Chapter 1782 Save the Rich First
Usmanov asked Novov, "What do you mean by the workhouse model?"
He was still a "military general" unlike Novuf who read books every day to find solutions, so naturally he didn't understand what was going on.
"Workhouses were a method of poverty alleviation adopted in Britain about two hundred years ago," Nouf explained. "They established workhouses across the country and had the poor work there in exchange for wages and food. It was a good idea, but in 1845, The Times reported a scandal that shocked the nation. Starving people in the Andover workhouse fought over carrion from wild animal bones, resulting in numerous injuries and even fatalities. The news shocked the nation. After all, as early as 1836, Britain had established a standard workhouse diet that was sufficient to feed the hungry. How could such a fight unfold over a piece of carrion? An investigation revealed that the workhouse's director, MacDougal, withheld food and forced the hungry to work. The animal bones that sparked the conflict were the raw materials he had purchased and had the hungry people grind and sell as fertilizer to surrounding farms. If they disobeyed, they would be whipped and deprived of food. As for the women... they were even worse off!"
Usmanov asked, puzzled, "Isn't this just a question of a vicious dean?"
Upon hearing this, Xiao Peng shook his head and explained, "No, it's a problem with the poverty alleviation system."
Nouf agrees with this statement: "Indeed, after the enclosure movement in Britain, a large number of farmers lost their land. In addition, the Industrial Revolution led to more people losing their jobs, so there were homeless people everywhere. If there were too many homeless people, riots would easily occur. Therefore, the British government used various means to help these people get out of poverty. Their basic idea is: the reason why the poor are poor is because they are lazy! At that time, any healthy homeless person on the street would be caught, locked up for three days, beaten up, and then thrown back to their original place to find a job. If they couldn't find a job after a few days and were caught again, they would be locked up for six days and beaten up again. Sometimes they would even drag the poor to the market and whip them in public to humiliate them. In serious cases, some even had their ears cut off and branded on their bodies. Anyway, they were told to find a job quickly. After these policies were issued, it was found that there were more homeless people. After all, there were only so many job opportunities and the internal competition was too serious. Later, workhouses emerged in Britain. They dumped homeless people there and fed them. However, this proved too costly, so they devised a new solution: the Poor Law Commission, which directly oversaw social relief efforts. This turned the workhouses into profit-making production institutions, turning the inhabitants into valuable laborers. Eating less and working more served the workhouses' interests. Thus, the Andover Scandal arose, and the workhouses became sweatshops. Yet, these workhouses continued to receive government subsidies, even increasing them, because they believed that larger workhouses would help more people.
Xiao Peng nodded and said, "This is the current approach to poverty alleviation in the UK and the US. In 2008, the CEOs of General Electric, Chrysler, and Ford flew to Washington, D.C., on luxury private jets to collect poverty funds. This isn't a joke, it's true. Furthermore, the US government, fearing the money wasn't enough, is desperately trying to give them more."
Usmanov asked in confusion: "Why is that?"
Xiao Peng explained, "They believe that as long as they can ensure that companies can make more money and expand production, they can hire more employees. Employees with wages can spend money, which stimulates consumption, and all poverty problems can be solved. See, isn't it exactly the same as the workhouse model back then?"
Usmanov suddenly understood: "It's like a champagne tower at a wedding. When the top tier is full, the wine flows to the next tier!"
Xiao Peng snapped his fingers. "That's right. If the economy is good, we'll give subsidies to large companies to help them expand production. If the economy is bad, we'll cut taxes on companies. To put it bluntly, to save the workers, we have to save the capitalists first."
Novov said, "Isn't this the same plan as the 'Road to Prosperity' that the Americans put out in 2012?"
Xiao Peng smiled after hearing this and said, "Nouf, I now believe that you are really trying to find a way to study economics. You are right, it is that emergency plan."
Seeing Usmanov's puzzled expression, Xiao Peng explained directly to him, "They're giving tax cuts to large American companies to get them to invest in expanding production. But doing so will reduce government tax revenue, so they're proposing to cut subsidies for the poor and help the rich. When the pandemic hit, the first thing the Americans did was to enact various policies that prioritized rescuing businesses."
Usmanov frowned slightly after hearing this and thought for a moment before saying, "I'm afraid this approach won't work. After all, if I were one of those capitalists and had the money, I wouldn't expand production. Instead, I would invest it in places like the stock market or the real estate market where I could make more money."
Xiao Peng nodded: "You're right. So... don't be so surprised when you see so many homeless people on the streets of America."
Usmanov continued: "What about the 'German model'?"
Xiao Peng explained, "The 'German model' is the 'European model,' but it's called that because Germany's approach is the most extreme. Their commonalities are high taxes and high welfare benefits. Their poverty alleviation system differs from the British and American systems in that they prioritize helping the poor. For example, the German Employment Agency specializes in finding jobs for the unemployed. And the unemployed can't refuse the jobs they offer; if they do, their benefits will be cut. This is to encourage these unemployed to find work."
Usmanov's eyes lit up after hearing this: "That's a good idea!"
After hearing this, Neuf shook his head and said, "This approach isn't good at all. I considered it before but gave up. Walter Wollenweber's book, The Crowd Against Society, specifically addresses the shortcomings of the German model. Germany's largest industry is no longer the automotive or construction industries, but social assistance. The combined employment of the automotive, construction, mining, fishing, and energy industries in Germany still outnumbers the social assistance industry. Its annual output exceeds €100 billion, and the industry's growth rate is seven times that of the German economy!"
"You mean 'industry'?" Usmanov came back to his senses.
Neuf nodded and said, "In order to reduce fraud and increase poverty alleviation coverage, the German government outsources all this work. Private companies do the work, and the German government subsidizes them. Private companies want to make a profit, so the more impoverished a household is, the more subsidies they receive and the more money they earn. And what is the purpose of all these private companies competing with each other? Profit, of course! If this isn't industry, what is it?"
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