Welfare State

The Issue

Should the state guarantee its citizens a minimally decent standard of living, insuring them against the risks and uncertainties of life?

Welfare Statism and the Welfare State
  • Welfare Statism is the doctrine that the state should guarantee its citizens an adequate standard of living.
  • The Welfare State is a collection of social insurance programs and social services, the so-called Social Safety Net
Brief Timeline of the US Social Safety Net

View Timeline

Welfare Statism vs Libertarianism
  • Welfare Statism is the doctrine that the state should guarantee its citizens an adequate standard of living.
  • Libertarianism is the doctrine that the state’s only function is to protect the rights of its citizens to life, liberty, and property.
Welfare Statism vs Libertarianism ≠ Socialism vs Capitalism
  • Socialism is an economic system where the government owns and controls most capital goods (goods used to produce goods and services).
  • Capitalism is an economic system where most capital goods are privately owned; and prices, production, and distribution of goods and services are determined primarily by the operation of markets.
Big Picture
Arguments for the Welfare State
Right to an Adequate Standard of Living
  • Human beings have a fundamental right to an adequate standard of living that insures them against the risks and uncertainties of life. Therefore the state should guarantee its citizens a decent standard of living.
  • Universal Declaration of Rights
    • Article 25, Part 1
      • Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
Better Quality of Life

UN World Happiness Report

The quality of life is better under welfare states than under states that are more libertarian.

