UK, December 11, 2017.- Climate change can be denied, but it is clear that the climate has changed in the last 50 years. The death of the Welfare State can be denied, but the population pyramid has changed drastically. And technology, added to finances, looks for new ways to guarantee our level of purchase and the future of pensions.

A quick example of the discrepancy in the existence or not of a climate change:

 

Let’s leave climate change, and go back to personal finances. The present is full of uncertainties, but the life expectancy rises and we have to think about the 20-30 years that we are pensioners. Will the Welfare State guarantee our life when we stop working? Will we have to extend our working life 5-10 more years ?. I have searched for answers and found these reflections, centered in the UK, but which can be extended to other countries:

• The welfare state is a concept of government in which the state plays a key role in the protection and promotion of the social and economic well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life. The general term may cover a variety of forms of economic and social organization. The sociologist H. Marshall described the modern welfare state as a distinctive combination of democracy, welfare, and capitalism.^[Modern welfare states include Germany, France, the United Kingdom and the Netherlands, as well as the Nordic countries, such as Iceland, Sweden, Norway, Denmark, and Finland which employ a system known as the Nordic model. Esping-Andersen classified the most developed welfare state systems into three categories; social democratic, conservative, and liberal.The welfare state involves a transfer of funds from the state to the services provided (i.e. healthcare, education, etc.) as well as directly to individuals (“benefits”). It is funded through redistributionist taxation and is often referred to as a type of mixed economy.Such taxation usually includes a larger income tax for people with higher incomes, called a progressive tax. Proponents argue that this helps reduce the income gap between the rich and poor.

• The UK chancellor’s recent Budget reminded us that systemic problems continue to plague the government’s delayed roll-out of universal credit – a single monthly welfare payment that will replace six separate benefits. Philip Hammond also spoke of the UK government’s commitment to innovation, with the chancellor calling for a new tech startup to be founded in Britain every half hour. Put the two together and what do you get? Govcoin. You probably haven’t heard of Govcoin because the government has been very discrete about trials of the technology, which began last year.It’s the brainchild of a London-based tech startup of the same name, led by mathematician, former financier and entrepreneur Robert Kay. Govcoin, intent on “disrupting” welfare state provision, has been working with the Department for Work and Pensions (DWP) since early 2016 to develop a blockchainsolution for welfare payments. So how does it work?. Govcoin aims to virtually mimic the jam-jar method which, according to the Money Advice Service, is a good way to manage your savings. The aim of Govcoin is to use this traditional method in the virtual environment of a mobile phone app to give claimants instant access to benefits and avoid delays in payment processing. Given the recent and ongoing problems faced by government over slipping deadlines for the deployment of universal credit, as well as concerns that delays in payments could lead to an increase of cases of homelessness, Govcoin must sound like music to the ears of ministers. But isn’t it simply a proposal for the wholesale privatisation of welfare distribution – a proposal legitimised by the government’s wider commitment to unfettered tech innovation?. Kay claims Govcoin will financially empower benefit claimants. But its distribution model involves benefits being paid – not in pounds and pence – but in the form of a cryptocurrency similar to Bitcoin. Govcoin promises to allow claimants to pay for goods and services – such as utilities – linked to the system. This is significant because, unlike Sterling, cryptocurrencies in the form of coins or tokens transacted on a blockchain can harbour additional and potentially valuable data regarding the person “spending” it. This data can then be used to create new markets in goods and services, or what Adam Greenfield refers to in his book, Radical Technologies, as “ever-tighter loops of response to desire”.

• Britain’s record on tackling poverty has reached a turning point and is at risk of unravelling, following the first sustained rises in child and pensioner poverty for two decades. Almost 400,000 more children and 300,000 more pensioners are now living in poverty than in 2012/13. Since that year, there have been continued increases in poverty, across both age groups. Very little progress has been made in reducing poverty among working-age adults. The warning comes in a state of the nation report by the independent Joseph Rowntree Foundation (JRF), the leading authority on poverty in the UK. UK Poverty 2017examines how UK poverty has changed over the last 20 years, providing the most comprehensive and up to date picture of the challenges and prospects facing low income families in modern Britain. In November, the Institute for Fiscal Studies (IFS) forecast that child poverty will continue to rise until the end of this Parliament. Campbell Robb, chief executive of the Joseph Rowntree Foundation, said, “These worrying figures suggest that we are at a turning point in our fight against poverty. Political choices, wage stagnation and economic uncertainty mean that hundreds of thousands more people are now struggling to make ends meet. This is a very real warning sign that our hard-fought progress is in peril. “Action to tackle child and pensioner poverty has provided millions of families with better living standards and financial security. However record employment is not leading to lower poverty, changes to benefits and tax credits are reducing incomes and crippling costs are squeezing budgets to breaking point. The Budget offered little to ease the strain and put low income households’ finances on a firmer footing.

• Absent any government at all, it is likely that our economy would be substantially weaker. Without the rule of law and its interaction with property rights, effective judicial and policing systems, and state provision of certain public goods and services that might be under-provided, it is likely the GDP potential of the economy would be lower. OECD evidence suggests that certain investments, such as provision of transport links and primary and secondary education, can be growth-enhancing too. Of course, in reality infrastructure projects are often chosen using political rather than economic criteria, and so are not growth enhancing in practice, even if they could be in theory. And these need to be financed. If the revenues used to fund infrastructure projects come from highly distortionary and economically damaging taxes, on net they might retard growth.Across OECD countries, four fifths of government spending does not fit into this “productive” category anyway. The overwhelming majority is transfer payments – cash moving from taxpayers to other groups – and government consumption.Then there are regulations. While some improve the functioning of markets, the UK’s land use planning and energy laws in particular undermine the growth potential of the economy. Tight rules hamper labour mobility due to high and variable housing costs, cause unproductive retail, childcare and social care sectors, and encourage over-investment in real estate. Little surprise then that when the Institute of Economic Affairs examined the evidence, we found that the “growth maximising” size of government was likely to be between 18 and 23 per cent of GDP. Of course, there are ways the government can enhance wellbeing beyond growth, yet other work suggests that the size of a “welfare maximising” government is likely to be around 27 to 33 per cent of GDP. The government has pledged to found an independent “industrial strategy commission” to observe if the policies actually have the intended effects. Whether such a body would ever conclude that the whole idea is a waste of time even if it were the case is an open question. What is crucial though is that the commission focuses on whether the interventions raise the rate of return on investment and the productivity of capital. And that must include comparing outcomes against what would happen if the resources were simply left in the private sector. Certain interventions and investments undoubtedly could have a positive impact on growth. But given the level of government spending and regulation and the UK’s experience with industrial intervention before, Macpherson’s conclusion that “the starting point” should be about how government constrains growth seems uncontroversial.

My conclusion is that we have lost the ability to plan our work life and our life as pensioners. Any strategy depends incredibly on the technological evolution applied to the finances and the resources of the population to subsist. Was the health of the Welfare State better 25 years ago than today? Probably yes.

The dependence of the State is increasingly less, this push us, and we must seek our personal solutions to major problems for health, pensions or quality of life. The key will be in the blockchain technology?: