Covid has got me thinking about the government’s role in social welfare.
Providing social welfare through money allows for people to misallocate the money or skim off the top of the money. For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder resulting in a massive wealth transfer from public funds to banks and those who own land.
I think the government should directly supply the basic needs of its citizens instead of using money as an intermediary for supplying social welfare. Money is only a means to an end for obtaining the basic necessities to live: you cannot eat a dollar bill for nutrition or sleep under a dollar bill for shelter. Government provided housing and food should be available to any citizen — no questions asked. At that point you can get rid of all welfare programs since the government is directly supplying the basic necessities for those in need.
People would still be incentivized to work in order to obtain luxuries which are not supplied by the government: a private house, travelling, a car, etc.
Stories like this further affirm that handing out money is not a good way for the government to provide welfare.
This… has been tried, many times, and been found to not work too well. First off, unless you socialize the whole economy (well, that has been tried as well), government-provided food is still bought from somebody, by the government, and typically this is seen as a superfluous and inefficient extra step.
Second, people very much like going to a supermarket and being able to pick their groceries and other necessities, and having the government distribute some sort of standardized alimentary packages to those in need does not work too well. You could have whole government-run supermarkets with their government-run logistics chains, but again, historically that hasn't worked too well (and I'm saying this as a European liberal leftist!) That said, there are some specific goods and services where a single-payer system works fairly well, such as medicine.
Third, government-supplied housing has, of course been tried as well [1], and housing projects like that often have a tendency to turn into slums sooner or later. It can be done right (first rule: you cannot isolate poor people into their own neighborhoods! [2]) but it's highly nontrivial because of, among other things, NIMBYism.
I lived in Vienna and there the city ownes a good punch of social housing since the 50s. Only thing: these houses are built at a good standard and still cheaper to live in than other comparable offers. They also cleverly mixed them in theoughout the whole city. This means the money they invested here not only reduces rents overall, it also provides housing to people in need while at the same time counterbalancing the otherwise naturally evolving contrast between rich/poor districts. ll of this benefits the social climate of the city overall because people are not segregated into their own districts as much.
Vinnea was repeatedly voted to be the city most worth living in in world.
So:
- built social houses to a higher standard not a lower one
- Don't build blocks of social houses in one area but mix them in throughout the city (e.g. mandate this by law whenever new buildings are built)
- the rent should be lower than average and the same independent of the neighbourhood
- the waiting lists for this flats should priorize people in need who are poor, minorities, ill, students, single mothers, but occasionaly mix in people from wealthier background to avoid social stigma. In vienna even wealthy people see it as an achievement to get into one of these flats.
> Government-provided food is still bought from somebody, by the government, and typically this is seen as a superfluous and inefficient extra step.
Why is this seen as superfluous? We all have to eat; so why not bulk buy food for the population, this could even replace subsidies for farmers; just buy from your own farmers in preference to importing. After all, one of the reasons for providing subsidies to farmers is to ensure that you can grow food for your population in a time of need; perhaps we should do that all of the time.
During the second world war, many were bombed out of their homes and couldn't prepare food. The British government set up British Restaurants [1] to provide nutritious meals; we could do that now, without all of the overhead of fighting a world war. This would also help to feed those children who are going hungry, as many now are [2].
Has it been tried without means testing in a capitalist system though? Where only the most basic necessities are provided to anykne who wants them, and you can buy whatever else you want beyond that?
Who is going to classify all zillions of goods offered by a modern market economy into “basic” vs “non-basic” necessities? Is triple-ply toilet paper basic? What about bananas? Beef? Coffee? A cellphone? A smartphone? After all, modern life is increasingly difficult without a Web terminal of some sort. Some luxuries become necessities over the years. It’s just utterly impossible to draw a line.
Hmm. In Finland all foodstuffs (apart from alcohol) have the same reduced VAT rate, which is somewhat easy to arrange but of course doesn’t exactly match the essential/luxury division very well. Everything from noodles to caviar has the same reduced VAT rate.
Anyway, whether something costs 1.06x or 1.23x is not a vast difference, so VAT brackets can be a useful tool, crude as they are. It’s quite a different story when it’s about something being literally free or not. You also have the problem of deciding how to ration all of those free goods, given that market forces aren’t there to control demand.
