If we continue to use the term "social security" in our public utterances, we should at least recognise in our thinking that what we are organising to do is to raise the total social welfare of the whole people by all appropriate means, of which social security measures in the Anglo-American and New Zealand sense are only a few, (although an important few for a section of the population.) Otherwise we may find ourselves inadvertently defending a "code" whose chief effect may be to emphasise still further the gulf between Europeans and non-Europeans in respect of social welfare, a gulf which continues to retard the economic progress of the entire community, and to depress the standard of living of hundreds of thousands of the poorer Europeans.

My object in writing this Memorandum, therefore, is not to argue the general case for a social welfare policy, but to set out some preliminary considerations bearing on its application in South Africa. It discusses the definition of social security, its relation to social welfare and to the social services and its relevance to the peculiar problems of this country.^ My main purpose has been to place social security schemes in their proper perspective, without, I hope, belittling their importance for groups to which they are appropriate. I also put forward somp principles or axioms which, in my opinion, should govern^ our subsequent consideration of detailed programmes and policies.At this stage I have attempted no discussion of such details, or of financial questions, and no assessment of the merits of the Durban Code. In particular, I have not tried to work out in detail what different arrangements will be required for different sections of our complex multi-racial community.

Believing that it will be helpful, I begin by analysing the different, but related concepts of Social Welfare, the Social Services and Social Security.

II. Social Welfare, The Social Services and Social Security.(A) Social Welfare. The level of social welfare of a population

is measured by the extent to which the individuals and families of which it is composed attain, or fall short of a standard of living which is regarded as "normal" or desirable in the countries of western civilisation. Generally the "norm", while continuously expanding, is considered in minimum terms. To-day it must include minimum requirements in respect of health and safety, diet, housing, clothing, education, recreation and variety of choice of purchas­able commodities, as well as family harmony and solidarity. (Sometimes non-material elements are also included, e.g. culture, morality, happiness in work, freedom and self-government.)Social welfare in this sense is now a prime goal of state policy and party politics. There is a widespread belief that.the growth of science promises its attainment' by all on a continuously increasing scale.

It is Important to note that the view still prevails (in my opinion rightly) that it is the right’and the duty of the private family, through its head or chief breadwinner, directly to provide as many as possible of the essentials of welfare for its members out of its own resources, these being predominantly earnings from work. So powerful is this opinion that we commonly equate the standard of living with the amount of family money- income, often ignoring such communally-provided benefits as education, public health and local government services. At least in the democratic countries it is our aim, in improving children's welfare for example, not to do anything that impairs the sense of family responsibility or the status of the home.

Experience, however, 3hows that the efforts of the private family, and the income it receives from the work of its members, require to be supplemented, and In some cases superseded, by what have come to be known as the Social Services. Social/welfare....

welfare, then, Ig maintained partly by the independent efforts of the private family, where earnings are adequate for the purpose, and partly by the Social Services.'

If we ask how 'social welfare is to be promoted in the Union of South Africa, the answer admits of no doubt......The author ofthe Durban Social Security Code .and the Third Interim Rep err t of the Industrial and Agricultural Requirements Commission are only the latest authorities for the view, supported by every recent Royal Commission, that it depends on raising the level of skill, health and productivity of the entire population, still Indefensibly low, and on re-organising our economic system to permit of the maximum utilisation of all our resources, both material and human. Only through a substantial increase in the national income can the family standard of living be raised to a tolerable level. At present It Is about £35 per head per year, which is barely sufficient to purchase the minimum physiological requirements for health and’decency, as calculated by the Cape Town Social Survey, allowing nothing for distinctively human or social needs and nothing for capital replacement or investment.

(■B) The Social Services. These are variously defined and consist of very different things. One definition states that they are "those activities by which public provision is made in Western Society for the survival or betterment of those whose existence at a tolerable level is not assured to>them by the Private Family, Private Property, or Personal Effort." Their cost thus involves a transfer of money income =.or real Income from the relatively prosperous to .the relatively poor.

Another definition, stressing a somewhat different aspect of the social services, regards them as the communal provision of elements of social welfare which, by their very nature, cannot be provided at all, or provided adequately, by the Private Family or by some private families out of their own resources. This very Important class of social services includes education, public health, the provision of many child welfare services,° vocational guidance, certain medical services like hospitalisation, legal aid and legislation dealing v/ith working hours and factory conditions. Here, as a rule, the criterion is the provision of a skilled service, including inspection, rather than of a direct money payment. Since the benefits are.not pecuniary, these services are available to all, without means tests or similar conditions.

The term Social Services is often very loosely employed.We use other names, like pensions, social insurances, benefits, compensation, allowances, sub-economic rates, subsidies, poor relief or public assistance for still other types of "social services". These denote types of collective provision somewhat different from the social’,services enumerated above, and differing, too, among themselves. Strictly speaking, they are not services: they all involve the receipt by the beneficiaries of direct money payments or (as in the case of poor relief) payments in kind.

