Edward Hadas

“Charity is a cold, grey, loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at whim.” Clement Attlee wrote that in 1920. As British prime minister after World War Two, Attlee turned thought into policy. The welfare state that he helped create has decimated private charities for the poor.

It’s much the same in all rich countries. Governments now take the prime responsibility for the care of the poor. Even in the United States, where the charitable (voluntary) sector is relatively large – twice as high a share of GDP as in the UK, according to the charity Philanthropy UK – the share of GDP taken by federal and state welfare programmes, as measured by the OECD, is 10 times higher.

But Attlee’s judgment has been proved wrong. If organised charity was cold, the carefully calibrated payments and entitlements of the welfare state are icy. The welfare state has many aspects but in terms of the alleviation of misery it has not worked as intended. The decline of hunger and voluntary homelessness – and the spread of electricity, telephones and the like – might suggest otherwise. But the increase in overall prosperity and the establishment of the principle of a “living wage”, rather than the mechanisms of government entitlements, have wrought these changes.

In any case, Attlee and his allies thought the welfare state could do much more than merely keep wolves from doors. They thought it could destroy what Oscar Lewis would later call the “culture of poverty”. The anthropologist talked of “a strong feeling of marginality, of helplessness, of dependency, of not belonging”.

But while the decline of proletariat and peasantry has reduced the proportion of the population of rich countries who live in that culture of poverty, the welfare state has tended to increase both the marginality and the dependency of those who do. They live in their own world, dependent on the government programmes and rewarded for irresponsibility.

I have heard the children in a welfare-dependent family talk about “getting paid”, as if their mother’s indolence were a sort of job. That family, like so many in the system of poverty-relief, had no father. The rise of such single-parent families cannot be attributed entirely to the availability of welfare, but such payments make antisocial behaviour that much easier.

Attlee accused charity of being loveless, but the recipient of government money experiences a profound alienation amid the welfare state’s bureaucratic structures. Care professionals have forms to fill, quotas to meet and regulations to obey. However good their intentions, they cannot avoid treating their clients as administrative ciphers. The two sides are not tied by charity, but separated by a cold wall of impersonality.

For society, the result is disastrous. Too many children of welfare families end up as welfare-dependent adults, or in prison. Too many people on benefits cannot emerge from semi-permanent unemployment, or from substance abuse.

It’s time to give voluntary help, the free spirit of charity, a new chance. If the state would withdraw, there would be fewer rules; more opportunities to develop personal relationships with the needy; and more space for organisations motivated by a higher calling, be it religious or philanthropic.

It won’t be easy to reduce the government’s role in what has been an age of expansion. But the collapse of state economic control after the fall of Communism can serve as a helpful precedent. The trauma and corruption of that transition need not be repeated. What is required is a slow and carefully planned privatisation of anti-poverty programmes.

The first step would be to make the various government agencies more like state-funded not-for-profit companies. A new legal and administrative status would make a full separation from the government easier.

A gradual withdrawal would follow. Donations would replace taxation over a decade or so. People would be generous; they would be paying less in taxes and could be persuaded that their gifts would help those in need. That is a much more attractive prospect than feeding a bureaucratic system. On the allocation side, the rules could be loosened in proportion with the advent of private funding. Competition should also play a role. As the state’s flow of money dwindled, outsiders might well take over from the former state agencies.

In the end, charitable arrangements might offer less money and less certainty than the State’s blanket coverage. But that would not necessarily be a bad thing. The culture of poverty will be less appealing if it is less comfortable. And while a modestly funded culture of charity will not be able to afford the carefully calibrated assistance of Attlee’s dreams, it can offer the poor more of what they really need: the burning fire of charity. And charity, after all, is another word for love.

The euro zone debt crisis shows that something is seriously wrong with Europe. But what is it?

Most financial professionals think the problem is economic. They have long considered continental Europe something of a mess – slow GDP growth, inept governments, smothering regulation and a culture that doesn’t “get” markets. European residents seem equally gloomy, especially about the economy. In the most recent Eurobarometer survey, 71 percent of respondents did not expect the crisis to be over two years hence.

The economic worries of both financiers and citizens are misplaced. Even if the slow patch does last a few more years, the European economy will continue to do what a modern economy is supposed to do. European consumers are basically as well off as Americans after adjusting for longer European holidays and different lifestyle choices. There is probably greater justice in the distribution of incomes and consumer goods in Europe than in the United States. The euro zone’s low trade deficits – less in total since 1990 than the United States ran in the last six months – suggest that Europe is globally competitive. Europe probably has a worse unemployment problem than the United States, but national governments are belatedly trying to remedy that.

Where Europe is really weak is not in economics but politics. A lack of political cohesion turned relatively minor financial problems – one small reprobate government (Greece) and two small careless ones (Portugal and Ireland) – into a disproportionately large struggle to avoid a devastating financial meltdown. Despite the risk, politicians and bureaucrats spent years bickering. They may have finally found the necessary toughness and solidarity, but there are enough unanswered questions to suggest that further crises are a lively possibility.

The indecision and discord needs to be kept in proportion. Politically, Europe is far more stable than it was a century ago, when a much smaller trigger set off the First World War. It is more unified – fiscally and financially – than it was in that war’s aftermath, when the anti-solidarity policy of reparations and the anti-flexibility of the gold standard wreaked havoc.

Still, Europe could do better. I suggest a three-pronged effort to make the region stronger.

The first is supposedly underway: balanced national budgets in normal economic times. An earlier effort to mandate this, the Stability and Growth Pact, failed, but the intervening crisis may have concentrated minds and strengthened resolve. If it hasn’t, then the euro project is liable to topple over as soon as economic challenges arrive.

