Posted: April 26, 2005
e know at least two things about the Democratic Party. First, it is preoccupied with economic inequality. Implying that the middle class had somehow vanished, Senator John Edwards campaigned for a year with a showcase speech about two Americas, "one for people who are set for life, [who] know their kids and their grandkids are going to be just fine; and then one for most Americans, people who live paycheck to paycheck." Second, it is unyielding in its defense of Social Security—a defense that rejects the idea of reducing by a penny the pension checks the government sends to Warren Buffett. (Twenty years ago Paul Kirk, then the chairman of the Democratic National Committee, suggested publicly that the party ought to consider means-testing Social Security benefits. He was forced—before the end of the day—to issue a statement of regret for even mentioning the subject.)
To make sense of this apparent contradiction is to make some sense of the ongoing debate over Social Security and the meaning of modern liberalism. One can begin by imagining a government program to prevent poverty among the aged, one that would be both simpler than Social Security and more aligned with liberals' desire to tax the rich and help the poor. It would derive its revenue from the progressive income tax rather than Social Security's regressive payroll tax. It would pay its benefits according to individual need. And for the majority of people who—John Edwards notwithstanding—are neither rich nor poor, it would devise incentives and requirements that would encourage them to provide secure retirements for themselves from pensions and savings.
What's wrong with such an approach? Wilbur Cohen, who devoted half a century in government to designing and defending America's social insurance programs, gave his answer in a 1972 debate with Milton Friedman on Social Security: "I am convinced that, in the United States, a program that deals only with the poor will end up being a poor program.... Ever since the Elizabethan Poor Law of 1601, programs only for the poor have been lousy, no good, poor programs. And a program that is only for the poor—one that has nothing in it for the middle income and the upper income—is, in the long run, a program the American public won't support." In other words, people who don't need Social Security and Medicare are enrolled as beneficiaries for the sake of people who do. Cohen doubts that people can be persuaded to support programs to help the poor, but he is confident that they can be induced to support them.
There is cynical calculation in Cohen's position, and also some idealism. Chris Suellentrop, a political writer for the webzineSlate, captures the former when he says, "Liberals are willing to keep paying rich people Social Security in the hopes that the payments will keep those rich people from figuring out that Social Security is a redistributive transfer program." The scope and complexity of Social Security—not one American in a thousand grasps the arcane formula that relates retirement benefits to lifetime earnings—reflect something more than the old line about a camel being a horse designed by a committee. There is method in the madness of social insurance, and the madder its programs the more methodical its politics.
The Green Tornado
Forty-five years ago William F. Buckley noted liberalism's penchant for turning "the skies black with criss-crossing dollars." Those dark skies serve a purpose. As more and more dollars fly around, the confusion about where all of them start out and end up increases. The dollars often arrive ostentatiously (Social Security checks in the mailbox) but depart surreptitiously (payroll withholding and employer "contributions" to Social Security). This contrast makes it easy for each household to regard itself as a net importer rather than a net exporter of the dollars that make up this green tornado. The ultimate goal is to leave people believing an impossibility: that an enormous but nevertheless finite number of dollars can be vacuumed up and airdropped in such a way that the vast majority of people wind up gaining more than they lose.
The confusion caused by the crisscrossing dollars is not the only inducement to support the welfare state. Liberalism depends, in addition, on the reliable psychological tendency to treat whatever we become accustomed to as something we are entitled to. No task in democratic politics is more difficult than taking things away. As a result, conservatives have won many electoral victories since 1964, but few domestic policy victories. (Ending Aid to Families with Dependent Children in 1996 stands out as an exception; the rule is for government programs to endure and grow.) Ten years ago David Frum wrote, "Conservatives have lost their zeal for advocating minimal government not because they have decided that big government is desirable, but because they have wearily concluded that trying to reduce it is hopeless, and that even the task of preventing its further growth will probably exceed their strength."