(ij They are intended only for specified classes of persons;{ii; they are not available to those who are thought to be

able to buy the benefit aimed at out of their own resources, i.e. they are almost always accompanied by a means test;

• (iii) they do not normally carry with them the services of specialists, e.g. social workers;

(iv) they are often contributory or administered on an "insurance" basis.Health protection and medical care are partly ordinary

purchasable commodities (sometimes privately insured against, as in medical Benefit Societies), partly a social service of the first kind (public health and preventive medicine), and partly a money benefit (free or assisted hospitalisation, national health

/insurance....

insurance, etc.). Some proposals for safeguarding the nation s health would make it completely a social service, like education, -i.e. all its branches would be financed out of ordinary taxation and be available to all without a means test.

It will be seen, therefore, that there is r.O easy way of defining the social services. Some are general, others restricted; some involve the provision of skilled service, Others consist of money benefits; some are financed out of general state revenue and in many cases involve a transfer from rich to poor, while others are in great part contributory, thus re—distributing income mainly within the ranks of the compulsory contributors themselves; some provide elements of welfare which have the effect of raising the whole standard of living and of national productivity, others only protect or maintain a given customary standard exposed to risks and emergencies. Some of these distinctions are vital.^I believe that our thinking will be clearer, if we bear them in mind. It may even be valuable to restrict the term "social services" to those community-provided services which (a) involve a transfer of real Income from the richer to the poorer and(b) have"the effect of uplifting the entire standard of living and skill "and productivity of the population, especially^of the, working classes^ A conspicuous advantage of this procedure is that ifc enables us to give a clear definition of provisions aiming at social security.

(C) Social Security. Increasingly during the present century the working people of capitalist industrialist countries have begun to feel Insecure. This means, not so much that they feel their standard of living to be Insufficient, (although many feel this also), but that they feel that their current standard, which they have so painfully attained and which is recognised as "normal", is constantly being endangered. Historically this feeling has been expressed more by the better-off section of the working class, and even by the lower middle classes, whose standard of living has not risen appreciably during the last forty years, but on the contrary is increasingly threatened either by Competition from below or by the failurer;pf Industry to maintain it. These sections have a stake in 'the coufitry',' 'They have some­thing to. lose. They-do not'press so much for better social services., as for the maintenance and protection of* their accustomed standard of life. They are represented.’chiefly by trade unions catering for skilled workers. The semi-skilled and especially the unskilled are more conscious of the need to lever up their present wage-rates and thus their total standard of living, and to obtain more benefit from existing social services by extending and improving them.

It is interesting to observe that the pioneers of the social security movement are the. Labour Parties and the established trade unions, together with groups representing the salariat, small shop-keepers and the lower middle classes. This was true in the France of the Blum Government; it was true of the U.S.A.; it is true of New Zealand and' it is true of the Union of South Africa.It is very significant that the newer trade unions of less well- paid -European workers in this country and the representatives of Poor Whites are far less anxious for "social security" than they are for higher wages. Even more significantly, the spokesmen of the non—Europeans are indifferent, even hostile, to the goal of social security, which they fear is meant to protect the interests of relatively well-off white workers,• perhaps even at the expense of any appreciable improvement in the non—European standard of living. Whether this is true or not, it is vital to note the fact that social security appears to be the goal only of a section of the working masses of South Africa,

Unless we understand this point of view, we cannot deal justly with the representatives of the non—European masses,Standards of living can be so low, in comparison with others in

j "t h.6 • • • •

the same country and. in relation to what is regarded as practically attainable, that those forced to live on them find them intolerable and not worth preserving. They do not want to be protected in them; they want them to be organically changed. The customary risks of ill-health, unemployment, old age, etc.. seem negligible, in comparison with the fact that even the ordinarily healthy worker in full employment cannot provide out of his wages a tolerable living for himself and his family. The psychology of social security is conservative, that of the advocates of higher wages and better jobs dynamic and optimistic. (Another point worth making is that most people, especially when they are young, except to avoid the risks and emergencies of life; their eye is on the standard of living in "normal11 times. The age composi­tion of the poorer Europeans and of non-Europeans is very much younger than that of the skilled workers and middle classes.)

These groups are not alone in preferring radical methods of snifting the entire standard of living to a higher level. Many socialists and scientists in Europe and America, to say nothing of the U.S.S.R., share their views. They attribute the widespread desire for social security to pessimism about the ability of capitalism to increase productivity, to a restrictionist outlook comparable with the economic policies of vested interests and monopolies, It may well be urged that we in South Africa, a country still young in spirit and economically undeveloped, should not fall victims to this depressing philosophy* At least our non-Europeans feel that, given the right opportunities * they could greatly improve on their present standards of living. It would be a fatal error to discourage that sentiment.

