BEYOND

THE
WELFARE
STATE
DAVID MARSLAND

Political Notes No. 65

ISSN 0267-7059
ISBN 1 85637 037 2
An occasional publication of the Libertarian Alliance,
25 Chapter Chambers, Esterbrooke Street,
London SW1P 4NN
www.libertarian.co.uk
email: admin@libertarian.co.uk
1991: Libertarian Alliance; David Marsland.
David Marsland is Reader in Social Sciences in the
Department of Health and Paramedical Studies at the
West London Institute of Higher Education, where he
teaches epidemiology and research methods. He is also a
member of the Social Sciences Committee of the Council
for National Academic Awards, a Fellow of the Royal
Society of Health, and Treasurer of the Radical Society.
In 1991 he was the first recipient of the Thatcher Award.
The views expressed in this publication are those of its
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FOR LIFE, LIBERTY AND PROPERTY

BEYOND THE WELFARE STATE

DAVID MARSLAND
THE WELFARE STATE AS A MAGIC SPELL
The Welfare State is sustained by entrenched vested interests and by the temptation of cradle to gave security to
which man is perennially susceptible. Over and above this,
however, and more fundamentally, it is sustained by the
curious characteristic it has of operating as a sort of magic
spell (Anderson et al., 1981). It somehow holds even its
rational critics in its charming thrall. It eludes opposition
by promising more even when it fails at everything. It
whispers of salvation even as it wreaks destruction.
Somehow we will have to break this spell and overcome its
primitive magic powers, if we are to retrieve freedom and
personal responsibility.
A nice example of the magical power of welfare state
thinking surfaced recently in London. Young beggars
pleading poverty and homelessness have multiplied on the
streets of central London these past few years. Mostly the
police have tolerantly ignored them. This year they began
a programme of experimental arrests and prosecutions.
They found that a large proportion of those arrested had
homes and had incomes, some quite high, and that among
them were seasoned criminals who used other young
people to beg a big income out of gullible Londoners and
tourists for them - the professional criminals. The story
was featured, headlined and followed up in the London
Evening Stardard (August 6th, 1991).
Now, one might reasonably have thought that the policemen and the journalists had done a commendable public
service - exposing criminals, saving public finances, rescuing innocents from abusing criminals, revealing important truths hitherto carefully hidden.
But this was not how it came out at all. The so-called
quality press, the TV news programmes and features, the
charities, the churches, the trade unions, the left wing, the
Labour Party, the bleeding hearts in the post-Thatcherite
Conservative Party - all of them to a man condemned not
the idle beggars, not the bullying criminals, not the Welfare
State values which fraudulently justify beggary, but the policemen, the journalists, and the few social scientists who
supported them.
Before long the confidence tricks and the criminality were
forgotten, and the whole episode was being used as a basis
for demanding yet more state welfare - new hostels, higher
benefit levels, artificial job creation, bigger cadres of youth
counsellors. One would scarcely be surprised if they insisted on state-run training schools to instill the skills of
begging, and government-financed propaganda designed to
induce positive attitudes towards young beggars in the
population at large.
Thus the more we lunge at the rotting body of the Welfare
State the more heads it sprouts, like the Hydra, and expands its hold on the soul of the mesmerised people.
Knock it down and it stands up twice as tall. Demonstrate

its inefficiency and destructiveness and the more its magic

holds us spellbound.
But of course we dont believe in magic. We must therefore persist with a rational critique of the Welfare State,
and with clear accounts of better practical alternatives.
However, we should acknowledge in entering on this task
that this is still a dissident perspective. For in Britain, even
after ten years and more of Thatcherism, it seems we remain for the most part smugly content to conceive of our
society as a Welfare State, and staunch in defence of
whatever that incoherent notion supposedly stands for.
To disapprove of the Welfare State in principle is still regarded here - even by critics of socialism, even indeed by
avowed supporters of individualism and enterprise, as evidence of philistine incivility at best, and at worst as symptomatic of blimpish reaction. To argue not merely that the
Welfare State is wasteful of resources and inefficient in
practice, but that the values underlying it and the institutions in enshrines are incompatible with liberty and inimical to democracy, is viewed as scarcely less foolish and
reprehensible than Anaxagoras claim - for which he was
exiled from his native land - that the moon is not a god but
a stone.
Indeed, even beyond the massed ranks of social science
academics, television pundits, investigative journalists,
worldly priests, and arts administrators who comprise what
passes for the intelligensia in modern Britain - even, that is
to say, among ordinary people and the general population the Welfare State remains sacred territory, protected by impregnable taboos from rational analysis and honest criticism. If Mrs Thatcher had failed to insist that the National
Health Service - the corner-stone of the whole crumbling
edifice of the Welfare State - was safe in her hands, she
would, no doubt, have been arraigned by the media for secular impiety, and impeached by a committee of the great
and the good as an enemy of the peoples security and happiness.
FAILINGS OF THE WELFARE STATE
A thoroughgoing critique, such as can overcome the Welfare States magic power, needs to encompass at least the
following:
* To examine the incoherence of the concept of the Welfare State, and the contradictory policies it necessarily
entails in practice.
* To challenge the need for the Welfare State, given high
and improving standards of living.
* To demonstrate the general advantages of market provision of welfare by comparison with state collectivist provision.
* To assess the damaging economic consequences of the
Welfare State.

