3. Robert Wallace and
Alexander Webster, two scottish drunken ministers invented insurance for orphan
and widows. A premium would be paid and invested for profitable purposes.
Widows and orphans would be paid out with the return of that money, leaving the
premiums to accumulate.
4. People
started to believe that the poor deserved better than to live off charities and
the streets. This state system of insurance was designed to exploit the ultimate
economy of scale by covering every citizen.
5. The
welfare superpower is Japan. So in the mid-20th century disaster was constantly
striking japan and in 1023, a huge earthquake devastated Tokyo. Insurance
companies did not pay as much as expected and the idea that the state should
take care of risks emerged. But this was with no positive ambition. The
Japanese set up the welfare to promote war and to insure a more fit population
so that the emperor could get a steady supply of soldiers. The mistake that
they made was engaging with The United States and getting over 3 million of
their soldiers killed. The value of stick was reduced to zero by United States
bombers and cities that were built from wood were incinerated and a third of
the population lost their homes. This is when welfare was switched over to help
citizens in need that have issues such as health, unemployment, and maternity.
At this point, the Japanese had succeeded in giving everyone security and
elimination of risk and by 1968, they had the second largest economy in the
world
6. Britain and the western
area removed incentive so the capitalist economy could not function. It was an
easy life for those who were already thriving but those who were not were
having a hard time. This caused low grown and high inflation. Milton Friedman restated
that if the money supply went up, then so did the price level.