Let^us now define what we mean by social security more closely* individuals and families will feel insecure, when neither their earnings and savings on the one hand nor the traditional social services on the other are: sufficient to protect their accustomed standard of living against certain common risks or emergencies of family life and employment. (Low wage-rates are not a risk in this sense.) The most important of these contingencies are as follows:—

(1) loss or interruption of employment or a reduction of earnings by reason of sickness or disability,

(ii) loss or interruption of employment or a reduction of earnings through lack of demand for the worker’s services, i.e. unemployment, under-employment and the compulsion to accept inferior types of employment,

(ill) widowhood and orphanhood.(ivj loss of earning capacity resulting from old age.(v) "too many children" in relation to family income and

accustomed standard of living.(vi) total destitution, temporary or prolonged, from any

cause whatever.It is obvious that higher wages as such would not be the most appropriate method of meeting all these risks, unless wage increases were all saved, not used to enhance the current standard of living. The experience of all industrial countries is that work­ing Class savings are totally inadequate to provide against these risks, partly because the risks are often prolonged, partly because the saving habit is declining with the growing requirements of current living standards, partly because the institution of the family is very much weaker than it was in the 19th century.

To meet these risks, therefore, the workers demand to have their incomes temporarily supplemented. The money payments wanted are sickness, disability or invalidity benefits, widows' and orphans1 pensions, old-age and superannuation pensions, family allowances and poor relief or emergency assistance.

type ought to be included in the category of social security provisions. They form a part only, though an important part, of the whole body of services which the jtate, or collective effort, can render to the workers, They constitute a distinct class, with a distinctive purpose, (i) They all consist of money payments; (ii) they are aimed at safeguarding an existing standard of life and leave the present wage structure of industry intact; (iii) unlike other social services, they almost always involve the spreading of certain risks among the whole group exposed to them, rather than a transfer of income from richer to poorer;’ (ivj their- effects in raising the level of skill and productivity of the whole population are fet best uncurtain, and indirect.

Methods of financing such social security provisions as already exist vary considerably. Some, like old-age pensions, invalidity pensions, children's maintenance grants and poor relief, are at present provided out of general taxation. To that extent they involve a transfer of income from richer to poorer. Unemployment benefits are paid out of funds to which employees, employers and the state contribute. In countries which have them, health insurance benefits and family allowances are usually contributory. As a rule the state pays as little as it can, the workers as much as they can afford; while employers, where they can, no doubt pass on to consumers a part of their contributions,.

Apart from the danger of encouraging malingering, improvidence, idleness, etc., the chief reason why such benefits are not provided free for all who require them (like education and public health) is their enormous cost. If they were to constitute a first change on the national Income, the whole economic system would have to be revolutionised. Probably the state, as in Russia, would have to control every source of the national income and determine the shares that individuals would be permitted to have in it, after social security costs and other •charges had been met first. In default of such heroic methods, attempts are made In capitalist countries to finance such schemes mainly from contributions or taxes levied on the workers and employers and to keep down the share of the state to manageable proportions. New Zealand has its Social Security Tax of l/-: ln the pound of all incomes. The Beveridge Report is expected to make a similar propqsal for Qreat Britain. The Durban Committee's scheme also follows closely the New Zealand plan.

Before leaving this subject, it is important to recognise the very large part played by old—ag6 "benefits In existing and proposed social security schemes. Already the Union devotes nearly half the total it spends on social welfare services (excluding education) on old-age pensions. In 1940 New Zealand spent about the same proportion in the first year Of operation of the Social Security Act. The sums required are likely to increase sharply in the near future, in view of the rapid ageing of European populations and possible increases in the scale of benefit paid to recipients. A social security scheme inevitably has the aspect of emphasising the needs of those who are no longer productive either of wealth or population. (It may be added that the spread of a psychology of "security" in younger age-groups will also- have the .effect of further discouraging parenthood on a scale adequate for replacing the population).

The foregoing discussion may be summarised as follows:-(i) Especially in a country of low productivity and of_

undeveloped social services (like the Union) , Social Security is not •primarily a method of increasing the general standard of living' or of solving the main^ problems of poverty and sub—standard living. It is not a sole or sufficient programme for a state wishing to increase the social welfare of its members.

uhe same country and in relation to what is regarded as practically attainable,- that those forced to live on them find them intolerable and not worth-preserving. They do not want to be protected in them; they want them to be organically changed. The customary risks of ill-health, unemployment, old age, etc. seem negligible, in comparison with the fact that even the ordinarily healthy worker in full employment cannot provide out of his wages a tolerable living for himself and his family. The psychology of social security is conservative, that of the advocates of higher wages and better jobs dynamic and optimistic, (Another point worth making is that most people, especially when they are young, except to avoid the risks and emergencies of life; their eye is on the standard of living in "normal" times. The age composi­tion of the poorer Europeans and of non-Europeans is very much younger than that of the skilled workers and middle classes.)

These groups are not alone in preferring radical methods of shifting the entire standard of living to a higher level. Many socialists and scientists in Europe and America, to say nothing of the U.S.S.R., share their views. They attribute the widespread desire for social security to pessimism about the ability of capitalism to increase productivity, to a restrictionist outlook comparable with the economic policies of vested interests and monopolies. It may well be urged that we in South Africa, a country still young in spirit and economically undeveloped, should not fall victims to this depressing philosophy. At least our non-Europeans feel that, given the right opportunities, they could greatly improve on their present standards of living. It would be a fatal error to discourage that sentiment.

