Here’s a left-wing screed I wrote this morning for my Comparative Social Policy class. It’s an “assignment”, not a “paper”, so I felt like I could have some fun with it. The footnote references didn’t copy from Word; if you really care I can e-mail it to you. The first half is a somewhat boring summary of the reading, the second half is where I start complaining about America, so skip down if you want.

A response to Rothstein’s “The political and moral logic of the universal welfare state”

In Chapter 6 of Just Institutions Matter: the moral and political logic of the universal welfare state, Bo Rothstein investigates the relationship between the institutionalization of welfare policy and public opinion. Why is public support for the welfare state strong in some countries (i.e. Sweden) and weak in others (i.e. the United States)? Part of his answer is that universal welfare policies seem to enjoy more public support than selective ones.

Some researchers have questioned the purpose of a universal welfare state since it seems that tax revenues just go around in a big circle. Rothstein, however, demonstrates that even with a non-progressive taxation scheme redistribution is significant, and in fact, “the more universal the welfare system, the greater the redistributive effect”.

A key factor in the popularity of the universal welfare state is, well, its universality. Rothstein quotes Walter Korpi and Joakim Palme in saying, “If we take from the rich to give to the poor, the rich simply will not part with especially large sums.” If, on the other hand, everyone feels they are getting some sort of benefit from the system, they shouldn’t mind paying their share.

Rothstein describes the political logic of the universal welfare system: while social democratic parties begin as an outgrowth of working-class movements, they can only achieve political success by appealing to the middle classes as well. Therefore, the programs they promote must benefit the middle class and provide a middle-class level of services. Although in Rothstein’s simplified redistribution model the middle class gets exactly as much out of the system as they put in, and are therefore likely to waffle on the issue of universal welfare, ultimately it is the “safety net” idea which wins them over. Knowing that they will be secure even if the unexpected happens is persuasive enough to keep their support.

However, the safety net may not be enough to garner the support of the upper economic classes, so this is where the moral logic of the universal welfare state comes into play. First, a selective welfare state which employs means-testing can be said to violate the notion that “the state should treat all citizens with ‘equal concern and respect’”, because it requires that the government intrude into the privacy of welfare recipients, and those recipients become stigmatized. Further, the process of means-testing encourages applicants to cheat and officials to be sceptical, resulting in a vicious circle of mistrust which undermines the legitimacy of the system. Rothstein also makes the argument – which seems to be of a practical nature rather than a moral one – that the process of means-testing and verifying claims is administratively costly, much more so than a universal system.

Ultimately, Rothstein asserts that the support for any welfare system hinges on the public’s belief that the government can be trusted to manage people’s money, and that everyone is paying their fair share. People are willing to participate if they feel that the system is just. Rothstein cites interviews which indicate that even Americans would agree to an expansion of social services and an increase in taxes if they felt the government would administer the programs wisely – the problem is that they don’t trust the government.

I agree very strongly with the moral logic of the universal welfare system, but as an American who has been subjected to neo-liberal ideology all her life, I noticed several critical points which Rothstein does not address. One is the logic of redistribution. While he says that one of the major criticisms of the universal welfare state is that it is not sufficiently redistributive, it is precisely the notion of redistribution that many people object to. Their logic is, “Why should my money be taken from me and given to someone else?” Even if rich people also reap the benefits of the system, the value of those benefits is still smaller than what they pay in taxes. However, maybe this question is irrelevant, because the rich represent a tiny portion of the voting population, and are therefore not crucial for policymaking purposes (although economic elites have a disproportionate influence even in a democracy). The middle class are a much more significant proportion of the voting population, and Rothstein makes a good case for the logic behind their support of a universal system.

Another part of the debate which Rothstein doesn’t account for is what happens in a global economy when the rich are tired of paying high taxes without visible benefit, and feel their interests are not represented politically. Elites have the ability to simply move themselves and their businesses to a different country where the tax conditions are more favourable, undermining the tax base – which is more consequential to the state than the elites’ voting power. This process is certainly taking place in the corporate world, but I’m not certain to what extent individuals have chosen to uproot themselves. In any case, one must appeal to the moral logic of the universal welfare system here. There must be a common understanding among all citizens: this system educates you, gives you the opportunity to succeed, to simply abandon it because you have made a lot of money is immoral.

One argument, not mentioned by Rothstein, in favour of elite support for a universal welfare model even fits into a rational choice paradigm. This is the notion that “everyone does better when everyone does better”. In a society where income inequality is reduced by redistribution, there is less incentive for crime such as theft, because lower economic groups experience less relative deprivation. Ostensibly everyone benefits from living in a society where everyone has access to high-quality education. Health care for all means fewer epidemics and fewer public health crises. One can, of course, defuse this argument by saying that the rich can protect themselves from the consequences of weak social policy by separating themselves from the rest of society (hiring security guards, using private health clinics, and generally keeping away from the unwashed masses) but these measures cost money too, and are not desirable to everyone.

Unfortunately, I’m not convinced that the main reason for Americans’ scepticism about the welfare state comes solely from mistrust of government. I think that most people’s objections are more philosophical than practical. Americans at all economic levels resent paying taxes, even if they get more out of the system than they put in, in the form of roads, schools, etc. Right-wing populist politicians (elites who have a great economic interest in reducing taxes) have done a good job of persuading even the working class that their tax dollars are going to lazy welfare recipients who don’t want to work. Even if you explain to people that the majority of their tax dollars go to the bloated military budget, not to mention public services that they actually use, they still resent that tiny portion that goes to the needy. While a universal welfare system would undermine this belief, there is no politically viable way to establish a universal welfare system in the U.S. A large number of Americans believe very strongly that government benefits breed laziness and welfare equals communism. In fact, many Americans would be happy to do away with even the minimal means-tested welfare system that we have.

The moral arguments about “universal concern and respect” for all citizens are also not terribly salient in an American context. Many Americans feel that if a person is asking for money from the government, the government has the right to invade that person’s privacy by asking intrusive questions. (In fact, I would say that right-wing Americans don’t believe in any universal human rights other than right to guns and property, the right to pollute the environment with oversized cars, and the rights of fertilized eggs which disappear the moment the egg becomes a breathing person… but I digress.)

Overall, the mainstream opinion on the welfare state in the US is contradictory, hypocritical, and lacking in compassion. If people are poor it is seen to be their own fault, yet the market economy that Americans believe in so religiously (as well as their opposition to labour unions) ensures that wages at the low end of the pay scale are kept as low as possible, guaranteeing that there will always be people in poverty. Higher taxes and universal welfare coverage could guarantee everyone a basic standard of living while still upholding the sacred market, but people are simply unwilling to pay higher taxes, viewing this as a form of “forced charity” rather than simply the cost of living in a well-functioning and morally just society.