Real Welfare Reform

by David D’Amato

Yesterday (August 22), NPR’s Tell Me More inquired about the current state of America’s welfare system, taking President Clinton’s “historical overhaul” in 1996 as its starting point. A guest on the program, activist Barbara Ehrenreich contended that the overhaul “began an era of the government washing its hands” of “the poorest of the poor.”

Whatever you think about welfare as such, it would be hard to dispute the claim that the poor are getting a raw deal in the United States.

Within the context of the American political dialogue, wherever it surfaces, the word “welfare” itself is incendiary. All by itself, it seems to have the ability to divide people into at least a couple of camps, to unnerve Americans into a kind of reflexive defensiveness centered on their ideas about politics, class, even morality.

For the American “right,” roughly designated, welfare represents a special kind of injustice, redistribution that allows a shiftless, undisciplined class the right to something for nothing. The left, again speaking generally, regards welfare as essentially a charitable endeavor, a helping hand for the less fortunate, for the victims of injustices in society, ranging from enduring racial prejudices to exploitation of the working class; to this latter group, it is the rich — the privileged, educated, suburbanite corporate elite — who come away from the Washington card table with their chips stacked high.

American conservatives, on the other hand, oppose “taking from Peter to pay Paul” in principle, maintaining that people ought to work for what they get and pull themselves up by their bootstraps. As with nearly all divides as evaluated under the American political lexicon and categories, both sides are grievously unenlightened about the attitudes underlying their opponent’s worldview.

Although their accounts are incomplete, both the conventional left and right have important insights to offer. Rearranging stolen wealth according to the impulses of a coercive political process — rather than those of a voluntary, market process — does seem to contravene basic ideas about self-ownership and the philosophical concept of just deserts.

At the same time, concerns for the helpless and indigent certainly ought to motivate our ideas about what “the good society” should look like. What the working dichotomy in the U.S. doesn’t seem to tolerate, though, is the fact that the foregoing ethical contentions — one fundamentally opposed to redistribution and the other prescribing economic justice for the downtrodden — are by no means mutually exclusive.

In fact, the two narratives are naturally aligned. While favoring voluntary exchange and objecting to taxation and coercive redistribution, market anarchists hold that the foremost beneficiaries of redistribution are indeed the rich. The American economy is riddled with examples of state-granted economic privilege, legal strictures and rules creating the bargaining power imbalances that cheat the common worker.

And special privileges for the exploiter class come in all shapes and sizes. One pervasive example (among many) is the existence of barriers to market entry, which limit competition by increasing overhead, enabling the corporate aristocracy to monopolize wealth and resources.

Timothy P. Carney, in The Big Ripoff, handily dismantles the myth that Big Business loathes government regulations: “If something does not hurt you, or hurts you a little while seriously hindering your competition, it is a boon, on balance.” The overall regulatory framework thus favors the continued expansion and dominance of corporate power within the millions of transactions we described as “the economy.”

From party to party and administration to administration, ever more regulations are added by federal rule-making agencies. The reasons become clear, the goal being to centralize power in state-backed cartels. It should come as no surprise that General Electric alone, to take a prominent example, spent $40 million dollars lobbying the federal government in 2010, more often than not asking to be regulated.

Political stunts like President Obama’s “revolving door ban” executive orders, which ostensibly blocked corporate lobbyists from certain posts in the government, show that people are catching on — that Americans are beginning to understand the connection between state and commercial power. But that connection (and the political realities that accompany it) is also the reason why such theatrics are destined to fall by the wayside.

“Welfare,” then, — at least at the present moment — turns out to be something of a scare word for both sides, a red herring that, on its own, doesn’t address the more important, foundational question: Who really, primarily benefits from the state’s violent interventions into economic relationships?

When we begin to acknowledge the indisputable answer to that question, we can accordingly start to see the state as one sweeping welfare program for the rich and well-connected. We can see genuine free markets not as advantaging big business, but as offering their own kind of welfare reform, this kind targeting the unearned profits of the United States’ corporate powerhouses.

2 responses to “Real Welfare Reform

  1. Rather a longwinded and turgid way of pointing out the corrupting relationship between big government and big business.

    Yes, welfare can corrupt and cause harm by trapping people in dependency and deforming expectations.

    Yes, corporate welfare also corrupts and distorts society, politics and the economy.

    The two points are not mutaually exclusive.

  2. I enjoyed reading this post. Much tosh about lately so this was interesting. I never thought of welfare, be it social or corporate, as really only benefiting the rich and the powerful. It certainly can lead to a better argument for private vs public funded and run welfare.