* To examine the social inefficiencies of state monopoly

provision of welfare which result from centralisation,
bureaucracy, large-scale organisation, and absence of
market disciplines and consumer choice.
* To survey the damaging moral consequences of the Welfare State which result from its weakening of the family,
the local community, and voluntary associations. Specifically, to examine the growing problem of welfare dependency and the underclass.
* To suggest a programme of disestablishment of the Welfare State, relating to housing, health care, education,
pensions, and income support - with all these services
delivered by normal market mechanisms backed up by
private insurance.
* To examine the scope for radical reform of provisions by
the state of social assistance to the very small number of
people in temporary special need and incapable of finding their own way back to normal self-reliant social life.
* To consider the economic, social, and moral benefits of
self-reliance as a source of real welfare in a genuine free
society, by comparison with the all round ill-fare produced by Welfare States.
Proponents of the Welfare State have sought, by nationalising charity and outlawing self-reliance, to create an egalitarian paradise. Given their naive assumptions about human
nature, their enmity towards the family, their perverse faith
in the State, and their lack of confidence in the capacity of
democratic capitalism to improve standards of living and
quality of life all-round, the failure of this project is hardly
surprising. Thoroughgoing socialists are at least acknowledging, if rather late in the day, that their god has failed.
How long before the champions of the more modest paradise promised by the Welfare State acknowledge as honestly that they too have lost their way, that their dream of
effortless brotherly prosperity has turned out to be a nightmare of envious squalour?
THE CONTRADICTIONS OF THE WELFARE
STATE
It would be a typically socialist or extreme rationalist mistake to expect that any human enterprise can be tightly
defined and coherently planned to the last detail. Nonetheless, the level of contradiction and incoherence in the concept of the Welfare State is absurd and intolerable. This
philosophical chaos is at the root of its practical and operational failings.
Thus for some of its proponents the Welfare State is an
alternative to socialism, a modest practical exercise designed at minimum financial and ideological cost to spike
the guns of radicals and revolutionaries and to save democratic capitalism from its own worst excesses. Others, by
contrast, have viewed it from the beginning as a mechanism for effecting a gradual transition towards socialism,
rather than away from it. As state welfare policies are
gradually extended and made more ambitious, so capitalism
is steadily forced to yield on its fundamental principles, to
the point where ultimately socialism is securely established.
Contrasted both with the reformist and the socialist approach is the ambitiously Utopian view that the Welfare
State represents a distinctive third way between socialism
and capitalism, which somehow transcends the shortcom-

