Economic and Financial Aspects of Social Security, by Henry Richardson

[p021] Welfare%State Economic and Financial Aspects of Social Security, J. Henry Richardson. George Allen & Unwin, 30s. As a book of reference of the different social insurance schemes existing in different countries, this book is invaluable. As a work deal- ing with the principles underlying the need for social insurance and how it should be administered, it provides an interesting sidelight on the thoughts of the philosophers and social scientists of the Establishment. ‘Social security’ under capitalism is a contradiction in terms. The one cannot co-exist with the other, if only because the periodic recessions, bouts of inflation and so forth inseparable from a capitalist form of economy tend to wipe out the value of the benefits received. Richardson himself admits that the ‘ decline in purchasing power in a depression is much greater than the increases in social insurance and assistance payments to the unemployed ’. But apart from this basic con- tradiction the big question which we should ask—who pays? Richardson capital proposals _ is not at all convincing when he argues for the flat rate contribution system. He states that ‘high taxation . . reduces the ability of people to save and to provide resources for investment’. This sort of specious argument is used by the government in justifying the new pension plan, to come into operation this year, which seeks to provide a supplementary pension but one which will be substantially paid for by the worker by a flat rate contribution. No subsidy from direct taxation is provided for, so that, because of the declining value of money, the benefits he receives are less than the con- tributions paid by the worker. Richardson agrees that such benefits are only deferred wages. He is against what he calls an early retirement age and argues for paying standard pensions at a ‘rather high age’ and paying, if necessary, at an earlier period lower pensions at sub- sistence level which could be supple- mented by public assistance with a means test. In fairness to him he considers that early retirement can cause great unhappiness. But this evolves from his outlook on property relations. Work is for workers; leisure is for those who can afford to indulge in it. It is good to see that this book is not hypocritical in its attitude to “social~ security’. There is no nonsense about the humanitarian aspects involved. Richardson states that social security is necessary because it has the effect of increasing productive efficiency. token he is for unemployment insurance being linked with an efficient employment exchange system so that the ‘ payment of benefits must be conditional on unemployed workers accepting suitable jobs offered to them’. Mobility of labour is a pre-requisite to an efficient capitalist system. Still, there are some very interest- ing statistics in this book. Britain has the reputation of being the home of the Welfare State. Yet the people of West Germany now spend more on social security than any other country, with Britain now only twelfth in the table. But the effect of bigged arms spending by West Germany may alter their position. Richardson, however, believes that it is valid to obtain funds from the By the same-. 19 community by taxation or social insurance but spend the money on current consumption, for example, on military defence. Social security, in other words, has 2. place in the scheme of things, but ‘ defence’ takes priority. . 5.G. Hard Luck on Dimple