality of British life.  In the author’s view:

The [British] welfare state has caused tens of thousands of people to live deprived and even depraved lives, and has undermined the very decency and kindness which first inspired it.

The chart depicts his view of the damage done to British society, highlighting how effects – such as incivility and the rise in crime – arise from a combination of causes and secondary causes:

Lone parenting, low-quality compulsory education, living on benefits, council estates and the widespread reduction of the sense that each of us must take responsibility for ourselves and our families, all of these – caused by the welfare state – have contributed to it.

click the graph to enlarge

The Welfare State We’re In, published by Politico’s Publishing, is an excellent read.

For a focus on remedies to some of the entrenched problems revealed in the book, and a reform programme for moving from a welfare state to civil society in a New Zealand context, see this Business Roundtable report by David Green.

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Reducing Poverty or Inequality: Which Matters More?

Today the Herald published the third in a six-part series by Simon Collins titled Divided Auckland, asserting that poverty in Auckland is rising again and the income gap between rich and poor has widened dramatically.

There would be much to commend in a focus on poverty: why people at the bottom of the income scale are not doing well at school, not making a successful transition from school to work, are getting stuck in welfare poverty traps, or are struggling to raise kids, sometimes without intact families.

Since government is the dominant player in education, housing, health, welfare and the regulation of access to jobs, such a focus on poverty should consider carefully which existing policies are likely aggravating poverty and which ones are likely alleviating it.

But this is not, unfortunately, the focus of the articles to date.  Having identified the poverty concern, the series quickly switches the focus to income inequality.

The Business Roundtable has made many contributions to public debate on the issue of poverty versus inequality in recent decades.  In an article here on the topic, Roger Kerr wrote:

Other things being equal, I prefer less inequality in incomes and wealth rather than more. But I worry much more about poverty and hardship – in New Zealand and in poor countries.

It’s easy to explain why. Imagine if all incomes in New Zealand could somehow be quadrupled tomorrow. Most people would see this as a huge advance, especially for the least well off. But inequality would remain unchanged.

Or consider what would happen if Microsoft and all its millionaire employees were to relocate to New Zealand. Income inequality would ‘worsen’. But how many New Zealanders would regard that as a bad thing?

See also Roger’s article here, my blog The OECD Report on Inequality – A Quest for Equal Poverty for All? here, the Business Roundtable’s release on Richard Epstein’s case for a flat tax here, and Buchanan and Hartley’s book Equity as a Social Goal.

The last article in the Herald‘s series is to be published on Saturday and is about ‘what to do’.  Let’s hope the focus is on what to do about poverty.

Bryce Wilkinson
Acting Executive Director