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Home , Social policy

The Role of Redistribution in Social

by RICHARD M. TITMUSS*

IN THE literature of the West, concepts and and social, and predominantly dependent needs, models of social policy are as diverse as con- which the market does not or cannot satisfy for temporary concepts of . Historically, the certain designated se&ions of the population. t,wo have indeed had much in common. They Typic.ally, these direct services are functionally certainly share diversity. There are today those organ&d in sepa.rat.e and spec.ialised ministries, at, one end of the who see departments or divisions of , central social policy as a tra.nsitory minimum activity of and local. They are seen as the “social policy minimum government for a minimum number department.” What they do is t,hought to be of poor people; as a form of social control for explicitly redistribut,ive ; they politically interfere minority groups in a “natural” ; as a may with the pat.tern of claims set by the market,. of resolving the conflict. between the religious They assign claims from one set of people who ethic of compassion and undiluted . are said to produce or earn the national product In this view social policy is not good business. to another set of people who may merit com- Statistical estimates of t.he national income per passion and charity but not economic rewards for capita look healthier if the infant mortalit,y rate productive service. In short, they are seen as un- rises. At the other end of the political spectrum covenanted benefits for the poorer sections of there are writers like Macbeat,h who has com- the community. And because these separate prehensively stated that “Social are con- functional units of social service are accountable cerned with the right. ordering of the network to the public their activities are, in large measure, of relationships between men and women who quantifiable. We can thus measure the size of the live together in , or wit.h the principles presumed burden (as it is conventionally called) which should govern the act,ivities of individuals on the economy. and groups so far as they affect t)he lives and This, I propose to argue, is a very limited and interests of other people.“’ inadequate model of the working of social policy Some.where bet.ween these extreme visionary in the second half of the twentieth century. In notions lives a convent,ionai, text.book, definition its distance from the realities of today it is about of social policy. 2 The or social as helpful (or unhelpful) as some recent models , the labels we have for long attached to of economic man maximising his acquisitive describe certain areas of public intervention such drives. Latter, I attempt to support and illustrate as income maintenance and public health, are seen this statement by examining some of the lessons :AS the main ingredients of social policy. They are of experience of nearly 20 years of so-called obvious, direct and measurable acts of govern- “Welfare ” in Britain. First., however, I ment, undertaken for a variety of political want to briefly consider one or two of the factors reasons, to provide for a range of needs, material whic.11 have contributed to this limited concept of social policy-particularly in re.lation to its * Professor, I,ondon School of Economies. Paper given role as a redist.ributive agent,. before the staff of the Social Security Administration in Perhaps the most important eausative factor in December 1964. Britain has to do with the heritage of the poor 1 A. Macbeath, Gun Social Policies be Rationally Tested? Oxford University Press, London, 1957. law (or public assistance). Less than 60 years ago L’For some discussion of the problems of definition see social policy was, in the eyes of the middle and H. L. Wilensky and C. K. I&beaux, Indu.striaZ Societg/ upper classes, poor law policy. This model of and SocQl Welfare, Russell Sage Foundation, New York, 1958 ; SociuE Welfare Statistics of the Northern Countries, “welfare use” was part of a political philosophy Report No. 9, Stockholm, lQ64; Gunnar l\lgrdal, Beyond which saw society as an adjunct of the mnrket.3 the , Pale University Press, 1960; and Richard M. Titmuss, Essuys on the “WeZfare State.” 3 See, for example, A. V. Dicey, Law arad Opinkm in Allen and Unwin, Ltd., 1958. England During the Nineteenth Century, London, 1905.

14 SOCIAL SECURITY As Karl Polanyi puts it, “Instead of economy The history of the poor law and public assist- being embedded in social relations, social relations ance is thus still important to an understanding are embedded in the economic system.“* The es- of social policy concepts today. If one disregards sential, though financially reluctant, role of the the social costs of industrialism, of allowing a poor law was to support industrialism and the large part of the disservices of technological attempt in t.he nineteent.11 century to establish a progress to lie where they fall, then the system completely competit,ive, self-regulating market (of public assistance) was clearly redistributive. economy founded on the motive of individual It directly benefited the explicit poor. Those in gain. It thus had to create a great many rules of the greatest need did receive some benefit. But expected behaviour ; about work and non-work, with the limited instruments of policy and ad- property, savings, family relationships, cohabita- ministrative techniques to hand in the past, the tion, men-in-the-house, and so forth.” Poverty, system could only function by operating punitive as Disraeli once said, was declared a by tests of discrimination; by strengthening con- industrialism. Laws about poverty became as- ceptions of approved and disapproved depend- sociated with laws about crime. encies ; and by a damaging assault on the recipients of welfare in terms of their sense of This system, which legally survived in Britain self-respect and self-determination. Within the until 1948, inevitably involved personal discrimi- established pattern of commonly held values, the nation. The stigmata of the poor law test, moral system could only be redistributive by being judgments by people about other people and their discriminatory and socially divisive. behaviour, were a condition of redistribution. The requirements of poor law and public assistance All this is now well documented in the archives administration were, we can now see, remarkably of social inquiry and is somewhat ancient history. attuned to the characteristics of bureaucracy Equally well-known is the story of society’s drawn by Weber and others.6 It was theoretically response to the challenge of poverty during the a neat and orderly world of eligible and ineligible past 30 years or so : the discovery that this system citizens; of approved and disapproved patterns of public aid was administratively grossly ineffi- of dependency ; of those who could manage cient; the discovery that it could not by its very change and those who could not. From its opera- nature absorb the new dimensions of social and Con for over a century Britain inherited in 1948 psychological knowledge and that, therefore, it a whole set of administrative attitudes, values could not function effectively both as a redistribu- and rites; essent,ially middle-class in structure; tive agent and as an agent to prevent social and moralistic in application. The new social breakdown ; and the discovery that the system service bottles of 1948 had poured into them was fundamentally inconsistent with the need much of t,he old wine of discrimination and to grant to all citizens, irrespective of race, prejudice. It has t,aken nearly two decades of religion or color, full and equal social rights.* sustained programmes of new recruitment, train- Gradually in Britain, as we tried to learn ing, retraining and intraining, and t,he appoint- t,hese lessons, we began to discard the use of ment of social workers to t,he public services, to discriminatory and overtly redistributive services eradicate part of this legacy of administrative for second-class citizens. The social services on behaviour.7 minimum standards for all citizens crept apolo- getically into existence. In common with other 4 Karl Polanyi, Origins of Our Time, Beacon Paper- countries we invented contributory national in- backs (No. 45)) London, 1945, page 63. surance or social security and provided benefits as 5 Reports of the Royal Commiesion on the Poor Laws, of right. The a&uary was called in to replace His Majesty’s Stationery Office, London, 1909. 6 H. H. Gerth and C. W. Mills, From : the functions of the public assistance relieving Essays in , Oxford University Press, New York, officer. Free secondary education for all children, 1946. irrespective of the means of their parents, was 7 See, for example, Annual Reports of the National dssistancc Board, 195~63, Her Majesty’s Stationery Office, London, and Seventh and Eighth Reports on the 8 Illustrated in the recommendations of the Beveridge Work of the Children’s Department, Home 05ce, Her Report (Social and Allied Servioes, Cmd. No. Xajesty’s Stationery Office, London, 1955 and 1961. 6404), His Majesty’s Stationery 05ce, London, 1942.