ings of both. These three theories are contradictory and

mutually incompatible.
Much of the futile muddle apparent in most academic and
political analyses of the Welfare State is attributable to this
fundamental incoherence in the concept. Much of the Welfare States sadly disappointing record is due simply to the
fact that those who are responsible for its administration,
management, and day to day operations are working on
vague and contradictory definitions of their real purposes.
At the two extremes there are on the one hand those who
conceive of it as a practical means of helping people in
need back into the mainstream of society, and on the other
hand people whose every action is shaped by their glistening vision of a new society. Between these extremes there
is every kind of variation imaginable, comprising together a
philosophical babel which guarantees that little if anything
beneficial is achieved in any direction whatsoever.
WHO NEEDS THE WELFARE STATE?
Except on utopian or dogmatic socialist definitions of the
purposes of the Welfare State, the number of people who
need its ministrations ought to decline as prosperity grows.
In fact it has inexorably expanded - in scale, cost, and
coverage - as standards of living have improved.
The real incomes of the population as a whole have improved steadily and substantially over the past hundred
years (Seldon, 1991). Real poverty, save for temporary
emergencies, has vanished altogether in Britain, and the
very concept of poverty is a mere talisman of socialist theory. Even thus the concept has been salvaged from the
dustbin of historical sociology only by resort to its fraudulent relativisation. In these - fashionable but absurd terms, there is more poverty in Britain than in Egypt, and
in general the wealthier the nation, the more the poverty!
By the same token, a wealthy man with an income of no
more than a million pounds a year can legitimately claim
genuine poverty - since a second millionaire has an income
of five million a year.
Standards of living and quality of life are high and improving for the vast majority of the population. The exceptions
to majority prosperity comprise a very small minority.
Even the unemployed were during the worst period of the
early eighties recession no more than 12% of the employed
population, and an even smaller proportion of all households. Moreover, unemployment is not a permanent condition except for a very special minority within the minority
who are in one way or another handicapped. There is considerable movement in and out of unemployment. Longterm unemployment, even by the generous definition
usually adopted - more than twelve months - is much
higher than it should be or could be, but it is certainly very
exceptional. Furthermore, all the unemployed have access
to adequate and continually improved benefits - benefits
which could as easily be provided by personal insurance as
by the state, at lower cost and more effectively.
A second large block of the population on lower incomes is
comprised of pensioners. Here too state benefits provide
substantial assistance, and an increasing proportion provide
even more adequately for themselves by means of occupational schemes. At contemporary levels of earnings, there
is no reason why almost everyone should not secure their
own pensions without state aid.

Leaving aside the unemployed and pensioners, the vast majority of the needy in contemporary Britain are people in
special and unpredictable personal circumstances - one-parent families, the chronically sick, the seriously handicapped, and the homeless. In toto these comprise a tiny
minority of the population. Their problems are not for the
most part caused by economic factors as such, and financial
assistance cannot provide an adequate answer to most of
their problems. Nor certainly do their problems and needs
provide any justification at all for the Welfare State and its
comprehensive, universalist provision. On the contrary,
their situation cries out for special provision targeted
sharply on their special needs, with the vast majority of the
whole prosperous population allowed and encouraged to
look after themselves without state interference.
Thus if we really want to find out who needs the Welfare
State, we ought to identify carefully the small number of
cases of genuine hardship and real need. This might reduce
Welfare State coverage from the current 100% - with state
education, health, pensions, leisure provision and all the
rest, available even to the wealthiest - to some 15%. The
whole of the large, prosperous majority of 85% of the
population could fend perfectly easily for themselves without state welfare help, given tax reductions and tax incentives, and provided that Government commitment to
encouraging self-reliance were genuine and long-term.
Indeed, even a realistic analysis along these lines exaggerates the extent of need for the Welfare State. For many
even of this small 15% minority could easily provide for
themselves and their families out of their own resources by
means of personal insurance, given encouraging tax incentives and personal planning.
This might leave a hard core of eight to ten per cent who
unavoidably need welfare assistance. The whole complex,
bureaucratic machinery of the Welfare State is needed at
most by about two million families. Even this could probably be reduced further by sensible social policies, and the
remainder could certainly be effectively helped if the delivery of welfare were radically reformed.
One of the oldest Welfare States in the world is New Zealand. Under the pressure of economic crisis largely caused
by extravagant public expenditure, the newly elected Government of Mr Bolger is currently cutting back state welfare savagely. Why wait for economic crisis? The British
Welfare State is a redundant trace-effect of antique ideological errors and historical accidents. Who needs it? Not
all of us. Not most of us. Just a very few at the most, and
even they would be better off without it.
THE BENEFITS OF CONSUMER SOVEREIGNTY
The benefits of consumer sovereignty by comparison with
any form of administered system are now widely acknowledged, even by socialists. In principle the market has been
accepted everywhere save in states ruled by lunatics or villains.
The market is more efficient than the state in the delivery
of goods and services by orders of magnitude. Unless consumers have real choice among competing suppliers whose
quality is measured by profit and loss, and whose livelihood - and in the long run survival - is determined by profit
and loss, quality is driven down, efficiency is reduced, innovation is stifled, and the interests of producers and

