THE WELFARE STATE: Need for a Kiss of Change (Part III)

What is a Welfare State?
Readers would find it intolerably pedantic if they were walked through certain areas of welfare economics and through the philosophical essence of such an elastic concept as 'welfare' is. It's a concept that is intensely discussed in economic philosophy for every economic policy objective - monetary or fiscal - is intended to ultimately improve the economic well-being of the people. Reduced to its simplest form, economists use the term 'welfare' to mean a condition of 'being and doing well'. Over the years, just like mothers used to invoke bogeyman to frighten kids, a class of politicians in most welfare states has fed the popular perception that any withdrawal of or cutback in the provision of welfare services is tantamount to a welfare loss. A withdrawal or cutback of spending, however socially and economically desirable, is thus perceived as an ominous move by governments to snatch bread out of people's mouths. An extension of welfare spending, however detrimental to society and the economy, makes people 'feel good'. Emotional as opposed to rational considerations dominate judgments. It's déjà vu in Mauritius. Let me cast behavioural economics aside and stay on track.
The Arthashastra, a 2,200 year old Sanskrit classic on statecraft showered with substantial touches of political economy authored by Kautilya, the King's Chief Advisor and Strategist, popularly known as the Indian equivalent of Machiavilli's Prince, enumerates the factors and arrangements that contribute to welfare of the people:"the increase in economic activity, the protection of livelihood, safeguarding vulnerable segments of society, consumer protection, the prevention of the harassment of citizens, and due considerations for labor and prisoners as well". The Arthashastra defines the vulnerable segments of the population to include "minors, the aged, the sick, the disabled, the mentally challenged, Brahmins and ascetics". The vulnerable "are to enjoy priority of audience before the king, maintenance at state expense, free travel on ferries and given special consideration by judges". That the 'third gender'/homosexuals should be maintained by their families as they lack children and therefore do not inherit property is specifically mentioned. It forbids the vilification of the 'third gender'. Those who fall outside the vulnerable segments do not get special attention from the State. Kautilya defines the ideal ruler as one "who is ever active in promoting the welfare of the people, and who endears himself by enriching the public and doing good to them". Note the precedence given to the phrase, 'the increase in economic activity' which is suggestive of economic growth being the key enabling factor for the promotion of the well-being of the people. Also note the criteria that made people eligible for the benefits from the State. The modern view on welfare approximates the Arthashastra's view, reflecting the timelessness of the concept of welfare. (L.N. Rangarajan, "Kautilya: The Arthashastra: Edited, Rearranged, Translated and Introduced"; Delhi: Penguin Publication, 1992).
Economists use the phrase Welfare State to mean the provision by the Government of a politically decided basket of unrelated goods, services and cash transfers. Often welfare services provided by Government in whatever forms are elegantly referred to as 'benefits'. Technically, they are 'subsidies' financed by 'taxation', direct and indirect. Instead of the dreaded word 'taxation', an often preferred use of language is 'contributions'. 'Contributions' as opposed to 'taxes' are made voluntarily. Involuntary contributions (e.g mandated Corporate Social Responsibility contributions) are de facto taxes. The Government, because it has the power of compulsion, appropriates part of the income earned by individuals to spend on their 'welfare'. Individuals' responsibilities, in quite some respects, are thus shifted on to the State. It is thus implied that Government - Dad and Mum, all in one -spends people's earned income more efficiently than they would on themselves. For instance, Government would spend people's money on their children's education more efficiently (without the children having recourse to the private tuition industry), their grown up children would not escape classes for fear of missing invaluable OECD's PISA-tested quality education (as opposed to a kind of education whose standard is systematically lowered to improve percentage of passes)  and college boys and girls wouldn't be found loitering and tangled up in public beaches, secluded places and food courts during school hours; the Government would spend people's money on their health care more efficiently (without the need for spending hefty sums of money for medical care in private clinics and for depending on bureaucrats or politicians to obtain what Ayn Rand calls the 'aristocracy of pulls” for urgent treatments); the Government would spend people's money on their children's transportation to school and back home comfortably, safely and efficiently. The public transport system would not make senior citizens feel like rejects or excess baggage at bus stops, subsidized food items meant for human consumption are not wasted and the subsidies do not feed and swell the profits of bakers and supermarkets more than they help the living poor with bread, pastries and cakes, etc.
Essentially, the Welfare State constitutes a set of Government interventions to correct for market imperfections. The set of interventions has two basic intermediate objectives: one is to redistribute income in favour of the poor and the otherwise less privileged and, the other which is a corollary of the first, is to alleviate poverty.  The ultimate objective is to lift the weaker members of the society from deprivation and eventually to make them self-reliant, that is, independent of assistance from the State. In other words, the Welfare State is an “enabler' - an 'enabling' mechanism that helps people grow out of poverty and free them from a state of permanent dependency on the State. Welfare services are not meant to be 'free lunches' in perpetuity that corrupt the minds of the recipients. The tragedy is that most politicians the world over have tended to portray the provision of welfare services as an act of compassion and generosity financed out of their own bank balances to gain political mileage. In 1970 I had listened to Henry Kissinger making a very telling statement: “Control oil and you control nations; control food and you control the people.” Aren't Welfare state interventions, often decided arbitrarily and maintained indefinitely, used for similar purposes?