A further, powerful inducement to support the welfare state comes from the logic and rhetoric of social insurance. Franklin Roosevelt had stipulated in advance that any federal pension system had to be based on funds "raised by contributions rather than an increase in general taxation." According to Freedom from Fear (1999) by Stanford historian David M. Kennedy, FDR's advisors understood that his insistence on following the model of private insurance "meant that, virtually alone among modern nations, the United States would offer its workers an old-age maintenance system financed by a regressive tax on the workers themselves."
Roosevelt, as usual, was thinking farther ahead than his aides. In 1941, after the law had been passed and the first pension benefit checks had been issued, he defended the system when someone complained about its regressivity: "Those taxes were never a problem of economics. They are politics all the way through. We put those payroll taxes there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program."
Nor was it simply the structure of Social Security that encouraged Americans to believe that its benefits were a return on their own money, not welfare. The government's subsequent public information efforts amounted to a vast marketing campaign for the idea that there was no contradiction between the American tradition of self-reliance and receiving Social Security. In their book on entitlement programs, On Borrowed Time (1989), Peter G. Peterson and Neil Howe say that in 1939, "the Social Security Administration first began to describe the program to the public in terms of private pension and insurance metaphors. Payroll taxes became known as 'contributions'; the...trust fund was where taxes were 'kept' in an 'account'; and benefit provisions were dubbed 'insurance.' After decades of this rhetoric, the American people eventually became convinced that they were 'buying' future benefits with their own payroll taxes."
What a Deal
The marketing campaign worked brilliantly. The author of a letter to the Wall Street Journal in 1994 spoke for millions of citizens who had absorbed its lessons: "Social Security is not an entitlement program, but a savings system. When the government sends a Social Security check to an individual, it is not giving him anything; it is paying him back a portion of the money he has saved for his retirement through a special retirement plan. The money belongs to the individual, money owed to him, money systematically and forcibly taken from his paycheck as security against a time when he will be too old to work." Every one of those assertions (except the "forcibly") is wrong—and every one is also a vindication of FDR's political strategy.
Thus is the New Deal both a fair deal and a terrific deal. We are led to believe that we only get back what we put in, and yet somehow we all get considerably more than we put in. The miracle of the loaves and fishes was a card trick by comparison. For 70 years Social Security has borne out FDR's prediction that no damn politician would ever scrap it. Never mind that for 70 years the government has systematically misled the damn voters.
People have learned what liberal programs and rhetoric have taught—governments exist less to secure our inalienable natural rights than to deliver our unassailable public entitlements. (We can glimpse the success of this project in the general strikes that bring France to a halt when the government is foolish enough to talk about reducing the five weeks of guaranteed vacation.) The "Don't Tread on Me" spirit is now visited upon any government that doesn't come across with every entitlement it promised, or induced us to make it promise. The insurance façade of the Social Security system has served its purpose. That the people regard their benefits as a "legal, moral, and political right" is clear. But so too is the debasement of their understanding of the ideas of law, morality, politics, and rights.
What, then, of the idealistic argument for Social Security? Robert Kuttner, co-editor of The American Prospect, points us in that direction:
In a democratic polity that also happens to be a highly unequal market economy, there is immense civic value to treating middle-class and poor people alike. A common social security program, or medical care program, or public school program, helps to create the kind of cohesion that Europe's social democrats like to call "social solidarity"—a sense that basic humanity and citizenship in the political community require equal treatment in at least some areas of economic life. And by doing so it also creates a reliable constituency for the Democratic Party.
This is an argument from which neither political calculation nor circularity has been expunged. Social solidarity promotes the growth of the welfare state, which promotes the growth of social solidarity. Kuttner doesn't ask if there's a point at which the welfare state might become too big, or where social solidarity might trigger claustrophobia. Nevertheless, his concern for cohesion, basic humanity, and political citizenship suggests that he sees social solidarity as an end in itself, not just as an instrumental value.
