Public welfare: concept, definition, main functions and economic efficiency

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

When the planned economy was replaced by a market economy, the level and quality of public welfare fell sharply. Numerous and varied factors contributed to this process: enterprises were closed with a massive disappearance of jobs, monetary reforms were carried out several times, including devaluation, absolutely predatory privatization was carried out, plus people lost all their savings at least three times due to the financial policy of the state.

How it was explained to the people

All the most popular media spoke and speak with one voice (exceptions are now so rare and mean so little that one can hardly take their warnings seriously): In the context of the transition to market regulation of the economy, all economic activity of the state was directed to achieve the onlygoals - to raise the bar of social welfare, and this process has not only begun, but at the moment it is possible to sum up some results. The population already now, in thirty years, in principle, can fully satisfy all its basic needs, which are constantly growing quantitatively and changing qualitatively for the better.

Almost never taken into account is such a relationship as the needs of an individual and society as a whole. The country has achieved public welfare, it seems, only in reports. None of the reforms that have been accomplished have benefited the bulk of the population. We can talk for a long time about the exorbitant demands of housing and communal services, about the collapse of medicine and the fall in the level of education.

Pension reform is a huge blow to absolutely all segments of the population, except, of course, the notorious "two percent" who are doing well. The media are also trying to present this as necessary steps towards raising public welfare. However, now it is hardly possible to deceive anyone with this.

On social security

The policy of "public welfare" defined its functions long ago and is not going to change them. What is presented as an improved quality of life is not at all. So the Soviet man had the right to housing, guaranteed by the Constitution. Now much more housing has been built than was built in the USSR. We will keep silent about its quality for now.

However, those who dared to move to brand new multi-storey "human settlements" ended up in suchfinancial bondage, which will be felt not only by their children, but also by their grandchildren. Exhausting mortgages, extortionate interest on bank loans - these are the functions of today's housing policy. Public welfare in this area has not been achieved. However, there is no such area that would be, from this point of view, prosperous.

A bit of science

The standard of living (and this is the level of social welfare) is the degree to which people are provided with goods - spiritual and material, as well as the necessary living conditions for a safe and comfortable existence. It is necessary to evaluate the standard of living qualitatively and quantitatively, and not only these or other benefits of the spiritual and material order are determined.

A reference is always made to the existing level of development of social needs, which depend on a given socio-culture and specific historical conditions. In this way, it is easy to underestimate or overestimate the bar that public welfare has reached, and the effectiveness of the state information policy will pay off many times over.

People and numbers

It is impossible to determine the standard of living without indicating the volume of GDP production, as well as national income, which are calculated per capita. Social welfare in the economy is calculated in this way. But per capita ND and GDP are only calculated, in fact, both goods and we alth go back to the notorious "two percent" of the population, which controls the property that should belong to the people. Including subsoil and all usefulfossils in them.

People would process raw materials themselves. It is unprofitable for businessmen who own the public domain. Therefore, the growth of social welfare is observed only in dictated figures, and the national economy does not rise from its knees, and the country's position in the world market is becoming more and more difficult day by day.

About theorists

American scientist A. Maslow drew a well-known pyramid of needs, where you can trace the consumer hierarchy. He is one of the brightest public welfare theorists, and the effectiveness of his work, adopted by some countries, is visible firsthand.

For any person, initially there are no conditions for the development of needs, they just need to be created, that's when everyone can develop, using all the possibilities to meet the needs. Moreover, the scientist advises to start with the most necessary, that is, primitive (according to Maslow), since if the lower and higher needs are not realized, it will not be possible to satisfy.

Theories of public welfare continued to build F. Herzberg. His two-factor model, which demonstrates needs, is also widely known outside the academic community. It relies on factors such as motivation and support.

Further on, the third level was added to this model by the scientist K. Alderfer. Here already the work of the model passes through the stages of existence, relationships and growth. In fact, classify literally all human needsunusually difficult, too many derivatives. According to the Swiss scientist K. Levin, these are quasi-needs.

Social policy of the state

However, the welfare state was never created. One could cite Sweden as an example with its democratic socialism and detailed redistribution of benefits, but there are also a lot of problems there, and the initial conditions for its growth were fundamentally different from those in which other countries were.

Since 1914, Sweden has been neutral, and therefore neither the First nor the Second World War touched it. The rise of the Swedish economy began on the post-war ruins of the rest of Europe, where it was possible to trade very successfully with the presence and integrity of the Swedish people and industries. Not only Sweden, but none of the more or less developed countries can be compared in terms of social welfare with Russia. There is no realization of needs here - even basic ones.

Income Distribution Scholars

The loss of public welfare is most often associated with issues of equity in the distribution of income. Recall the recent increase in VAT, which will kill the entire processing industry in the bud, and also ask why both those who receive the minimum wage of 7,000 rubles and our multimillionaires from the notorious "two percent" pay the same fee - 13% of income tax. Such problems were thoroughly studied even under A. Smith, who stood up not for justice, but for the efficiency of the economy, which would bring prosperity. "Our everything" A. Pushkin read his theories, but did not free the peasants.

