Nowadays, people’s motivation, but excessive welfare policies can make

Nowadays, some
developed countries in Europe and North America have very lenient conditions
for welfare policies. For example, in the United States, government welfare
payments are commonly known as “benefits”, and welfare traps often
indicate that one is completely dependent on welfare and little or no
self-sufficiency. This will result in some people with basic working abilities living
by great welfare. However, this is very unreasonable. Everyone is constantly
trying to find the most favorable employment opportunities, no matter what
capital he can master. In fact, this is his own advantage, not what he thinks
of society. But naturally studying his own strengths, or more certainly, his
preference for the most socially beneficial employment. By pursuing his own
interests, he often promotes society more effectively than it actually does. However,
this is based on the desire for assets and status. A competitive environment
can boost people’s motivation, but excessive welfare policies can make some
people who are less motivated generate the idea of getting money without labor
and effort.

Welfare directly
affects the accumulation, affecting innovation and upgrading of economic
structure. A society should raise the level of consumption and implement high
welfare on the premise that it is necessary to raise the level of production.

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The production here is not a simple reproduction but an expansion of
reproduction. Nor is it a mere expansion of production scale, but an expansion
of reproduction through technological innovation and upgrading of industrial
structure. Such expanded reproduction has no borders and can provide a steady
flow of consumer information. And such an enlarged reproduction necessarily
requires an increase in the organic composition of capital and must be
sufficiently accumulated. And this could be one of the reasons of high welfare
hinders economic development.

High welfare is
prone to moral calamity, resulting in the waste of social resources and
national inertia. The high welfare provided by the state is a kind of public
goods, which, like the big pot of rice under the planned economic system, in
Chinese proverb, it is a pity you don’t take since people around you all would
take. Thus it lays down moral calamity. For example, under the high welfare,
the utilization rate of social security resources is not high, such as the
waste of medicines and other medical resources in public medical services.

Some people
could have been able to work normally. However, because of the high welfare,
they did not choose to take active employment, over enjoying the leisure time
brought by social security and unemployment insurance, and choosing to retire
early; over-reliance on the state, self-accumulation, weakening the enthusiasm
and ability of self-protection and so on. Once these phenomena are universal,
the social resources are seriously wasted and the national spirit is no longer
positive, it will affect economic development.

            High
welfare trap (not the word “welfare trap” defined by UK government) refers to a
series of social security measures provided by Western European countries after
World War II, including pension, medical treatment, childbirth, work-related
injury and so on. The reason why high benefits become “traps” lies in
the fact that the state violates the basic principle of “living as hard as
possible” and provides benefits to the citizens far beyond the
government’s financial ability. Since these welfare meals are too much and too
high, they have crushed the finances and can only get caught in the vicious
cycle of consuming food and clothing. The social welfare of “cradle to
grave” in high-welfare countries once attracted the envy of the world.

However, since the 1980s, the economic stagnation of high-welfare countries has
gradually changed people’s minds. The OECD has deliberated on the crisis
brought about by high welfare, with the topic of “Welfare countries in
crisis.”

            People
who depends on welfare caused serious unemployment, resulting in high
unemployment rates, making full employment policies difficult to achieve. As
workers rely too much on the welfare system, undermining people’s employment
motivation, unable to mobilize the enthusiasm for work, resulting in the
phenomenon of welfare dependence. In Western countries, due to the government’s
relatively good benefits to the unemployed, some unemployed people are no
longer actively seeking new jobs and have long relied on social welfare relief.

The original intention of the welfare state in formulating the universal
high-standard welfare treatment was to stabilize the ruling party’s political
power and post-war social stability. However, the welfare model with
social-democratic nature weakened the “self-regulation ability” of “invisible
hand” through capitalist market economy to a certain extent. In some
northern European countries, there is not much difference in welfare subsidy
between laborers and non-workers, and as a disappointed affect, laborers even
have to pay a higher tax. As a result, the unemployment rate remains high and
is not appropriate incentive mechanism to improve the enthusiasm of workers,
and people who rely on government subsidies tend to be more and more.