This phrase is the epitaph of the post war welfare state or it is supposed to be. As I discussed in my blog on the welfare state (http://piemandmu.blogspot.com/2010/11/welfare-reform.html) Beveridge himself did not want people to become dependent upon the state but merely be saved from the five giants.
Hayek reminds us that anyone depend upon the state (or indeed upon another) is not free but enslaved to his provider; an argument so strong and compelling that I have never doubted it and have sought to use it in life and policy.
It is not true, however, that no man would choose to live enslaved to the state. Indeed capitalist theory is predicated upon the concept that all men work in their own self-interest; alone. If it is in the direct interest of a man to become reliant on the state then that is what will occur. It is odd that when dealing with hand outs, we often forget about this central idea and except high ideas of duty and honour.
If we allow anyone to live of the state(and you be surprised how little man can life off) they will somehow managed to live of the state. We must always make the non-state route more attractive than the state rout. We must offer the much fabled hand up approach, rather than, the suffering approach (forcing people to do X via punitive sanctions).
If you ask me to flesh out what a hand up not a hand out look like I would say look at tuition fees, yes the much reviled tuition fees. A scheme where a person receives hand up in the form of additional education but are expected to re-pay until after education thus this is not a hand out. This scheme is ideal because it continues to make education free at the point of use but still ensures that the receivers of the benefit pay for what they have received.
The central ideas of the hand out are as follows. Firstly they must be free at the point of use, secondly they must be limited, either in the number of time you can apply or the length they can last, thirdly they must add to the person, either emotionally or mentally, fourthly the hand up should not be used to save the state money. lastly they must always be structured so it is never in anyone’s best interest to become reliant upon them but not so structured that it is not in there interest to use them.
It is too easy to think of the hand up as simply a cheaper or harsher version of the hand out or as a way of pretending to be assisting with people needs whilst doing very little. All too often the hand up not and hand out has been the epitaph not of the state centric model but of the entire concept of a caring state at all, this is why people have become cynical and bitter toward it.
I still believe in this concept. I still believe that state can and should offer and hand up to all its citizens, often funded by those more fortunate in this life but more often funded from those who have received the hand up. I believe if we embraced the ideals of a hand up not only would we improved the lot of our nation but also improve the competitiveness and flexibility of are citizens.