Between complacent bureaucracy and cruel market

Every society wrestles with a fundamental question: how much should the state take care of its people, and how much should it leave to the market? Tilt too far toward an all-embracing welfare state and you risk breeding complacency — where some citizens, knowing their basic needs will be met regardless, lose the incentive to work, innovate or contribute. Swing to the other extreme — pure free-market capitalism — and you end up with a merciless system that rewards the already advantaged while trapping the structurally disadvantaged in a cycle of poverty.

Pakistan is no stranger to this dilemma. We have, over the decades, flirted with both instincts - populist slogans promising 'roti, kapra, makaan' on one side, and IMF-prescribed market reforms on the other. Yet we have rarely paused to ask: where exactly is the balance between dignity and productivity, compassion and enterprise?

The fear of "free riders" in a welfare system is real. In any society, there will be those who exploit subsidies, dodge work and game the system. But in Pakistan, the greater risk has often been the reverse: our social safety nets are so thin, patchy and politically manipulated that millions remain one illness, one failed harvest or one factory closure away from destitution.

The market, meanwhile, has its own parasites. We rarely acknowledge that in an unregulated economy, monopolies, rent-seekers and politically connected businesses extract wealth without genuine value creation. Whether it's land mafias hoarding plots, cartels fixing sugar prices or speculative traders inflating currency volatility, the "free" market is often anything but free for the ordinary citizen.

Countries that have managed to combine prosperity with fairness — think Denmark, Norway, or even Singapore — do not cling to an ideological extreme. They build economies where the state guarantees a basic floor of dignity (healthcare, education, food, shelter) while also fostering an environment in which work, innovation and enterprise are rewarded.

Pakistan's challenge is more complex because our state capacity is weak, tax collection abysmal and trust in public institutions almost non-existent. In such an environment, simply declaring "we will have Scandinavian-style welfare" is fantasy. We do not yet have the fiscal discipline, institutional strength, or civic culture to sustain such generosity without sinking into debt or corruption.

Yet neither can we surrender fully to the market. Left to its own devices, it will widen the gulf between the gated elite and the undernourished majority. The result will not be economic dynamism but social fracture, political instability, and eventually, economic collapse. So, what might a realistic Pakistani middle path look like?

First, our welfare system must act as a trampoline, not a hammock. Direct cash transfers are essential for the poorest, but they must be paired with opportunities — training, micro-enterprise support, digital literacy — so that able-bodied citizens can bounce back into economic activity. The goal should be to make welfare a short-term support, not a lifelong crutch.

Second, we need to dismantle the rent-seeking structures that masquerade as market forces. Tax the idle wealth locked in speculative land holdings. Break up cartels. Close loopholes that allow corporate giants to avoid taxes while small businesses suffocate.

And finally, we must foster a civic culture that prizes contribution over entitlement. In Scandinavia, most citizens pay high taxes without resentment because they trust their state to deliver, and they see their peers working. In Pakistan, the perception, often accurate, is that the system is rigged: the poor are squeezed, the rich evade, and the corrupt thrive. Until this moral economy is restored, neither welfare nor market reforms will gain legitimacy.

For Pakistan, the way forward is not to copy Denmark or deregulate like Dubai, but to design a system true to our realities — one that guarantees every citizen the basics needed to live with dignity, yet demands from every citizen (and every corporation) a fair contribution to the common good. The danger is not choosing too little welfare or too much market; the danger is refusing to choose balance at all.