September 5, 2017
With Responses From
Sep 5, 2017
5 Min read time
To build public goods, policy must attend to the American context.
I am certainly sympathetic to Sabeel Rahman’s critique that there is “a long-standing pattern of casting beneficiaries of certain public goods as ‘undeserving.’” Starting with Ronald Reagan’s welfare queens, the recipients of public goods have often been demonized as unworthy in one way or another. This is especially upsetting given the plethora of government benefits—from mortgage deductibility to retirement savings accounts to college savings accounts—that accrue to the advantage of the upper middle class. It can be argued that the truly undeserving are the well-off Americans whose government largesse comes in the form of tax expenditures, not welfare checks.
Nonetheless, to ignore or dismiss the “underserving” argument is to miss an important ingredient of successful American public policy. Americans have always been strong individualists. This ethos goes back to the pioneer experience of settling a continent in an era when people had to rely on themselves and their immediate neighbors and when government was, for all practical purposes, nonexistent.
It can be argued that the truly undeserving are the well-off Americans whose government largesse comes in the form of tax expenditures, not welfare checks.
Although we are a long way from the pioneer era, a nation’s DNA dies hard. A substantial number of Americans still glorify the individual and believe that it is everyone’s responsibility to work hard and take care of their own. It’s why, for instance, America has never had a successful socialist party while Europe has.
Progressive or liberal policy that ignores this strain in the public consciousness will always be vulnerable to the argument that government that takes from those who work and gives to those who do not is illegitimate. Fortunately policy that is constructed with an understanding of this tension can stand the test of time.
The best example is President Franklin D. Roosevelt’s creation of Social Security. The Great Depression highlighted the need for a significantly more robust social safety net than America had ever had before. But in 1933, two years before Roosevelt and his secretary of labor, Frances Perkins, set to work designing a social safety net, Roosevelt created the Civilian Conservation Corps—a massive program that put people to work. It was a politically shrewd move, and one that was completely consistent with the value Americans place on work over “a handout.”
Then, when Frances Perkins began to look for models for the safety net, she looked to prominent academics, including Russian immigrants such as Abraham Epstein and Isaac M. Rubinow. These two men dominated thinking in the policy community at the time. Epstein was the author of Facing Old Age (1922), which shaped thinking in the 1920s. Rubinow, an avowed socialist, founded the American Association for Old Age Security in 1927 and promoted the ideas of national health insurance and income maintenance for workers.
And yet, when it came time for Perkins to put together a team to enact social welfare legislation, neither Epstein nor Rubinow was called into the White House to participate (much to their dismay). As the process unfolded, Roosevelt dumped many of the ideas that had been near to the hearts of these reformers—including national health insurance.
Roosevelt understood that he needed to create a uniquely American social safety net—one that tapped into the deep reservoir of individualism that lay underneath the American psyche and one that avoided, at all costs, the appearance of a “dole.” As a result, the architecture of the two social safety net programs that survived, unemployment insurance and old-age insurance, evolved in a substantially different direction than similar programs in Europe.
Roosevelt understood that he needed to create a uniquely American social safety net—one that tapped into the deep reservoir of American individualism.
The unemployment compensation program was given to the states to run, reflecting the prevailing (and current) belief in localism that is so much a part of U.S. political culture. And both programs, unemployment insurance and the old-age pension (what we now know as Social Security), were structured as insurance programs. In both instances, taxes were deducted from the payroll and, unlike in Europe, only citizens who had contributed to the system could get benefits.
The result was most definitely not to the liking of the reformers who had come from or who looked to Europe for their inspiration. But Roosevelt knew what he was doing. Because the structure was uniquely American in its values, it was able to survive. As he explained:
These taxes were never a problem of economics. They were politics all the way through. We put these payroll contributions there so as to give the contributors a legal, moral and political right to collect their unemployment benefits. With these taxes in place no damn politician can ever scrap my social security program.
The genius of Roosevelt was to create a social safety net that was based on a familiar model—the insurance model—and that tapped into the American values of individualism and hard work. Social welfare benefits were to be “earned,” not simply given out by the government. This clever distinction meant that the changes survived even as Republicans attempted to undo the New Deal. By 1952 a popular Republican president, Dwight D. Eisenhower, made it clear that his party would no longer try to unravel the signature safety net program of the New Deal.
In subsequent years the program was expanded to include dependents, survivors, and even the disabled, and it has been responsible for a dramatic drop in poverty among the elderly. No wonder it remains unparalleled in its popularity and has been called “the third rail of American politics” because of the potential damage to any politician who dares oppose it.
American social reformers working in other countries, especially developing countries, make a great (albeit not always successful) effort to be culturally sensitive in their work. But reformers working on American social programs do not often internalize the same lesson. While Rahman is correct to point out that the bureaucratic administration of the welfare state often consists of too many barriers to entry, it is critical to understand that many of these barriers are rooted in America’s culture and morality. If we are more culturally sensitive in the American context, then we can build, as Roosevelt did, sustainable public goods.
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September 05, 2017
5 Min read time