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Cooking the Books: Pie-crust Pie-chart

Did you get one? The government propaganda sheet, that is, sent to some 24 million people recorded as paying income tax or national insurance on ‘How your tax was spent in 2013-14’.

What stood out – and what you were expected to see standing out – was a huge slice of a pie-chart for 'welfare'. It amounts, if you do the arithmetic (which the propaganda sheet doesn't), to a quarter of the whole pie. How terrible, we are supposed to conclude, all that money going on welfare for scroungers who are too lazy to work.

However, imagine for a moment that we are living in a rationally-organised society, one geared to meeting people's needs, and that the pie-chart was measuring not money spent but real resources used. 'Welfare' would then be the goods and services consumed by or for certain people to ensure that they 'fared well'. But who are they?

The government propaganda sheet doesn't help but the Institute for Fiscal Studies does, in an article on their website 'What is welfare spending?' (www.ifs.org.uk/publications/742). They break the 25 percent into 'personal social services' for people in care (4 percent), public service pensions (3 percent), other benefit spending on pensioners (4 percent) and other benefit spending on those of working age (14 percent).

So, 11 percent of the pie is going to people who have retired from work or people needing to be cared for, children and the disabled as well as the elderly. What's wrong with that? A rationally-organised society would certainly cater for the needs of people in this position and devote resources to this, in fact more than today though allocated on the basis of need and as of right rather than final or average salary or pensions contributions (if only because nobody would be working any longer for a wage or a salary).

That leaves 14 percent of the pie going to people under retirement age, but some of this will be going to people who are disabled or who are temporarily sick. That would still happen in a society geared to meeting people's needs. As to the able-bodied unemployed, they would no longer exist as everybody would be free to contribute work to society instead of being forced to be part of capitalism's industrial reserve army or be included in the 6 percent rate of unemployment that economists say is 'natural' under the market system.

But back to capitalism where what the pie-chart is showing is how capitalism distributes some of society's resources. Three other slices of the pie, amounting to nearly 17 percent, stand out as waste: national debt interest (7 percent), defence (5.3 percent) and criminal justice (4.4 percent). Talking of scroungers who contribute nothing, a good example is the capitalist holders of the national debt who are getting a much larger income than Job Seekers Allowance without having to work. The remaining nearly 9 percent goes to maintain the coercive part of the state machinery, which would not need to exist in socialism (for that's the rationally-organised society we're talking about) where only the non-coercive and non-financial parts of central administration would continue.

So, what the government propaganda sheet is unwittingly showing is how capitalism wastes society's resources and is not geared to meeting people's needs, ie. not catering for everybody's welfare. Thanks, Mr Osborne.