Saturday, January 20, 2007

Public vs private charity

There is a debate going on at Cactus Kate's site about private vs public charity, charity being the giving of resources to the poor or needy. Some people want the government right out of it. Others want the government to continue on being the main provider through the welfare state.

There is risk in every life. Risk of sickness, disability, death of a partner, unemployment, etc. And so individuals feel they must make provision for these possibilities, even though the risks have lessened over time rather than increased.

In the early part of last century the debate was about whether the government should be the insurer. The 1938 Social Security Act developed a plethora of benefits which were all funded from one social security tax (absorbed into general taxation in the 60s). People were delighted with it. A great deal of suffering was alleviated. As there existed a commonality of values the scheme was appreciated, not abused. (Although there were problems with the then quite separate rural Maori society with benefits supposed to be for the indivual or children, being abused by the wider whanau).

But, as long as the numbers stayed low and the recipients were genuine, society was reasonably pleased with the set up. And government was just as suited to fill the role as any private charity or friendly society.

Unfortunately, as values changed, the permissive society evolved, sexual liberation proliferated, feminisim raged, non-judgementalism became the new religion, people demanded more rights, more welfare and the government had to loosen eligibility. For instance, before the sixties a person who had themselves caused the condition that prevented them from working eg an alcoholic, wasn't eligible for a sickness benefit. Before the sixties single mothers were helped by the state but didn't automatically qualify for a benefit.

So what we now have (as in all welfare states) is a group of people who have retained values like honesty, a work ethic, those sometimes called judeo-christian and they are clashing with others' values or lack of. The first no longer want to pay for the welfare of the second although they would still be happy to help the genuine.

So the question arises, is government the best agency to provide charity, given what has developed?

The answer as it stands is no. Not only because of the fact it takes money for welfare off people who no longer want to 'buy-in' but also because of the diversity of opinion about just who is deserving and who isn't.

Here's the thing though. As long as the government continues to insist on being the major player using taxpayer money, people are not inclined to further support private charities - and even some of those have become socialist enclaves constantly advocating for more government redistribution from 'rich' to 'poor' instead of doing the work of getting people back on their feet.

Ultimately the answer will have to come from government. It'll take a very brave one (and they aren't unheard of) prepared to do a number of things.

A/ Close down working-age welfare to newcomers except in a tightly specified cases eg people whose disabilies or illnesses genuinely prevent them from working and have no other source of income eg immediate family
B/ Allow people to opt-out of the existing welfare system. No tax - no benefits
C/ Make donations to private charities fully tax deductible
D/ Make insurance premiums for loss of earnings or loss of partner (including separation) policies tax deductible
E/ Put considerably more money into Law and Order
F/ Encourage adoption ahead of fostering

Unlike absolutist libertarians I am not overly concerned with banishing government from any charitable role or constantly focusing on it as the sole source of our social problems. Let those who can (most), make their own provisions and make it easier for them to support private organisations that will work with those the government no longer supports.

There is no utopia. Things will get worse before they get better. Society is constantly changing and policy causes those changes as well as responds to them. We are dynamic beings individually and collectively. And in states older than ours, historically, the provision of welfare has swung between public and private. We are merely repeating that pattern. The pendulum is possibly at the extreme point in its trajectory but will by necessity and nature soon change direction.

3 comments:

sagenz said...

I could see a decent case for making B dependent on demonstration of D. It is effectively what some of our tax money is used for now. no fault mass insurance.

your problem will be the high earning high spending people who opt out then suddenly lsoe their income through no fault of their own.

Making it more directly insurance means risks and returns will ne more closely correlated with individual circumstances.

use of youth minimum wage & availability of training should ensure that number of young unemployed is limited

the flip side of opting out is simply putting term limits on welfare.

I think this theme is worth developing as a policy proposal. you are clearly right about the extent to which government is the problem. The real question. What is a practical path to a long term solution.

Anonymous said...

Any steps along the road to a totally private sector welfare situation is fine with me...we have to start somewhere.

If Act proposed to give people the "opt out of the state services" option so that they could go totally private while paying little or no tax I think that would raise massive interest while shaking the Left to its core. ;-)

And if National nick it as they do most of Acts ideas and make it their own then things may get really interesting...

Anonymous said...

Private sector charity also has the ultimate in regulation hanging over them...the freedom of choice of free people with control over their own money!

Just like every other area of the private sector charities are required to produce value for those who give them money....unlike the State which has no such incentives because it gets your money regardless through coercion.