Let us now define what we mean by social security more closely. Individuals and families will feel insecure, when .neither their earnings and savings on the one hand nor the traditional social services on the other are sufficient to protect their accustomed standard of living against certain common risks or emergencies of family life and employment. (Low wage-rates .are not a risk in this sense.) The most important of these contingencies are as follows:- '

(i) loss or interruption of employment or a reduction of earnings by reason of sickness or disability.

(ii) loss or interruption of employment or a reduction of earnings through lack of demand for the worker's services, i.e. unemployment, under-employment and the compulsion to accept inferior types of employment.

(Ill) widowhood and orphanhood.(iv) loss of earning capacity resulting from old age.(v) "too many children" in relation to family income and

accustomed standard of living.(vl) total destitution, temporary or prolonged, from any

cause whatever.It la obvious that higher wages as such would not be: the most appropriate method of meeting all these risks, unless wage increases were all saved, not used to enhance the current standard of living. The experience of all industrial countries is that work­ing class savings are totally inadequate to provide against these risks, partly because the risks are often prolonged, partly because the saving habit is declining, with the growing, requirements of current living standards, partly because the institution of the family is very much weaker than it was in the 19th century.

To meet these risks, therefore, the workers demarid to have their incomes temporarily supplemented. The money payments wanted are sickness, disability or invalidity benefits, widows1 and orphans1 pensions, old-age and superannuation pensions, family allowances and poor relief or emergency assistance.

type ought to be included in the category of social security provisions. They form apart only* though an important part, of the whole body of services which the state, or collective effort, can render to the workers. They constitute a distinct class, with a distinctive purpose, (i) They all consist of money payments; (ii) they are aimed at safeguarding an existing standard of life and leave the present wage structure of industry intact; (ill) unlike other social services, they almost always involve the spreading of certain risks among the whole group exposed to them, rather than a transfer of income from richer to poorer; (iv) their effects in raising the level of skill and productivity of the whole population are &t best uncurtain and indirect.

Methods of financing such social security provisions as already exist vary considerably. Some, like old-age pensions, Invalidity pensions, children's maintenance grants and poor relief, are at present provided out of general taxation. To that extent they involve a transfer of income from richer to poorer. Unemployment benefits are paid out of funds to which employees, employers and the state contribute. In countries which have them, health insurance benefits and family allowances are usually contributory. As a rule the state pays as little as it can, the workers as much as they can afford; v/hile employers, where they can, no doubt pass on to consumers a. part of their contributions.

Apart from the danger of encouraging malingering, improvidence, idleness, etc., the chief reason why such benefits are not provided free for all who require them (like education and public health) is their enormous cost. If they were to^constitute a first change on the national income, the whole economic system would have to be revolutionised. Probably the state, as in Russia, would have to control every source of the national income and determine the shares that individuals would be permitted to have in it, after social security costs and other charges had been -met first. In default of such heroic methods, attempts are made in capitalist countries to finance such schemes mainly from contributions or taxes levied on the workers and employers and to keep down the share of the state to manageable proportions. New Zealand has its Social Security Tax of l/~ in the pound of al- incomes. The Beveridge Report is expected to make a similar proposal for Great Britain. The Durban Committee’s scheme also follows closely the New Zealand plan.

Before leaving this subject, it is important to recognise the very large part played by old-age benefits in exiscing and proposed social security sQhemes. Already; the Union devotes nearly half the total it spends on social welfare services (excluding education) on old-age pensions. In 1940 New Zealand spent about the same proportion in the first year of operation of the Social Security Act. The sums required are likely to Increase sharply in the near future, In view of the rapid ageing of European populations and possible increases in the scale of benefit paid to recipients. A social security scheme inevitably has the aspect of emphasising the needs of those who are no longer productive either of wealth or population. (it may be added that the spread of a psychology of "security11 in younger age-groups will also have the-effect of further discouraging parenthood on a scale adequate for replacing the population)..

The foregoing discussion may be summarised as follows:—(i) Especially In a country of low productivity and of_

undeveloped social services (like the .Union) , Social Security is not primarily a method of increasing the general standard of living or of solving the main problems of poverty and sub-standard living. It Is not a sole or sufficient programme for a state wishing to increase the- social welfare of its members.

ic. *r (ii.) It is neither a panacea for all social evils nor a social gospel which can be expected to engage the enthusiasm of youth, or fulfil the aspirations of those who represent the poorest and most under-

• :i .?• privileged groups in our population.(iii) Politically., it is a plan to protect the existing

'.'normal" standard of living mainly of industrial■ wage-earners, while leaving the existing wage-

structure and ;socio-economic system intact.(iv) Economically, it is a plan to redistribute the

national income partly between classes, partly within the working-class itself, rather than to increase It,

(v) Socially, it is a plan for supplementing individual, independent efforts to maintain the standard of living, rather than for directly strengthening them by improving skill and opportunity.