BULLETIN, JUNE 1965 enacted in 1944 as part of a comprehensive educa- medical care, housing and other direct services. tional system. authorities were What have we learnt in the past 15 years about called upon in 1945 to build houses for people the actual functioning of these services? What and not just for working-class people. A limited has universalism in social welfare achieved? and second-class health insurance scheme foi Clearly, I cannot, give you a full account of all working-men was transformed, in 1948, into a aspects of t,his development during a period comprehensive and free-on-demand health service when, for 13 of these years, the Government in for the whole population.” power was not, in the early stages at least, All t.hese and many other changes in the direct cutirely committed to the concept of the “Welfare State.” I shall therefore concentrate my con- and publicly accountable instruments of social clusions, brief and inadequate though they are, policy led to the notion that, in t’he year 1948, on the theme of redist,ribution. the “Welfare State” had been established in Britain. While there was general political con- Up to this point I have dealt only with what I sensus on this matter there was, on the other sometimes call the “Iceberg Phenomena of Social hand, much confusion and debate about cause and Welfare.” That is, the direct public provision of efFect.1° There were many, for instance, who services in kind (e.g. education and medical care) thought that these policy changes were brought and the direct payment of benefits in cash (e.g. about for deliberately redistributive reasons and retirement and family allowances). that the effects would be significantly egalitarian. I now turn to consider two other major cate- This, perhaps, was understandable. Direct wel- gories of social policy which have been develop- fare in the past had in fact been redistributive ing and extending their roles in Britain and (considered apart from. the effects of the fiscal other countries over much the same period of system). Therefore it was natural to assume that time as the category we call “the social services.” more welfare in the future would mean more re- Elsewhere, I have described the former as “Fiscal distribution in favour of the .poor. There were Welfare” and “Occupational Welfare.“” These others however (among whom I count myself) are the indirect or submerged parts of the “Ice- who believed t,hat the fundamental and dominat- berg of Social Policy.” In both categories a re- ing historical processes which led to these major markable expansion has taken place in Britain changes in social policy were connected with the during the past 20 years. demand for one society; for non-discriminatory Ml three categories of social policy have a services for all without distinction of class, great deal in common in terms of redistribut,ion. income or race ; for services and relations which They are all concerned with changing the indi- would deepen and enlarge self-respect; for serv- vidual and family pattern of current and future ices which would manifestly encourage social claims on resources set, by the market, set by the integration. From some perspectives these major possession of accumulated past rights, and set changes in policy could be regarded as ideological by the allocations made by government to provide pleas to the middle- and upper-income classes to for national defence and other non-market share in the benefits (as well as the costs) of sectors. Social welfare changes the pattern of public welfare. claims by, for instance, directly providing in Built into the public model of social policy kind education or mental hospital care either free in Britain since 1948 there are two major roles or at less than the market cost. Fiscal welfare or objectives : the redistributive objective and changes the pattern of claims by taking less in the non-discriminatory object’ive. To move to- tax (and thus increasing net disposable income) wards the latter it was believed that a prerequisite when a ’s child is born, when its educa- was the legal enactment of universal (or compre- tion is prolonged, when men have ex-wives to hensive) systems of national insurance, educat,ion, maintain, when reach a specified age, and SO on. An individual’s pattern of claims on resources is today greatly varied through fiscal 9 M. I’. Hall, The Social Semites of Modern England, Routledge, London, 1952. lo Richard RI. Titmuss, Income Distribution awl Social I1 Richard 31. Titmuw, Essays on the “Welfare State,” (‘hairgc, chapter 9, Allen and l!nwin, Ltd., London, 1962. Allen and Unwin, Ltd., London, second edition, 1963.

