Voices for Reason - The Welfare State Myth – Part 1 | The Ayn Rand Institute

The Welfare State Myth – Part 1

“Ideology is as much about understanding the past as shaping the future.” So starts Mike Konczal’s recent Democracy Journal article, “The Voluntarism Fantasy.” And on this point, he couldn’t be more right.

To understand America’s past, you have to understand the ideas that created the freest country in history and the ideas that have led us to surrender a good deal of that freedom over the last 125 years. You also have to understand how ideology has often led people to distort and misuse history in order to serve their ideological agendas. Case in point: Konczal’s essay.

The conventional wisdom today is that America before the welfare state was a harsh, insecure, and heartless place to exist — and that the creation of the welfare state was a great moral achievement that helped improve the brutal conditions created by capitalism.

But as I and a number of thinkers on the right have argued, this account is one of those things people know that just ain’t so. Free individuals both prospered and effectively coped with tough times. Capitalism — the system of individual freedom, individual responsibility, and voluntary cooperation — worked.

It is against this view that Konczal, a fellow at the Roosevelt Institute, has picked up his pen. According to him, the welfare state and the government “social insurance” programs it establishes are critical to America’s well-being. Our view that capitalism worked

is wrong. It’s incorrect as a matter of history; it ignores the complex interaction between public and private social insurance that has always existed in the United States. It completely misses why the old system collapsed and why a new one was put in its place. It fails to understand how the Great Recession displayed the welfare state at its most necessary and that a voluntary system would have failed under the same circumstances. Most importantly, it points us in the wrong direction. The last 30 years have seen effort after effort to try and push the policy agenda away from the state’s capabilities and toward private mechanisms for mitigating the risks we face in the world. This effort is exhausted, and future endeavors will require a greater, not lesser, role for the public.

To his credit, Konczal has at least taken the time to acknowledge our arguments, and overall his facts are unimpeachable. But the argument he weaves with them is filled with more holes than the worn-out afghan my grandmother knitted for me when I was two. In a series of blog posts, I’m going to address all of Konczal’s major claims. I’m going to show that:

  • America was not always a welfare state.
  • The system that existed before 1935 was, whatever its problems, morally and economically superior to the welfare state.
  • The welfare state did not “collapse,” but was a product of a particular ideology, one hostile to the ideas America was based on — the same ideology that Konczal advocates in his article.
  • The welfare state has been bad for America, and abolishing it is the cause of our time and the mission of our age.

Finally, let me add that I go into far more depth on these ideas in my books, Free Market Revolution and, especially, in my forthcoming work
RooseveltCare: How Social Security Is Sabotaging the Land of Self-Reliance.