Economists on the Welfare State and the Regulatory State: Why Don’t Any Argue in Favor of One and Against the Other?
The symposium Prologue suggests that among economists in the United States, on matters of the welfare state and the regulatory state, virtually none favors one while opposing the other. Such pattern is a common and intuitive impression, and is supported by scatterplots of survey data. But what explains the pattern? Why don’t some economists favor one and oppose the other?
Contributors address those questions:
Dean Baker: Do Welfare State Liberals Also Love Regulation?
Andreas Bergh: Yes, There Are Hayekian Welfare States (At Least in Theory)
Marjorie Griffin Cohen: The Strange Career of Regulation in the Welfare State
Robert Higgs: Two Ideological Ships Passing in the Night
Anthony Randazzo and Jonathan Haidt: The Moral Narratives of Economists
Cass Sunstein: Unhelpful Abstractions and the Standard View
This Fall I took a course on the history of the Welfare State at Penn. I also used to work “in the system,” teaching English and job skills to Spanish-speaking TANF recipients at an NPO in North Philadelphia, so it was a nice complement to that experience. Overall the course was great given the volatility of the subject and the difficulty of understanding an abstraction like “welfare.” I thought the course fell short in contextualizing the welfare state within the broader scope of government, so I wrote a paper about how the welfare state and foreign aid interacted in Kennedy’s policy and rhetoric.
The perils of globalization and modernization have largely been attributed to “neoliberalism” and neoliberal American global hegemony, which I think has some merit. The American welfare state has historically been such a strange beast that it’s really difficult to point fingers–few nations have seen a clash between principles of general welfare/security and personal liberty on the scale of the USA. Yet today it seems that “foreign development” (generally taking place under neoconservative, globalist institutions) and “domestic” or “community development” (generally taking place from the American “left”) are at odds with one another. The consensus on foreign aid at best rests on our duty to help the global have-nots and at worst is a less-risky way to build global security in the post-911 world. But both of these reflect a Bismarckian idea of State building to me… So is there a historical link?
My paper looks for answers in JFK and his Alliance for Progress. This project was a foreign analogue of the New Frontier that got Kennedy elected and seemed to be the future of the American Welfare State until his untimely assassination. Due to resistance at home, the Alliance for Progress was much further along than any New Frontier domestic reforms, despite complementary rhetoric and Kennedy’s constant comparison of the two. The Alliance provided millions in aid to Latin America in the name of developing economy and–as many historians neglect to mention–society. It died out by the mid-70s (largely due to neoliberal push-back and underfunding, or so the story goes) but what was the ideological basis of the reform? What did Kennedy want out of the millions he was lobbying to send abroad?
Overall, the Alliance was multifaceted: It sought to strengthen perceptions of America, grow international political ties, and generally create a buffer against the Cold War Communist threat. But these aspects were presented as international extensions of domestic policy by both outward rhetoric and by internal Congressional and diplomatic correspondence. Agrarian reform (ie, away from communal landholding, especially in Mexico), income redistribution, and a more just hemispherical society were also included as benchmarks.
The program eventually aimed to directly map Tennessee Valley Authority river basin development on top of Colombian valleys, hoping to make a Tupelo or Knoxville out of Cali or Buenaventura. The founder of the TVA, David Lilienthal, won a contract to develop Colombia under the Alliance for Progress after abortive plans to similarly shape the Mekong Delta and the Nile. And while big business was the engine running the machine, rubber met road with promises of social reform, workforce development, and increased social equality for the poor, uncivilized masses susceptible to Communist dogma.
While globalization’s detractors cry capitalist overreach, authoritarian power grab, or something in between, proponents of foreign aid still need to explain why hunger, malaria, and TB are so prevalent given global wealth–and be honest about the beginnings of these international institutions. I can’t make prescriptive calls to action, but I can say that the foundation of the current international aid regime was laid by the example of domestic welfare state-building, by ideals of a strong state guiding a “free” market to achieve affirmative social outcomes
Pour des raisons techniques mysterieuse, je n’ai pas reussi a afficher une reponse au commentaire sur mon essai du 16 Novembre, “Une culture politique du n’importe quoi.” envoye par celui que j’ai nomme “Le Chouan.” J’en ai fait un essai a la place que voici:
Bien sur, je suis tributaire de l’etroit menu en Francais disponible ici. Ce n’est pas grand-chose. D’ailleurs, j’interroge plus que j’affirme quand il s’agit de la France. J’aime bien “On N’est pas couche” pour une raison: Cette emission interroge en profondeur les homme politiques de maniere que je n’ai jamais vue ici, aux E.U. Et son presentateur me semble bien faire son boulot, quoique ce soit qui fasse flotter son bateau. (Traduction de l’Anglais.)
Le pessimisme de ton analyse force a se poser cette question: Comment est-ce qu’un pays de 60 millions, dont peu d’analphabetes, jouissant d’un plein acces a l’Internet, en est arrive a dependre d’un classe politique aussi nulle? S’agit-il d’une consequence d’une culture francaise plus ou moins constante ou plutot d’un deraillement. Dans le second cas, le deraillement daterait de quand?
Ou alors, assistons- nous a la gueule de bois qui suivrait trente annes de grandes vacances bien arrosees? Est-ce que la structure meme de la societe francaise rendrait l’acte de gouverner tres difficile?(Je mets en cause l’etat-nounou, bien sur, et le tout-subventionne.)
