South African policy makers face an inherited welfare system which is neither universalist and high benefit, nor small. Currently suggestions are being made for increasing coverage, for instituting benefits where none exist and for installing some form of socially funded health insurance for lower income earners.
Across Europe the universalist welfare state is under increasing scrutiny. It is rigid, high cost, bureaucratic and increasingly non-viable. In America President Clinton famously vowed to end welfare as we know it.
At base, however, the problem of state provided welfare in developed countries is not financial but moral. Most households receive sufficient income across their lifetimes to be able to afford to finance their own house purchase, healthcare, unemployment and sickness insurance and retirement income without recourse to third parties.
Welfare from the state jeopardises work incentives and increases disincentives to effort. The result is a decline in self-, family- and community-responsibility. An underclass has developed which represents not a degree of poverty but a type of poverty characterised by deviant attitudes towards parenting, work and crime.
If people are paid to be poor, there will be larger numbers of poor. Simultaneously policy approval of poverty crowds out the virtues of self-reliance and self-responsibility. Instead of bringing out the best in people and helping those who are down on their luck, welfare policy has appealed to our weaker natures by pandering to our desires to grab what we can get.
South Africa shows similar trends. Formerly strongly community-oriented towards family and extended family responsibilities we now find ourselves in need of what Deputy President Jacob Zuma calls a moral regeneration.
Saunders argues for asset-based welfare systems such as those of Chile or Singapore. Such systems strengthen the incentives to build on family and community support.
