Using welfare to restructure economy

Previously I wrote about the make-work problem of developed countries’ economics. In brief, the problem is that to produce the needs of a population, only small percentage (i.e. much less than 100%) needs to work. Thus, a system is needed to:

  1. Distribute the fruits of the producers’ labor among the entire population.
  2. Discourage people from being freeloaders incapable of doing productive work should this ever be necessary.
  3. Allow people to choose to work more (or make effort in another socially acceptable way) in exchange for more luxurious lifestyle.
  4. Develop and maintain excess capacity to work. This excess will allow the population to recover quickly from disasters.

There are some possible solutions:

  1. The conventional solution is to use advertising to develop artificial demand, and to get people to work to meet this artificial demand. I wrote elsewhere about some consequences of this solution.
  2. A better solution is to let people work in smaller and less efficient production units (factories, farms, or whatever) if they cannot pay for the products of bigger production units. On the other hand, people may find themselves working so much and get so tired that they cannot get ahead by studying.
  3. Even better system is to get people, who don’t have a job, to spend time learning something which will improve their productivity in the future.

The first two solutions are such that no special mechanisms are needed to cause cash to flow in a way which holds them together. This is why several economies implement them. The third solution needs special mechanisms to get goods to flow from the producers to the students, as there is no direct benefit to the producers from the fact that students spend time studying.

Now, I would like to propose a solution to this problem.

Welfare - both taxing of high incomes and handing out of money to people with low incomes - is now an established and accepted part of several economies. The welfare systems do a lot and get abused a lot.

My proposal is to replace existing income-based criteria for getting welfare by willingness to spend time studying something new.

Under this proposal, anyone, who did not (or was too lazy to) find a job, can get money for studying something. Welfare applicants would be evaluated to get a recommended course of study. However, they will then be free to study whatever they wish, at least some of their time.

Single mothers would be provided with services which look after their children while they study. People, who have learning disabilities, will be catered to by special methods of instruction, matched to their preferred studying style.

Just by studying, people would be able to get a minimum level if income. Certain subjects, which are deemed to be in demand, may carry higher pay tag. People, who study those subjects, will get more money while they study them.

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