workers triumph over the needs and preferences of consumers. A powerful demonstration of this case has been
provided recently by Arthur Seldon in his remarkable new
book Capitalism (1991, and see also Marsland, 1988).
The case holds equally in the so-called industrial sector and
in what we have been schooled to define as the "welfare
sphere". There can be no excuse, therefore, for leaving
anything much except law, order, and defence in the hands
of the state. Yet in Britain as in other typical Welfare State
societies, a half or more of the economic system remains because of Welfare State ideology - in the clumsy hands of
the state, carefully protected from the beneficial impact of
consumer sovereignty, and in its turn precluded from delivering the genuine welfare which only the market, competition, and consumer sovereignty can guarantee.
MONEY DOWN THE DRAIN
Wherever Welfare State have been established, considerable damage to the economy is evident. Uruguay, for
example, is known as South Americas first Welfare State
(Biddulph, 1990). Today it is in economic crisis, and the
government of Louis Lacalle is desperately struggling to
privatise the bloated state sector in the face of popular resistance. According to Biddulph, Uruguyans have grown
quite comfortable with a government that provides salaries
of some sort for 60% of the population. But the cost of
maintaining these benefits is out of control. With a $7 billion foreign debt, Uruguay has one of the highest per capita
debts in the world.
In New Zealand too, as we have seen, the government is
currently cutting the extravagant welfare budget to the bone
in response to a serious economic crisis occasioned primarily be excessive public expenditure.
Even socialist governments, faced by similar economic
problems, are adopting similar strategies of reducing welfare provision to minimum essential levels. For example,
in 1990 the Australian Labour government completely
abolished unemployment benefits, and cut back severely on
medical and other welfare benefits. Previously available
indefinite unemployment benefit is being abandoned entirely, and replaced by a short-term job-search allowance
and a form of work-fare. Those unwilling to work - the
so-called dole-bludgers or cheats - will get no help from
the state at all.
And it seems that the majority of the Australian people acknowledge that unemployment benefit has been largely
squandered in earlier decades, that it has proven counterproductive, and that is has been a gross waste of public
financial resources. Support for the reforms is strong.
In Sweden too, radical re-structuring of welfare is being
implemented. Already for many years the Swedes - like
the Dutch and even the less than Protestant French, but unlike the British even under Mrs Thatcher - have operated
work-fare as a means of preventing abuses of unemployment benefit and of inhibiting its dependency-creating effects. Now the whole intricate panoply of cradle to grave
state support is being cut back, as the impact of excessive
public expenditure on economic growth and standards of
living is at long last being recognised (Stein, 1990). The
tax burden of 57% of GNP and expenditure in the public
sector amounting, incredibly, to 65% of GNP, are both to

be reduced very substantially to deal with the problem

characterised graphically by Stein:
We have one of the lowest growth rates and one of the
highest inflation rates in Europe. Radicalization of
public policy and an ever increasing government intervention have eroded wealth-creation.
Thus, far from providing, as British apologists for the Welfare State tirelessly claim, irresistible evidence of the feasibility and desirability of combining a Welfare State with
economic efficiency, Sweden in fact offers (as does Austria
also) an exemplary case-study of the inevitably destructive
impact on economic progress of extravagant public expenditure and grandiloquent state welfare. This even in societies which have managed to avoid state intervention in
industry such as we have had in Britain for fifty years
(Feldt, 1990).
One could go on, but it seems unnecessary (Jallade, 1987).
A big Welfare State is not, as its proponents claim, a mark
of civilisation, but a destructive drain on economic prosperity and dynamism, and therefore on the primary source
of real welfare.
MONOPOLY, BUREAUCRACY, AND OTHER
SOURCES OF INEFFICIENCY
It is difficult to find anyone with a good word to say about
monopoly, whether private or public. Wherever a producer
or a supplier manages to secure monopolistic control of a
market, quality and service are immediately threatened.
This is evident in Britain in every sphere, from television where the BBCs monopoly served for years to inhibit innovation, through transport - where British Rail is still antiquated and inefficient, and telecommunications - where
before de-regulation the state monopoly safely ignored consumers complaints for years, to libraries, the Post Office,
and until recently air travel.
Allied to but separate from monopoly is bureaucracy - that
curious mode of organisation which, whatever its alleged
benefits, secured for bureaucrats everywhere an alibi for incompetence, an excuse for delay, a device for screening out
reality, and a mechanism for controlling clients, customers,
and consumers almost as powerful as monopoly. Even privatisation cannot ensure the defeat of bureaucracy, which is
as much a matter of ethos and spirit as of market share or
organisational form. It seems to me that our extraordinary
tolerance in Britain of bureaucratic nonsense is an expression of a serious defect in our national character, rather
than a measure of mature civility. The British queue is a
shameful product of antique deference which provides
bureaucrats with a more reliable and more cost effective
means of control than machine guns!
Besides monopoly and bureaucracy, there is a third major
source of inefficiency in organisations which I should touch
on here. This is unionised labour.
It is commonly at its destructive worse in monopoly situations, and in organisations where enterprising leadership
has yielded to bureaucratic administration, but it is a distinct phenomenon which needs addressing in its own right.
The case of Ford - which operates in a highly competitive
market and is far less bureaucratic than most other motor
manufacturers, yet has been plagued for decades by militant disruption - demonstrates graphically the destructive

