Collectivist Arguments for State Funding

The collectivist arguments for state funding are not solely ideological: there can be economic benefits from well directed spending

Collectivists prefer to give some economic power to the State and/or local government: a ‘Welfare State’.  This ensures that everyone has the basic economic necessities to live a dignified life and fulfil their potential – whilst spreading the associated costs so that wealthier people pay more, as described previously (3.5.1).  There are several ways of investing in people:

●  Benefit payments, such as those described earlier (, put money in the pockets of the poor.  They are more likely than wealthier taxpayers to spend that money immediately in their own countries. – so there are more customers for local businesses.

●  A welfare safety net enables people to spend confidently, increasing consumer demand (3.2.2). Otherwise they need to save money in case of future problems – as described in a World Economic Forum article: What’s holding back China’s consumers?

●  An adequate social safety net enables individuals to take risks, to find better employment or start businesses. There is thus more likelihood of business innovation and high performing individuals.

An economy depends upon a supply of labour with the necessary skills (3.2.5), so there is an economic justification in providing State funding for education

●  Health is another aspect of investing in people – ensuring that the sick can return to work quickly, and that the talents possessed by people with disabilities can be suitably deployed.

There are also strong collectivist arguments for state funding of investment for future benefit.  The Observer reported on advice from senior economists ahead of Britain’s budget in spring 2024:

“Two former advisers to the Treasury, backed by other economists, said that ..the chancellor should focus on the long-term national interest with measures to spur investment and growth.

.. The time has come to reform the fiscal rules and banish the myth of fiscal headroom. Debt is not a burden if it finances resilient, sustainable and productive investment.”

Public funding offers the opportunity to take a long-term view of future benefit:

●  Governments can invest in infrastructure and research, taking a holistic view of the economy, to help to prepare the country to take advantage of future opportunities (

●  Government investments result in increased employment, higher productivity and ultimately in increased economic growth that more than pays for the initial investment – as described by Joseph Stiglitz: When it comes to the economy, Britain has a choice: May’s 80s rerun or Corbyn’s bold rethink.

●  Public provision should be able to leverage the benefits of scale and eliminate duplication, though there are concerns about its efficiency in practice, as discussed in the next section (3.5.3).



This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition04/3522a.htm.