16 SOCIAL SRCURITY welfare policy by his or her change in cir- The populations to which these three categories cumstances, family responsibilities, and op- of welfare relate differ, but a substantial section portunities available (and taken) for prolonged of people may be eligible for benefits in respect education, home ownership and so on. In Britain, of all three. In Britain, most of the social welfare t,he and other countries the tax services (except national assistance and university system has recently been regarded as an alterna- education) are universalist, and citizen-based ; tive in certain areas to the social security system ; t,hey are open to all without a test of means. Thus, as a policy instrument to be used to provide access to them does not depend upon achieved or higher incomes for the aged, for large families, inherited.; status. Fiscal welfare relates to a for the blind and other handicapped groups, and smaller population ; only to those who pay direct for meeting part of the costs of education which taxes and not those who pay property taxes and today may last for up to 20 years or more.12 social security contributions. Occupational wel- Occupational welfare, provided by virtue of fare relates to the employed population and, at status, achievement and record, may present,, predominantly favours white-collar and t,ake the form of social security provisions in cash middle-class occupations. Benefits are thus related or in kind. Such provisions are legally approved to achievement. by government and, as in the case of fiscal wel- All three categories of welfare are, as we have fare, t,hey may be seen as alternatives to extensions seen, redistributive ; they change the pattern of in social welfare. Their cost falls in large meas- claims on current and future resources. They func- ure on t.he whole population. It is thus, like social tion redistributively as separate, self-contained welfare and fiscal welfare, a major redistributive systems and they do so also in relation to the mechanism. whole economy. Here is one example. Many In Britain, occupational welfare may include: private schemes, which include manual pensions for employees; survivors benefits; child and non-manual workers, tend to redistribute allovvances; death benefits; health and welfare claims on resources from lower-paid to higher- services ; severance pay and compensat,ion for loss paid employees. This happens because the lower- of office (analogous these days to compensation paid workers change jobs more frequently; in for loss of property rights) ; personal expenses doing so t,hey do not have credited to them the for travel, entertainment and dress; meal full amount of pension contributions or pre- vouchers ; cars and season tickets; residential miums. It is estimated in Britain that the cost accommodation ; holiday expenses ; children’s of full preservation of pension rights for all school fees at private schools; sickness benefits; employees in the private sector (an objective in medical expenses; education and training grants the present Government’s proposals for the and benefits ranging from “obvious forms of reform of social security) could add 15 to 25 per- realizable goods to the most intangible forms of cent to the actuarial costs of private schemes.l* amenityY’13 expressed in a form that is neither Moreover, as at present organ&d, the cost to the money nor convertible into money. Treasury (t,he whole community) of private A substantial part of t,hese occupational welfare pension schemes substantially exceeds the Treas- benefits can be interpreted-again like fiscal wel- ury contribution to social security pensions for fare-as social policy recognition of depend- the whole population. The pensions of the rich encies ; t,he long dependencies of old age, child- are more heavily subsidised by the community hood and widowhood, and such short-term than the pensions of the poor.15 dependencies as sickness and hhe loss of job This in part happens because occupational wel- rights. fare and fiscal welfare benefits are fundamentally based on the principles of achievement, status and 12Reports of the Royal Commiesion on the Taxation of Profits and Income, 1952-55, Her Majesty’s Stationery Office, London, 1955. 14 See references in Richard M. Titmuss, Income Dis- 13Final Report of the Royal Commission on Taxation, tribution and Social Change, chapter 7, and BritGh Tax Cmd. 9474, Her Majesty’s Stationery Office, London, 1955, Review, Jan.-Feb. 1964. page 68. See also A. Rubner, Fringe Benefits, Putnam, 15Richard M. Titmuss, The Irresponsible Society, London, 1962. Fabian Tract No. 323, London, 1959.

BULLETIN, JUNE 1965 17 need. If there is need, then the higher the income doctoral theses. By contrast, the latter has been the higher is the welfare benefit. By contrast, virtually ignored. social welfare benefits generally take account only One further example of double standards op- of needs--the need for medical care, for educa- erating in different categories of welfare may be tion and so on irrespective of income or status. selected from a large field-this one to illustrate I have now described in very general terms the role of moral values in social policy. three categories of social policy redistribution- In the category of social welfare, cash aid with particular reference to their operation in from public funds for unsupported mothers, and B&a&. At present, they are publicly viewed as their children may be stopped if it is believed virtu&y distinct systems. What goes on within that cohabitation is taking place. This is an event and as a result of one system is ignored by t.he --or a relationshipthat can rarely be legally others. They are appraised, criticised or ap- proved. It is hardly a scient,ific fact. We have in plauded as abstracted, independent, entities. Britain a cohabitation ;le you have a Historically, they have developed different con- man-in-the-house regulation.20 They amount to cepts of poverty or subsistence ; different criteria the same thing; they cannot be spelt out in precise for determining approved dependencies; different operational terms. Their application in practice standards of moral values in determining eligi- depends in large measure, therefore, on hearsay bility for welfare. Some examples will illustrate and moral judgement. this point. The same problem of to give or not to give aid The social policy definit,ion of subsistence as arises in the category of fiscal welfare. As an developed in the fiscal system for determining example I quote from a memorandum by Lord exemption from taxation, income needs in old Hodson to a Royal Commission on Mar- age, and so on, differs markedly from the defini- riage and Divorce: “A superktax payer may, and tion used in public assistance.lG In some areas quite frequently nowadays does, have a number of policy the fiscal definition of poverty is em- of wives living at the same time since after ployed-as, for instance, in determining grants divorce his ex-wives are not treated as one with to university students.‘? ln other and similar him for tax purposes he can manage quite nicely areas of policy the public assistance definition is since he is permitted” (a social policy decision) employed-as, for instance, in determining aid for “to deduct all his wives’ maintenance allowances poor parents of 16-year old children at school.1s from his gross income for tax purposes leaving It is odd, when you come to think of it, that his net income comparatively slightly affected.“21 dependency at age 16 is assessed at a lower stand- In both instances redistribution takes place; ard of assistance than dependency at 18 or even the community renders aid in these situations of 23 (in the case of medical students and need and dependency. But while the decision to graduates). help the public assistance mother may involve We have in fact two standards of poverty for judgements about moral behaviour, in the case of determining aid from the community ; both highly the taxpayer the decision is automatic and imper- subjective and unscientific ; both employed to sonal. The logic of the double standard is not assist dependent states; a working-class standard apparent. If one is socially acceptable and ap- and a middle-class standard. The former has been proved behaviour then why not the other? investigated, studied, measured and argued about Now I must begin to draw these reflections to- for long by sociologists, social workers and econo- gether. What have been the lessons of experience mists, and made the subject of many books and 19National Insurance Act, 1946, section 17 (2) and 16Reports of the Royal Gommiaaion on the Taxation Digest of Commissioner’8 Deciaione, Her Majesty’s Sta- of Profit8 and Income, 1952-55, Her Majesty’s Stationery tionery Offlce, London, 1946-64. Oilice, London, 1955. 20 See Report of the Public Welfare Crisis Committee, 17 Ministry of Education, Grants to Student& Cmd. Metropolitan Washington Chapter of the National Asso- No. 1051, Her Majesty’s Stationery Ofice, London, 1980. ciation of Social Workers, Washington, 1963. 18Report of the Working Party tm Educational Main- 21J. Hodson, Royal Commia8ion on Marriage aad tenance AZZowancee, Her Majesty’s Stationery Of&e, Divorce, M D P/1952/337, Her Majesty’s Stationery Ofice, London, 1957. London, 1952.

10 SOCIAL SRCURITY m tirltam aDout the actual functioning of these ing need and in selecting or rejecting patients, three categories of welfare during the past 15 clients and students for this or that service. In the years? Obviously, I cannot give you more than a modern world, the professions are increasingly fragment of an answer, and even this involves becoming the arbiters of our welfare fate ; they over-simplifying to a dangerous degree. To are the key-holders to equality of outcome; they analyse and measure the redistribut,ive effects of help to determine the pattern of redistribution in this process of the social division of welfare social policy. would be an immensely complex task-even if These generalisations apply particularly when the essential statistical data were available which, services in kind are organised on a universalist, in many areas, they are not. All I can offer are a free-on-demand basis. When this is so we sub- few generalised conclusions. stitute, in effect’, the professional decision-maker The major positive achievement which has for the crude decisions of the economic market- resulted from the creation of direct, universalist, place. And we also make much more explicit- social services in kind has been the erosion of an important gain in itself-the fact that the formal discriminatory barriers. One publicly ap- poor have great difficulties in manipulating the proved standard of service, irrespective of income, wider society, in managing change, in choosing class or race, replaced the double standard which between alternatives, in finding their way around invariably meant second-class services for second- a complex world of welfare. class citizens. This has been most clearly seen in We have learnt from 15 years’ experience the National Health Service. Despite strict con- of the Healt,h Service that t,he higher income t,rols over expenditure on the Service by Con- groups know how to make better use of the Serv- servative for many years it has ice ; they tend to receive more specialist attention ; maintained the principle of equality of access by occupy more of the beds in better equipped and all citizens to all branches of medical care. Viewed staffed hospitals; receive more elective surgery; solely in terms of the welfare objective of non- have better maternity care; and are more likely discriminatory, non-judgemental service t,his is t,o get psychiatric help and psychotherapy than the signal achievement of the National Health low income groups---particularly the unskilled.