One: The American Welfare State
The Architecture of the American Welfare
- Public branch
- public assistance
- social insurance
- independent sector
- charities and social services
- employee benefits
The term "welfare state" refers to a collection of
programs designed to assure economic security to all citizens by
guaranteeing the fundamental necessities of life: food, shelter,
medical care, protection in childhood, and support in old age.
- Public assistance has been marked by"
- stigma - "undeserving poor"
- administered and funded locally rather than
- being inexpensive (AFDC ,1% of GDP).
- Cost of social insurance programs dwarfs
- Social security and Medicare are national
- provides more generous benefits than do any
public assistance programs.
- Taxation "hidden welfare state"
- tax breaks for social purposes was more than
twice the amount spent on AFDC.
- charity, volunteerism and philanthropy
- In the mid-1990s, annual cost was $568
Billion (roughly the cost of Social Security and Medicare combined).
- exceeds even those of the independent sector
(1992, $824 billion.
America's welfare state not only retains a mixed
economy, it also remains remarkably local and decentralized.
- Social Security
- Food Stamps
- EITC (Earned Income Tax Credit)
State Programs (partially or wholly state programs)
- workers' compensation
- unemployment compensation
- Block grants for child welfare
Its links to employment, as well as its
decentralization, distinguish the American welfare state from its
counterparts in other industrial nations. In no other modern industrial
nation is health care an earned privilege rather than a human right.
Welfare reform (1996 transmuted survival itself into a privilege
contingent on work.
America, unlike other advanced nations, lacks national
health insurance. It has no family allowance. More of its children
remain in poverty than does any comparable country. It spends far less
on active labor market policies, such as job training and job creation.
Public outlays on pensions, health insurance, and other income
maintenance was ranked lowed among the G-8.
The U.S. incarcerates a far higher proportion of its
population than does any western European country. Avg. Rate is 78 per
100,000, whereas, in the states it is 519 per 100,000.
European welfare states reduce labor force
participation by making it possible to live without work. But in the
process they also redistribute income and increase equality.
Poverty and dependence in America have never been easy
or pleasant to endure, but a century ago they were immeasurably worse.
to Table of Contents/ . . .
Welfare and the Conservative Ascendancy
Conservatism built on a demographic base in the South
and the suburbs, draw strength from its affliction with evangelical and
fundamentalist Protestantism, and from ideas disseminated by
conservative think tanks underwritten by big money.
It's ascendancy signaled a victory for international
"The welfare state, they believed, increased the cost
of business by raising taxes and forcing business to raise wages to
attract workers who found an alternate source of support in public
Relentless international competition and massive
military spending directed limited federal funds away from the welfare
state. The economic stresses felt by ordinary workers fueled a
hostility toward welfare and the dependent poor, driving politics in a
Instead of directing anger at the wealthy and
powerful, the fusion of race and taxes deflected the hostility of
hard-pressed lower and middle-class Americans away from the source of
their deteriorating economic position and toward disadvantaged
minorities - and,, in the process, eroded support for the welfare
state. This scenario played itself out worldwide.
Race and economic insecurity propelled politics
rightward and weakened popular support for welfare states. Lower- and
middle-class whites were angry at competition from blacks, scared by
economic insecurity, and upset at the transformation of the old racial
order. "Suburbia" did not take kindly to rent subsidies, school balance
schemes, growing Negro migration or rising welfare costs.
The 1970s saw the emergence of the Conservative
Christians (a term that includes evangelicals and fundamentalists) who
entered politics in order to protect their interests and reverse the
moral corruption of the nation.
The Christian Right's involvement resulted in
fundamentalist politics opposed to the social and moral tendencies of
modern government "but in support of economic policies favorable to the
middle-class" - a movement crucial for building both the electoral and
financial base of conservatism.
By the 1990s, evangelicals and fundamentalists
constituted the largest and most influential grass-roots movement in
The Christian Right supported Republican candidates
who won 55% of the seats in congress and were a crucial element in
Congress that voted to "end welfare as we know it".
