DESPERATELY trying to reverse the fortunes of the British economy, Labour’s first year in office has proved that its core economic policy is to attack working-class living standards.

Unflinchingly accepting the orthodoxy of balanced budgets — presenting itself to the financial markets as a government to be trusted — it has embraced welfare cuts; taking aim at the elderly, disabled and sick.

Opposition by many of the government’s own MPs meant legislation passed at the start of July, forcing through welfare “reforms” limited the severity of these proposals; but they were not reversed entirely.

With the Prime Minister insisting that it is crucial to cut government debt to revive economic growth, those with the least are paying the highest price for the irrationality of capitalism and the acquisitiveness of the wealthy.

Verbal assaults on welfare recipients like “work-shy” and “scroungers” are all too familiar. But, despite these criticisms, the welfare state’s existence has never seriously been challenged for it has been, since its earliest days, advantageous for capitalism.

As David Lloyd George reasoned over a century ago, regarding the state taking a more active role in healthcare: “Money which is spent on maintaining the health, vigour, the efficiency of mind and body in our workers is the best investment in the market.”

The sentiment behind this assertion remains as true today, in its applicability to the welfare state as a whole, as ever. The welfare state guarantees the workforce has minimum levels of health and education; additionally, it promotes capitalist values: many claimants of social security, for instance, must demonstrate they are seeking work to qualify for benefits.

Welfare is indicative of a paradox at the heart of capitalism. Having long benefited business, history testifies that it was also a victory for the working class, won through years of struggle.

“The history of all hitherto existing society is the history of class struggles,” Marx and Engels famously asserted. Class struggle infuses all aspects of life under capitalism — including the welfare state.

Welfare has consistently served as a battleground, with business and workers using it to advance their class interests.

Socialists must unfailingly defend the state’s welfare services from the constant onslaught of attacks. The many deficiencies of the welfare state, however, cannot be ignored, being frequently tight-fisted and authoritarian, but the value of services like the NHS is immeasurable, while benefits, although frugal, do provide a basic lifeline for millions.

But the latest wave of cuts highlights a deeper truth: when welfare is left to the whims of political elites and managed by a capitalist state, it becomes acutely vulnerable to the shifting priorities of the market.

Moreover, the welfare state depicts the scars of class conflict. Yes, it has been shaped by the working class through years of resistance and expresses, to some degree, working-class values — reflecting what Marx once referred to as the political economy of the working class.

But welfare also represents the interests of capitalism. This raises an urgent question — what would a welfare system designed to meet the sole needs of working people look like?

Rather than a distant bureaucratic state managing welfare, the community must be in control; characterised by democratic communal infrastructure coexisting with a decentralised state.

Accordingly, the first principle of socialist welfare is community democracy. Far from utopian, progressive movements are already fighting for this. Initiatives such as Co-operation Jackson in the US — a network of worker and consumer-owned co-operatives — Co-operation Hull, and Co-operation Sheffield, in Britain, are striving to revitalise local democracy. A key objective for them is to create local assemblies as centres of democratic authority. Under capitalism the state has an iron grip over public expenditure, but a working-class system of welfare is one where assemblies would be spaces for democratic decision-making over welfare expenditure. As for the way decisions are made, we can already point to how this might look with the use of participatory budgets (PBs).

In Porto Alegre, Brazil — often cited as the home of such schemes — at the peak of the city’s PB programme, municipal spending was co-operatively determined between communities and local government.

Through local assemblies’ citizens were given opportunities to decide upon issues most important to them. Assembly representatives would co-ordinate budget plans across the city, co-operating with local authorities.

Although modest in comparison, there has been a growing precedence for the use of PBs in Britain over the last decade. In Glasgow, Tower Hamlets and East Renfrewshire residents have been given the opportunity to determine the use of grant money for community projects. Consequently, we are already seeing efforts to democratise public spending.

True, current PB schemes have largely been attempts to reform the system rather than a trigger for radical change. But, if injected with a commitment to socialism, they would be essential to ensuring the welfare system responds to the needs of the people rather than those of the market.

The emphasis on democracy must extend to the delivery of welfare; something which is already a prominent characteristic of many radical movements globally.

Focusing on health, for instance, from Bolivia to the Zapatistas of southern Mexico, and Rojava in north-east Syria, communities are democratising health planning.  

Typically, community control of healthcare is taking the form of residents, government officials and healthcare professionals coming together and using community forums to debate local healthcare needs, and collectively deciding how best to deliver care to suit the community.

In Rojava, efforts have been made to establish health assemblies. Consisting of community residents and health professionals, the intention is for assemblies to become the democratic nucleus of healthcare planning.

Likewise, looking back to the peak of the Bolivarian revolution in Venezuela, in the early 2000s, local health committees were formed. Consisting of residents and doctors, they collectively determined the most pressing health needs of the community, with the lived experiences of the local population informing the actions of doctors.

The NHS lacks true democratic participation; with only a token acknowledgement when discussing the “empowerment” of service users. Outside the NHS, however, there are increasing examples of health professionals and services users co-operating.  

Lambeth GP Food Co-operative is bringing together patients and health professionals on an equal basis to grow nutritious foods. Within social care, Yorkshire-based Equal Care Co-op allows providers and receivers of care to collectively manage the delivery of personal services.

Attempts to transition to a radical system of welfare are very much real. Around the world communities are taking control of budgets, and they are active in taking decisions alongside the state and welfare professionals.

As essential as this is, fundamental to any socialist system must be communities having the opportunity to take direct control of welfare. Housing provides some inspiring examples.

Uruguay has a long-standing co-operative housing model. Each co-operative is funded by the state but democratically and collectively managed by residents. For many years this model has ensured housing is accessible to working-class families.

Equally, in Venezuela, community assemblies have handled up to 70 per cent of the development of new housing, including the planning, design and building, again using state funds.

Both examples illustrate that a progressive and democratic relationship with the state is entirely possible. We see communities, through communal institutions, taking charge of state funds and democratically and collectively determining how best to use public finances to meet their own housing needs by being the direct provider of a welfare service.

The welfare state was, and remains, a significant victory for working people.

Under capitalism, though, it is a contradiction. Crucial for working-class living standards, it is also essential to securing capitalism’s prosperity.

The welfare state has been ravaged by class conflict — as the current proposed cuts clearly demonstrate. For this reason, as socialists, it is time we looked beyond the current welfare state and explore a new direction.

Progressive movements around the world, including in Britain, are demonstrating that alternative ways of organising welfare are possible; ways that embrace socialist values of democracy, co-operation, love and care. Instead of welfare being something done to us by a bureaucratic capitalist state, it should be something we collectively do for each other in solidarity.