(vi) Administratively, it is a plan for providing mainly monetary benefits; for classes of persons eligible to receive them, to be used at their discretion, not for providing collective- specialist services directed by skilled personnel.III. Application to South Africa.

Social Security legislation existing or proposed in other countries is designed for populations where the national income per head is two or three times greater than it is in the Union. It is pertinent to ask whether the Union's poverty does not make compari­sons with New Zealand and Great Britain misleading. Both these countries already have social services developed on a far more adequate scale than the Union (even for its European population), and a tax revenue probably elastic enough to enable adequate sums to be found for financing social security. It may be taken as proved that the Union could not pay for a programme of social security applicable ( rren with differential racial scales of benefit) to all sections of the population. Recognising this, the Durban Committee proposes social security only for Europeans (to a lesser extent also for Coloureds). contenting itself with advocating some inexpensive additions to the social services for Africans. It must be asked whether more could not be gained by spending far larger sums on the last object, even if it meant less spent on Europeans. It might also be suggested, if Europeans above a certain income level want increased social security, that they should be prepared to pay for it wholly or largely themselves, by means of a tax on wages. This would leave the yield of ordin­ary methods of taxation available fox* extending and improving the ■basiiC.social services, in the interests mainly (but not exclusively) of non-Europeans.: More steeply-graduated Income .and Super Taxes and higher Death Duties would compel the more prosperous Europeans to finance social services for the least prosperous classes, namely non-Europeans.,. This would satisfy our demand for justice and, if combined with*modification of colour bars in industry and the reduction of regressive taxation, would vastly increase the national Income and the standard of living of all sections.

•■'••■•I , ; i'. VI propose, therefore, that our best procedure would be to ascertain the urgent needs of the people, of- South Africa, from the -point of view of raising the standard of income and welfare of the country as a whole, A programme" of social security ■ has no justification except in so far- as it forms.an integral part of a wider policy of social welfare. The great danger of comparison with other countries is this: elsewhere social security, as defined above, is the most.urgent task of a total social welfare policy, - the social services being already well—developed for all sections of the population, - while in the^nion it is

/probable....

probable that other types of social welfare provisions are more urgent and would yield a proportionately higher return in social welfare.• . • * * *

Throughout this Memorandum I have tried to avoid contrast­ing all Europeans with all non—Europeans, It should be recognised that a growing number of non-Europeans, including nearly all Coloureds and Indians and perhaps as much as one-fifth of Africans, are regular wage-earners in industry or large-scale agriculture, commerce and mining e^c., living the detribalised lives of a mainly urban working-class. While they still require basic social services before social security, it is^also true that, being in a transitional stage, they also qualify for inclusion in certain pension and benefit schemes, e.g. old-age pensions, children's allowances, unemployment and sickness benefit. It is probable, therefore, that modified provisions of the social security type should immediately be made available to such groups. Family structure, urban residence and occupation mu therefore be our criteria in deciding what groups of non- Europeans shall be included in a social security scheme.

TV. Some General Principles.(i) The most urgent needs of the poorest should be satisfied

before the less urgent needs of the relatively more prosperous. This principle applies both within the European population and between Europeans on the one hand and non-Europeans on the other hand,

(ii) Such urgent and basic needs are known to be identical(or nearly so) for all groups of human beings, irrespec­tive of race and colour. Social services in respect of nutrition, education, health (and to a lesser extent housing and clothing) should therefore be available to all sections of the population on the same terms and on the same level of quality. Where money benefits are Involved, for the satisfaction of minimum needs, they should also be the same. (This principle does not equally apply to social security provisions, which are based on the maintenance of existing and Ilffsrent standards of living).

(iil) In financing the social services and the provisions of a social security code the broad principle of., ability to pay should consistently be applied. This means the total exemption of the.very poorest from direct taxation and a sharply progressive scale of income taxes and death duties. Everywhere this principle is applied to the provision of the traditional social services.Its application to social security schemes requires the fixing of proportionately higher exemption limits for non—Europeans and a progressive scale' of rates of contributions based on the amounts earned. For reasons I have already stated, I do not consider that all such schemes for Europeans should be non—contributory. But consideration should be given t-o proposals for purely

■■■> nominal contributions for non-Europeans.(iv) At a later stage I shall give detailed reasons against

the use of the concept of "social insurance", except in a limited number of cases, to describe the fin an c i'll basis of some forms of benefit,; It is a merit of the New Zealand legislation and of the Durban Committee's proposals, that they speak of "contributions11 and "benefits" and not of insurance "premiums" and "payments" The principle should be accepted that, in the light of the experience of other countries, no general attempt should be made to put Social Security Funds on an ac tutorial basis.

(v) A corollary of a state social welfare policy should be the repudiation of all existing legislation and trade practices, whose effect is to increase the cost of living of the poor, and thus to reduce their .standard of living. This principle raises very big questions concerning our customs duties, the effect of agricultural control boards", and industrial legislation, etc. tending to raise the cost of necessities (e.g. housing) to the poor. It is folly to perpetuate such Social Disservices (ae they have aptly been called), while professing to be engaged on a Social Welfare policy.