Second, national politicians and the European Central Bank should agree – and state it publicly in no uncertain words – that the fiscal compact implies that the cost of future national fiscal failures will be shared between debtor and creditor nations. There will always be disputes about how to apportion the losses, but those can be resolved if everyone accepts the principle of shared responsibility. A bad loan is a sign that both sides messed up. A multi-country currency union cannot survive without solidarity among its members.

Third, Europe needs to make the economy the servant of something greater, something with more political resonance than a prosperity pact. A merely materialist agreement will always be vulnerable to economic downturns.

Half a century ago, when the predecessor to the European Union was founded, there was a good reason to emphasise economic unity: other sorts of multi-national convergence were much more challenging. Europe is not like the United States, which can boast of a single “American way of life” both culturally and politically. (U.S. states’ rights were effectively crushed 150 years ago in the Civil War.) Nor is Europe like China, which established a national language and culture three millennia ago.

On the contrary, European nations have basically been moving apart for centuries, developing their own national languages and cultures. The nations often behaved like teenage gang members, convinced of their own superiority and always up for a mutually destructive fight.

After the biggest fight, World War Two, the peacemakers followed their profession’s best practice: build trust by focusing on a common effort in the least controversial area – the economy. It has worked, although almost every step has been difficult. The last step, the merger of monetary and fiscal policies, proved traumatic.

But after 60 years of economic success, it should be clear that greater unity need not destroy national diversity. Italians may never be as much like Germans as New Yorkers are like Californians, or as Shanghainese are like Beijingers. But Europeans should be able to find enough common ground – if only as an entity able to hold its own against the United States and China – to give the EU stronger support than mere economic self-interest. If not, there really will be something wrong with Europe.

The first anniversary of Japan’s nuclear disaster is a good time to take stock. Opponents and proponents of nuclear power are doing so, and they have come to the same conclusion: “We were right all along.”

The meltdown at the Fukushima power plant is certainly grist for the mill of the anti-nuclear crowd. It forced the evacuation of 300,000 people and will cost as much as $250 billion to clean up, according to the Japan Center for Economic Research. If a natural disaster can trigger such a dangerous, disruptive and expensive crisis in a country as advanced as Japan, then it’s impossible to guarantee safety anywhere. Efforts to do the impossible will make nuclear power even more expensive and, by some analyses including that of the Worldwatch Institute, it already costs more than solar energy.

The technical and economic data, though, may offer less support for the anti-nuclear brigade than the images from Fukushima, including explosions, mass evacuations to escape the deadly and invisible threat of radiation, and workers in white safety suits. The pictures reinforce the visceral fear that radioactivity is just too hot to handle.

Proponents of nuclear plants haven’t exactly been comforted by Fukushima, but they argue that a cool look at the situation actually supports their case. After all, the damage from a near worst-case scenario at a badly managed, ageing plant is proving to be quite bearable. This case is strengthened by the Japanese government’s minimum estimate of direct clean up costs – something like $15 billion, spread out over several years. That’s less than 10 percent of the highest estimates of damage, and of the expected non-nuclear cost of the earthquake and tsunami which overwhelmed the Fukushima plant.

Besides, the pro-nukes say, the affected plant was too old to be relevant for future investment decisions. New plants are safer by design. Fukushima won’t significantly alter the result of the studies promoted by the World Nuclear Association, which conclude that atomic energy is relatively cheap. Enthusiasts, who have always dismissed atomic phobia as illogical and exaggerated, are quick to point out that Fukushima has nothing to do with Hiroshima. The chain of activities required to generate, say, coal-fired power can be shown to cost more lives, too.

What Fukushima really teaches is that the gap between the two sides of the nuclear argument is too wide to be bridged by evidence. Whatever happens, many opponents will always see an intrinsically dangerous technology which people should not try to tame. And however expensive the last plant or accident, most proponents will continue to believe that nuclear power is a wonderful technology, needed for humanity’s long-term comfort, and with risks that can be managed.

I think the factual arguments hide a deeply philosophical disagreement– about just how much control man can and should have over the hidden forces of nature. The same fundamental discord embitters arguments about global warming, biotechnology, assisted reproductive technology and the population the earth can durably sustain. In such heartfelt debates, facts and pseudo-facts are sought largely as weapons to be thrown at the other side. Fukushima seems to provide a fair supply.

The philosophical issue is important. There are surely technologies which really do cross a fairly clear moral line, and the natural world should not be exploited blindly. But nuclear power is no longer an appropriate field for this ideological combat.

That was not always the case. In the 1950s, the destructive power of atomic fission was clear, while the human ability to make it beneficial was not. After more than a half-century of operating nuclear plants with only a few accidents – none of them killing as many people as the 1984 explosion at the Bhopal chemical factory in India – it’s no longer appropriate to consider this technology as beyond the moral pale.

On the other hand, nuclear costs have consistently failed to plummet as predicted for the past 50-plus years. So the technology cannot be considered a potential wonder-cure for energy woes. It is never going to live up to a U.S. promoter’s 1954 dream that it would be “too cheap to meter”.

How does nuclear power look once it is freed from the weight of ideology and dreams? Neither clearly better nor clearly worse than gas, coal or solar. It’s certainly competitive, thanks largely to low operating costs – uranium is much cheaper than coal or oil – but comparisons that consider all types of associated expenses are inevitably highly subjective. The problem is ignorance of the future.

Nuclear plants last four to six decades, far too long for accurate predictions of fuel prices and technological developments. They are a diversifier away from coal, oil and gas generation. But there’s no way to foresee, let alone calculate with anything like precision, whether nuclear power will prove more or less expensive, safe, clean or reliable than its rivals.

In the face of this uncertainty, a reasonable policy choice is to temporise. The Chinese, who have made a serious commitment to nuclear power and several other technologies, paused to learn the lessons of Fukushima, and now look set to go on as before. That sounds about right.