Benjamin R. Barber, a political theorist who teaches at the University of Maryland, elaborated the case for the intrinsic value of solidarity in a recent Los Angeles Times op-ed. Privatizing Social Security would, he argued, "do irreparable harm to our democratic 'common ground.'" "[P]rivatization—whether of education, housing, or Social Security—makes us less of a public. It diminishes the republic—the res publica, or public things that define our commonweal. It turns the common 'we' into a collection of private 'me's.'" Privatization is "a kind of reverse social contract: It dissolves the bonds that tie us together."
As with Kuttner, it is hard to know how far Barber wants to pursue togetherness. The most important words in the English language, it has been said, are "up to a point." We can only assume, or hope, that there is a point beyond which Barber would not wish to press his argument that any privatization makes us less of a public.
The disappearance of the individual, of the private, was presented for the purposes of instruction in the city in speech imagined in Plato's Republic. Barber really seems to mean it. He reduces a complex and profound political reality to a simple dichotomy—either we are an atomized collection of "me's" or we are a cohesive, public-spirited "we." Since the former is bad, every move in the direction of the latter is good.
Such a false perspective leads Barber to his peculiar reading of social contract theory, which cites Hobbes but is derived from Rousseau. "The social contract takes us out of the state of nature," he writes. "It asks us to give up a part of our private liberty to do whatever we want in order to secure common liberty for all." And again, "Privatization puts us back in the state of nature where we possess the natural power to get whatever we can but lose the common power to secure everything to which we have a natural right."
By making every political good a thing we have in common, Barber renders the individual rights to liberty and the pursuit of happiness both less secure and highly alienable. At one point he explains, "It is as citizens that we pay our Social Security taxes, and it should be as citizens that we enjoy the fruits of our labor." But it is as citizens that we'll be imprisoned if we don't pay our Social Security taxes. One fears that Barber broadly endorses such muscular efforts to force people to be free when they persist in enjoying the fruits of their labor in insufficiently public-spirited ways.
Elizabeth Anderson, a philosophy professor at the University of Michigan, has put forward a defense of Social Security even more emphatically communitarian than Barber's. Social Security, she argues, is like "the Amish practice of community barn-raising. When a young farmer starts out on his own farm, he does not build his barn all by himself, nor does he pay others to help him build it. Instead, he enlists his community to build it without pay." Cohesion and reciprocity accomplish within the Amish community what individualism and calculations of self-interest do outside it in the raw world of capitalism.
After the vats of red and blue ink spilled since the 2004 election, it's strange to learn that some Democrats want to base social policy on the construction practices of an old-fashioned, intensely devout religious sect. Anderson misses the point when she rejects the idea that Social Security, unlike a barn-raising, depends on government coercion. "The Amish system isn't voluntary. Ever been shunned? Private associations have their own legal means of coercion."
But precisely because they are private associations, people willingly submit to them. This argument vindicates a welfare state run by the federal government only insofar as today's Left has embraced the reactionary slogan of the 1960s: America, love it or leave it. Furthermore, "shunning" acquires its practical and moral force from the shared religious beliefs that bind the Amish together. Leave those aside and the shunned farmer who has better things to do than help build his neighbors' barns might as well depart a community that, in any other context, liberal intellectuals would deride as narrow-minded, sexist, and oppressive.
Newsweek International editor Fareed Zakaria recently told an interviewer, "People often say, 'How could you, living in India, end up a Reaganite?' Well, the answer is, live in India. There are two things that people don't understand. One is the degree to which a highly regulated economy produces masses of corruption because it empowers bureaucrats. It just has to be seen to be believed. The second is that you are very quickly inured to the charms of pre-industrial village life. Whenever someone says the word community, I want to reach for an oxygen mask."
