Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 62
being developed if the contractors or government agencies performing the construction
recruit directly from the community in question; otherwise, the multiplication effect will
likely benefit adjacent, and possibly already more affluent, communities. A major line of
criticism with respect to foreign-run community development projects in LDCs holds that
they mainly generate jobs for skilled workers from MDCs, and are thus really a form of
supply-side subsidy for already-viable economies, a criticism which may also apply to
development programs within MDCs.
Materu’s appraisal of low-income housing as a form of economic investment is thus
somewhat overly optimistic insofar as it fails to see the critical differences that the kind
of investment can make. Moreover, it is predicated on the Keynesian notion that direct
state intervention in markets is the best way of assuring a stable economy. A more
laissez-faire argument might hold that poorly planned communities with unsustainable
economies should simply be allowed to fail, and that subsidizing housing in struggling
communities rewards mediocre planning. However, the analogy between communities
and markets is a dubious one, particularly since the state has a fundamental role in the
lifecycles of communities in virtue of its planning and management functions. Moreover,
the social consequences of community failure, as discussed above, can be dire, and may
ultimately propagate themselves in the form of widespread economic instability, both
regionally and internationally. A qualified and more plausible claim is that certain
investments in low-income housing can promote economic stability, but that the scope,
scale and roles for state and market need to be considered carefully in each case.
Equitable distribution of resources
As discussed in Chapter 1, two fundamental goals of the modern welfare state have been
the establishment of what Marshall termed a “social minimum,” 37 and the elimination of
what Lord Beveridge called the “five giants on the road to reconstruction,” including
want, disease and squalor. 38 Adequate housing is an obvious element of the “social
minimum,” while the role of sanitary housing conditions in the alleviation of disease and
squalor is obvious. Indeed, the Global Report provides extensive evidence of “the
enormous health burden of poor quality housing.” 39
In nations such as France, Germany, Britain and the Netherlands, modern housing
policies after World War II played a restitutional role, restoring living conditions in warravaged
areas. 40 The pervasiveness of social democratic ideals in European society in the
latter half of the twentieth century has helped to popularize the justification of social
housing on equity grounds, a rationale that remains fairly widely embraced. The
longevity, scale and cost of these policies bespeaks the continuing importance placed on
the provision of adequate housing from the point of view of social equity. Indeed, as
McCrone and Stephens observe, “[t]here is […] no European country, no matter how
advanced, where it is considered that housing can be left completely to the free market
without state subvention in some form; and it would be unwise to assume that this will
change with rising living standards.” 41 Even the United States, which began effectively
dismantling its National Housing Policy under the Reagan administration, reaffirmed its
commitment to a comprehensive housing program with the 1990 Rouse/Maxwell Report,
stating that “the Federal Government must reaffirm its role as a leader in finding
solutions to the country’s housing problems.” 42