The veteran US journalist, George Will, has commented that there seems to be a new political consensus in the US: that “we should have a large, generous welfare state and not pay for it.” There is an uncomfortable truth in that observation, and it prompted me to think about whether there might not be ways to square the circle – to provide welfare without seeming to pay for it.
There are lots of ways of raising money besides taxation: they include mutualist contributions (many welfare systems are non-governmental), voluntary payments (e.g. lotteries), nationalisation and sequestration (governments can, and do, claim or confiscate resources), and raising other government revenue (e.g. returns on investment, profits on government enterprise, or the sale of resources). The last of these categories is possibly the most interesting: if governments can make a profit, for example out of banking, energy or telecommunications, the money can be used for the common good. The Alaska Permanent Fund – possibly a model for Scotland – has allowed the State of Alaska to save resources for the long-term benefit of its people. It appears to be a principle that even American Republicans can accept. But we seem in Europe to have set our face against the idea that a government can legitimately take profits in order to benefit its citizens.