power of unionised labour even where it is unprotected by

monopoly and subject to management rather more purposedul than the spineless variety provided by bureaucrats.
Wherever the labour force is allowed to abuse its proper,
limited rights, inefficiency escalates, costs increase, market
share is reduced, and bankruptcy is imminent. The docks
industry, printing - where Britain used to be a world leader,
and coal mining - where Mr Scargill stands as an egregious
paragon of untamed unionism, provide more than sufficient
evidence of the lethal damage which a unionised labour
force unrestrained either by sensible laws or effective management can inflict in short order.
In the institutions of the Welfare State all three of these
organisational disease-conditions - monopoly, bureaucracy,
and ungovernable labour - are as profusely rampant as
maggots in a decaying carcass. The schools are case
studies in the debilitating effects of monopoly. The Health
Service is snared in a spiders web of bureaucracy spun
simultaneously from the cenre in Whitehall, from strategic
controls in the regions, and from petty HQs of interference
at district level. In Social Services and other local authority Departments, the work force is almost as readily
available for the political shenanigans of militant shop stewards as they are for the more or less useful work for
which they are actually paid.
All this is generated and sustained by the nature and structure of the Welfare State. Somehow it will have to be dealt
with.
It seems to me that the Governments current reforms of
education and health care are a sensible start on the task of
addressing these problems. In particular the establishment
of grant maintained schools, the introduction of local
school management, the installation of an internal market
in health care, and the authorisation of independent hospital
trusts and budget-holding GPs - all these are very valuable
innovations. They diminish monopoly, introduce competition, and encourage attention to consumers needs and preferences. They challenge the stranglehold of bureaucracy.
They provide incentives for management to manage with
confidence, and for staff to behave sensibly.
The deficiencies in the Welfare State examined in this section will only be fully and finally overcome by thoroughgoing privatisation and marketisation. Short of that,
the introduction of vouchers with which consumers would
purchase competitively even in the absense of a genuine
market might provide a reasonable second-best solution.
The current reforms - with their reliance on an internal
market and structurally induced competition within a persisting state monopoly - are admittedly a softer option than
vouchers, let alone a real market. They are, nonetheless, a
brave and useful start, and in the political circumstances
prevailing tactically wise. What is crucial is that at long
last a beginning has been made on the difficult task of addressing the underlying sources of inefficiency in the Welfare State - unrestrained monopoly, rampant bureaucracy,
and a de-motivated, unmanageable work-force.
MORAL HAZARDS AND WELFARE
DEPENDENCY
It might seem more than enough to criticise the Welfare
State for its philosophical incoherence, its redundancy in an
era of general prosperity, its extravagant wastefulness, and

its bureaucratic inefficiency. There is, however, one further

charge to be levelled against it, and this is the most serious
of all.
The most damaging impact of the Welfare State is on the
character, motivations, and behaviour of the individual men
and women subjected to its comprehensive expropriation of
their capacity for free and independent action, for self-reliance, for enterprising initiative, and for moral autonomy.
The Welfare State creates and reproduces dependency.
These destructive moral consequences are apparent wherever self-reliance has been replaced by comprehensive state
welfare provision. They are best characterised in Hermione
Parkers concept of the moral hazards (1984) of a handout culture.
We see these consequences most clearly where collectivist
welfarism has been carried furthest - in the societies of actually existing socialism, where deep moral corruption of
whole populations has been scarcely moderated even by the
lingering trace-effects of long-established religious beliefs.
The renewal of socialist Europe is going to require the radical transformation of persons and institutions to re-equip
them for hard work, honest effort, enterprising initiative,
self-reliance, and responsible concern for the community.
All this has been destroyed by the nationalisation of care
and the expropriation of personal responsibility.
These effects are fortunately not quite so overwhelming as
yet in societies with mixed economies of welfare. But as
Parker has demonstrated, they are already quite severe, and
rapidly getting worse. They affect every level of society
and every sphere of social life. Welfare by right and on
demand inevitably destroys what free and civilised societies
have always defined as the fundamental characteristic of
human beings - the capacity to make rational moral choices
as a basis for independent action.
Not before time, Charles Murrays enormously important
research on the creation of the underclass (1984), is at last
being brought before large audiences in Britain. Where social policy analysts were somehow able until recently to
marginalise and ignore the equally cogent critiques of welfarism provided by the Institute of Economic Affairs (Seldon, 1981), the Social Affairs Unit (Anderson et al., 1981;
Saunders and Harris, 1989), and a few others, Murrays
work seems at last to be constraining the attention even of
our Poverty Lobbyist academics and the moguls of media
collectivism (Murray, 1990).
What he shows beyond any doubting is that collectivist
welfarism generates helpless dependency in its cowed
clientele. While this has damaging consequences for almost the whole of the population, breeding for example irrational deference to doctors and nervousness about their
childrens education even among the prosperous and the
privileged, its major structural impact is the creation of an
alienated, de-motivated underclass excluded by socially engineered incapacity from genuine participation in the mainstream of society.
With Ralph Segalman, I have explored these effects in a
comparative study reported in our book Cradle To Grave
(1989). The evidence is clear: however benevolent the intentions underlying it, collectivist welfare provision damages the economy, cripples the dynamism of enterprise
culture, fails to help those who most need help, and worst

