The Politics of a Welfare State

In one of my recent blogs on "Lessons From Greece," I note the window for action for true federal spending reform is rapidly narrowing in the US. While I pointed out we are not like Greece, we do have much more in common culturally with Great Britain, whose recent election shows how difficult fundamental reform is when the state creates an entitlement mindset among voters, destroying civic society that underlies successful representative democracies.  This WSJ article, "Not Britain's Finest Hour", highlights the depressing reality of British politics:

"Given that this fiscal repair job is likely to be the major domestic policy challenge for the next government, it is striking how reticent all three main U.K. parties have been in explaining how they would confront the task. Their public spending plans are particularly vague," said the Institute for Fiscal Studies, a nonpartisan think tank, this week.

In fact, even as they paid lip service to the scale of the fiscal dangers, the British political leaders' promises to voters seem to involve more spending increases.

On Wednesday, the day before the election, British televisions were in split-screen mode; on one side Messrs. Brown, Cameron and Clegg roamed the country competing to offer more money for health spending, education or the environment. On the other side, Greece, member of the euro zone, was burning as the political consequences of years of failing to address mounting debt problems were laid bare. 

To be sure, Britain's public finances are much more manageable than Greece's. Its debt is less than half that of Greece's in relation to its national income.

But the direction of the U.K.'s economics and politics are clear—and run directly counter to the nation's pressing needs.

The reality is that the state has—in economic terms—become so dominant in Britain, the public largesse so pervasive, that the political costs of reining it back are seen as dangerously high for any party that wants to get elected."  [emphasis added]

There are tradeoffs between having a more economically egalitarian society and freedom. To achieve egalitarianism, the state must rely on income redistribution, usually via higher taxation.  But you ultimately pay in freedom.  I remember having a conversation with a liberal concerning income redistribution for welfare payments. When I pointed out this out tradeoff, he said, so what? So you go to one less restaurant a week or don't buy that IPod.  Never mind that I think it's none of his business on how I should spend my money.  What if I want to save my money to reach my American dream, or to send my son to a better school?


Some liberals will undoubtedly see this as a bit selfish.  I'm not against all forms of income redistribution--I'll outline my philosophy on redistribution in a separate follow-up post.  However, while they may acknowledge the first order costs of egalitarianism on economic freedom, they don't acknowledge the indirect costs which when cumulative, cost us much more than that IPod.  
Here is where the difference between conservatives and liberals sharpen. Conservatives are more comfortable with inequality if they believe there are few barriers to someone born of any class, to have the freedom to achieve success. Liberals seen injustice in great inequality, and feel it's in society's interest to help those they feel are worse off--otherwise, they reason, they have little opportunity to achieve the American dream if they're too worried living hand-to-mouth. Additionally, they point out these people do not feel part of society and there is a greater likelihood of societal conflict with great inequality. The conservative rejoinder is that by giving government assurances of meeting all one's basic needs, the incentive for individual responsibility is reduced; security is traded for freedom over time.  And thus, the importance of freedom is diminished.  After all, what's the point of freedom without individual responsibility?

Britain is a prime example of this--the voters don't want to give up their entitlements, but somehow expect the government to return their nation to some semblance of fiscal order.  The conservative candidate, Dave Cameron, has claimed the Tories are the party of the NHS, and has pledged more government spending on it.  Since the costs of egalitarian programs like health care are socialized, economic freedom isn't the only freedom that suffers--even individual freedom to eat what you want starts coming under scrutiny since the rationale goes, society is paying the costs for your obese behind.  


Suffice it to say, philosophers of these positions articulate them much more elegantly than I can do on a blog.  The liberal economic tradition is often articulated by John Rawls and Ronald Dworkin while the conservative position is take by John Kekes.


My simple point as with Britain, our nation is not immune to these types of policies and politics which will irreversibly change our national character. For once, I actually hope Britain proves me wrong on this.