My post on teen pregnancy and the discussion in the polygamy and welfare thread about polygamist Mormons’ welfare collections are both good springboards for writing about welfare policy in general, something I’ve wanted to do for a while.
Welfare is basically a collection of money transfer programs from the government to people the government deems to need assistance. It usually connotes assistance to the poor, but social security is the most common and most costly form of welfare
The best way to abstract welfare principles is via John Rawls’ theory. Justice as fairness is pretty intricate, but the part of it that applies here is simply a pair of principles for politics:
1. Liberty: government policy should never deprive people of basic civil liberties. In a welfare context, this rules out welfare schemes that impose any kind of puritan morality on the poor, such as the requirement that single mothers receiving TANF benefits not live in with boyfriends.
2. Equality: subject to the constraints of principle #1, government policy should aim for maximum equality; inequality is only permissible if it improves the economic situation of the poorest members of society.
It’s principle #2 that’s interesting from a welfare point of view. It’s possible for a government to say that nobody can receive more than $15,000 per year or $10,000 plus the cost of housing, whichever is lower. That will certainly be more equal than paying $3,500 a month to an unemployed engineer or retired businessman. But paying the engineer so much less in welfare than what he made when he was employed will wreak havoc on his life, which will make him likelier to find an unskilled job rather than wait a few months until he can find an engineering job.
It’s in society’ interest that middle-class professionals take jobs commensurate with their skills, because that increases economic productivity. Some welfare to the middle class is then good, even though the poor need it more.
Social security – that is, pension, survivors’ benefits, and disability benefits – is a bit more problematic. There’s no overriding interest that says a retired businessman who used to make $130,000 a year should get more than a retired retail worker who used to make $20,000 a year. Personal comfort could be a good excuse, but it doesn’t increase the poor’s quality of life. It encourages home ownership, since by retirement one no longer has to pay mortgage, and a higher saving rate among the middle class. In an American context, increasing the saving rate is a good thing, since Americans only save 2-3% of their income on average, whereas a healthy level of saving is close to 10-15%.
Next post I’m going to actually hash out the details of a workable welfare system based on Rawls’ principles. As I like to say, the supreme principle in liberalism is really that of evidence and real-world workability.