Two sides of the same coin

The aftermath of Katrina has once again sparked a debate over the proper role of government in our society.

I’ve addressed this issue in the past, specifically here and here.

It is my contention that neither pure capitalism nor pure socialism are viable economic forms suitable for modern society. While many people see them as opposites, I see capitalism and socialism as two sides of the same coin. I believe it is necessary to have a mixture of the two.

I previously tried to make this point using the analogy of an automobile (one that I am kind of proud of) and I will repeat it here:

“Let us look at the U.S. economy as a car where capitalism is represented by everything that makes that car go - the engine, the drive shaft, the steering column, the brakes and so forth. Socialism is represented by everything that goes into the car to make the ride more comfortable, but is superfluous to making it go. That would be the cushioned seats, the plush interior, the windshield to keep the bugs out of your face, shock absorbers, power steering, power brakes, power windows, power locks, the A/C and heater, the radio and cd player, and on and on....

I think this is a great example of the growth of government and the increasing expectations of the people it serves. How much is too much? When you go to buy a car, what do you expect it to have at a bare minimum? I just bought a new car last year. It was the first car I’ve ever bought that had power locks and power windows. I used to think those were silly extras that I would never need. Now they are practically standard on every car and I personally love the convenience.
The government is the same way. Without some of the social programs in place, capitalism would be a bumpy ride. But too many programs weighs everything down and hinders our forward progress. So we are constantly struggling to come up with the proper balance. When critics urge the elimination of welfare, ag subsidies, Medicare and Social Security - it’s like trying to sell the American people a car with metal seats and no shock absorbers. They are not going to be happy. They won’t buy the car and they won’t vote for your candidate. That is the reality.”

Very few people think that we have the perfect formula in place. Most people believe that we have too much of one side and not enough of the other. Whichever side that is would probably place you on either the right or left half of the ideological spectrum.
I tend to think that we have a pretty good system in place overall, but I am open to arguments that we need more of some things and less of others. What I reject are the extreme arguments from either side that claim the current system is somehow an abomination (or unconstitutional) and needs radical altering.

Stephen, one of my frequent commenters here, has recently made an argument along these lines, specifically in regards to welfare:

We will always have the orphaned, the aged, the sick of body, mind and soul. And we have an aching responsibility to care for them as best we can. Add to them the sufferers of some catastrophic event. In that category reside those who, for one reason or another, have suffered a set-back. Any profit conscious society would see the value of giving those persons a hand up. .... All others fall into a bracket we might label scum. It is THIS category – the scum of the earth – that welfare statism has so successfully nurtured and perpetuated.

The “unfortunate” I describe above are a tiny, tiny minority. We need not concern our government with the care of those few, but deserving people. We are the most charitable nation on earth. Moreover, there is nothing in our Constitution that warrants that concern.

Finally, I do recognize that these despicable humanoids I have labeled “scum” produce children. These children are “orphans” in every sense of the word. It is the duty of everyone to be on the lookout for them so that we might remove them from their diseased environments as early as possible. Again this is a community concern; a deep responsibility we must all bear.

It is my position that, were it not for government, the scummy multitudes would not exist at all; given their penchant for knifing each other in dark alleys, overdosing on drugs and committing crimes that would ensure a lifetime in prison, or a place on the gallows. But, by virtue of the trillions of dollars we have spent guaranteeing that these malicious and contemptible people will have plenty to eat, air conditioned bedrooms, and a new Lexis to get them to McDonalds and the lottery machine, they have multiplied into the tens of millions.

First, I want to applaud Stephen for acknowledging society’s need to take care of “the orphaned, the aged, the sick of body, mind and soul.” Unfortunately, his contention that this group - along with the “sufferers of some catastrophic event” - make up a tiny, tiny minority is not at all in touch with reality. Perhaps I misread him and he meant to say that the group he labels as “scum” is the tiny minority. That would be closer to the truth.

But let’s talk for a moment about the “scummy multitudes” whom Stephen believes would not exist is if were not for government aid programs. How many people believe that there was no poverty before government welfare programs were established? Can I see a show of hands?
Hmmmmmm. It’s obvious that some folks could use a bit of a history lesson.

Let’s not pussyfoot around. There are obviously plenty of able-bodied people who end up on welfare in one form or another - perhaps even some who deserve the label of “scum.” But arguing over whether or not they deserve to recieve government handouts ignores the central role they play in our economic system. The purpose of government welfare, as Frances Fox Piven and Richard Cloward pointed out long ago in their classic work “Regulating the Poor : The Functions of Public Welfare” is to regulate labor.

”When mass unemployment leads to outbreaks of turmoil, relief programs are ordinarily initiated or expanded to absorb and control enough of the unemployed to restore order; then, as turbulence subsides, the relief system contracts, expelling those who are needed to populate the labor market.”

Note that it only expels those who are “needed to populate the labor market.” This raises another interesting aspect about capitalism that conservative critics of welfare tend to overlook or ignore - the role that unemployment plays in keeping wages down. Our economic system depends on having a certain percentage of people unemployed (usually between 4 and 6 percent) so as to keep pressure on workers and prevent them from having the upper hand in wage disputes. If we had full employment, then workers could go and demand higher wages from their bosses with no fear of reprisal - rising wages would mean higher costs for businesses which would be passed on to consumers through inflation.
But by having a constant pool of unemployed people in need of work, the laborer is constrained from demanding higher wages for fear that the boss would fire them and hire the next guy desperate for a job and willing to work for the same or less pay. This helps to keep a cap on inflation and stabilizes our economic system.

It strikes me, then, as the height of cruelty to have a system that depends on a certain percentage of people being unemployed that would then deny them the basic necessities of life - food, shelter, medical care - while they are serving that purpose.

Fortunately, we do not have such a cruel society. And the welfare program that we do have takes up only a very tiny portion - less than 2 percent - of our nation’s $2.5 trillion annual budget.