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Posts Tagged ‘welfare’

After WWII, the ideas of Otto Von Bismarck and William Beveridge came to the fore. In almost every country, citizens demanded that the State should take an active role in helping people in distress: labourers without work, sick people, retirees, etc.

That thinking dominated the world till the Reagan-Thatcher liberal revolution. Helped by an ageing population in almost every country, the current thinking of the last decades of the previous century and first two decades of the twenty first  have centred around the  possible unsustainability of the social umbrella designed after WWII.

Then came SARS-CoV-2 and the COVID-19 pandemic. It changed everything. If the post-WWII design was meant to care for people in distress, citizens are demanding that the new social-welfare policies now include the whole population. From worrying that the social-welfare system was about to collapse, to demanding a bigger role for it, only a pandemic has sufficed. As an example, according to a recent editorial by The Economist (March 6th, 2021), today two-thirds of Europeans are asking for a universal basic income. How we are going to finance those new demands is not clear, but the old rule of lower taxes and no interference by the State in our personal socio-health has been broken into pieces.

We are demanding a social system in which help moves quickly and seamlessly to the entire population, and not only during crises, but always. Governments will need to find ways in which to finance that demand, and not only through borrowing, as is the case today, but permanently. The chunk of social services in the overall government budget will increase and, accordingly, the chunk of taxation in respect to GDP will increase. There will be a movement away from the Anglo-Saxon model towards a more comprehensive model, something more similar to what the Scandinavian countries have in place.

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