The Welfare State Myth – Part 5
Here’s the welfare state myth: America has always had a welfare state, but for too long we relied too heavily on the private sector and voluntary organizations to protect people from some of life’s greatest risks. Voluntary institutions failed and have thankfully been replaced by more effective government institutions. We must act to protect and expand those institutions because, despite what the ideological opponents of the welfare state say, they are good for everyone: “Everybody Gives, Everybody Benefits.”
What’s the truth? America was created to protect the rights, freedom, and property of the individual so that he could pursue and achieve his own happiness. This foundation produced the social system of capitalism, which led to the greatest prosperity mankind had ever witnessed. Under capitalism, all economic institutions were private, including those that aimed at dealing with challenges such as unemployment, sickness, and infirmity. This made possible something the world had never seen: a voluntary society in which everyone was able to get better off at the same time, each taking responsibility for his own life. And despite numerous handicaps — the pre-capitalist legacy of poverty, remnants of government control, and a largely non-capitalist outside world — most Americans thrived.
But then America changed direction. After fifty years of prodding, Progressive intellectuals and political leaders succeeded in getting Americans to embrace a welfare state with the Social Security Act of 1935. They were able to achieve the goal fundamentally because Americans had accepted a lethal tenet: that the individual has a moral duty to serve others.
The results have been totally, completely, and without exception bad.
The welfare state is a system of injustice. It deprives people of what they earn in order to hand out unearned benefits to others. The more you achieve, the more you owe. The harder you work, the greater your debt. If you create something and want to enjoy the fruits of your labor, you are deemed greedy and immoral — but if you create nothing, you are entitled to the fruits of others’ labor.
This injustice strips people of control over their lives. Do you want to use the money you earned to send your child to college? Too bad: you have to send someone else’s child to school. Do you want to use the money you earned to invest for your retirement or start a new business so you can enjoy a lifetime of riches? Too bad: you have to pay for someone else’s retirement. Your choices, hopes, and dreams are constantly put on the back burner for the alleged good of society.
What if you manage, after years of sleepless nights and eighty-hour work weeks, to earn a fortune and you want to use some of it to fund the political causes you care about? That is “philanthropic paternalism” resembling “a hereditary monarchy,” and control over charity should instead be handed to the government “so that charity enhances the lives of the less fortunate instead of forcing them to rely on those with money and luck.”
What if you want your children or grandchildren to enjoy a prosperous happy future — but are terrified that
Social Security and Medicare are on track to bankrupt them? Tough luck: “expanding Social Security…will be a necessary step.”
Every productive person is worse off under the welfare state — and so are the handful of people unable to support themselves through no fault of their own, since the welfare state leaves less wealth to support them and herds them into a nightmare bureaucracy.
Mike Konczal deserves credit for actually addressing the history of America before the welfare state rather than repeating the fantasy that it was an era when people “starved in the streets.” But what he dismisses as the Voluntarism Fantasy is, properly understood, not a fantasy at all, but profoundly true. And it’s a history Americans deserve to know.