Spoke Too Loosely

The commenter on my post about GWB's irritating habit of lying about social security takes me to task for glibly asserting, as I certainly did, that there is a "popular ideological consensus" in favor of the New Deal welfare state. I think his narrative of a Hayekian majority is flat-out wrong, unless "Hayekian" is a token for everything that's wrong with crony capitalism---a redefinition that's grossly unfair to Hayek.

But OTOH, I definitely could have chosen my words better. There were two separate points I was trying to make within one very loaded phrase, and it's my fault that it's easy to misinterpret. So here's my attempt to do better.

Point 1 was the trivial truth that logically prior to implementation and practice, the public soundly supports Social Security in all its essential characteristics. That's why the Bushies are taking a path of less resistance---"fabricating crises," as Harold Meyerson put it---rather than trying to change public opinion about Social Security itself.

Point 2, which I'll have to elaborate on another time, goes to the prescience of a lot of what James Burnham had to say in the Managerial Revolution (flipping crazy though he became). For all intents and purposes, the issue of a publicly controlled economy versus a privately controlled economy versus a mixed economy was settled decisively in favor of the last by World War II and the Great Depression. There's no extracting the state from commerce and industry or vice versa; the transition costs, so to speak, would be prohibitively high. The most fascinating quality of our economy to me is the process by which private companies can eventually become so big that their failure is rendered impossible, or at least tracked to the survival of the state itself. The unembarrassed celebration of that feature, it seems to me, is what's crucial about George W. Bush's political economy---something like social democracy turned on its head. It's a state of affairs, by the way, that is most certainly somewhere along the road to serfdom.

As for my explanation of what happened to the welfare state in the 90s, it again comes in two parts: First, the commenter vastly overdramatizes the extent to which the welfare state was done away with by a reduction in low-income welfare benefits. Assuming for the sake of argument that welfare reform was the wrong thing to do (and I'm only doing that so as not to get lost in a tangent), there are still mechanisms readily available to restore its former magnanimity because the change was a tiny proportional reduction of the public/private mixture of the economy, not any sort of fundamental shift in its nature. (Okay one tangent: this same logic is the reason I absolutely could not care less if the top marginal income tax rate were 34% or 31%, and why it's so schmucky of conservatives to treat that question as a burning moral issue.)

Second, and more importantly I'd say, public preferences on economic policy and the election of governments disposed to the implementation of those policies came apart a long time ago. As for the growth of the "virtually unregulated world market over the past three decades," sit tight, because this one actually begins with the completion of the Silk Road. Globalization is very, very old. And it is definitely not the product of conscious population-wide choices such as the consensus behind Social Security.