Wednesday, December 26, 2012

Bruce Bartlett — A Conservative Case for the Welfare State

..there are sound reasons why a conservative would support a welfare state. Historically, it has been conservatives like the 19th century chancellor of Germany, Otto von Bismarck, who established the welfare state in Europe. They did so because masses of poor people create social instability and become breeding grounds for radical movements.
In postwar Europe, conservative parties were the principal supporters of welfare-state policies in order to counter efforts by socialists and communists to abolish capitalism altogether. The welfare state was devised to shave off the rough edges of capitalism and make it sustainable. Indeed, the conservative icon Winston Churchill was among the founders of the British welfare state.... 
American conservatives routinely assert that the people of Europe live in virtual destitution because of their swollen welfare states. But according to a commonly accepted index of life satisfaction, many heavily taxed European countries rank well above the United States....
The New York Times | Economix
A Conservative Case for the Welfare State
Bruce Bartlett
(h/t Mark Thoma at Economist's View)

Historically, the conservative bugaboo, "Keynesianism.," was designed as the capitalist backstop against the rising tide of socialism and communism. Get rid of "the welfare state" and reap the whirlwind.

27 comments:

Dan Kervick said...

This is right. Progressives should not have gone for the welfare state model, but should instead have pushed for a full employment state. The point of the welfare state is to keep people malleable and on the dole, to disempower workers and destroy their bargaining power, to divide working people from the recipients of transfer payments and to defuse social criticism.

Andrew Weeraratne said...

There is one common thing that binds the 1st world economies from the 3rd world economies and that is all 1st world nations have a social safety net such as government funded free education, free healthcare, unemployment benefits, even housing etc, while none of the 3rd world nations have those. Hence the population in the 1st world nations lives rich lives whereas the 3rd world population lives in abject poverty. Guess in what direction the USA is heading? They are fast heading towards the 3rd world system in its fight to the bottom.

Mike Norman said...

What the hell is Bartlett talking about? We have a welfare state already, a very big one, but it's welfare for corporations and the well-to-do. There's a very simple reason why corporations and the rich have seen their profits and share of national income rise faster than anyone else's --it's because of specific policy designed to make that happen. Whether you're talking about labor policy, wage policy, tax policy, trade policy, industrial policy, health care, Social Security or paying interest on the government's own money that it issues freely, it's all designed to sustain big business and the wealthy. That's welfare. When it comes to "promoting the general welfare," like it says in the Constitution, that only applies to corporations and the rich, not to average everyday Americans and certainly not to the truly needy, who have seen their meager support ripped away under the cynical guise of ending government "waste" or striving to run the gov't like a business.

Mike Norman said...

Liberals and progressives must stop their bleeding heart arguments about "fairness" and "justice" and start talking about printing money to achieve the things that society wants and needs and countering all the bullshit propaganda and misinformation about currency debasement, Zimbabwe and other asinine crap that is totally ridiculous. Did we get hyperinflation when Eisenhower spent like crazy to build highways? Liberals are their own worst enemy. They're fucking stupid and fractious.

Mike Norman said...

By the way, let's just agree right here and now that we can never achieve full employment because the very nature of capitalism combined with technology makes that pretty much impossible. So we do actually need welfare, not jobs. Each year, more and more wealth is created from fewer and fewwer people working. We can certainly find ways to spread this around. You can't just create stupid "make work" jobs with people sweeping the streets. That's dumb.

Tom Hickey said...

Of course, the other "solution" is the old solution of employing the "lower classes" as servants of the rich. In fact, this is what a lot of undocumented workers are now doing.

Malmo's Ghost said...

"By the way, let's just agree right here and now that we can never achieve full employment because the very nature of capitalism combined with technology makes that pretty much impossible. So we do actually need welfare, not jobs. Each year, more and more wealth is created from fewer and fewwer people working. We can certainly find ways to spread this around. You can't just create stupid "make work" jobs with people sweeping the streets. That's dumb."

You're about the only person I've heard say this outside of Bertrand Russell and a few other very bright folks.. .FWIW I agree with you 100%.

andy blatchford said...

@ Malmo's ghost... havent you been reading some of the things Tom has been posting lately? Its not a few its a lot. The subject is being brought up all across the net and even in the MSM.

Malmo's Ghost said...

