Work, Productivity & Pay
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Work, Productivity and Pay

Wanjiru Njoya, PhD (Cantab.) MA (Oxon.) LLM (Hull) LLB (Nairobi) PCAP (Exeter)
​Fellow of the UK Higher Education Academy

​​​

The welfare state

27/1/2018

 
Capitalist free markets do not generally create a situation where everyone has the same amount of stuff. Sadly, progress tends to yield unequal outcomes. Enter the welfare state, a creature of most modern capitalist economies. The idea is that taxes will be collected to create a repository of public funds to provide a safety-net for the poorest and most vulnerable in society. Thus the welfare state would be expected to meet the costs of  unemployment insurance and pensions for those who found themselves cast on the heap when the company they worked for goes bust.

This theory made sense long ago, in a time when the focus of welfare programmes was on lifting people out of poverty. But now some people are getting rich beyond imagination, and the others who are not that rich think this is very unfair. Enter the reformulated welfare state, whose updated purpose is now to ensure that everyone has an equal amount of stuff by redistributing everything. The welfare state will just have to keep on giving and giving until we're all as rich as Bill Gates. That way it's fair.

You see the problem. In the modern era of rising prosperity when the focus has shifted to creating economic equality the modern welfare state increasingly sees a surfeit of claimants over contributors. There are too few of Bill Gates putting the millions in, and too many of the rest of us taking the millions out. The maths simply doesn't work out. If the welfare state goes bankrupt that will be a huge problem for many workers whose income security depends on social welfare benefits guaranteed by the state.

Luckily, there are many large and wealthy corporations that can help. It's silly to expect corporations to step in and replace the government (that would be silly, right?) but since they employ millions of people then perhaps if they look after those millions and offer them some form of income security then there'll be less pressure on the welfare state. This will only work, though, if people are content to take their corporate income security in the form of good jobs, good income, good workplace perks, and perhaps a little pension. Contentment, my friend, and counting your blessings. The economic model won't really work if people are determined not to rest until they achieve the total income equality of everybody on planet earth.


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    Wanjiru Njoya

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