Welfarism, it's consequences and an interim solution

Libertarianism is obviously the purpose of individual responsibility and contribution for the benefit of the individual and society as a whole, among other things, and that is why is it so opposed to the concept of the welfare state. Although I have stated that in the 21st century some form of safety net is a requirement, this does not include the vast majority of benefits that are currently on show.

This article focuses on employment and its consequences, in particular how unemployment benefit and its associated housing benefits have led to the current social breakdown and the ghettoisation of our country, and the wider western world to a great extent.

Unemployment is the great strain on many areas of our society, in many ways beyond many people's scope. Worklessness is not simply not having a job, it is the removal of individual freedom through the loss of income and therefore choice. The western, in this case British, solution to this is the welfare state.

The welfare state is no longer as it was meant to be. Originally it was the progressive liberal idea of a safety net largely based upon the parish taxes and other systems previously devised. As time went on it introduced the pension amongst other things. To clarify, I am not getting into the NHS here, although part of the system it should be approached separately.

Original intentions are important in other areas too. For instance, social housing, which has become inseparable from unemployment. This, however, was not always the case. Originally social housing rents were in fact higher than the private sector and you were given tenancy on your ability to pay the rent, not on you not having a job. That is, you had to have a job to pay the rent. Social housing was the better form, better facilities and was largely a solution to the slum dwellings that blighted much of this country.

It is important to note here that there was no security of tenure. If you broke the rules through crime or anti-social behaviour, you were out. The person who scrapped this and gave social housing security? Maggie Thatcher.

Unemployment is in the vast majority of cases the overwhelming economic factor of crime. The evidence is manifest. In turn, due to the changes of the 80s to switch the nature of social housing to the provision of tenure to those who were unable to pay or work, council estates became concentrations of poverty and in turn, crime.

A huge issue here is that unemployment benefit has become on a par with work. The cultural mistake of believing that work is a desirable human thing has become quite clearly wrong; the million or so who are euphemistically known as long-term unemployed but realistically permanently so, have no intention of working. They lower their standard of living to one that they find acceptable but many of us would not and therefore the incentive to improve it is simply not there.

On top of this they will readily supplement this income from the black economy - crime.

A key driver of their ability to live like this is simple: housing benefit. Housing benefit accounts for £12 billion per annum of taxpayers money, just to pay the rent of social housing for those that cannot afford it. 60% of housing benefit claimants live in social housing.

To go to work means losing your housing benefit, which means paying your rent from your wage, which means you might as well stay on benefits because you will now be worse off. This is a basic human calculation.

The libertarian solution is to scrap the welfare state, or depending on your position, some of it. However, I see an interim position as a way of ushering in a new era. I will mention others, but in the main...

The removal of social housing.

People on housing benefits would still receive money in order to pay their rent, but directly. No social housing requirement in new developments, no council or housing association as landlord. The money is paid directly into the person's account to be spent as they wish, in return they must provide a receipt for the housing provision they have used. In short, the rent is given to them to enter the private rental sector, which includes all previous social housing.

This makes them, forces them, to find somewhere to live, to enter into a rental agreement, to exercise free choice as opposed to allocation of resource. If they get a job, below a certain wage of course, they can top up their rental allowance and get a better place to live. If they choose to spend the money on drugs or drink and so do not get a roof over their heads, then they are homeless and their benefit is stopped. The consequences of their actions, or lack of it, are clear and absolute.

This gets people to start operating in the libertarian spirit. They must use money as a free choice, they must not just sit there and be spoon fed. If they choose to spend that money the wrong way, they go without. No back up, no help. They were given the chance, they blew it.

Many will obviously stay in their current homes, except now if they fail to pay the rent, they get evicted. The more they earn the less housing benefit they get until they are self-sufficient.

In turn, the black economy is removed. At the moment many turn to drugs and prostitution to earn and the only tax they may possibly contribute is VAT. My solution to this, in common with many people's, is decriminalisation.

Drugs are now taxed, prostitution is now taxed. They are regulated and licensed, they pay tax and they contribute to a person's income and help offset their benefits and also the deficit the state incurs.

Our country has become one of dependency. A huge number of people are utterly reliant on the state for their income, their housing, their food and water and clothing. On one side this is seen as a drain on the economy and an unacceptable use of an ever increasing tax burden on those that work. However, it is also the removal of freedom for those people. As Hayek argued, money is freedom. It is choice.

Before we remove the vast majority of the welfare state, we must first implement an interim system to get those affected back to exercising freedom of choice, the decisions that make them individuals and the consequences of their actions. Libertarianism's perspective on the welfare state is not just about the tax burden it creates, but also the freedom it removes from those that become reliant on it.

In turn the welfare state, and housing benefit in particular, have created no go areas, ghettos of poverty and state reliance, poor education, high crime. The approach above removes this, it gives people control over where they live and how they make those decisions, it removes the threat of crime and re-introduces the income produced from those activities back into the formal economy.

Before many of the things we want to see achieved can be implemented, a road map must be drawn up to show the stages that will be put in place to get to our primary objective: lower taxes, less state control, individual responsibility, freedom.