Fascinating read on reforming the welfare state

[Lurch]

Just finished reading this book: In Our Hands: A Plan to Replace the Welfare State

This website http://www.aei.org/publications/filt...pub_detail.asp
presents a brief review.

Anyway, the gist of it is actually quite similar to the original social credit ideal wherein people are given an "citizenship dividend". However, in this case, the dividend replaces the entirety of government services to individuals (health care, welfare, unemployment insurance, etc). Instead, every person is given a guaranteed income stream that is identical for everyone. Basically, the entire government infrastructure around administering these services is given over to the private sector, and people are given enough money to guarantee a minimum standard.

I thought it was actually quite brilliant and fascinating. Obviously not likely in that no government in Canada (or anywhere really) is really interested in minimizing their importance, but it makes a great thought experiment.

[Lanny_MacDonald]

I'm going to have to read that. Sounds interesting. I'm still guarded in anything that comes from the American Enterprise Institute as it is a think tank normally pretty focused on rich getting richer and the poor getting poorer. One thing that bugs me about them, they are a huge player in setting policy in the United States, and shouldn't be IMO. Corporations have no place in politics and vice versa.

One thing that bothers me about the idea is the privatization of entities that work for the whole public good. I've never liked that idea, mostly because it can lead to tiered systems. Everyone should have the same level of security IMO, and heathcare and social security are both personal security issues.

[calculoso]

Haven't read it, but here are some of my initial thoughts. Hopefully I didn't misinterpret what was written above:

The private sector is going to go where most of the money is.

Healthcare will have lots of firms wanting to be in it, as that is where most of the demand is.

Unemployment insurance, welfare, etc will have fewer firms, as the demand isn't as large (in comparison).

Add onto this, there could be user fees on top of this guaranteed income stream, creating tiered systems (as Lanny pointed out). The US has this already with their public medicare and extra medical insurance systems.

Even with the flaws above, some people will have to choose whether to take their income as unemployment insurance (for food, housing) or for medicare. Those that have a steady job won't have this choice, and will be able to get more medicare with their standard dollar from the government.

I don't know whether this has been taken into consideration or not, but these are major, major flaws in the theory.

[Lurch]

Even with the flaws above, some people will have to choose whether to take their income as unemployment insurance (for food, housing) or for medicare. Those that have a steady job won't have this choice, and will be able to get more medicare with their standard dollar from the government.

I don't know whether this has been taken into consideration or not, but these are major, major flaws in the theory.

The book is written in the context of the US. The dividend amounts to about 20k per year based on the current budget for the programs being replaced. Health insurance for basic services is surely less than this, though I don't know the actual number (I seem to remember $3000 to $5000 from the book, though I don't want to be quoted on that). Unemployment insurance is a complete misnomer under the system, as you get the money regardless of whether you are employed or not. As such, there is no real need to have a firm provide unemployment insurance and/or welfare, CPP, etc. Basically, a minimum level of income is available to all citizens and they have the choice on where to spend it. The basic premise is that you set this level at an amount that guarantees health insurance and basic food and shelter needs are met, and let people make their own decisions on the rest.

[Lurch]

I think that regulating this system would possibly lead to more government. You would have to regulate the minimum standards, and believe it or not regulating many companies is extremely difficult. Its a lot easier to regulate individuals (i.e. taxpayers) than organizations (exxonmobil).

I'm not sure what you are getting at - what needs to be regulated that does not already exist? The basic premise is that you give people enough money to ensure their own minimum standards, ie food, shelter and health care if they desire. Every citizen gets this cash in hand. If they choose to substitute this for a $20,000 per year crack habit and live in the street, that is a market based decision. One of the key ideas behind the entire system is that personal responsibility is missing from modern western societies, and this type of government role brings it back. I'm not even sure I think that it could possibly work - I just found it a well done book that makes you think about different ways of doing things.