Capitalism and the Welfare State: Dilemmas of Social Benevolence
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Even the phrase “welfare state” makes most Americans uneasy. For conservatives and neoconservatives, it smacks of socialism or, worse, European influences. For many, welfare has become synonymous with public assistance and other programs thought to foster indolence. Hence George Gilder’s adage, “the poor most of all need the spur of their own poverty.” If many liberals and those further to the left support the welfare idea, they are unsure about its scope and proper clientele. Still, more than a few will agree with Michael Walzer that a welfare state “expresses a certain civil spirit, a sense of mutuality, a commitment to justice.” Even so, the question is still raised whether programs will be largely for the poor, or if other classes should get services that are free or subsidized.
Nor can the issue be resolved by saying both may benefit. Robert Kuttner’s The Economic Illusion and Neil Gilbert’s Capitalism and the Welfare State, both important books, grapple with this question. In this country, Kuttner points out, we tend to keep “citizens” and “clients” in separate systems.
One has only to consider the visual and procedural differences between a local welfare office and a local social security office to appreciate that the recipients of middle-class social entitlements are treated as citizens, while welfare clients are presumed chiselers until proven otherwise.
Kuttner believes that a welfare state, properly conceived, must promote “the ideal of universalism.” That is, it should reflect and express “a common political community,” and do all it can to keep “the poor and the middle class within one system.” Thus citizens of every income level will attend the same medical clinics and send their children to common schools. One problem, as Kuttner acknowledges, is that for this universalism to take effect, the poor must be so upgraded that they will no longer be seen as a class apart. If we gave truly generous stipends to women heading households, they would cease being “welfare mothers,” and have the same status as, say, medical students holding scholarships. Kuttner cites unemployment benefits which, in the United States, peak at about 40 percent of wages previously received, whereas in Denmark and Sweden such compensation can reach 90 percent.
Compared with other countries, America has not used the welfare state to try to change the class structure. The Economic Illusion argues that because of a “flatter tax system and a more meager program of income transfers, US public spending has had relatively little effect on the final income distribution.” We have programs to ensure that the poor do not starve, but not enough to provide children with the shoes they need for school. Even now, we offer the homeless little more than a bowl of stew and a cot for one night.
Neil Gilbert takes the question further in his book, proposing to explain how the universal idea has been perverted in practice. He agrees that “one of the most forceful claims for universal entitlement to social services is the…
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