■ (vi) There seems to be no sound reason why all the elements of a progressive Social Welfare policy, or all the parts of a social security scheme, should be embodied in one Act of Parliament. To achieve the illusory goal of codification from the outset, certain sacrifices and compromises may have to be made. To allow of doing things by stages and for continuous expansion, a number' of Acts of Parliament will be required, spread over'a number of years and dealing with substantially different fields of welfare.

- ' ’(vil). In view of the fact that health prevention and pro­tection is a basic social' service,which requires to be continuously expanded for many years to come, It is essential that its finances should not be lumped together with those of social security measures, which deal with limited emergencies affecting specific groups of people at different times.The organisation and administration of medical services ought likewise to b6 separated from the mainly financial administrative machinery of a social security scheme. This principle should apply throughout all the social services, which Involve specialist personnel and measures to combat preventible evils. No-one has suggested Including educational services within the scope of social security. There is as little reason to include health and medical services. Moreover, it would be absurd to have different health schemes for different1 sections of the community. Health is indivisible. The Durban proposals err in both these matter's.

(vlii) 'This Committee should accept the principle that weought not to anticipate at this stage every sort of political and financial objection to our proposals. These should be worked-out and given publicity to, on their 'merits. Only at a later stage should attention be given to what is politically attainable,rather than to what is intrinsically desirable.• " -. >: • • i : ro

V. Conclusion.'• . \ ■t-.-1 r - _ ; * ? , ^3

The Durban Code violates many of the principles stated in the preceding section’and is highly defective on this and other grounds. > "

(i) The annual cost of the provisions included in the Code {not all are new benefits), is estimated at roughly £30m. Of this sum just over £8m. is earmarked for benefits and social services for non-Europeans. In other words. "80°/0 of the population, - and that the poorest, - are allocated less than 30°jo of the expendi­ture. On a per eaput basis, Europeans are to receive benefits costing £11 per annum, and non-Europeans

(ii) Throughout the Code it is assumed that non-Europeans can live on a physiological minimum very much lower than that required for Europeans. For example, the family allowance for a Coloured child is Q/- per month,, for an Asiatic child 2/— per month and for a European child 15/- per' month. There are similar huge discrepancies for old-age, sickness and unem­ployment benefit.. ' Moreover, non-Europeans have to be poorer than Europeans to qualify for benefits where there are means tests. It is also clear that differential levels of health protection are contemplated for different ethnic groups. Perhaps the most serious discrimination of all is to be found in the method by which four separate Funds are to be created for the four different ethnic groups.Thus the future social welfare of each group depends on the amount and elasticity of each separate Fund,It is clear that great difficulty will be experienced in increasing the three Funds for non-Europeans, although the need for growth is greater in their case.

(iii) The contributions to the Social Security Fund forEuropeans cannot exceed £10m. per annum. (The state will find the balance, relatively little of which is a new burden.) Contributions are based on a flat rate tax of 5$> of the incomes of individuals and companies, i.,e, the poorest individual has the same percentage deduction from his income as the richest individual or company. This is regressive taxation with a vengeance! Smaller percentage taxes are to be levied on Coloureds and Asiatics, although more than half of these probably live below the poverty line. The Native Medical and Security Fund alone Is non-contributory, but in this case the per caput expenditure i3 lowest.

(iv) I have already commented on the anomaly by whichthe finance and administration of health services are divided between four different funds. It also appears that, for natives a separate system of Social Welfare Departments is contemplated.

(v) There is a total absence of provision for methods of specifically preyentlng ill-health, unemployment, etc The emphasis is entirely palliative.-

(vi) An assertion made throughout all the propagandaemanating from the Durban Committee is that South Africa is a rich country. This is quite false. It is precisely the p'overty of the Union that makes an elaborate policy of social security for a section of the population so unjust and uneconomic, when it is not accompanied.by far-reaching proposals to extend and imp-rbve the fundamental social services.

(vll) In short, while paying lip-service to the need for Increasing the South African standard of living by all appropriate methods, including better social services, the Durban Code in practice fails to recognise the paramount importance of the latter.

An important point of procedure confronts us at the outset" Are we to confine ourselves to the consideration of methods of "social security" only? ' Or are we to stress the need for a wider social welfare, policy containing, but not limited to such methods? ■The Durban codes for non-Europeans implicitly recognise the need for better social services,) Can we accept the first resolution• * /passed....

D^r??n £ongress, adopting the proposed Social Security Code of the Durban Committee in principle, and providing ■n s subsequent revision by a National Social Security Council?

this resolution practically commit us to the support of a social welfare policy essentially partial and incomplete? Could we, perhaps exert our influence on such a National Council to

*to broaden its aims and to consider other measures S 10 spirit and intention of the Atlantic Charter and the speecftes of the Prime Minister?

* ’ -WNovember, 1942.