of all positively harms those it is most meant to help - by

creating out of temporary unfortunates among our fellow
citizens an underclass of welfare dependents. Moreover,
dependency is transmitted from one generation to the next
by the fractured families it encourages, thus creating a permanent and expanding underclass.
So long as equality and rights are the underlying watchwords of social policy - and let us be in no doubt that even
after the Thatcher years they still are - the moral decay of
our people will continue and spread. The watchwords we
need instead are initiative and self-reliance. These are the
only secure foundations of social policies appropriate to a
free society, the only principles capable of restoring that
essential moral dimension to social policy which Basil Mitchell (1989) has urged us to retrieve before it is too late.
TOWARDS THE DIS-ESTABLISHMENT OF
STATE WELFARE
Recently Professor Nicholas Bosanquet, an advisor to the
House of Commons Social Services Select Committee, suggested that the burden of care for the elderly, due to double
in number over the next thirty years, cannot be supported
eithout extra insurance-based funding (Observer, August
12th, 1990).
This undeniable claim, and accompanying proposals by
Commercial Union and other insurance companies to
mount and market community care policies, was greeted by
welfare lobbyists as if what was intended was compulsory
euthanasia.
Thus Jill Pitkeathley, Director of the Carers National Assocation, was reported as saying that Those able to afford
it will be able to buy their own future care, while the rest
will be dependent on dwindling state-funded services.
Eric Reid, Director of the Association of Retired People,
calling predictably for increased income for all elderly
people to guarantee a dignified old age, spluttered
anxiously that:
These insurance policies look a very uncertain risk to
me. People do not know in their middle years what
their needs in retirement will be. They could well be
wasting their money.
Melanie Henwood of the Kings Fund Institute reacted
rather more realistically than Reid to the unchallengeable
demographic and financial facts presented by Professor Bosanquet, but nevertheless managed to lament the development of the dreaded two-tier system. The introduction of
long-term insurance marked, she said:
... the end of the cradle to grave cover of social insurance envisaged by Lord Beveridge. Clearly the cost
of paying for the grave has been deemed to be too
great for a publicly-funded system. Private insurance
based solely on peoples ability to pay can only accelerate the growth of two nations in old age.
Its the old magic spell again! Despite an overwhelming
case for reform advocated by a distinguished academic well
known for his broad support for the Welfare State, resistance was absolute, dogmatic, and based on ritual resort to
antique shibboleths and taboos.
I have demonstrated elsewhere (1991 [1]) the illogic and
impracticality of welfare lobbyists routine opposition to