J. Bentham spoke about the criteria of social welfare, which consisted in the ideas of equal distribution of goods, and for a long time this point of view dominated. At the beginning of the twentieth century, the specificity of this theory began to gradually increase. For example, V. Pareto spoke about the optimal level as follows: one cannot harm the well-being of another individual by improving one's own. Bentham explained the utilitarian function of social welfare as follows: the process of production of services and goods, their distribution and exchange should not worsen the welfare of any of the subjects of the economy. That is, the enrichment of some at the expense of the impoverishment of others is unacceptable. One hundred years have passed since the proclamation of this dogma, which our contemporaries now accuse of being limited and overgeneralized.

For example, Italian economist E. Barone considered injustice in the distribution of we alth effective, because despite the fact that some people benefit, while others suffer, the increase in social status as a whole will take place. And if the winner also shares (compensates for the damage to the loser), literally everyone will win. And this formula has now become one of the most powerful points of support for the state system. But not in Russia. Economic inequality that arises in the production process, the society should level out, redistributing material goods and services, without losing the stimulating effect of such social protection: without demotivating labor and abandoning effortsfor the sake of improving their own well-being.

GDP indicators in the USSR and RF

The USSR ranked second in the world in terms of GDP production, and confidently held first place in some types of production. The baton was taken over by the Russian Federation. And back in 1992, it did not go far from the "Big Seven", having a GDP production indicator worthy of the eighth place in the world, remaining among the developed countries. There are standards in the UN that define such a division. If per capita GDP is less than five thousand dollars, the country rolls back into the category of developing countries.

Currently, Russia is losing in all indicators, in most cases the indicators are two and even two and a half times lower. However, no one in our country calls it developing. Yes, huge economic potential. But it is by no means implemented. Some media outlets even say that Russia has emerged from a state of crisis, while others claim that the process of exit is swift. However, the public welfare is getting worse and worse.

The economy of the USSR cannot be compared with the current state of the country in any indicator. It's better to keep comparing Russia and the US. For example, the generally accepted indicator of social welfare is the ratio of the production of material goods and the service sector. The higher the volume of the services sector rises in terms of GDP, the higher the well-being is assessed. In the 1990s, the service sector in Russia occupied 16% of the population, in the United States - 42%. In 2017, in Russia - 22%, and in the USA - 51%. The proportions will be the same if you countspecifically, hospital beds per thousand people of the population or the number of doctors per ten thousand. This is where we always lose.

International indicators

The standard of living of the country's inhabitants is determined by even more significant and specific international indicators:

1. For main products: consumption per capita, and then the same again - per family.

2. The structure of consumption is considered: the quantitative ratio of consumed milk, meat, bread, butter, vegetable fats, potatoes, fish, fruits, vegetables and the like. This is how the quality of consumption is determined, and this is a fundamental indicator of the welfare of society. For example, one hundred kilograms of meat per person per year and the same hundred, but in the proportion "half - meat, the other half - sausages." The second option is much higher in terms of quality of consumption.

3. The welfare reference point accepted in all countries is the consumer basket. This is a whole set of services and material goods, thanks to which one or another level of consumption is ensured (in a given country and at a given historical moment). For example, the consumer basket of a resident of Russia contains only 25 items, and a resident of the United States - significantly more than 50 items. It is even more important how much this entire set costs, since the whole structure of consumption, favorable for natural and climatic conditions, must be provided. Our 25 products in the consumer basket never met these requirements, they do not and now they are even worse than before. It is all the more terrifying that even a meagerthe cost of the consumer basket is beyond the reach of more than 60% of the Russian population.

4. The subsistence minimum (in other words, the minimum level of consumption) is an indicator that determines the poverty line. When passing beyond the specified level, a person is no longer poor - he is a beggar. He would need state assistance, but the levers of social policy are slipping, and therefore more than a third of the country's population is on the threshold of physical survival purely biologically. From a socio-economic point of view, even the reproduction of the country's population is under threat. Which is basically what we are seeing today. Here one can justify oneself by the success of the migration policy, which does not allow one to see this "hole" between population growth and decline in figures. But not necessary. The "hole" is in place, has not gone away.

State and society

There should be a consensus between the state and society about the necessary material support for the most needy citizens of the country. We need to create new and better regulate existing systems of in-kind and cash benefits in order to slightly raise the well-being of vulnerable groups such as the unemployed, the disabled, families with children, orphans and the like.

But the state looks at this problem quite differently. They give examples of situations where financial assistance undermines the usefulness of the income of a subsidized citizen, especially if he is able to work, but not employed (recall the unemployment that appeared due to permanently closed enterprises). It is believed that, receiving benefits, a citizen will no longer want to work.

Then the social product goes down, followed by the well-being of the society. But if he is not paid at all, he will either fit into the market - as an auxiliary worker or a courier for the minimum wage, so as not to die of hunger, or still die of hunger. No person - no problem. Migration policy, again, is working successfully. And the market mechanism is not so perfect, and, in principle, it does not care about the well-being of all participants without exception.

Moreover, the state tends to reproach even families with many children that the mother of numerous children lives only on child benefits. And this is as much as 3142 rubles and 33 kopecks for one child under one and a half years old and 6284 rubles and 65 kopecks if there are two of them. Truly, a mother will not deny herself anything and will not want to go to work, even if she can. The state can make such claims to its citizens only when unemployment is eliminated. And in the present state of affairs, it is necessary to think over options for stimulating and start saving our own people.