PROPOSED STATEMENT__OF POLICY.

■ ■■■■ '• 1. PREAMBLE. .-I'.There is a-widespread desire in South Africa to plan and

initiate now, and Carry to completion as soon as possible after the war, radical and comprehensive changes designed to improve ■the standard of living and well-being of all sections of our population. Such a policy is demanded by the conscience of civilised and .democratic communities. It is made possible by the resources of modern science and technology, together with new knowledge of how to organise human effort and enterprise for the attainment of social ends. Moreover, the realisation of this aim is widely recognised to be an essential prerequisite of a world that will find peace preferable to war. The Atlantic Charter has declared that one of the major purposes of the democratic nations is to procure 11 improved labour standards, economic advancement and social security" for all. peoples of the earth. Everywhere the concept of planning social welfare ifi accepted as part of the philosophy of the .modern, democratic state. >

The term "social security" has caught the imagination of large numbers of all classes in the Union of South Africa, as elsewhere, and is generally used as a short description of what we are aiming at. It is clear that the conquest of avoidable want and distress by state-organised methods of mutual protection is one of the great steps now requiring to be taken as part of a long-range plan of promoting better social and economic welfare.

Our special problem is to decide what are the most urgent, practicable and. constructive taaks of a policy of planned social welfare in.relation to the needs of South Africa. Three paths have to be followed simultaneously, if we are to further the social and economic interests of the peoples of the Union.

(l) Since the standard of living of the great majority of our population is still greatly below that of other civilised countries, and wholly insufficient for the maintenance of health, decency and efficiency, we must bend all our energies to the supreme task of raising the national income per head, without which no significant improvement is permanently possible for any section of our people. Methods of increasing national productivity must be compatible with the continuous betterment of wage standards and working conditions and the diminution of unmerited economic inequalities. We must aim at the more effective utilisation, not only of our soil and physical resources, but more especially of our human wealth. We must progressively abolish all existing obstacles to the achievement of economic opportunity and to the best use of the labour and enterprise of all our peoples. More particularly, such an aim demands ■th.e expansion of industry, an enlightened wage policy, the extension of our home market, the rationalisation of agriculture, sound town and country planning and state guidance of our economic life in the interests of national, and not merely sectional progress.

Different countries will require to stress different methods as the most urgent in realising a better life for all. In South Africa we must not blind, ourselves to the fundamental fact that ours is a poor and undeveloped country, at present unable to promise genuine freedom from want to the vast bulk of our population. But ours is also a potentially rich country. To Bhift the entire living standard to a higher level is our prime necessity as a nation. A dynamic policy requires the encouragement of initiative, the prospect of rising wage standards, of new economic.opportunities, as well as the protection of such existing standards of living as are above a tolerable subsistence level.

(2) In addition to promoting immediate measures of economic re-organisation, an enlightened stater policy in South Africa will direct itself to equipping the population with the means to become more efficient creators, of income.. For this purpose our paramount need is to enhance the skill, health and efficiency of the people by a long-range programme of improving and extending the basic social services. Such basic social services are education in all its' forms (including technical training and physical education), health, nutrition, housing, recreation and child and maternal'welfare. No nation can raise its living standards without the conquest of illiteracy and ignorance, disease, squalor and idleness. By bearing directly upon the capacity of the people to work and earn income the social services play an indispensable part in increasing national productivity and thus the standard of living attainable by all. Expenditure on these services is an investment for the future. Together with a rational economic system designed to increase the flow of wealth, they afford the prospect of a secure Individual and family life based on dependent earnings from work.Their development will do much to eliminate many of the risks of family life and earning a livelihood against which we are proposing to protect people to-day. In South Africa the basic social services are still woefully inadequate for the great majority of our population. Until we have largely improved and extended them, we shall not be within sight of guaranteeing a minimum earned standard of living for our people, nor Of adequately protecting it in emergencies by measures of contributory social insurances.

(3) The third path to planned social welfare is the method of Social Insurance against the common and recurring contingencies of family life in the modern, Industrial age» This is the method popularly known to-day as Social Security. At present the bulk of the v/orklng population cannot, out of their own independent earnings and with their present types of saving, make provision against old age, widowhood and. orphanhood, sickness, etc. The state has, therefore, an inescapable duty to maintain them In health and d.ecency or to aid them to organise a national system of insurance against these risks. So long as our economic system cannot provide full and regular employment for all at a living wage, we must collectively support the involuntarily unemployed and help to rehabilitate them for work. The method of contributory social insurance has found very general acceptance as that best ad.apted in western democratic communities to attain these ends.A contributory system is required owing to the enormous sums of money involved, as well as the need to preserve independence and social Incentives. Social insurance, by enabling all to share the cost of the risks to which nearly.all are liable at different times and in different degress, is a fine example of mutuality .and co­operation. The contributory principle, when it is applicable, ensures that the system is based on the efforts of a population engaged in work and service and entitled to share in the benefits by undisputed right. By removing all stigma of charity, and, under proper safeguards, all tendency to pauperisation, it maintains and encourages social and industrial morale. Moreover, a system of social insurance is immediately practicable and offers immediate; beneficial results.