two-tier systems and their supposed threat to justice. Provided the superior system is used by most people, and provided access to it is in principle available to all, and
actually encouraged by the government, there can be no
reasonable argument agianst such arrangements except
from a sectarian left-socialist perspective. Why drag down
standards of service for four fifths and more of the population in a futile bid to save the small minority who may not
be able to manage in the first instance from the alleged risk
of stigma? Why not use stigma - read competitive emulation - positively to encourage involvement all-round in the
main-stream?
As far as the prosperous majority is concerned, we should
move boldly - but also carefully, and gradually - towards
privatisation and marketisation of education, health care,
pensions, housing, unemployment protection, and many
local government services. The process of transformation
should be optional and staged, requiring at least ten years
for complete implementation. It will require institutional
innovation, by the insurance industry, by new suppliers, by
existing suppliers adapting to operation in a market, and by
local and central government as they shift from their longestablished function as suppliers to a regulatory role. It
will require radical changes in taxation, involving both substantial tax reductions and confident use of tax rebates and
other incentives, regardless of predictable Treasury resistance (Marsland, 1990 [2]).
Not least it will require consistent and courageous leadership by government, and sustained backing in the face of
concerted sabotage by the opposition, the unions, and the
media. In short it will be difficult - but surely far less difficult than the more ambitious version of the same task
which we are expecting the peoples of the quondam USSR
to undertake. It is, moreover both necessary and feasible here as there. If we are to have a genuinely free society it
is as essential to prise the institutions of welfare from the
incompetent and morally deadening grasp of the state, as it
is to keep the state off the back of industry. Freedom is
indeed indivisible.
A PROGRAMME FOR SPECIAL NEEDS
Dis-establishment of state welfare along these lines will
leave a small and changing minority who need special care.
If we are to avoid the dangers inherent in the current system, particularly the moral damage done by state welfare
and its evident tendency to create a growing underclass of
welfare dependents, the programme for special needs
should be governed by a number of crucial principles:
* Grants to be replaced by loans.
* All benefits to be conditional on reciprocal obligations,
such as commitment to training or further education, an
undertaking to participate in counselling or therapy
where it would be beneficial, involvement in useful community activity, and so on (Marsland, 1985).
* The fundamental aim in all cases should be the restoration of self-reliance as rapidly as possible.
* Care should be provided by non-state organisations, such
as churches, clubs, and other genuinely voluntary bodies
free of involvement in political activity or (except for the
purposes of fund-raising) campaigning.

* The training of welfare and social workers (full-time and

part-time, professional and voluntary) should be transformed as radically as the communist systems of training
for teachers in the former German Democratic Republic
and Czechoslovakia. There needs to be a decisive shift
away from the current emphasis on rights to practical
skills in helping people to help themselves and to values
appropriate to a free society (Segalman and Marsland,
1989). The prevailing attitudes of social and welfare
workers are a major impediment to genuine welfare.
Socialists and other supporters of collectivist welfare will
no doubt argue that these are Gradgrind principles, and
that any welfare programme defined by them is likely to be
mean-spirited, hard-hearted, and ineffectual.
The argument should be taken up resolutely. For far too
long people of good sense and charitable intent in all parties and none have allowed themselves to be bullied by
professionalised welfarists and their academic and media
spokesmen. It is their system of collectivist state welfare
which is ineffectual - and worse. It is unreconstructed Welfare State social policies - spend more money, legislate
more rights - which encourage abuse (Anderson, 1991);
which provide extra benefits for people who have no need
of them while depriving those who genuinely need it of the
help they deserve; which harm those they are supposed to
help by encouraging their worst characteristics and denying
their real capacities.
By contrast, a radical programme such as that suggested
here will provide for all except criminals the real help they
both need and want - support for becoming their own best
selves, and for finding their own way back to the autonomous self-reliance appropriate to free people and their
families.
LIBERATION FROM STATE CONTROL
Laurence Marks devastating, and devastatingly accurate,
obituary on the Soviet Communist Party concludes as follows (Observer, August 25th, 1991):
The Communist Party of the Soviet Union will be remembered for the cruelty, corruption, mendacity and
administrative incompetence of its leaders, for the credulity and cynicism of its western apologists, for its
repression of ethnic minorities and religion, for its silencing and destruction of the greatest flowering of
twentieth century Russian literature and art, for its obscurantist persecution of scientists, and for the dark
night of the soul it inflicted on three generations of the
Soviet people.
Now of course the Welfare States of democratic societies
cannot be remotely compared with communism in terms of
criminal savagery or even incompetence. The damage they
have done and are doing - despite democracy - is, nonetheless enormous. Moreover, the source of their destructiveness is identical with what made communism such a fearful
enemy of humanity and progress - its commitment to a specious form of equality and to institutionalised envy. Again,
in both cases the strategy adopted to secure equality is
identical - subversion of supposedly bourgeois, actually
human, values, and expropriation of private property and
the market.

