FROM BIG BROTHER TO RICH UNCLE

Throwing money at British kids (Theodore Dalrymple, April 29, 2003, National Post)

According to Cicero, there was nothing so absurd but that some philosopher had not said it; if he were alive today, he would write that there was no policy so ridiculous but that some British government would not try it.

As if to prove the point, our current Chancellor of the Exchequer, Britain's Finance Minister, Gordon Brown, has just come up with a scheme of stunning idiocy. He is not an idiot, however: for he knows perfectly well that popularity and idiocy are not diametric opposites, far from it. Mr. Brown is like a potentate of old, who secures the applause of the crowd by throwing money into its midst. The crowd is always so delighted by this largesse that, in the ensuing scramble, it forgets to ask where the money came from in the first place.

Mr. Brown's scheme is this: Henceforth every British child born will be given a notional $550 trust fund, notionally to be invested at interest until he or she reaches the age of 18, when he or she will "inherit" it. Children of the poorest third of the population may be given twice as much. The whole idea -- to call it half-baked is an insult to bread -- is that the trust fund will give every child a chance to make something of him or herself in life.

It goes almost without saying that this is a peculiar kind of trust fund: a Holy Roman Empire of a trust fund, in fact, without a fund, and without trust either. Mr. Brown has merely committed his successors (let us hope by the time the first payment comes due there will have been several of them) to pay a sum to the fortunate adolescents of this country on the occasion of their 18th birthday. This is a scheme that, once started, will be very difficult to end: for God help the Chancellor of the Exchequer who is mean enough to stop giving other people's money to other people's children.

This is one of the few times I find myself in some disagreement with the estimable Mr. Dalrymple. The accounts should be private, rather than run by the government, and should not revert to the individual until they're quite aged, but a scheme not unlike this seems like a possible way to replace the current welfare state. The government could kick in some initial amount when a child was born, then contributions could be made before taxes by the parents, or the parents' employers, or whoever else, or by the government for children living in poverty. This fund would then serve as a Medical Savings Account and a Retirement Account for life, with opportunities to borrow against it, or even take a partial payout, for college and an initial home purchase. The range of investment options would obviously have to be fairly narrow and relatively low risk, and there would be some fluidity requirement so that medical services payments could be made easily.

There are, of course, many things for conservatives to dislike about such an idea. However, since we're never going back to a genuinely pre-Welfare State system, these kinds of accounts seem our best bet for restoring some kind of personal responsibility and market forces to the social services arena and reducing the scope of government involvement in these areas. Posted by Orrin Judd at May 4, 2003 11:07 PM