Voici une observation qui est peut-etre (peut-etre) liee a mon interrogation: Je suis en rapport avec un blog de lyceen parisiens intelligents. Ils s’expriment pourtant comme des militants communistes de 1953. On dirait qu’ils vivent dans une film, dans un mauvais film.
La societe francaise me donne d’ailleurs souvent l’impression d’etre une sorte de feuilleton. Je suis tous les jours absaourdi, par exemple, de constater les emprunts a la langue anglaises par des gens qui ne connaissent pas l’Anglais et qui possedent d’ailleurs une langue parfaitement viable. J’ai entendu avec mes propres oreilles un Francais plutot creatif utiliser le mot “gun.” dans une phrase en Francais. Cela m’etonne, bien sur, la langue francaise ne manque pas de vocable pour dire “arme a feu.” On dirait que beaucoup de Francais trouvent leur propre realite irreelle, qu’ils essaient de se refugier dans le monde des ecrans etrangers a leur proproe culture. Et ou les idees, exprimees dans une langue peu ou mal connue, sont mal saisies parceque elles sont rendues par la-meme insaisissables.
Je dis ca, moi, c’est pour causer.
The French are rebelling in large numbers. They wear red wool hats as a signal of rebellion (elegant, this!) and to rally one another. I am told by French connections I trust much of the time that the rebellion is not along political lines, that it includes left, right and center.
There seems to be two main targets. First, on the surface, it began as a manifestation of opposition against an “ecotax,” a tax on big trucks intended to fight global warming. (Good for the French! See my many essays on this blog on the myth of global warming. More coming.)
Second, but this is an interpretation, there seems to be a widespread feeling that the French nanny state is finally coming to an inglorious end. This is an interpretation because the French media do not articulate clearly this link:
generous free social services→ high taxes→ stagnant economic life, high unemployment, poor everything, sense of doom, low fertility, etc.
Many ordinary French people are simply disgusted with the poor quality of everyday life in their country, and, especially, with low employment with no end in sight. Many envision no future for their children. Many of their children say they want to emigrate, leave France for good.
It does not mean that the French are poor, overall. They are much richer than say, Mexicans. Yet, impressionistically, subjectively, urban Mexicans are much merrier than urban French people. It seems to me that it’s because the ones, living with reasonable economic growth, have hope, while the others, living at a higher level but with no growth, despair.
You can’t fool all the people all the time. And the people can’t even fool themselves forever, not the French, not anyone!
Dr Gibson and Dr. Delacroix have both staked out their positions on the matter, and Dr. Delacroix has promised more, but I thought I’d add my own two cents to the matter.
I’ve already shared my thoughts here before, and nothing that I see in the Middle East or elsewhere changes my argument.
Among observers of all political stripes, there have been two broad categories into which they have gravitated. One of these has been the Islamic societies are still in the middle ages argument. This is a legitimate point, too. As Dr. Gibson points out: Continue reading
This morning’s Wall Street Journal had an op ed piece (may be gated) by one Alan Colmes whose book “Thank the Liberals for Saving America” is just now coming out. It’s a paean to the “liberal” policies of Lyndon Johnson and his successors, featuring a big photo of LBJ and Lady Bird under a “great society” banner. I had to turn the page quickly as I was in the middle of breakfast, but have now reopened and read the whole thing. Since the chances of the Journal publishing a rebuttal from me are essentially nil, I decided to inflict my response on my readership. Both of you.
The piece brought back memories of the visceral disgust I used to feel at the sight of LBJ when he was in office even though I wasn’t much attuned to politics in those days. I would be hard pressed to say who’s worse, Obama or Johnson.
To begin with, Johnson was a blatant criminal. He and his wife got rich by manipulating radio and television licenses in Texas. He stole the primary election in 1948 which got him into the Senate. He may have been complicit in stealing Texas electoral votes in 1960.
But what of the article? Most of it is a recitation of the accomplishments of “liberal” programs including food stamps, health care, bailouts, marriage equality, and women’s rights. In essence, he tells us that the beneficiaries of “liberal” welfare programs benefited from them, and they’re not all lazy bums.
Well, duh. This is the sort of shallow thinking that characterizes “liberal” discourse. No recognition of short-term or long-term consequences. No acknowledgement of public-choice insights into the perverse incentives of welfare administrators whose primary motive is to retain and expand their empires.
An overlooked consequence: the erosion of incentives to take responsibility for one’s own life; instead these programs have instilled a world-owes-me-a-living attitude which by now spans multiple generations of welfare recipients.
An overlooked consequence: the massive buildup of debt.
An overlooked consequence: the loss of personal freedom that must follow the loss of economic freedom as Hayek so eloquently showed in “The Road to Serfdom.”
An overlooked consequence: the insight of Mises that interventions invariably lead to outcomes contrary to the intentions of the intervenors, who then call for yet more interventions. In our mixed economy, a blend of free markets and government force, markets take the blame for every problem. And so the market takes the blame for everything. As Jeff Hummel says, market failures are to be cured by more government; government failures are to be cured by more government.
Thanks to the “liberals” and the conservatives who have failed to mount a principled opposition in domestic affairs, and thanks to both parties who have launched disastrous foreign wars, we are hurtling toward an American brand of fascist dictatorship.