Rawls’ Argument
  • Human beings are not responsible for their race, ethnicity, gender, native intelligence, natural endowments, physical appearance, disabilities, and the socioeconomic conditions into which they are born. 
  • Therefore “those who have been favored by nature, whoever they are, may gain from their good fortune only on terms that improve the situation of those who have lost out. ”
Arguments against the Welfare State
Redistribution violates the right to property
  • The Argument
    • The Welfare State is funded by redistributing income and wealth from the rich to the poor. But such redistribution violates the fundamental right to property.  It is morally wrong for the government to take one person’s property and give it to another.
  • Conscience of a Conservative, Barry Goldwater (1960)
    • “Suppose I should vote for a measure providing for free medical care: I am unaware of any moral virtue that is attached to my decision to confiscate the earnings of X and give them to Y.” Page 50
    • “Government has a right to claim an equal percentage of each man’s wealth, and no more” Page 61
  • To Make Men Free: A History of the Republican Party, Heather Cox Richardson, 2014
    • After Lincoln, and after Roosevelt and Eisenhower as well, Republican leaders gradually turned against their own reforms in favor of protecting the interests of the rich. Their argument was always that taxes redistribute wealth, interfering with the fundamental right to property.
    • Founding Fathers, they said, had deliberately created a government that would protect rich men from “the tyranny of the masses,” from those who demanded wealth redistribution.
  • Evaluation of Right-to-Property Argument
    • britannica.com/topic/political-philosophy
      • A person who prospers in a market economy might plausibly say, “I earned my wealth. Therefore, I am entitled to keep it.” But how one fares in a market economy depends on luck as well as effort. There is the luck of being in the right place at the right time and of benefiting from unpredictable shifts in supply and demand, but there is also the luck of being born with greater or lesser intelligence and other desirable traits, along with the luck of growing up in a nurturing environment. No one can take credit for this kind of luck, but it decisively influences how one fares in the many competitions by which social and economic goods are distributed. Indeed, sheer brute luck is so thoroughly intermixed with the contributions one makes to one’s own success (or failure) that it is ultimately impossible to distinguish what a person is responsible for from what he is not.
    • Since a person’s natural talents and the socioeconomic circumstances in which he is born and raised are not his doing and beyond his control, “those who have been favored by nature, whoever they are, may gain from their good fortune only on terms that improve the situation of those who have lost out.” (John Rawls, A Theory of Justice, Page 101)
Redistribution violates the right to liberty
  • Argument
    • In violating the right to property, redistribution also violates the right to liberty, since a person whose property has been taken away is no longer free to use it.
  • Conscience of a Conservative, Barry Goldwater (1960)
    • “How can he be free if the fruits of his labor are not his to dispose of, but are treated, instead, as part of a common pool of public wealth?  Property and freedom are inseparable: to the extent government takes the one in the form of taxes, it intrudes on the other.” Page 59
  • The right to liberty, like most rights, is a prima facie right.
    • A prima facie right is a right that can be overridden by other considerations. An absolute right, by contrast, can never be overridden
  • A person’s right to liberty is not violated when he is incarcerated after being found guilty in a fair trial.  Rather, his prima facie right to liberty has been overridden by other considerations.
  • Likewise a person’s right to liberty is not violated when he is compelled to pay taxes for the common defense.
  • Finally, a person’s right to liberty is not violated when he is compelled to pay premiums for social insurance that guarantees everyone a right to a minimally decent standard of living, including himself.
The Welfare State creates dependency
  • Social insurance encourages dependency on government, a lifestyle of “welfare as a way of life,” and thus lower labor force participation rate
  • “Why look for a job when, if you find one, your government benefits stop?”
  • “The effect of Welfarism on freedom will be felt later on – after its beneficiaries have become its victims, after dependence on government has turned into bondage and it is too late to unlock the jail.”
  • Evaluation of Dependency Argument
    • Some people will be content to live off the government, with only a minimal standard of living.
    • For others, though, such government assistance is a lifeline, providing a springboard to raise their standard of living.
    • That some people take advantage of a program doesn’t justify terminating it.
The Welfare State is paternalistic
  • The Welfare State violates a person’s right to freedom by compelling him to do things for his own benefit.
  • For example:
    • The ACA requires that a person buy health insurance or pay a penalty.
    • Social Security Retirement requires that workers pay payroll taxes, forcing them to pay into the Social Security Retirement Trust Fund.
  • John Stuart Mill’s Harm Principle (1859)
    • “The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise or even right.”
  • Sometimes it’s permissible to force a person to do something solely for his own good.  For example,
    • Police restraining a person on LSD who’s about to jump from a skyscraper
    • Police restraining a deaf jogger about to cross a bridge on the verge of collapse.
  • Rights are in general prima facie, not absolute. i.e. they can be overridden or outweighed by other considerations.  Having a right to an adequate standard of living is more basic and important than the right against being compelled to act in one’s self-interest.  The former right thus overrides the latter.
WS requires a vast bureaucracy, inefficient and subject to fraud
  • The welfare state requires a vast bureaucracy that’s costly, inefficient, and subject to large-scale fraud.
  • Ideas for improving bureaucratic functioning
    • Consolidate and streamline the myriad programs and agencies that make up the welfare state.
    • Outsource appropriate functions.
    • Replace paperwork with digital technology
    • Universal Basic Income
      • Dismantle the Welfare State bureaucracy and, instead, pay every citizen, working or not, an annual “paycheck” sufficient to support an adequate minimum standard of living
The Welfare State leads to Socialism
  • Conscience of a Conservatism 1960, Barry Goldwater, pages 48-49
    • “The collectivists have not abandoned their ultimate goal — to subordinate the individual to the State — but their strategy has changed. They have learned that Socialism can be achieved through Welfarism quite as well as through Nationalization.”
    • “Socialism-through-Welfarism poses a far greater danger to freedom than Socialism-through-Nationalization precisely because it is more difficult to combat.”
  • Ronald Reagan Speaks Out Against Socialized Medicine
    • On a 1961 10-minute LP record Reagan warns that if his listeners do not stop a proposed medical program (a precursor to Medicare), “behind it will come other government programs that will invade every area of freedom as we have known it in this country until one day as Norman Thomas said we will wake to find that we have socialism.” Under this scenario, Reagan says, “We are going to spend our sunset years telling our children and our children’s children, what it once was like in America when men were free.”
  • Evaluation of Socialism Argument
    • Pace Goldwater and Reagan, Medicare has not led to socialism and loss of freedom. (pacewith all due respect or courtesy to)
    • As note earlier, Welfare Statism isn’t Socialism
    • Welfare Statism doesn’t lead to Socialism
      • Example of Germany (britannica.com/place/Germany)
        • Germany’s system of social benefits is among the world’s most elaborate and all-embracing. 
        • Although the free market operates in Germany, the federal government plays an important role in the economy.
The Welfare State stifles economic growth
  • Argument
    • Large taxes on entrepreneurs stifle economic growth
  • Objection
    • GDP of welfare states compares with that of US
  • CIA World Fact Book
The Welfare State creates a moral hazard
  • Argument
    • The WS creates a moral hazard, i.e. people are more inclined to take unwarranted risks because they can rely on social insurance if things go south.
  • Objection
    • People are also more inclined to take calculated risks, e.g. starting a company.