How governments are realising that by privatising their obligations to you they can employ a freemium model letting social entrepreneurs take up the slack so they can prop up the private sector.
Every few years we get to exercise our democratic right to elect the government, the suits who will relentlessly appear on terribly dull news programmes talking about GDP, unemployment and who they feel we should feel we need to wage war on. Every few years, they tour round the country, kissing our grandmas and babies, get chummy with rock stars and actors and appeal to our good sense to give them our vote. Politicians are our representatives; they look after our needs and the needs of our nation. A democratically elected government is the management team, responsible for making sure our needs are met and we are cared for. This mammoth organisation is funded and its (our) employees are paid through the taxes. So why are they slowly but surely passing these obligations to private industry who charge us again for the same services? This is the century of DIY
Everyone knows that the Greeks invented democracy, the word itself means rule of the people. Around 6th century BC some clever Athenians decided that every citizen of the state should have a say in how the state was run and taxes were levied on the people for the defence of democracy. This model was used by subsequent republics for millennia and the taxes were collected by monarchs and autocrats to keep them in palaces and armies.
It wasn’t until the 1850s when Otto von Bismarck, the first elected chancellor of Germany, expanded the remit of the government to the welfare of the people by taking over and consolidating the role of charitable organisations.
It was the British who really threw themselves into social welfare, maybe in a bid to stem the tide of communism or maybe because they were just really good people but liberal prime ministers Herbert Asquith and David Lloyd George furthered the reach of the government with state pensions, unemployment benefits and health cover.
This was the beginning of governments taking responsibility of the people they were expecting to keep them in a job. Under the guidance of John Maynard Keynes and the findings of the 1942 Beveridge report Britain established the welfare state to tackle what William Beveridge called the “five Giant evils” of squalor, ignorance, want, idleness and disease. To this end, the people of Britain made contribution to a system of national insurance and in return received housing, schooling, unemployment and disability benefits, work and health care. This idea quickly spread and some countries, such as Sweden are famed for their high levels of taxation and exemplary public services while others lag behind with the bare minimum of welfare such as USA. The one thing is universal, we have become used to looking to our governments to provide for our needs and this justifies our payment of taxes.
And the payoff was that it enabled the state to manipulate the populous and thus the economy more efficiently.
In the 70s, attitudes changed and a new age of neoclassical, laissez-faire economics came to the fore under the influence of Milton Friedman and Friedrich Hayek (Margaret Thatcher’s mentor). Hayek’s “Road to Serfdom”, written around the time of the Beveridge report, warned of the dangers of government intervention in welfare and Friedman openly spoke out against social welfare. Critics of the walfare state argue that if you provide for peoples’ needs you encourage them to develop their needs over their abilities. In fact, revered author and philosopher, Ayn Rands’ magnus opus, “Atlas Shrugged” tells the story of a world gone mad due to a society of need rather than giving the reigns to super dynamic industrialists.
By the 80s, many governments were beginning to devolve their welfare systems, sell public industries, sell public housing and encourage private industry to run free and proliferate. The result was a boom time for many. Wages rose, bonuses swelled and credit made almost everything attainable to almost everyone. But it wasn't to be for long; the boom went bang.
The 90s were spent trying to balance the books after the bust. The main strategy was to deregulate banking and finance and allow laissez-faire economics to drive a new era of wealth and then when things were looking good, it all collapsed around our ears.
Now governments are trying to rake back the losses made from propping up the private sector, a new welfare state, for the welfare of industry.
As for Sir William Beveridge’s “five Giant evils”
Squalor: Public housing has been sold off leaving private landlords to turn any cupboard into a “studio flat”.
Ignorance: Higher education is now the privilege of those able to take on huge student loans to have the possibility to get a job that will enable you to pay it off.
Want: Pensions and unemployment benefits have had the goal-post moved so far that private pensions and zero-hour contracts are now the base line.
Idleness: With unemployment and under-employment across the western world at historic highs, especially amongst the young and old, entire generations are dispossessed and not contributing to the community.
Disease: National health services are crumbling under the pressure. Britain’s NHS is being propped up by the private medical insurance despite the fact that the recession has ensured that less people can afford it. Greece’s system has changed names and protocols so many times recently that even those working in it are unsure of what advice to give patients. France’s system is hanging in but costs are spiralling.
You can still vote, you can still pay taxes but make no mistake, you are on your own.
The state is adopting the freemium business model. You can have basic services from the state, but in order to get anything more, private industry is on hand to provide supplementary services. The private sector is expected to provide the same, if not better services than a non-profit institution like the state while still keeping an eye on the profit margins.
Social entrepreurism is the new way with individuals encouraged to take up the slack. Set up an NGO and plug the gaps in the state. While the state props up the private sector, with your money.
For what was, in reality, a short period of history, governments made an admirable effort to care for the people who put them there in the first place. Then came the civil war of public versus private and private won. Now you are on your own again, governments and industry are washing their hands of any public responsibility with taxes, once again, collected to fund the wars on the global markets.