The Paternal State,
the Liberal State, and the Welfare State

Stipendia enim peccati mors.
For the wages of sin is death.

Romans 6:23

From wealth (, khrémata) does not come virtue (, areté), but from virtue comes wealth and the whole of other goods (, agathá) for men, private (, ídios) and public (, demósios).

Socrates, Plato's Apology of Socrates, 30b

Still one thing more, fellow citizens -- a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

Thomas Jefferson, First Inaugural Address, 1801

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this:  you must first enable the government to control the governed; and in the next place oblige it to control itself.

James Madison, Federalist No. 51

My concern with democracy is highly specific. It begins in observing the remarkable fact that while democracy means a government accountable to the electorate, our rulers now make us accountable to them. Most Western governments hate me smoking, or eating the wrong kind of food, or riding to hounds, or drinking too much, and these are merely the surface disapprovals, the ones that provoke legislation or public campaigns. We borrow too much money for our personal pleasures, and many of us are very bad parents. Ministers of state have been known to instruct us in elementary matters, such a reading stories to our children. Again, many of us have unsound views about people of other races, cultures, or religions, and the distribution of our friends does not aways correspond, as governments think that it ought, to the cultural diversity of our society. We must face up to the grim fact that the rulers we elect are losing patience with us.

Kenneth Minogue, The Servile Mind, How Democracy Erodes the Moral Life, Encounter Books, 2010, p.2

When I am discussing the state with my colleagues at Duke, it's not long before I realize that, for them, almost without exception, the State is a unicorn .

I come from the Public Choice tradition, which tends to emphasize consequentialist arguments more than natural rights, and so the distinction is particularly important for me. My friends generally dislike politicians, find democracy messy and distasteful, and object to the brutality and coercive excesses of foreign wars, the war on drugs, and the spying of the NSA.

But their solution is, without exception, to expand the power of "the State." That seems literally insane to me -- a non sequitur of much monstrous proportions that I had trouble taking it seriously.

Then I realized that they want a kind of unicorn , a State that has the properties, motivations, knowledge, and abilities that they can imagine for it. When I finally realized that we were talking past each other, I felt kind of dumb. Because essentially this very realization -- that people who favor expansion of government imagine a State different from the one possible in the physical world -- has been a core part of the argument made by classical liberals for at least three hundred years.

Michael Munger, "Notable & Quotable," The Wall Street Journal, August 18, 2014, A13, The Freeman, August 11, 2014, color & unicorns added.

From the Greeks to the 18th century, the job of lawgivers was widely regarded as fostering the virtue of citizens. Originally, this may have been mainly to promote the health and strength of the state. Later, the salvation of individuals became a religious issue, but what was needed to please God usually involved many of the virtues that otherwise were already thought to contribute to the strength of the state. This kind of state, a protector and promoter of virtue, was a paternalistic state, acting like a father, whose job was to punish, but which otherwise was relatively indifferent to the welfare of citizens. Being virtuous, citizens were expected to be able to care for themselves, or stoutly do without. Only the truly destitute and helpless, the widows and orphans, the halt and the lame, could expect care from the state or, at least, the Church. Since there wasn't actually a lot of wealth to go around, and the ruling aristocracies of most Mediaeval states expected to live in a style commensurate with their status, most poverty was not regarded as something that much could be done about anyway. After all, Jesus had said, "For ye have the poor with you always, and whensoever ye will ye may do them good" [Mark 14:7].

From the 17th to the 18th century there was a revolution in this approach. John Locke held that the purpose of government was simply to protect natural rights, i.e. protections of person, property, and contract from wrongs by others. This meant that the virtue of the citizens was no longer the principal concern of lawgivers. While the revolution did not immediately mean that virtue was of no concern to lawgivers, the tendency was in that direction because of the reasoning that there were natural rewards and natural penalties to virtue and vice and that the lawgiver therefore actually didn't need to worry about the matter. This led from Locke's apologia for the Glorious Revolution (1688) to Jeffersonian democracy in America (1789) and to the 19th Century Liberalism of people like John Stuart Mill (1806-1873). Such reasoning also goes back to the Stoic principle that virtue is its own reward, to the Biblical statement, "For the wages of sin is death" [Romans 6:23], and even to the assertion of Socrates above from the Apology. All this was conformable to the Protestant "work ethic" that was regarded as predominant in the 19th century, that virtues like hard work, enterprise, prudence, sobriety, etc. were productive of success and wealth (now the Confucian work ethic in East Asia). In such terms, the welfare of citizens could only be assured by their own activity, while public responsibilities for positive care, again, applied only to the truly destitute and helpless, the widows and orphans -- the "deserving" poor. These could expect attention either from the state, Churches, or, now, from mutual aid and fraternal organizations. Unlike Mediaeval paternalistic societies, these new liberal societies, in Britain and especially in America, actually produced a tide of new and unprecedented wealth -- in the latter case drawing in a shoal of immigrants hoping to benefit. This, as it happens, was in part their undoing.

