France and Germany
By Arnold Kling
Anthony de Jasay argues that French and German welfare state policies are based on
a belief that the distribution of the national income is the government’s business as well as its natural prerogative, and that whatever it happens to be, the government must use its powers to make it tilt a little more, and a little more again, in favour of the lower income groups. It is very important, though, that such repeated redistribution should mainly take the form of “social” benefits in natura, rather than simply cash transfers.
…In Germany and France, taking the gross wage cost as 100, an average of 50-55 goes to social insurance contributions and 45-50 is pre-tax take-home pay. The two together, however, are not worth 100 to the worker, but always a little less
De Jasay describes the emotional attachment the many in France and Germany have for this unsustainable economic policy.
Bitter political adversaries in the two Sick Men countries are equally eager to preserve the “European social model” from the largely imaginary liberal menace, seemingly quite oblivious to the total failure of the “model” to produce the blessings it is supposed to bring.