Fixing the Welfare State Isn't About Neoliberalism

European Straits #19

Dear all,

Last week’s newsletter, about the future of the welfare state, became an op-ed in the Financial Times’s Monday edition: How to fix the welfare state for the entrepreneurial age.

If you follow the link and scroll down to the comments section, you’ll see that most people criticize the idea that entrepreneurs have a bigger role to play when it comes to covering critical risks. For them, the fact that startups can contribute to making social insurance more efficient and effective is seemingly synonymous with the neoliberal ideal of scaling back state intervention.

But that’s not what I have in mind. The neoliberal case is about relying more on the private sector for the sake of reducing public spending, even if it means depriving people of proper coverage because of well-known market imperfections. The entrepreneurial case, on the other hand, is precisely about correcting those market imperfections. By relying on tech startups, not incumbent insurance companies, entrepreneurial lib…