As the British middle class grew, the disparity between their new wealth and the poverty of the lower classes became conspicuous and embarrassing to them. In large part, this did not make much difference in liberal ideology. What the lower classes needed was virtue, not unqualified support, and it was simply the business of the successful and virtuous to "visit" the poor, exhort and upbraid them, give them as much aid as is appropriate, and straighten them out. Those hearkening to such concern and advice straightaway become productive and successful. Those indifferent to the advice become the "undeserving" poor, left to wallow in their own self-imposed poverty, drunkenness, and squalor -- setting a negative example of failure for others. As the century wore on, specific issues became the focus of moral concern. Slavery was an early cause célèbre, regarded as degrading for both slaves and masters, particularly for the former because they were denied the fruit of their labor, and so the natural reward for virtue, but also for the latter, since they expected to live off the labor of others and thus could indulge in every possible vice, including unsanctioned unions with slaves, without facing the proper consequences, either morally or legally. After slavery, concern for the sufferage of women and about strong drink marched hand in hand. These did tend to go together, since drunkenness was mainly regarded as a male problem, and women came to be conceived as morally purer in general, which not only made them suitable as voters but the most fitting as leaders against "demon rum." The United States led the way, adopting alcohol prohibition and women's sufferage almost simultaneously (the 18th and 19th Amendments, adopted 1919 and 1920, respectively). Unfortunately, this no longer embodied a liberal ideal, but reverted to a paternalistic one, since virtue was no longer expected to be its own reward and vice its own punishment. Vice was now punished by federal law. Britain, first in abolishing slavery (1833 -- for which there had been no large natural constituency in Britain itself), lagged on both later issues, not adopting women's sufferage until 1928 and never instituting prohibition. In this it was still in the liberal tradition.

Meanwhile, however, there was a new competing ideology over and against both paternalism and liberalism. What if, one might ask, the squalor of the poor was not due to their own vices, but to forces beyond their control? What if such forces were promoted by a social order that only benefited others? This goes back to Rousseau, who held that "civil society" was simply a conspiracy by the rich to guarantee their plunder. "Civil society," as it happens, is the basis of liberal ideology, the sphere of private action, respecting rights of person, property, and contract, protected by government but otherwise left alone by it. The existence of civil society only makes sense if virtue need not be the concern of government, and if government need otherwise make no effort to guarantee that virtue be rewarded by economic success. With Rousseau, however, as with Marx later, virtue was lost, not rewarded, in civil society.

With these new ideas, there would be no "undeserving" poor. What would be needed was a new social order, a thoroughgoing political order, that would simply provide to all whatever they needed. This aptly came to be called "socialism." At first none of this was of much political effect, but it began to knaw at the edges of the liberal order. When the Liberal government elected in Britain in 1905 decided to institute old age pensions, these were at first intended to only be for the "deserving" elderly poor, who, after all, could not be expected to go back to work like the young and healthy poor; but it definitely signaled a reversal, as much as Prohibition in America, since such benefits in the liberal order had consistently been the concern of civil society and private prudential and charitable arrangements. Now the government would be providing positive benefits, with many voices expressing the point of view that every citizen (or simply every person) had a right to equal benefits, and that denying benefits to the "undeserving" was moralistic, inequitable, reactionary, and unfair.

Nevertheless, there was not much of a compromise of basic principles. That began to change thanks to the influence of two events:  (1) the Russian Revolution, and (2) the Great Depression. The Russian Revolution took place in a country that did not have a liberal order, either politically or economically. In terms of orthodox Marxism, it was no place for the kind of revolution predicted by Marx for capitalist countries. Nevertheless, Lenin figured that history could be speeded up a little, and others thought that if the evils of capitalism could be avoided altogether, so much the better. If the Soviet Union could succeed without private property, markets, or capital, it would immediately establish a new paradigm. This began to attract radicals and the credulous almost immediately. The Depression then added to this. If Western economies collapsed, despite the liberal order, while the Soviet Union survived and did fine, then some intermediate set of institutions, at least, seemed indicated.

