William Galston had an interesting piece in Saturday’s Wall Street Journal as part of a debate concerning the role of government. However, his title for his column shows a profound…misunderstanding…of what it is to be an American, of what it is that has made the United States so exceptional on the world stage and in history: “They’re Part of the Civic Compact.”
The very term “entitlement” displays a breathtaking move away from self-reliance and recognition of the immorality of government-mandated wealth transfers. A man deserves something simply because he exists according to “entitlement.” Indeed, he deserves an equal share, even though he has done nothing to earn it. “Entitlement” and “earning,” though, are mutually exclusive conditions. More, the man who lives on entitlements has become entirely dependent on the provider of the entitlement, his government. He no longer is free.
Further, the title itself evinces a misreading of our history. By way of illustration, I offer a couple of remarks by James Madison. First, Congressman Madison had this to say concerning a bill before the 3rd Congress which was intended to provide help to French refugees from the Haitian Revolution.
I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.
Madison also had this to say in an 1831 letter to his friend, James Robertson:
With respect to the words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.
Moreover, the outcome of the trend toward an entitlement state is acknowledged by Galston himself.
As far as I can tell, [Nicholas] Eberstadt’s statistics [in the companion article] accurately represent the trends on which he focuses.
An outcome of those trends? As Eberstadt put it:
The US is now on the verge of a symbolic threshold: the point at which more than half of all American households receive and accept transfer benefits from the government.
In other words, we’re about to reach the point where half of our country is dependent on government—dependent on the other half of our country—for its subsistence.
Our duties to our fellows, especially including those who are less fortunate than us, are clear and present; they are at the foundation of our, and of our nation’s, Judeo-Christian heritage. But our duties are individual, and they can only be discharged by each of us, or by groups of us acting in concert through our charities, our churches, or our local communities, thereby pooling our individual resources according to our own views of, and capacity for, the means of assistance. Our duties are not collective, and they cannot be wished off onto a government for it to relieve us of our responsibilities.
Galston makes this very point,
When I do something for you that you would be hard-pressed to do for yourself and you respond by helping me with something I find difficult, we depend on one another and are the stronger for it.[]
and then he misunderstands it. He insists instead that government must be the first entrant into this exchange and that it must be the middleman in all such exchanges. Then he demonstrates the failure of this in practical terms, and misses his own demonstration:
In the first place, we are an aging society. Our massive investments in public schools and universities at the height of the baby boom have given way increasingly to the funding of hospitals and nursing homes. A second trend has exacerbated the consequences of aging: the near-disappearance of the pensions and health insurance for retirees that employers provided in the decades after World War II. The third trend is macroeconomic. During the generation after World War II, the economy grew briskly, and the fruits of that growth were widely shared. Since then, growth has slowed, the distribution of gains has become more concentrated at the top, and less-educated workers have seen their wages stagnate while their benefits wither.
How could this be otherwise? With money being withdrawn from the private economy at the alarming rate described by Eberstadt and accepted by Galston, of course growth has slowed. Further demonstrating his confusion, he notes the transfer of private benefit-related agreements between employee and employer to a concept of entitlement from government without comment. On top of this, he accepts the local (and state) funding of public schools and universities as in some strange way equivalent to Federal funding of health facilities while tacitly assuming that such Federal funding is somehow appropriate.
The growth of the entitlement state, with its taking of the fruits of success from those more successful, and transferring those fruits to others who did not earn them, not only truncates that success, it removes incentives from both sides: the one to work harder for more success, the other to work hard for his own success. Indeed, this overhead cost that is this transfer prevents all participants, in Teddy Roosevelt’s words, from “showing the best that there is in him.” And it tries to transfer the moral duties of both—the one to take care for the least among us, and the other to do all he can so as not to be a burden on others—to government.
Galston then offers Social Security as an example and uses it to deny a moral dilemma [emphasis added].
Social Security works this way [a privately purchased annuity for the benefit of the purchaser] for millions of Americans. For many others, it is more complicated: Some can expect to receive more than the actuarial value of their contributions, others less. Americans in the latter category are helping to fund retirement for those in the former. In effect, some workers are relying on others for a portion of their retirement income. But again, this quantitative premise does not imply a disturbing moral conclusion.
But he misunderstands the morality of this situation. (As an aside, Galston conflates a privately purchased annuity for the benefit of the purchaser with a tax on some for the express purpose of transferring that money to the benefit of others. Privatization of Social Security of any sort, though, is anathema to Progressives, which makes the conflation all the more…interesting.) Galston’s first misunderstanding is this. His description ignores the original purpose of Social Security—to be supplemental income, not replacement income, with the retirees expected to continue to rely on their families for the rest of their needs (and for a shorter time than today, but demographics are a distinct matter).
Second, our modern, distorted Social Security system denigrates those family ties. It makes the retiree dependent on a collection of strangers for his replacement income rather than on his own family for help with his retiree expenses. At the same time, this system takes money away from a family man that he could otherwise commit to supporting his own retired parents and transfers it to a retired stranger.
Finally, by making the retiree dependent on government for his entire support (neglecting medical expenses; Medicare is of a piece with this, though), government is robbing the retiree of his opportunity to honor his own morality—the effort of being the primary source of his own sustenance.
Galston “would make a similar argument about the Earned Income Tax Credit, which supplements the earnings of low-wage workers,” but the practical and moral argument is similar here, too.
Finally, this moral failure flows directly from economic truisms: taxing a thing (and taxes, whether present or future, are the source of funds for the transfers) causes less of it to be produced, while subsidizing another causes more of that to be produced. Taxing the fruits of labor—especially for the purpose of simply giving the collected funds to another—leads to less labor, either outright, or through poorer quality labor. Paying people for not working lowers the incentive—the need—to seek employment.
Contra Madison, in a small way government has a (very limited) role in seeing to the sustenance of those who cannot help themselves, but only as a last resort, after private, charity and church, and local community resources have been exhausted. But these cannot have their full effect until an overgrown, and overwrought, government gets out of our way.