Idealists of the left have often called for “planning from the bottom up.” This chapter discusses the failures of Soviet-type planning, but then discusses some examples of planned resource allocation processes within a limited sphere in predominantly market economies that seem to fit the description as “planning from the bottom up.” One instance is the grant-making process of the National Science Foundation. The chapter then speculates that a similar process might be adopted by a Social Endowment Fund at a stage that it might need to function in part as a venture capitalist. Drawing on the mathematical expression of equalitarian values in the appendix to Chapter 3, this appendix derives a scheme of distributionally weighted cost-benefit analysis and speculates as to how it might be implemented in practice.
What Can Be Done About Wealth Inequality?
Roger A. McCain
Revisits and adapts some economic ideas of Sir Arthur Lewis. Writing for the Fabian Society at midcentury, Lewis argued against nationalization of industry and instead for redistribution of wealth through the tax system: by running an average government surplus in successive years, the government might use the surplus to buy corporate shares and similar wealth, establishing a public patrimony. This chapter suggests that a Social Endowment Fund built in this way might be run essentially as an index mutual fund, thus retaining an arm’s-length distance between economic and political decisions. Some obstacles to this program are considered and responses sketched.
International and Critical Perspectives
Edited by James Midgley, Espen Dahl and Amy Conley Wright
This chapter by Sarah Cook reviews the role of the international organizations in promoting social investment. This chapter explores the ways in which a ‘social investment’ approach and terminology has been adopted and promoted by selected international development organizations, including international financial institutions, the United Nations, European Union and the Organisation for Economic Co-operation and Development, as well as some international non-governmental organizations. It focuses on the period since the 1990s, when a ‘social turn’ in development policy emerged as a reaction to the devastating social consequences of Washington Consensus adjustment policies, foreshadowing the global commitment to poverty reduction through the Millenium Development Goals and the evolution of a range of new policy instruments to deliver on this social agenda; most notably through targeted and conditional cash transfers.. International organizations have played a significant role in the spread of such ideas and practices which can be identified with the social investment approach, if not always labelled as such. The widespread promotion of these new instruments in development contexts, however, tends to obscure significant differences in goals, values and approaches among organizations. While often justified in social investment terms, a strong theoretical case for the use of such instruments as development policy is lacking. Instead, the case is largely grounded in evidence of ‘what works’ for short-term results linked to organizational priorities, notably poverty alleviation, impacts on specific groups (women, children) and behavioural change (such as use of health and education services). Key words: social investment, international social welfare, international development organizations
This chapter by Steinar Stjernø discusses the role of social investment as a means of integrating immigrants in Europe. The total foreign-born population of the European Union (EU) now constitutes 21 million persons, and in recent years, more than 1 million persons have been seeking asylum every year. A large share of immigrants are young people of working age. The author discusses the idea of social investment in EU immigration policy. First, the chapter describes the number and distribution of immigrants from non-EU countries. Second, the development of the role of the idea of social investment in the EU’s normative framework is analysed, with a particular focus on immigrants and the intnionegration of immigrants into the labour market. Third, the chapter concludes with a discussion of the relationship between declarations and actions. Key words: social investment, international social welfare, immigration, social integration, European Union
The first chapter by James Midgley provides a broad introduction to the concept of social investment and the way it is used in different academic and professional fields. Noting that the term ‘social investment’ is poorly defined, he offers a definition and examines the meaning of terms such as ‘investment’, ‘consumption’, ‘income’, ‘assets’ and ‘capital’ which are widely used in economics. The chapter then reviews the different ways the term ‘social investment’ has been used in four academic and professional fields, namely social policy, nonprofit management, community studies and development studies where investment ideas have been influential since the 1950s. The chapter contends that scholars will benefit from understanding the way the concept of social investment has been employed in these different academic and professional fields. It concludes by suggesting that may be possible to synthesize these different approaches to promote a comprehensive and globally relevant interpretation that will enhance the academic and policy relevance of social investment ideas. Key words: social investment, international social welfare, social policy
Amy Conley Wright
This chapter by Amy Conley Wright discusses social investment in early childhood in Australia. She presents arguments for social investment in young children and potential benefits for families, children and the broader society. The chapter then examines the Australian national early childhood development strategy, called Investing in the Early Years (Council of Australian Government, 2009) to analyse strengths, gaps and challenges. This strategy is designed to promote the best possible outcomes for children, and by extension the nation. Policies in the areas of early childhood care and education, social transfers and parental leave are described and contextualized through a comparison with averages provided by the Organisation for Economic Co-operation and Development to identify strengths, gaps and challenges. Key words: social investment, international social welfare, early childhood, Australia
This chapter by Sony Pellissery discusses social investments policies in India focusing on employment and early childhood programmes and the way they seek to meet the needs of poor families in India and provide them with resources that have an investment function. The Integrated Child Development Scheme (ICDS), since its beginning in the 1970s, focused on providing nutrition to the pregnant women and children up to the age of formal schooling. In contexts where poverty is pervasive, the chances of welfare loss through neglect as well as affordability are very high. The long-term impact of such neglect on human capital is immense. Similarly, since 1972 one of the states of India – Maharashtra – has had an employment guarantee scheme, which has been scaled up to national level since 2005, with an aim to provide employment opportunities in lean agricultural seasons as well as to build community assets through such labour. The chapter offers a detailed review of these two programmes and shows how a social investment approach was an essential component of development expenditure in the Global South. Key words: social investment, international social welfare, social protection, India
What Can Be Done About Wealth Inequality?
Roger A. McCain
Reconsiders the proposals to form a Social Endowment Fund and expand it via a hypothecated wealth tax as a whole and considers some details. The division of the proprietary income of the Fund between reinvestment and payment of a social dividend will probably shift toward reinvestment as the Fund becomes more and more the dominant financier in the market economy. This will also be influenced by “business cycle” conditions, as would the use of the Fund to retire the public debt. The impact of the wealth tax on small business is considered. Some shifts from free government provision to efficient pricing of services are quite consistent with the program proposed here. Finally, the abstract determinants of the stability and trends of social systems are reconsidered and the proposal discussed in that light.