1.
Welfare State in the
Trap of Redistributionism
To honour Stephen Hawking,
can we escape the Black Hole
of redistribution?
by Robert Nef

2.
Democracy and the welfare state
cannot exist together in the long run.


3.
As a redistributor of wealth,
the state can never be fair.


4.

In the long run, redistribution
• reduces standard of living,
• is environmentally unfriendly, and
• is antisocial.

5.
Financial crisis of the welfare state
is symptom of a deeper crisis.


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.
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.
Welfare state is not
in a bottleneck.
It is in a dead end.


9.

Elites:
– diverse
– overlapping
Political circle:
– constrained
– built up from competing small entities
– members easily exchangeable

10.
Karl Popper

11.

“Egalitarianism” of welfare state tries to
overcome the past:
– feudal inequality of 3-Estates Society
– Industrial Revolution gap Rich vs. Poor

12.
Three-Tier Societies
Plato
• Rulers
• Soldiers
• Producers
Middle Ages
• Armed Estate (nobility)
• Learned Estate (clergy)
• Sustenance Estate (farmers)

13.
Case Study
Why have the Swiss never developed
powerful aristocracy and clergy?

14.
Johann Heinrich Pestalozzi
(1746-1827)

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.
How Redistribution Hurts:
Burden Bearers
• Not much
• May be even positive
– Majority population obedient
– Increased purchasing power for their products

17.
How Redistribution Hurts:
Beneficiaries
• The most
• Denied own dignity
– Slaves of Redistribution Machinery
– Advance only through increased redistribution

18.
How Redistribution Hurts:
Bureaucracy
• System gives them livelihood
– Want more state – more work
• Dispensers AND supervisors of redist.
– Who supervises the supervisors?

19.
Too much redistribution
destroys the majority principle,
and with it probably also democracy.

20.
HOMO
OECONOMICUS
CULTIVATUS

21.
Serenity prayer

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.