I was thinking stronger measures, e.g. you get free housing and basic utilities (with caps) if you want, and UBI for food and other basic necessities. Beyond that is up to you.
How much food and what quality? Do I get to ask for tomahawk steaks every meal and an extra one to bring home to my dog? Is everyone entitled to an avocado or just those that live close to an avocado farm? There is no easy answer to this and you bet a government mandated system would be heavily lobbied to include/exclude certain things. For housing, do you get to decide where you live? Or does the government set up a massive new settlement of block housing in the cheapest part of the country? Do I get to ask for an apartment close to my family or do they just add me to the next unit available?
We can argue about how many funds should be directed to certain programs, but SNAP and no taxes on food essentially is what you are suggesting while allowing for individual choice. Same for housing. The US basically gives your first house away for free which is part of the reason housing is so expensive.
This type of discourse seem to be more focused on affirming how this can't possibly work than on genuine interest in discussing the issue.
Imagine I propose that everyone should get access to free universal healthcare or education. You can make all these kinds of questions to defend how these things can't possible work and yet they do. Are these "perfect" in all instances? Of course not, but they are a net positive and much better than nothing.
The same can be implemented for the basic necessities. The best way to figure out what the really important questions are, is to implement a system and iterate on it.
Food stamps are degrading and paternalistic, though, by design. Their whole point is "we won't give you real money because we don't trust you to not misuse it."
Eh, there is a reason for this mistrust along with the limits on what you can buy with them in US. My wife used to work in Jewel and she has no end of stories about people and snap cards. Maybe they are paternalistic, because, well, you can't take care of yourself and your family. Little help is needed.
> Their whole point is "we won't give you real money because we don't trust you to not misuse it."
Their whole point is to ensure the money gets used on what it was intended for.
People don't want the "money for the poor" food stamps being used to give the wealthiest citizens a small discount on their Ferrari - which means you then have to start means-testing. In OP's original point, you might be able to give everyone food stamps to basic rice for example without means-testing (because the rich aren't going to worry about going out of their way to pick up a packet of cheap rice).
I mean we could just give money to people instead of bailing out corporations, that would be good enough by me. Or place strict conditions on corporate recipients of welfare. I'm just tired of news like this.
How much money to spend on a decent diet is much easier to ask than how many apples and, if the person wants to substitute apples, how many pears is that?
> How much food and what quality? Do I get to ask for tomahawk steaks every meal and an extra one to bring home to my dog?
You would get rice, lentils, beans, vegetables, grains, etc. The raw food ingredients to live a healthy lifestyle.
Nobody on this type of welfare would be entitled to “luxury food”.
> For housing, do you get to decide where you live?
This would be the toughest part of implementing this system, I think. Managing the demand for welfare housing on the regional level. Ideally you would just move to one of the several social housing complexes in your city, but managing capacity would be tough since it can take years to build new accommodations.
> For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder
At a strong risk of over-simplifying, this is a problem solved by regulation. The problem is that you're suggesting we regulate the average citizen by replacing their money with rationed supplies.
You've got it all wrong, the average citizen is entitled to freedom within the bounds of the law. The institutions and the corporate abstractions are entitled to regulation and more restricted bounds of law, they are not entitled to more freedom than a human being.
Our current situation with corporate power is evidence of a total failure of Western capitalist ideals. We've fucked up worse than communism because communism (at least with the USSR) ended, but we fund and support the same atrocities ourselves nonetheless, with our supposedly superior ideals.
> The problem is that you're suggesting we regulate the average citizen by replacing their money with rationed supplies.
I’m not sure how my suggestion inhibits liberty on the individual. My suggestion is to simply change the way welfare is executed: instead of giving people welfare money you give them the actual goods they need to live a civilized life.
The economic system would still be capitalistic, just the welfare is handled differently.
> For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder
And then the money that _would_ have gone to pay those bills went into their pocket; and then to presumably pay some other bills (food, etc). Paying for a place to live is an expected expense that most people have. Helping people pay that expense helps those people. To pretend the only ones helped by it are the landlords/banks is ridiculous.
> Government provided housing and food should be available to any citizen — no questions asked. At that point you can get rid of all welfare programs since the government is directly supplying the basic necessities for those in need.
No, you can't. As an example, what about someone that is paying off a house and is in a downturn. Your solution is to have them stop paying for the house (lose it to the bank) and move into government housing. So, in exchange for a couple months of help with their bills, they get to discard their ownership in their house.