Yes, I know what Tom has posted (he's one of those other very bright persons I alluded to earlier, only not by name---sorry for the omission). He is extremely insightful and I rank him as one of my favorite commentators on the internet. I like Dan too, but I have some not so minor disagreements with him on various issues, especially regarding the nature of work.

geerussell said...

So we do actually need welfare, not jobs. Each year, more and more wealth is created from fewer and fewwer people working. We can certainly find ways to spread this around.

Does that translate to support for something like a basic income guarantee?

Dan Kervick said...
This comment has been removed by the author.
Dan Kervick said...

By the way, let's just agree right here and now that we can never achieve full employment because the very nature of capitalism combined with technology makes that pretty much impossible.

Doesn't follow, Mike. All that follows from the importance of technology and capitalist creative destruction is that no particular private sector job is likely to be secure and permanent. That's why we need a permanent government employment program. The private sector is constantly destroying jobs, but there are always a million things to be done on behalf of the public good. As private sector jobs are destroyed, transition as many people as is necessary through public sector employment until a suitable new job opens up for them in the private sector. If nothing ever opens up, keep them working for the public.

andy blatchford said...

Sorry then Malmo, its a subject some of us have been concentrating on, its quite obvious its going on and that something must be done, its either a JG or a BIG personally I prefer a JG.

Matt Franko said...

Andy,

I think Peter Cooper created a JIG to do both of those things a while back:

http://heteconomist.com/category/job-and-income-guarantee/

Why not both? I find it hard to argue against this type of thing....

rsp,

andy blatchford said...

Matt

Yep agreed I wouldnt want to force people into "slavery" but what I mean which wasnt clear that you do if possible want to try to incentivise "work" ... the wording in the MMT JG makes that clear...provide a job to anyone WILLING, dont think it actually says that a BIG shouldnt be there as well.

Malmo's Ghost said...


"Doesn't follow, Mike. All that follows from the importance of technology and capitalist creative destruction is that no particular private sector job is likely to be secure and permanent. That's why we need a permanent government employment program. The private sector is constantly destroying jobs, but there are always a million things to be done on behalf of the public good."

Dan, Frankly you idea here is frightening on a par with Marxist-Lennisim. Why not be perfectly clear regarding working conditions? In other words what rights would a wage slaves have with these make work state jobs?

You'd have us bossed by bureaucrats as opposed to business overlords. What a deal. I'd take the business overlords in that deal. Oh, and the heck with the economy being run like the Post Office. That's not remotely progress.

Let me ask you. Are you and yours willing to do any heavy lifting under a bureaucratic, make work regime? And why are you so concerned with the concept of a "free lunch" anyways? Are you channeling your inner Randian self?

Tom Hickey said...

DAn K All that follows from the importance of technology and capitalist creative destruction is that no particular private sector job is likely to be secure and permanent. That's why we need a permanent government employment program.

According to mainstream neoclassical-based economics, whether neoclassical economics or the Keynesian-neoclassical synthesis, employment above the "natural rate" results in inflation, therefore a buffer stock of unemployed ( Marx's "reserve army of unemployed) must be maintained to discipline wages and head off inflation that would otherwise occur at FE.

This is the basis of current economic policy making, which uses monetary policy following a Taylor rule.

Tom Hickey said...

Additionally, the basis of NAIRU is keeping the number of unemployed equal to the number of job offers. The ideal is that if the job offers exceed the number of unemployed, then wages will rise and inflation will ensue.

Not difficult to see here how technological innovation leading to increased productivity leads to less job offers over time and a larger buffer stock of unemployed. Unless govt employs the difference, with a JG, for instance, or takes some other measure to correct this, such as Lerner-Colander and Vickrey suggested.

geerussell said...

Frankly you idea here is frightening on a par with Marxist-Lennisim. Why not be perfectly clear regarding working conditions? In other words what rights would a wage slaves have with these make work state jobs?

Is it only people who voluntarily work in government-funded jobs who are wage slaves under the boot of Marxist-Leninism or does everyone with a job fit that description?

Also, why the description of "make work"? I don't know about where you live but I can look out my window and see work, real work, for many hands if only the funding were there.

Dan Kervick said...

Not difficult to see here how technological innovation leading to increased productivity leads to less job offers over time and a larger buffer stock of unemployed.

