How the North can learn from the South in building a welfare state


Are the poor really dependent on welfare and is that necessarily a bad thing, as the ‘post-welfare generation’ might want to argue?

The most recent video with Berkeley professor Ananya Roy under the #GlobalPOV initiative is looking at the issue of the welfare state and inequality. Actually, these ideas are reminiscent of claims heard back in the 1970s in the US and UK. Nixon’s welfare queen jumps to Roy’s mind. Roy goes on to argue that it is actually ‘us’ – the relatively wealthy – who are just as dependent on state help. She herself receives more in tax deduction on her mortgage than ‘any money spent by the US government on what has come to be vilified as public housing’.  And without doubt the biggest welfare queens are sitting in corporate offices. The Walmart workforce is the greatest recipient of US welfare help because Walmart – despite its $13 billion profit – does not pay wages that are high enough for people to survive.

Discussing the TV series ‘Benefit Street’, Hasan recently wrote about very similar issues in the UK: it is not the benefit receivers who are getting the biggest chunk of money, but pensioners, middle-class people and mainly corporations, such as G4S and Serco or the private rail companies, not to mention the bail out for the banks (an estimated £1.1trn – enough to pay for 200 years of benefits). Similar calculations would hold true in Germany and many other major European countries.

Roy’s conclusions also work in Britain as well as in the US: even though cash transfers based on conditions have serious problems, it is the state and only the state which can (and is financially able to) effectively change the situation of the poor. A Universal Basic Income seems like a utopian vision for some, but we are getting closer in some contexts, such as Switzerland as Haeusermann has recently documented.

The forerunners in all this are not liberal, Western market economies but what we still disdainfully call ‘emerging economies’ in Asia and South America. In these increasingly affluent countries, the workforce demands a share of the wealth – and is often granted it by the state. Under Brasil’s ‘Bolsa Familia’ program, for instance,  families who send their children to school and allow them to be vaccinated earn $100 more per month. This has helped more than 22 million people over the last 10 years. As Roy also claims, this welfare state has to be fought for. The recent protests in China and Chile did exactly that; they fought for a greater share of the wealth (not yet necessarily with the desired effect).

It might be time to turn development on its head: the overly-developed North (with its now completely underdeveloped unions) might be able to learn very much from the emerging power-houses in Asia and South America when it comes to building up a new model for welfare states.

Johannes Lenhard is currently a post doctoral researcher at the Max Cam Center for the Study of Ethics, the Economy and Social Change at the University of Cambridge and a College Research Associate at King’s College, Cambridge. His work is focused on the intersection of alternative economics, social theory and the ethnographic study of homelessness and mental health. His new project is discovering the ethics of venture capital investing and is the current editor-in-chief of KR.