Safety Nets, Growth, and Liberation from Family

by Will Wilkinson on March 27, 2007

In his by-request post on safety nets, Tyler writes:

Most of all, the welfare state liberates the productive and the creative from their sometimes burdensome family ties. The welfare state is the Randian’s secret dream, and that is what clinches the case for a government safety net.

I don’t think I understand. How many productive and creative people take advantage of government assistance programs for the poor, or are liberated by them? It would seem that genuinely productive, creative people would need them least.

Probably Tyler means that Social Security and Medicare allow the productive and creative to foist their poor parents off on the state. True. But increasing incomes also allow the productive and creative to foist their not-so-poor parents off on “assisted living” facilities. Wealthier parents don’t need their kids’ money, and wealthier kids can afford to have somebody else worry about their parents. How much has the deadweight loss of our actually existing, almost entirely middle class to middle class “social insurance” tranfer system decreased economic growth over the last half-century? It is not obvious that the history of our real system compares favorably to even a slightly higher-growth counterfactual in terms of the kind of liberation from burdensome family ties Tyler is talking about.

If you’re a Sen-type positive liberty advocate like Tyler, and don’t so much care about the coercion implicit in transfers, your problem with safety nets ought to be the potentially psychologically debilitating effects of transfers on the recipients with respect to a sense of control, self-efficacy, motivation, etc. I do not doubt for a second that many, many people have been genuinely helped by public assistance. I do, however, have some doubt that the overall effect has been positive relative to some of the potentially feasible alternatives.

  • Consumatopia
    The point is that protection from risk enables experimentation. Failure is how we learn to do better--that's especially true for the creative and productive.
  • Enoch Roote
    Here's a way to understand it:

    If the thing we all have in common is that we pay for each others' health care, then all our health care is done. We don't have to worry about it. We sort-of already do this, by the way, with insurance, but because the insurance is profit-motivated, it doesn't accept as much risk and is exclusionary.

    So we already have a collectivist health care system mapped into capitalism, with some middle-men ending up really rich, at the expense of those whose conditions are risky to insure.

    If my parents can't afford insurance, I end up being tied to them in a way that demands a sacrifice of my creativity. And the only reason this occurs is because some middle-men get to set the terms of the insurance policy, so that they can make money.

    Taking the profit motive out, we end up with insurance for whoever needs it. Suddenly, my parents aren't uninsurable any more, and I am free to support them to whatever degree I choose, allowing me to maximize my individual economic liberty.

    The middle men don't like this fact, and they'd really like to keep their stranglehold on my creativity. But should we let them?
  • Richard Pointer
    Better post Will. Most of the time you are too wordy. I agree with Lester. Tyler, of late, has been a ninny.
  • Will - Excellent post! Hard to believe that of the two of you Tyler is the one who is supposed to be the economist. This is proof that philosophy is not such a bad thing to study, after all!
  • I'd always thought the Randian dream re family was to denounce and abandon parasites, not to fob them off onto an alternative host.
  • stuart
    "It would seem that genuinely productive, creative people would need them least."

    This is similar to Tyler's take on tenure. He claims it's great for the stars, who do most of the work. But stars are the ones who would keep their jobs anyway.
  • C
    From the murky depths of inside a political science department, the arcane jargon that we have agreed upon is that the welfare state is "individuating."

    In some ways the welfare state simply replaces the bonds between parent and child with ones between individual and state. But other times the new relationship is more complex; the power dynamics are changed.

    Now Mom and Dad can live of Social Security and Medicare while I travel around the world. Sure.

    But it's also the case that I can escape from home, hit the streets, develop a drug habit, steal, etc. etc. and end up "in the system."

    Or perhaps I'll go off to college and then get a grant to make documentary films overseas. The state can fund my dreams! No more relying on the provincial and stultifying bonds of family, community, etc., etc.

    In addition to mutating our obligations and opportunities, the Welfare state just straight up changes the pay-outs and incentive structure of all of our lives.

    That's why Abraam DeSwaan says that the implementation of the Welfare State is as big a reform as the introduction of Representative Democracy.
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