Actually it is hard for me to see that Tom. We have had three centuries of accelerated technological innovation in the West, and constant warnings about job elimination, and yet we always seem to create new innovative, previously unimaginable occupations to replace the old jobs eliminated by productivity gains. Human beings are restless and curious seekers. When their creativity eliminates the need for older forms of work, they stay busy and move onto something else.

Tom Hickey said...

Recently most job creation is in low level service jobs that don't pay a living wage and so govt has to subsidize them. This is the "Wal-Mart" business plan that is driving the employment market in the US. It's a reverse JG.

The US also keeps a large standing army and a huge domestic security force, much of which is public, or contracted to public. Add to that the buffer stock of unemployed to control inflation, and that's a significant portion of the work force.

Dan Kervick said...

You'd have us bossed by bureaucrats as opposed to business overlords. What a deal. I'd take the business overlords in that deal.

If the business overlords manage to create all of the jobs we need, then fine. But they never do. Instead they always discard and disemploy large parts of the workforce.

My concern about free lunches is based on my conception of the social contract. It never would occur to me to suggest that society owes me some proportion of its output - the fruit of the hard work of other people - without me being bound to supply some productive effort in return to earn my share.

The idea that society can evolve a social contract in which a small portion of the population is doing all of the work, and the majority are living off that work so that they can pursue leisure activities seems ludicrous to me. Whatever total amount of work society settles on, it has to be shared in some fair way, or the society falls apart.

I have no dream of living off of the work of others, like an aristocrat in a slave society. Nor does it seem moral to me to seek to live off the rent of my invested "capital". That strikes me as parasitical money-for-nothing exploitation the labor of others.

paul said...

"We have had three centuries of accelerated technological innovation in the West,"

We haven't had a very long period of technological advancement where people are completely replaced by machines at the scale we are seeing now. Change has been relatively slow, now we're approaching Moore's Law territory.

We now have a workforce of some 152 million…roughly half the population…I can see this declining to 10 or 20%. What will everyone else do, who will pay them?

Anyway the bottom line is funding…spending drives the system…what is the government going to buy from us to fund the system? We will all (most of us) be working for the government.

Hey, the JG is a natural consequence of capitalism eating itself. Who woulda thought?

Tom Hickey said...

Change has been relatively slow, now we're approaching Moore's Law territory.

The interesting thing is that Moore's law works in the world of electronics because two years as been adopted as the life of product. Could be even faster in principle.

Same with productivity increase through automation and robotics. If increased leisure were the goal, it could go very quickly if demand were stoked by other than worker earned income.

It's just a matter of providing NFA in the appropriate amount to maintain the sweet spot of price stability. Then no need for FE for prosperity and leisure.

It's doable. The only sticking point is the vested interests, managing the transition, and raising the general level of consciousness enough for widespread realization of the potential and commitment to achieving it.

Tyler Healey said...

Since many jobs don't pay a living wage, it seems the best course of action would be to eliminate the FICA tax and the FUTA tax.

If this doesn't lead to higher wages for the working poor, then raise the federal minimum wage to $13 an hour.

Malmo's Ghost said...

Dan,

I respect your views, but they differ little, at least given your rhetoric, with the right wing moralizers. As bright as you seem to me to be, it puzzles me why you are so hell bent on a right wing workerist ethos? I truly think this mindset of yours inhibits your persuasive effectiveness for people on the left such as myself..

Andrew Weeraratne said...

As Mike Norman points out, you cannot “promote the general welfare” of our population as our constitution mandates by having a sick population not being able to afford healthcare and an uneducated population that cannot compete with the rest of the world due to gutting of education and having the highest prison population in the world by imprisoning citizens for trivial crimes (or crimes of desperation) so that corporate prison-owners can make profits through welfare.
Apart from corporations, the biggest welfare recipients currently are the Directors of public corporations who are paid outrageously to attend a few meetings a year and vote affirmatively for the agenda of the management (who incidentally decide on the amount of their own compensation—if a single mom decides on her welfare the Media will blow it 24/7 until everyone is outraged). We could eliminate the crisis of single moms in the nation by electing them as Directors and asking them to do the voting. It won’t be too hard to do that and that would save taxpayers some money and also will benefit the society by increasing aggregate demand (not to mention a good education for her kids, keeping them out of prisons). Also these single moms will buy food, clothes and other consumer goods the capitalists produce giving the multiplier effect, whereas most corporate directors put that excess savings (that increase with each tax cut) in assets creating bubbles and exporting inflation to the poorest nations through commodity price hikes.