This resulted in the basic form of the welfare state, though it took the new order a while to mature and to completely repudiate the moral basis of the old liberalism. The New Deal in the United States was principally sold in terms of the "deserving" poor, since most people without jobs knew that it wasn't by their choice and were willing to contemplate the government taking over economic responsibilities if no one else could. Even the crown jewel of the New Deal, the Social Security system (1938), was sold as a retirement plan that depended on one's own earnings. It was not until 1960 that the courts clarified the fact that social security "contributions" were simply taxes for benefits that could be expanded or revoked at the political will of Congress. Contributors never had property rights to monies taxed for the system, which had always been evident in the circumstance that benefits terminated at death, even if none had ever been paid, and were not inherited like other forms of wealth.

In Britain, the Depression killed the Liberal Party and brought to office for the first time the Labour Party, whose ideology was overtly socialistic and which represented a strain in Britain of public opinion, small but intellectually weighty, that admired the Soviet Union. Not much came of this at the time, but after World War II, the Labour government that was elected in 1945 and stayed in office until 1951 set out to nationalize many industries and institute classic welfare state programs like the National Health Service. These measures, with rationing and capital controls, stiffled the British post-War economy for some years. Meanwhile, the United States blasted off into post-War prosperity. With the return of the Conservatives in 1951, the British economy did better, but the nationalizations and social welfare programs were not reversed. The power of the labour unions continued to grow until by the 1970's people were speaking of the "British disease," whereby the unions stiffled modernization and efficiency and prevented the government from liquidating unproductive government industries, especially coal mines that were no longer profitable. The principle seemed to be that business only exists for the purpose of providing jobs, even if they cannot profitably provide a good or service. And the jobs better maintain the workers in the style to which they had become accustomed.

Meanwhile, there had been a revolution in American politics. Lyndon Johnson's "war on poverty" began in 1964 as a project with liberal mottos -- "not a handout, just a hand," etc. Like the liberals of the 19th century, and the New Dealers of the 1930's (as Johnson himself had been), Johnson was thinking that with a little help, with the best modern sociological knowledge, the poor would quickly be up and off on their own. The Secretary of Health, Education, and Welfare, Joseph Califano, testified to Congress that poverty would be abolished in 10 years. After fifteen years (1966-1981), including continuous Democrat control of Congress and a Democrat President from 1977 (Jimmy Carter), the poverty rate was about where it was at the beginning of the project (14%). Johnson also created Medicare and Medicaid as federal programs, to provide medical care for the elderly and the poor. This was widely believed, feared or hoped, to be the first step in government health care for all; and Johnson invited Harry Truman to the signing of the Act, since Truman had been frustrated in trying to follow the British into socialized medicine after World War II (whether Truman tried very hard is a good question).

Even though the war on poverty manifestly failed in its original intention, it became a matter where the purposes shifted with the ideology. The "progressive" idea came to be that everyone was simply owed an income. There was no difference between deserving and undeserving poor, no difference between virtue and vice -- which now was dismissed as a fiction of religious and moralistic fundamentalism -- and no difference between people working for a living privately and the government simply giving them money. The public never believed or approved of such notions, but they exerted a strong influence through elite opinion and militant political activism. And since these were always presented by the media as enlightened and compassionate ideas, anyone believing otherwise was consistently put on the defensive and portrayed as the most cruel, selfish, and mean spirited persons imaginable.

Virtue must be enforced by the Law, with vice sanctioned by punishment. This "makes a statement" about the values of society. Imprisoning drug users is, after all, to protect society from them.
Virtue has natural rewards and vice natural punishments. The purpose of Law is justice, retribution for wrongs, not making "statements" or adding additional punishment for things that, like using certain drugs, might not even be vices.
Behavior cannot be judged with terms like "vice" and "virtue." Everyone deserves a decent life, and if their behavior appears self-destructive, it is society's fault. Society therefore has the duty to protect them from the consequences of their actions. Imprisoning drug users is, after all, just because, as in THX 1138, we are only trying to help them.

