What is Welfare?
woensdag 18 maart 2020 11:16
Exercise Veil of ignorance:
Veil of ignorance: The "veil of ignorance" asks a decision-maker to make a choice
about a social or moral issue and assumes that they would not know, or would
not take into account, which person they are.
You get to divide €100.000.000 among several topics of national interest:
• Sports
• Arts
• Health care
• Environment
• Business
• Unemployment
• Education
• Safety
You don't know where you will end up in society after you divided the money. You
might be rich, you might be poor, you can e a man or a woman, you can be a
minority or a majority, you could be sick or healthy. From that position of
ignorance you have to decide who gets what.
Important concepts:
Welfare state: The government plays an active role in ensuring the welfare and well-being
of its people.
Well-being: The degree to which people are satisfied with their physical and mental
health.
Solidarity concept: In a group or society there is a willingness to share risks with each
other.
Functions of welfare:
1. Insurance, also called social security, it ensures people will have an income when
they are unemployed, ill, or unfit to work because of their age of a disability.
2. Care for those who struggle with psychological or physical problems.
3. Improvement of knowledge and skills amongst the general population.
4. Bonding in political sense, an economic sense (through collective insurance) and a
cognitive sense (through education)
Basic Social Rights: Constitutional rights that guarantee and require the welfare state.
What is a Welfare State Pagina 1
, Between a Planned Economy and a Free-Market one
dinsdag 24 maart 2020 17:37
Planned economy or free market
How much oversight and control should a government have over its economy?
Sharing risks and risk of sharing (Freeloader problem)
Prisoners' dilemma:
Two people are arrested for a crime (say a robbery). The prosecutor does not
have enough evidence to convict them outright, so he needs a confession. He
proposes a deal to the prisoners. If you confess and your partner in crime does
not, you go free and your partner will get 10 years in prison, serving the entire
prison sentence by himself. If you both confess we will diminish both your prison
sentences to 6 years. If neither of you confesses to the robbery, we will charge
you with break in and entry, which will land both of you a prison sentence of 1
year. Your partner in crime in the other room is given the same offer right now.
Please choose wisely. The option are repeated in the diagram below.
The prisoners' dilemma shows that the best possible outcome is achieved when
the players (prisoners) trust each other. However, if your trust turns out to be
misplaced, the consequences will be much worse for you than the other player.
Welfare is in a sense comparable to a prisoners' dilemma. The best possible
outcome is a collective social security system. By sharing the risks of losing your
income through unemployment, sickness, or old age, we are all much better
protected in those situation. However, there is risk in sharing. People can take
advantage of a social security system. By not contributing to the system, but
drawing from it, other have to contribute extra to compensate. We call the
people who take advantage of welfare freeloaders.
Free-market economy and planned economy
What is a Welfare State Pagina 2
woensdag 18 maart 2020 11:16
Exercise Veil of ignorance:
Veil of ignorance: The "veil of ignorance" asks a decision-maker to make a choice
about a social or moral issue and assumes that they would not know, or would
not take into account, which person they are.
You get to divide €100.000.000 among several topics of national interest:
• Sports
• Arts
• Health care
• Environment
• Business
• Unemployment
• Education
• Safety
You don't know where you will end up in society after you divided the money. You
might be rich, you might be poor, you can e a man or a woman, you can be a
minority or a majority, you could be sick or healthy. From that position of
ignorance you have to decide who gets what.
Important concepts:
Welfare state: The government plays an active role in ensuring the welfare and well-being
of its people.
Well-being: The degree to which people are satisfied with their physical and mental
health.
Solidarity concept: In a group or society there is a willingness to share risks with each
other.
Functions of welfare:
1. Insurance, also called social security, it ensures people will have an income when
they are unemployed, ill, or unfit to work because of their age of a disability.
2. Care for those who struggle with psychological or physical problems.
3. Improvement of knowledge and skills amongst the general population.
4. Bonding in political sense, an economic sense (through collective insurance) and a
cognitive sense (through education)
Basic Social Rights: Constitutional rights that guarantee and require the welfare state.
What is a Welfare State Pagina 1
, Between a Planned Economy and a Free-Market one
dinsdag 24 maart 2020 17:37
Planned economy or free market
How much oversight and control should a government have over its economy?
Sharing risks and risk of sharing (Freeloader problem)
Prisoners' dilemma:
Two people are arrested for a crime (say a robbery). The prosecutor does not
have enough evidence to convict them outright, so he needs a confession. He
proposes a deal to the prisoners. If you confess and your partner in crime does
not, you go free and your partner will get 10 years in prison, serving the entire
prison sentence by himself. If you both confess we will diminish both your prison
sentences to 6 years. If neither of you confesses to the robbery, we will charge
you with break in and entry, which will land both of you a prison sentence of 1
year. Your partner in crime in the other room is given the same offer right now.
Please choose wisely. The option are repeated in the diagram below.
The prisoners' dilemma shows that the best possible outcome is achieved when
the players (prisoners) trust each other. However, if your trust turns out to be
misplaced, the consequences will be much worse for you than the other player.
Welfare is in a sense comparable to a prisoners' dilemma. The best possible
outcome is a collective social security system. By sharing the risks of losing your
income through unemployment, sickness, or old age, we are all much better
protected in those situation. However, there is risk in sharing. People can take
advantage of a social security system. By not contributing to the system, but
drawing from it, other have to contribute extra to compensate. We call the
people who take advantage of welfare freeloaders.
Free-market economy and planned economy
What is a Welfare State Pagina 2