The cash to pay for the rightward movement of American
politics and culture and bankroll the attack on the welfare state
derived primarily from two sources:
- political action committees
- non-profit research centres "think tanks"
Conservative think tanks not only produce ideas - they
market them. Liberal organizations did not begin to match the outreach
efforts of conservatives, whose ideas, often unchallenged and based on
inaccurate data, powerfully shaped public opinion about politics, the
economy, and the welfare state.
An 'intellectual movement' that started in the States
in the 1950s and 1960s created a new conservatism that wove together
three intellectual strands - economic, social and nationalist.
- economic stressed free markets and minimal
- social led toward the restoration of social
order and private morals by authoritarian government.
- nationalist streak favored heavy public
spending on the military.
Conservative thought found acceptance because of the
economic strains on ordinary Americans, the anger and fear aroused by
the end of the racial order in the South and affirmative action in the
North, the needs of international business, the wage pressures felt by
American firms, and the resurgent evangelical Protestantism that spread
outward from the South. American exceptionalism was another
Keynesian economic theories are rejected and a
theoretical attack against activist government is led by Milton
Friedman. "By 1980 the climate of economic thinking in the U.S. had
changed utterly from the orthodoxy of 1965." Keynesian economics, which
had sustained the welfare state, appeared dead.
'Losing Ground' (1984) by Charles Murray became the
Reagan administration's new bible. Murray argued for the withdrawal of
government from social welfare, assaulted welfare from a market-based,
libertarian, anti-government perspective.
'Beyond Entitlement: The Social Obligations of
Citizenship (1986) by Lawrence Mead, justified big government in
conservative terms and focused on society, not the individual. Mead
advocated enforced social obligations for the poor. The major problem
with government social programs, claimed Mead, lay in their
permissiveness, not their size.
Ronald Reagan may have used Murray as his bible on
welfare reform, but the major welfare legislation of his term in office
owed much more to Mead.
The unrestrained capitalism that invaded the former
Soviet bloc showed the dislocation and misery that unbridled markets
and the shredding of social safety nets could create. Still, in the
U.S., not only communism and socialism but social democracy and its
offspring, the welfare state, seemed anachronisms, vestiges of a
discredited and outmoded political philosophy.
to Table of Contents/ . . .
Dependence, Devolution and Markets
In the 1980s, public policy redefined the American
- dependence (reliance for support on someone
- "Dependency at the bottom of the society and not
economic equality is the issue of the day."
- "one-size fits all" became one of the harshest
criticisms of social policies and programs, In the 1980s the federal
government began to transfer to states many of the services it had
funded since the 1970s, leaving states to pay for them as they could.
- "Markets epitomize decentralized, atomized
decision-making." "The idea that an individual should receive unearned
benefits contradicts the core assumptions on which markets rest." The
move to the market is a global phenomenon. Markets assume rationality:
rational individuals act in ways that serve their self-interest,
therefore, governments should interfere with markets as little as
possible. The recent application of market models to public policy as
an attempt to resolve the contradiction between markets and welfare
states by linking benefits more closely to employment, reducing
dependence, and privatizing services.
Political discussions of the welfare state and other
public policy issues remain by and large content with loose metaphors
and abstract assumptions that rationalize the actions of those who hold
Ultimately, the responsibility for economic security
should rest not with charity, employers, or the state, but with
autonomous individuals taking charge of their lives.
- Whom do market-based policies really serve?
- What are the forms of capital and who controls
- Who actually participates in the exchange, and
does it create casualties?
Imbalance of power inherent in market-based policies,
but little or no debate on its strengths and limits.
In the 1980s,
- dependency on public and private support and on
the paternalism of employers came to an end.
- Devolution of authority (transfer) from the
federal government to the states, from states to counties, and from the
public to the private sector. "one-size fits all."
- Application of market models to social policy.
- "Most human activity can be understood as nothing but a series of
markets, and that outcomes would be improved if constraints on market
behaviour were removed."
to Table of Contents/ . . .