In welcoming the widespread d.esire to introd.uce compre­hensive measures of social insurance into the structure of our welfare system in South Africa, we wish to reiterate our view that no effort should be spared to eliminate or substantially red.uce the risks we are proposing to insure against. The first aim of a com­munity's health services must be to prevent ill-health. The first aim of our economic system must be to provide full and regular work at decent wages, and In emergencies the provision of public works, industrial training and other productive forms of maintaining the employability of the people.

Moreover, social insurance is at present of limited applicability in South Africa. A large part of the population is

/inevitably .....

inevitably unfitted for inclusion in a contributory scheme.,- either because they do not earn enough to be able to afford to make con­tributions, or are living in an impoverished subsistence economy, or in rural areas where difficulties of administration are very formidable. For them the other two paths, i.e. of increasing economic opportunities and of providing better social services must be followed for a long time, before they can become eligible for schemes of social insurance.SUMMARY: We understand by Social Security, in its relation to the special needs of the Union of South Africa, a broad policy of in­creasing the economic opportunities and enhancing and protecting the standard of living of all sections of the population. This policy requires (i) economic changes designed to increase national productivity, (ii) better social services like education and health, and (iii) an effective system of contributory social insurance.

II. SOCIAL SERVICES. • .-.X -These include the following

1. Education.2. Health.'-'3. Housing. ■4. Nutrition.5. Welfare of children and young persons.6. Institutional, family and rehabilitative services.7. Recreation.

1. EDUCATION: We recognise that education is the social service- most fundamentally bound up with raising the standard of living of a community. .

• (a) Pre-School Education: A large and immediate increase is necessary in nursery schools and other forms of pre-school education particularly for the poorer sections of the community. The same facilities are required for Coloureds, Asiatics and urbanised Africans. : iiJrivX:.'.tV.r... • • J ' $**•

(b) Primary Education: Our general aim is to raise the minimum level of education to the equivalent of Standard VI for all sections of the community. As a first step in this direction, compulsory free education should be provided for Coloureds and Asiatics and for Africans in urban areas;'together with a substantial increasein the facilities for primary education for rural Africans. To attain this object, it will be necessary for the Government to consider large capital expeuditure on buildings and equipment and the extension of facilities for training teachers.

(c) Post-Primary Education: We recognise the principle that education in its widest sense should not end with the primary school but that according to the abilities of the individual and the needs of the community, provision should be made for higher education and technical and vocational training.

Non-Europeans need similar facilities for post-primary education, but these will be useless unless there is a corresponding increase in their economic opportunities and' a removal of such obstacles as debar them from higher forms of work.

For poorer children of ability, more adequate provision of bursaries is required to cover fees and. maintenance for post­primary education.

It is important that the educational system should include in its objects training to equip young people for citizenship and to prepare them for the responsibilities of home and family life.

(d) Physio-al Edu cation : The introduction of a national service of physical education is recommended to improve the efficiency of the population. '

Generally, we are in favour of Union control of education as against provincial control, and deprecate any division of educational finance and control based on racial distinctions.2. HEALTH:

We are in favour of the creation of a national system of health services, both preventive and curative, accessible to all sections of the population and financed out of general taxation.

As this matter is at the moment being dealt with, by a State Commission, we do not feel it necessary to make any more specific recommendations regarding health services at this stage.3. HOUSING:

We recognise the need for all sections of the population to be adequately housed, according to sound physiological, social and cultural requirements. To enable this object to be achieved a first step should be a nation-wide survey of housing needs conducted by a national planning authority.

We recognise that the provision of adequate housing for the poorer sections of the community must be on a subsidised basis. :4. NUTRITION: •

There should be a national food and agricultural policy designed to produce an optimum diet for all sections of the population. It will be necessary for the State to. subsidise food. Systematic measures of dietetic education are also essential, and communal meals should be available when and where necessary.5. WELFARE OF CHILDREN AND YOUNG PERSONS:~* -------- - - . - —- - - . - /

To every child should be given the opportunity, to be born healthy, brought up under healthy conditions, provided with facilities for education and training suited to his capacity, and on attaining the age and qualifications for work, work suited to his capabilities and such opportunities for physical, mental, moral and spiritual development as will enable him to become a useful citizen.

For those handicapped physically, mentally or socially, skilled services should be made available, according to their need, adequately financed and with the object of providing them with as nearly normal an environment as possible and that pro­tection, training and happiness which should be the right of every child.S. INSTITUTIONAL, FAMILY AND REHABILITATIVE SERVICES:

Other social services should be so developed as to minimise the need for institutions.

■ ‘ - • i , » >

Adequate provision must be made for handicapped persons unable to be absorbed into the full life of the community.

We call attention to the urgent need for an Increase in the number of specialist services rendered by skilled social workers in connection with family and"social services and social security benefits.

Collection Number: AD843

XUMA, A.B., Papers

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