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CEQLS Lecture | Robert Nef: The Welfare State in the Trap of Redistributionism

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Conservative Institute would like to invite you to another of the CEQLS Lecture. Robert Nef, Member and Past Chairman of the Board of Trustees of the Liberales Institut, was our guest on March 26, 2018 in Bratislava. Video and more information is available at www.institute.sk

Published in: Economy & Finance
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CEQLS Lecture | Robert Nef: The Welfare State in the Trap of Redistributionism

  1. 1. Welfare State in the Trap of Redistributionism To honour Stephen Hawking, can we escape the Black Hole of redistribution? by Robert Nef
  2. 2. Democracy and the welfare state cannot exist together in the long run. 
  3. 3. As a redistributor of wealth, the state can never be fair. 
  4. 4.  In the long run, redistribution • reduces standard of living, • is environmentally unfriendly, and • is antisocial.
  5. 5. Financial crisis of the welfare state is symptom of a deeper crisis. 
  6. 6.  Redistribution has infiltrated almost all state activities. What now? • Step One: Change perception –Welfare as limited task of the state • Step Two: Change practice –Welfare as targeted aid for truly needy
  7. 7. Social assistance must always be: • 1) supplemental – exist as an exception and not the rule • 2) time-constrained – Helper and recipient know it should end • 3) interpersonal – relationship between two actual human beings – (or under non-central local branch of helping org.)
  8. 8. Welfare state is not in a bottleneck. It is in a dead end. 
  9. 9.  Elites: – diverse – overlapping Political circle: – constrained – built up from competing small entities – members easily exchangeable
  10. 10. Karl Popper
  11. 11.  “Egalitarianism” of welfare state tries to overcome the past: – feudal inequality of 3-Estates Society – Industrial Revolution gap Rich vs. Poor
  12. 12. Three-Tier Societies Plato • Rulers • Soldiers • Producers Middle Ages • Armed Estate (nobility) • Learned Estate (clergy) • Sustenance Estate (farmers)
  13. 13. Case Study Why have the Swiss never developed powerful aristocracy and clergy?
  14. 14. Johann Heinrich Pestalozzi (1746-1827)
  15. 15. New tri-section of society, laid over the ideological fabric of political parties Triangle of Redistribution: Burden Bearers Beneficiaries Bureaucracy Rich and Efficient Disincentivised on Welfare Growing, eats into budget Tax Payers Tax Eaters Professional Redistributors 20% 40% 40%
  16. 16. How Redistribution Hurts: Burden Bearers • Not much • May be even positive – Majority population obedient – Increased purchasing power for their products
  17. 17. How Redistribution Hurts: Beneficiaries • The most • Denied own dignity – Slaves of Redistribution Machinery – Advance only through increased redistribution
  18. 18. How Redistribution Hurts: Bureaucracy • System gives them livelihood – Want more state – more work • Dispensers AND supervisors of redist. – Who supervises the supervisors?
  19. 19. Too much redistribution destroys the majority principle, and with it probably also democracy.
  20. 20. HOMO OECONOMICUS CULTIVATUS
  21. 21. Serenity prayer
  22. 22. Good Policy Prayer God, give me the Energy to fight with more perseverance in bottleneck situations, Courage to turn around in dead-ends, ... and Wisdom to know the difference.

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