*3 Service. In part this is due to the fact that t,he These are all factors which are essential to middle-classes, invited to enter the Service in an understanding of the redistributive role played 1948, did so and have since largely stayed with by one of the major direct welfare services in the Service. They have not contracted out of kind. They are not arguments against a com- socialised medical care as they have done in prehensive free-on-demand service. But they do other fields like secondary education and retire- serve to underline one conclusion. Universalism ment, pensions. Their continuing participation, in social welfare, though a needed prerequisite and their more articulate demands for improve- towards reducing and removing formal barriers ments, have been an important fact,or in a gen- of social and economic discrimination, does not eral rise in standards of service-particularly in by itself solve the problem of how to reach the hospital care.22 more-difficult-to-reach with better medical care, But, as some students of social policy in Britain especially preventive medical care. and the United States are beginning to learn, Much the same kind of general conclusion can equality of access is not the same thing as be drawn from Britain’s experience in the field equality of outcome. We have to ask statistical of education. Despite reforms and expansion dur- and sociological questidns about the utilisation of ing the past 15 years it is a fact that the propor- the high-cost quality sectors of social welfare and tion of male undergraduates who are the sons the low-cost sectors of social welfare. We have to of manual workers is today about 1 percent lower ask similar questions about the ways in which pro- than it was between 1928 and 1947. Although we fessional people (doctors, teachers, social workers have doubled the number of University students and many others) discharge their roles in diagnos- 23Richard M. Titmuss, Essays on the “Welfare State,” x A. Lindsey, Socialized Medic&e in England and appendix on the National Health Service, second edition, Wde.?, University of North Carolina Press, 1962. Allen and Unwin, Ltd., London, 1963.

BULLBTIN, JUNE 1965 19 the proportion coming from working-class homes ceived by poor tenants of public housing (local has remained fairly constant at just, over a government) schemes.26 quarter.2” These are no more than illustrations of the The major beneficiaries of t,he high-cost sectors need to study the redistributive effects of social of the educational system in “The Welfare State” policy in a wider frame of reference. Hitherto, have been the higher income groups. They have our techniques of social diagnosis and our con- been helped to so benefit by the continued exist- ceptual frameworks have been too narrow. We ence of a prosperous private sector in secondary have compartmentalised social welfare as we have education (partly subsidised by the State in a compartmental&d the poor. The analytic model variety of ways including tax deductibles), and of social policy that has been fashioned on only by developments since 1948 in provisions for the phenomena that are clearly visible, direct and child dependency in the category of fiscal wel- imnlediately measurable is an inadequate one. It fare.25 Take, for example, the case of two fathers fails to tell us about the realities of redist,ribution each with two children, one earning $60,000 a year, which are being generated by the processes of the other $1,500 a year. In combining the effect technological and social change and by the com- of direct social welfare expenditures for children bined eflects of social welfare, fiscal welfare and and indirect fiscal welfare expenditures for chil- occupational welfare. dren the result is that the rich father now gets How far and to what extent should redistribu- thirteen times more from the St,ate than the poor tion take place through welfare channels on the father in recognit,ion of the dependent needs of principle of achieved st,atus, inherited status or childhood. need! This is the kind of question which, funda- Housing is another field of social policy which mentally, is being asked in Britain today. And merits analysis from the point of view of redistri- it. is being directed, in particular, at two major bution. Here we have to take account of the com- areas of social policy-social security and hous- plex interlocking effects of local rate payment,s, ing. Both these instruments of change and redis- public housing subsidies, interest rates, t,ax de- tribution have been neglected for a decade or ductibles for mortgage interest and other factors. more. We have gone in search of new gods or no When we have done so we find that the subsidy gods at all. It is time we returned to consider paid by the State to many middle-class families their roles afresh and with new vision. Perhaps buying their own homes is greater than that re- we might then entitle our journey “Ways of Extending the Welfare State to the Poor.” 24Robbins Report on Higher Education, appendix 2, volumes A and B, Her Majesty’s Stationery O&e, 1GI). Sevitt, Essays 01~Housing, Occasional Papers on London, 1964. Social Administration (No. 9), Codicote Press, London, s The Economist, London, Oct. 26, 19CX3. 1964.

SOCIAL SECURITY