The strength of traditional liberal ideas, indeed, overcame the full force of elite horror and execration with the election of Ronald Reagan. Although Reagan articulated quite nicely many of the ideals of the liberal order, and he managed to get rid of some of the more worthless programs of Johnson's Great Society, he had no intention of reversing the New Deal. At the same time, his opponents could think of no worse charge than to ascribe such an intention to him. Since only a reversal of the New Deal would truly restore liberal ideals, this still left the terms of the debate confused. And since everyone tended to see politics as a dualistic, bipolar conflict, between Right and Left, or between Conservatives and "Liberals" (i.e. in American terms, socialists or welfare statists), it was easy to smear the ideals of the liberal order as part of a conspiracy by Conservatives to reestablish Segregation and the other illiberal diseases of the Old South [note]. Since Conservatives, indeed, very often would have preferred a paternalistic state more than a truly liberal one, as a movement, however energized by Reagan, they were poorly situated to clarify things. Just as drug prohibition was producing in the 1980's the same phenomena of crime and gansterism as had alcohol Prohibition in the 1920's, it was nevertheless agreed upon by Conseratives and "Liberals" that such paternalistic laws were the right thing, however vile the consequences. To this day, Joseph Califano, and not just Republicans, remains a conspicuous ideologue for the drug war.

And for socialized medicine. Although the cost of Medicare and Medicaid is many, many times what was predicted or anticipated, the program is reimbursing less and less of expenses submitted by physicians, and the shadow of bankruptcy looms over the whole system, there is a broad front of political support for extending such health benefits to provide for prescription drugs and for lowering the age of eligibility. The only argument about prescription drugs is that, naturally, the Democrats want to spend more and promise more, while the Republicans want to spend less and promise less. The Republican politicians thus continue to make no principled objection to the devices of the welfare state, even though one has no difficulty these days finding such arguments made, particularly on radio, if not much on television. Even Margaret Thatcher, who ended Britain's run as the "sick man of Europe" by privatizing state industries and breaking a few unions, has actually praised the National Health Service.

Thus, although presumably refuted and repudiated by Reagan and Thatcher, the welfare state actually marches on. Elite opinion has learned nothing and forgotten nothing and continues, as for the last forty years, at least, to exert a constant pressure towards greater socialism. Conservatism, of course, is a relative term. If Conservatism is simply to call "Stop," as William F. Buckley said, this would mean actually retaining the principles of the New Deal. Since neither Reagan, nor Newt Gingrich, nor George W. (or H.W.) Bush, have ever breathed a word against the New Deal, and occasionally even praise Franklin Roosevelt, they obviously are quite comfortable with one foot in the welfare state. When the other foot is closer to paternalism than to liberalism, this promises little hope for genuine progress towards liberal ideals.

That such movement would indeed be progress has been well revealed by events and by theory. The reproachful presence of the Soviet Union, as a successful social and economic order devoid of the trivial freedoms of civil society, guaranteeing a full life to all, crashed in ignominous failure between 1989 and 1991. The reputed prosperity and efficiency of the "command economy" was all a fiction, promoted well enough to deceive, not only credulous crypto-socialist economists like John Kenneth Galbraith, but even the CIA, which consistently overestimated the size of the Soviet economy. Thus, all the eggs that needed to be broken (i.e. millions of class enemies killed) to create the workers' paradise turned out to be an exercise in monstrous and cruel futility. Yet elite opinion in the West continues to think that price controls and other command economic regulations, together with rights to jobs, income, housing, education, medical care, etc., are still the direction called for by political and social progress. This despite the lesson that the failure was not in the Soviet Union alone. European states that never went as far as the Soviets, but did put in place large systems of welfare benefits and job protections, consistently experience poor to no economic growth and persistent high unemployment. What had been the British disease now looks like the French disease, as French truckers, for instance, regularly freeze French transportation to demand an even lower retirement age, greater benefits, etc. [note]. In the liberal state, such things would not be political issues.

Theoretically, Public Choice economics reveals why in the welfare state, as has been said of the National Health Service, "useless work replaces useful work." That is, it is nicer to get something for nothing through rent seeking than to actually create and run a business that avoids bankruptcy and provides something that people want. The costs of political appropriations are dispersed (onto the oblivious public), and the benefits concentrated (onto a grateful me), while the benefits of generating wealth economically are dispersed (onto the oblivious consumer, who takes them for granted), while the costs are concentrated (onto my precarious business). When government protects and subsidizes businesses in order to "save jobs," it can even make the procedure sound noble and compassionate. This is aptly called "corporate welfare," but politically it sells as well to labor unions as to business. Thus the steel tariffs instituted by George W. Bush buy votes and money from the steel industry and steel union, while the higher prices of steel are paid by everyone, including those put out of their jobs when their employers, operating at the margin of profitability, are put out of business:  Before the tariffs were withdrawn, the estimate was that 300,000 jobs were lost for the 100,000 jobs preserved in the steel industry -- and Bush got no thanks from the labor unions anyway.

