The Debate over the Role
of the Welfare State

In the last few years, the changing role of the Canadian welfare state has been the source of numerous articles and media pieces. Some want to dismantle the welfare state and start fresh. Others want to keep the welfare state, but make radical changes to it. And of course, there are people who are as pleased as punch about the welfare state, and want to keep throwing money into its ever-widening black hole.

The debate over the welfare state has grown nasty even in the circles of the political left, long the great defenders of this tired strategy. In fact, a recent book by Walter Stewart, Dismantling the State: Downsizing to Disaster, actually promotes the idea of preserving the welfare state, health care, public education, and so on.¹

However, in one case, long-time NDP supporter John Richards calls for “retooling” the welfare state and other parts of Canadian society, including health care. It is a gutsy strategy, to say the least.

Richards does want to keep the welfare state intact to some degree, and there are arguments both for and against this strategy. However, for the purposes of exploring ways to reform the current welfare state, this study is quite useful.

Richards and retooling

John Richards has a long history in socialist politics. He was a member of the NDP government in Saskatchewan from 1971-1973 under then Premier Allan Blakeney. Halfway through his term, he walked across the floor and sat as an “independent socialist” for the remainder of his political career (1973-1975).

Since that time, Richards has returned to the NDP and became an Adjunct Scholar for the C.D. Howe Institute. He has written on various public policy issues, many of which have irritated left-leaning Canadians for one basic reason: Richards often refuses to defend the status quo. The same theory goes for his most recent book, Retooling the Welfare State: What’s Right, What’s Wrong, What’s to be Done.

Richards compares the attitude of those running the current welfare state to that of William Shakespeare’s King Lear; the naive belief that generosity can conquer all leads to chaos and destruction of an empire. In Richards’ eyes, our society wants to be like the good King in that “we long to believe that the natural generosity of humanity will lead to a better society, but generosity does not suffice.”²

The welfare state is born

Richards sees two culprits, or in his words, “parents,” that led to the creation of the welfare state: the traditional left and the social gospel.

The traditional left “parent” has its roots in nineteenth century England, when living conditions were poor, people were destitute, and free market liberalism was not yet all the rage. Thus, government intervention, even just a bit of it, was popular amongst left-wing intellectuals.

The social gospel “parent” has roots in the Roman Catholic Church in Quebec, which set out to provide social services for the poor, sick, and needy. A popular advocate of a prairie social gospel was the late Tommy Douglas, former CCF Premier of Saskatchewan and NDP federal leader.

However, over time, our society became uninterested in defending the communal duties of Christianity and the broken record rhetoric of the traditional left in defending social programs. Thus, the welfare state became a “political orphan” (Richards, p. 37).

Election after election, left-wing parties defended the nature of social programs such as universal health care, and felt that their strongest position was a defense of the welfare state. This led to the evolution of what Richards calls the “loony left,” (pp. 50-51) or an excessive admiration of the ideas of the traditional left.

The loony left had the tendency to fall under three different syndromes: a fundamental hostility to market behaviour (the anti-free trade campaign in the 1988 federal election), identification with particular interest groups (the NDP’s reversal of its political position on the Meech Lake Accord from 1987-1989), and debt denial (the NDP’s stance against debt reduction in the 1993 federal election) (Richards, pp. 52-55).

What’s right

In his defense of the welfare state, Richards supports the need to keep certain social programs in place because the free market cannot, in his opinion, sustain all people. He is opposed to any political party that won’t support universal health care. He argues that the market is not able to take care of various environmental problems, such as urban sanitation in Third World countries. Richards also spends a chapter discussing the nature of market failures, and how income redistribution makes sense in certain case studies.

What’s wrong

In his attack on the welfare state, Richards goes on to say that it is “a work-in-progress, not a finished work of art to be admired reverentially” (p. 139). He interprets the four “hazardous dynamics” to the welfare state from the Swedish economist, Assar Lindbeck, one of which is the perverse effects of microeconomic stability and how market risks can turn into political risks. He spends a chapter on the enormous growth of interest groups on the welfare state, and the influence they had in creating economic burdens like the Canada Assistance Plan. As well, Richards looks at the nature and breakdown of civil society, including earnings polarization and the collapse of traditional family values, and the adverse effect of social programs and government transfers.

What’s to be done

Richards has five proposals for retooling the welfare state: clarify and balance budgets (citizens begin to understand program benefits and their costs in terms of taxes); maintain accountability (one level of government should be responsible for social policy); respect comparative advantage (the decentralization of jurisdiction between Ottawa and the provinces in terms of social programs); encourage two-parent families (where one parent is a mother and the other a father); and emphasize workfare (Richards, pp. 218-266).

Is retooling enough?

Naturally, there is much to disagree with in Retooling the Welfare State. For example, many will have obvious difficulties accepting the sections where the author constantly defends the present health care system. Richards refuses to look at other models such as medical savings accounts, user fees, or two-tier health care. Instead, he concentrates most of his energies on the benefits of universality and how it can be managed against any possible market failures.

However, Retooling the Welfare State does tackle established beliefs about the welfare state, and Richards does an excellent job of critiquing his colleagues on the political left. Overall, the book is a moderate, but well-argued left-wing roar of disgust against the modern welfare state. And that’s a good start from our friends on the opposite side of the political spectrum.

Notes

¹Walter Stewart, Dismantling the State: Downsizing to Disaster (Toronto: Stoddart, 1998). In reality, this is the same argument we have heard ad nauseam from the political left for years.

²John Richards, Retooling the Welfare State: What’s Right, What’s Wrong, What’s to be Done (Toronto: C.D. Howe Institute, 1998), p. 11.

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Last Modified: Wednesday, October 20, 1999.