The Collectivist Theory and Definition

The Collectivist Position, Collectivist Theory and Definition

The common characteristic of the previous positions has been the emphasis on public financing as distinct from public provision of welfare services. Redistribution is regarded as a means by which poorer persons are enabled, as far as possible, to help themselves. In the last analysis, if there were no poverty, then the 'welfare state' would disappear. Hence my previous prescription that 'the proper function of the welfare state ... is to teach people how to do without it', and the associated conditional projection that, if it were so desired, in the long run the welfare state could wither away.17 This position, however, is not acceptable to a wide range of influential writers on welfare state problems, though few economists appear to occupy their ranks.

The modern debate out of which the general differences between individu­alistic and collectivist positions emerge has centred in medical care. Let us assume that A fulfils his obligations to government under a libertarian regime and insures against illness, as he is required to do, whereas B evades his obligations. If they both fall ill with a similar complaint, A receives better treatment than B because the insurance company will pay up. This is unjust, it is claimed, because such an important service as medical care should be allocated according to people's needs and not according to their means. The fact that B chose to evade his obligations does not alter the situation. The general point being made is that equal access to consumption of 'priority' goods such as medical care fosters the ideal of fraternity and emphasizes interests held in common rather than the diversity of interests and viewpoints which libertarians believe to be the important characteristic of individuals in society. Diversity of interests, so it is held, particularly if matched by income inequality, make for a divided society. This idealist point of view is associated in recent times, of course, with Richard Titmuss. In his view, there was at least a minimum of priority goods and services which must be enjoyed in common, such as health and education. Ryan puts it thus:

the market can be left to give beer to beer drinkers and champagne to champagne drinkers but not to give blood to those who need transfusions. Both sorts of appeal rely on the belief that there are morally valuable side effects from communality of consumption; the Spartans thought they got extra loyalty and comradeship, Green ... and Titmuss... thought they got extra altruism on the one side, and gratitude and a sense of belonging on the other.

Even a brief resume of the 'communality of consumption' position makes it clear that concentration on the concept of a 'poverty line' is misplaced. However, our previous distinction between social security provision in the narrow sense and social services may still be useful. In the collectivist position, the emphasis shifts from 'entitlement' to some minimum standard of living to the fact of inequality of income distribution. Recalling the utilitarian argument, if in one situation every income receiver was at the margin of subsistence and then the situation changed and half of the income receivers increased their incomes twofold and the rest remained at the margin of subsistence, this would represent an improvement in welfare, though it would almost certainly not represent an optimal position to utilitarians. However, the fact that inequality had increased might warn the collectivist that a divisive element had been introduced into society. In short, instead of meeting a poverty standard subject to minimizing income redistribution, it must be shown why any income equality is necessary in the first place - something like the position taken by Rawls. However, this only takes us to the position of requiring positive income redistribution from rich to poor which, other things being equal, need only mean a redistribution of purchasing power as between individual citizens who would then be responsible for their own welfare. An essential element in the collectivist position is that the redistribution must take a form which furthers the aim of equal access to 'priority' goods such as health, housing and education. While redistribution must be reflected to some extent in government transfers, the main impact on the national accounts will appear in an increase, not in individual disposable income, but in a rise in expenditure on consumption goods and services by government.

It follows that the issue of universality versus selectivity of benefits is hardly an issue to collectivists, at least in its traditional context. The categorizing of the different causes of poverty may seem necessary, if only to determine the differing 'needs' in each condition, with benefit payments fixed by reference to these needs for each category as perceived by, say, social administrators. At the same time, a 'Social Dividend' payable in cash may be thought too insensitive an instrument to take account of the differing needs of the ill-off, and one which in any case could be overshadowed by payments in kind, which must now be considered in more detail.