More basic is one of the oldest principles in economics, Say's Law. Life gets better as production, of things that people actually want, increases. They even knew that in the Soviet Union; they just couldn't manage to increase production. This requires innovation, increased productivity, and the weeding out of failure. None of that works well in political or bureaucratic terms. Innovation is threatening to vested interests, political or bureaucratic, and so it is slow or stiffled; productivity decreases as the bureaucratic impulse is to spend the budget and demand more; and failure is rarely rewarded with elimination. The worse that the public schools have done, the more money that they have demanded, and the more they have gotten. The public hardly even notices that the ideology of the education schools and teachers unions has been to practice political indoctrination rather than actually teaching boring and demanding subjects like reading, writing, mathematics, history, etc. And the indoctrination, of course, is that the government owes everyone the necessities of life, the lifestyle to which they have become accustomed (or think they deserve), and protection from anything that will ever make them feel uncomfortable -- except that, if they are dying of cancer, they aren't going to be allowed to use marijuana or heroin.

When truths of economic principles like those of Public Choice theory or Say's Law are never heard in political discourse and almost never heard in public at all, things do not look good for the future of freedom. As the welfare state runs up against fiscal failure, the rebound can as well be back towards paternalism as towards liberalism. The ongoing popularity of the war on drugs and the virtual media black-out of principled criticism of it holds out little hope that liberal priniciples can be reestablished in that direction. Meanwhile, most citizens seem to have come to believe that a non-judgmental, unconditional maternal care is what the government owes them. In a democracy, this means that politicians will continue to promise the Moon and shuffle the paperwork under the carpet. Unlike Enron, the fraud and diseconomies of this can be concealed for decades, as long as the debt can be obscured or deferred. The Social Security system will cease to run a surplus and begin to draw on the Treasury some time beween 2012 and 2018, by current estimates. Politicians promising ever more benefits can hurry that along a bit. They do say that people get the kind of government they deserve. And the Founding Fathers did say that the Republic would only last as long as the virtue of the citizens. The greatest evil of the welfare state, indeed, is that it is designed to protect people from the consequences of vice. Now we have the worst of both worlds, and the most noxious and evil of combinations, when many in government think it is their job to enforce virtue, paternally, but then actually have to promise, maternally, to protect everyone from their own imprudence and folly -- meaning of course, that the remaining prudent and wise must pay the cost. They don't like that, but their political voice is usually muted or distracted. If they knew what to demand, it would simply be that government is neither mother nor father, while it is the duty of citizens to be adults.

The State of Nature and Other Political Thought Experiments


Political Economy

Home Page

Copyright (c) 2003, 2006, 2007, 2012, 2013, 2014 Kelley L. Ross, Ph.D. All Rights Reserved

The Paternal State, Welfare State, and Free State, Note 1

Late in 2002, when Republican Senate Majority Leader Trent Lott said that we might have been better off if Senator Strom Thurmond had been elected President in 1948, he may have forgotten that Thurmond was running as a Dixiecrat Segregationist. Or it may have been a Freudian slip. Either way, the worst suspicions of many were aroused, and reasonably so. Exactly how did the Democratic Party alienate Southern whites? With a drift to socialism, or simply by turning against Segregation? Or, conveniently, by both? When 90% of American blacks reflexively vote Democrat, it has largely got to be out of suspicion of these motives. Trying to redeem himself, Lott then confessed his support for affirmative action. Since "affirmative action" means preferential policies to anyone who actually governs such policies (even if they deny it), Lott either doesn't know how to be honest, doesn't know what he is talking about, or doesn't know that the majority of Americans, including many blacks, despise preferential policies. Whatever it is, it typifies the ongoing muddle of Republican ideology and strategy.

Return to text

The Paternal State, Welfare State, and Free State, Note 2

Even as I write, The Economist of June 7th-13th, 2003, reports crippling strikes by railway workers and air-traffic controllers in France, as well as strikes in Austria, all protesting plans for "pension reform." In other words, the governments anticipate the bankruptcy of the state pension systems, which are run like candy stores, and are looking down the line at what measures will be necessary to preserve their solvency. Since any such "reform" will involve increasing taxes, lowering benefits, or raising retirement ages, everyone eagerly awaiting their free lunch is going to feel betrayed and outraged. But King Canute had a better chance of stopping the tide. Raising taxes just on the "rich" would be the politically easy solution, except that now such governments realize that economic growth and unemployment will be even worse should they make their countries even more hostile to capital than they are. The taxation rates are already absurd and punishing.

Return to text