> Your solution is to have them stop paying for the house (lose it to the bank) and move into government housing. So, in exchange for a couple months of help with their bills, they get to discard their ownership in their house.
Yes, precisely. Part of the problem with skyrocketing housing prices is that the market is no longer rational. Bailing out home owners further entrenches the class divide between land owners and non land owners and limits upward mobility of those in lower classes.
To add another wrinkle to your "proposal", the cost of moving is also very real. If a money helps you remain in your current home for a couple of months that allows you re-establish your income stream without having to both spend money on moving and disrupt your life entirely (imagine having kids switch schools along the way too).
If you are going to help people in need, the best way to do it is with money. Sure, some will misuse it, but we should never optimise for the worst case scenario, but for the most common one.
As others have mentioned, you are quickly going to end up with government paying $5 per banana. And you'd have to add more administration to take care of allergies, religious requirements and similar.
With money, you decentralise all that and let people save on their own, and spend on the most needed items (maybe they just need fuel to drop off by their parents having a farm?).
> I think the government should directly supply the basic needs of its citizens
Suppose you give people $100 worth of food stamps rather than $100 cash. Let's assume people make good use of those food stamps, and let's also assume they have at least $100 to their name to start with. They still end up $100 better off. The landlords can still ramp up the rent by $100, no?
"For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder " you have evidence for that, other than people catching up on late rent/mortgage payments?
Governments miss-allocate things all the time, and its a lack of trust of citizens to do what is in their own best interest. It is a position that really limits the utility of government as a source of stimulus by a desire for control, a desire that a free people do not want to give in to.
A lot of PPP loans in my industry were passed through to the owners as dividends/profit taking, as they didn’t actually need the loans since we were all busy. Small/medium business owners in slightly affected industries got RICH last year.
Small/medium business owners in slightly affected industries got RICH last year.
Not to be that guy, but what if that was the real idea behind giving the loans? I have to confess that living in Wisconsin has left me jaded with respect to our leadership. The whole Foxconn experience still informs the way i look at new proposals from our leadership. It's become very difficult for me to believe that some of these politicians aren't fully aware of what they are doing and who they will be benefiting prior to taking the actions they champion.
They hold the poor hostage to their greed and the greed of their cronies. "Let me and my cronies take XX dollars or we won't give out a dime to those families that just got laid off." It's sickening.
I believe it was a side-effect rather than a cause. The PPP loan program did end up helping a lot of businesses, and to be fair, there wasn’t really time to pick and choose who gets what.
that creates its own perverse incentives. instead, we as citizens should do one thing keenly and singularly, and that is to make representatives regulate markets toward fairness and competitiveness, and against consolidation and regulatory capture. markets work best when there are dozens of mostly mid-sized competitors, not monopolized. capitalism is predicated on such competitive and fair markets, otherwise the capital allocation function doesn’t work (as we’ve seen for the past 50+ years). do not be distracted even a single bit on culture war topics (including covid).
The key word there is "perpetually". In the US welfare payments and other social support programs are usually time limited for recipients who aren't disabled.
I have no problem with government supports for people who actually work but still can't afford basic necessities. Just don't ask me to pay for non-disabled people to sit around all day.
You are always doing that through all sorts of both minor ("she's my uncle's friend") and major corruption ("they donated to our campaign, let's give them a contract where they simply take a cut on the deal with the provider"): a lot of people are "employed" but only "sit around all day".
If you want to fix that, you should be going into politics or law and law enforcement.
Providing social welfare through money allows for people to misallocate the money or skim off the top of the money. For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder resulting in a massive wealth transfer from public funds to banks and those who own land.
I think the government should directly supply the basic needs of its citizens instead of using money as an intermediary for supplying social welfare. Money is only a means to an end for obtaining the basic necessities to live: you cannot eat a dollar bill for nutrition or sleep under a dollar bill for shelter. Government provided housing and food should be available to any citizen — no questions asked. At that point you can get rid of all welfare programs since the government is directly supplying the basic necessities for those in need.
People would still be incentivized to work in order to obtain luxuries which are not supplied by the government: a private house, travelling, a car, etc.
Stories like this further affirm that handing out money is not a good way for the government to provide welfare.