Sufficient has been said so far to explain why collectivists would favour benefits in kind, but it is worth considering further the philosophical basis of this change of emphasis away from the simple provision of cash to the ill-off. First of all, the question of the form of redistribution must be discussed before its provision and extent are considered. The libertarian and, to some extent, the SME positions emphasize the important 'negative freedom' valued by individuals in the sense of freedom from outside interference in their exploitation of their preferences. It has been argued, however, that 'social justice' involves a 'natural right' to certain commodities such as food, shelter and medical care. It is interesting that this argument has been deployed by Dasgupta20 as consonant with the pursuit of the idea of freedom - not simply freedom from want but a right which would guarantee individuals' access to particular forms of consumption. A familiar argument is the paternalist one - the ability of individuals to make choices that will 'better their condition', as Adam Smith might have put it, diminishes with the degree of poverty. Even if choice is constrained by a voucher system, the ill-off may have neither the courage nor the skill to make the right choices among competing suppliers. There is a touch of this in Dasgupta's argument, but its main thrust is that the variability in needs is difficult to ascertain by the government and that if it polls individuals on what their needs are, it faces the prospect of non-truthful disclosure. The best that the government can do is to assume that individuals have equal needs. Then he adds his bull point. If incomes are more-or-less equally distributed, the deviation from the mean 'demand' for such needs would be negligible and a voucher system would achieve the aim of 'positive freedom'. If incomes are unequally distributed, then the rich would top up their vouchers and receive more than their 'natural rights'; only a state rationing system would achieve the desired aim of equal access.

The term 'equal needs' is clearly ambiguous, but what Dasgupta is concerned to emphasise is that for certain social services the collectivist is not demanding minimum but uniform standards of provision. This view is fully consonant with Titmuss's precept that there should be communality of consumption, for the most efficient way for the state to provide uniform standards of provision is to set aside the price mechanism and itself to provide the services in kind.

It follows from this argument that, whereas social security transfers would still remain an integral part of the welfare state, tax allowances would be frowned upon. Encouraging individuals to 'contract out' of state provision of health and education services by offering them tax relief on payments made to private suppliers would undermine the moral foundations of the welfare state. Not only would such individuals be denying that they had something in common with others, but they might prefer to be 'more equal than others' by purchasing more of these services than would otherwise be available to them through state provision. The real test of the pure collectivist argument, however, is whether it entails prohibition of any private provision of such services, whatever the tax regime. The logic of the Dasgupta position suggests that the answer is 'yes', in which case another look has to be directed at the definition of freedom. Are people to be prevented from travelling abroad in order to seek some preferred private provision of health and education services?

With the collectivist position, we move even further away from the 'insurance' principle in which there is some close relation between benefits and contributions. In the case of state-provided social services at zero cost, there is clearly no need for any form of earmarked taxation. The amount and composition of expenditure must be decided on 'scientific' lines without reference to any form of hypothecated revenue. So far as transfers, such as pensions, are concerned, collectivists might support the idea of the payment of a minimum contribution as a kind of 'badge of citizenship'. However, why have so many collectivists supported an entirely state-run pension scheme with benefits related to final salary or wage when this would provide a different standard of pension provision according to income?

Various explanations are possible, but none of them can be derived from the logic of 'communality' in social provisions, which would appear to support only uniform pensions for all. I hazard the view that collectivists are not generally in favour of draconian methods for creating income equality and consequently would have to be prepared to accept that diversity of preferences and incomes would produce diversity in the pattern of saving for the future, for example through private pension schemes. The damage that this creates for 'communality of purpose' in the welfare state can be limited by making it compulsory for individuals to join a state pension scheme with earnings-related benefits. A variant of this explanation would add the cynical observation that such a scheme would offer the opportunity for the state to build up reserves which could be used as a powerful control by the government over the capital market21 - what Hugh Dalton once called 'a gun to shoot bears'.
One major institutional difference between the collectivist position and the others is clearly the large proportion of the production of services which is under the direct control and operation of the public sector. Teachers, doctors, dentists and nurses, construction workers (in the case of publicly produced housing) and housing administrators are no longer subject to the pressure of the market. The challenge that this affords to the practical implementation of their ideals is clearly formidable. Writers such as Titmuss expected that the professional classes, not subject to the pressures of the market, would be better infused with the spirit of 'communality' and better able to devote themselves single-mindedly to public service. For those who are aware of the economic analysis of non-profit-making institutions and their propensity to be designed to maximize the interests of the producers but which nevertheless support public provision of social services, the challenge consists in devising substitutes for market forces in order to promote efficiency, such as controls over performance.