The benign past that Anderson invokes is as false as the benign future she assumes. Starting at a barn-raising, Anderson somehow winds up in a government office building. "In a democracy, government is nothing more than citizens acting together, through state officials functioning as their agents. It's no different in principle from the barn-raising system. It's just on a vastly larger scale that, due to its size, requires an intermediary administrative apparatus."
Her bland confidence on this point is compatible with Richard Rorty's association of leftism with "a constant need for new laws and new bureaucratic initiatives which would redistribute the wealth produced by a capitalist system." In Achieving Our Country (1998), Rorty, a philosopher and professor of literature at Stanford, says, "Marxism was not only a catastrophe for all the countries in which Marxists took power, but a disaster for the reformist Left in all the countries in which they did not." This disaster kept the American Left preoccupied with "Marxist scholasticism" and the assumption that "nationalization of the means of production was the only way to achieve social justice." What it should have been doing instead, according to Rorty, was evaluating "suggestions for preventing the immiseration of the proletariat...in the pragmatic, experimental spirit" of John Dewey.
The collapse of Marxism means that the make-it-up-as-we-go-along Left is the only one we've got. This hardly settles the problem. Rorty says that before it will endorse the Left's agenda, "The voting public...sensibly wants to be told the details." But the Left cannot provide them. It can't figure out "what, in the absence of markets, will set prices and regulate distribution." Nor, despite the endless talk about participatory democracy, can it begin to explain "how deliberative assemblies will acquire the same know-how which only the technocrats presently possess." The only option is "piecemeal reform within the framework of a market economy." And the only hope? "Someday, perhaps, cumulative piecemeal reforms will be found to have brought about a revolutionary change. Such reforms might someday produce a presently unimaginable nonmarket economy, and much more widely distributed powers of decisionmaking."
Beyond the Zero-Sum Game
Someday. Perhaps. Might. Rorty deserves points for candor. The rest of us, however, must live in the world while we wait, perhaps for centuries, to see if the Left—might someday—figure out what it's doing. The best Rorty can do in the meantime is to assure us, "Instead of seeing progress as getting closer to something specifiable in advance, we see it as a matter of solving more problems."
But, of course, if progress does not mean getting closer to a goal, then any assertion about this state of affairs being a problem, or that set of measures being a solution, is entirely subjective and arbitrary. There's no basis in Rorty's thought to join him in identifying the immiseration of the proletariat as the crucial problem. If our own instincts are different, we could just as easily and defensibly choose to side with Patrick Buchanan in regarding the influx of immigrants as a grave problem, or with James Dobson in Focusing on the Family.
President Bush is now endeavoring to redress the looming embarrassment of Social Security's obligation to pay more than it will take in. The semantic argument about whether this shortfall constitutes a crisis, a problem, or a banana daiquiri is pointless. The gap must be closed, either by reducing the program's obligations or increasing its revenues. The president's approach calls for restraining the growth of Social Security benefits, while compensating for that reduction by letting younger workers divert a portion of their taxes to build up their retirement savings. The logic is that while blackening the skies with criss-crossing dollars is a zero-sum game, participating in capital formation through investments is not. Wealth can be multiplied, not just divided.
Few Democrats or leftists of any stripe have come forward to applaud Bush's pragmatic, experimental social policy. Yet, they can't confess that their "principle," that government must always grow and never shrink, is something they pulled out of the air. Nor can they draw on the credibility they built up the last time a welfare state program was scaled back. In the Clinton-era debate over welfare reform, we were told (in The Nation) that Aid to Families with Dependent Children (AFDC) was crucial to "the fragile state of grace that suggests we are our sisters' and brothers' keepers. That is what community is fundamentally about." And we were warned that ending AFDC "will destroy that state of grace. In its place will come massive and deadly poverty, sickness, and all manner of violence. People will die, businesses will close, infant mortality will soar, everyone who can will move. Working- and middle-class communities all over America will become scary, violent wastelands." Show us, please, all those hellish wastelands that have sprung up in the last nine years...and then tell us why we must not make any changes to Social Security.