How dare we in Britain chide the peoples of Eastern and

Central Europe for their dilatory movement towards the
condition of a market society and democratic freedom
while we ourselves continue to exclude from the market the
whole of the welfare sphere - one half at least of economic
transactions, including many of the most important services
people need? The necessity of rolling back the state and
thus liberating individual initiative is at least as imperative
in Britain as it is in Romania or Khazakstan.
There as here there are many influential collectivists who
claim not only that a free market in the restricted sphere of
industry narrowly defined is compatible with a powerful
central state apparatus controlling planning and welfare, but
that it actually necessitates it. Reluctantly and late in the
day they concede that the market may serve us well as an
instrument of economic efficiency and dynamism. As far
as freedom and human dignity are concerned, however, collectivists in Britain, in Moscow, and worldwide persist in
their conviction that the market is at best irrelevant and at
worst a grave impediment, and that political mechanisms including state control and regulation - are necessary.
They could not be more wrong. The market is a pre-condition both of freedom and of human dignity. Only a market
guarantees people a real choice in relation to the most fundamental aspects of their lives. Where people cannot
choose freely in the market place, they have little hope of
freedom more broadly.
Moreover, by requiring - indeed constraining - individual
choice, the market schools us to prudent consideration, individual judgement, autonomy, and self-reliance (Novak,
1991). It is the seedbed of human dignity as much as it is
the foundation of freedom.
Where there is no free market, the people are serfs. Where
the market remains substantially restricted, as it does in
Britain and other Welfare States, the people are half free.
The argument in support of markets as the antidote to socialist dictatorship in Eastern and Central Europe is at the
same time and by the same token an argument for dis-establishment of the Welfare State. If it is valid there, it is
valid here.
In his latest book, Parliament of Whores, P. J. ORourke
characterises the welfare induced poverty of a contemporary New Jersey housing project - all squalour and stench
- as worse than conditions in Beirut and Manila:
What we managed to escape in 1966 in Squaresville,
Ohio, was not poverty. We had that. What we managed to escape was help.
The phoney help on offer from the Welfare State is no help
at all. It is a lethal threat to our freedom. We should get
rid of it once and for all, and replace it in its entirety with
social policies more appropriate to free men and free
women in a free society. We cannot rely securely on the
state - on any state - for our welfare. Real welfare is produced by the effort, initiative, and moral choice of individual men and women. With the state off our backs - and
only thus - we could do it (Gilder, 1981 and 1986).

REFERENCES
Digby Anderson, Breaking the Spell of the Welfare State,
Social Affairs Unit, London, 1981.
Digby Anderson, The Unmentionable Face of Poverty in
the Nineties, Social Affairs Unit, London, 1991.
G. Biddulph, Daily Telegraph, August 16th 1990.
K. O. Feldt, All These Days, Norstedts, 1990.
George Gilder, Wealth and Poverty, Basic Books, New
York, 1981.
George Gilder, The Spirit of Enterprise, Penguin, Harmondsworth, Middlesex, 1986.
J. P. Jallade, The Crisis of Re-distribution in European Welfare States, Manchester University Press, 1987.
David Marsland, Work to be Done, Youth Call, 1985.
David Marsland, The Welfare State as Producer Monopoly, Salisbury Review, Vol. 6, No. 4, 1988.
David Marsland, Poverty, Salisbury Review, Vol. 8, No.
3, 1990 [1].
David Marsland, Beyond Welfare: Towards a Free Society
in the 1990s, in A. B. Cooke ed., British Society in the
1990s, Conservative Political Centre, 1990 [2].
David Marsland, Against the Welfare State, Claridge Press,
London, forthcoming.
Basil Mitchell, Why Social Policy Cannot Be Morally Neutral, Social Affairs Unit, London, 1989.
Charles Murray, Losing Ground: American Social Policy
1950-1980, Basic Books, New York, 1984.
Charles Murray, The Emerging British Underclass, Institute
of Economic Affairs, London, 1990.
Michael Novak, The Spirit of Democratic Capitalism, Institute of Economic Affairs, London, 1991.
Hermione Parker, Action on Welfare, Social Affairs Unit,
London, 1984.
Pete Saunders and Colin Harris, Popular Attitudes to State
Welfare Services: A Growing Demand for Alternatives?, Social Affairs Unit, London, 1990.
Ralph Segalman and David Marsland, Cradle to Grave:
Comparative Perspectives on the State of Welfare, Macmillan, London, 1989.
Arthur Seldon, Whither the Welfare State, Institute of Economic Affairs, London, 1981.
Arthur Seldon, Capitalism, Basil Blackwell, London, 1991.
Peter Stein, The Swedish Model, Institute of Humane
Studies Newsletter, Spring 1990.