In 1777, a correspondent told Adam Smith that the British loss at the Battle of Saratoga worried him. “If we go on at this rate, the nation must be ruined,” he said. But Smith was unconcerned. “Be assured, my young friend, that there is a great deal of ruin in a nation.” Supporting those distant colonies was not an economic proposition anyway. Smith published figures to that effect in The Wealth of Nations (1776). Getting out of what would become the United States was probably the best policy.
He knew, in short, that it took more than battles lost or colonies abandoned to ruin a nation. President Obama and the Democrats know that too. But they have a more cynical take on Adam Smith’s adage.
Over generations the U.S. has accumulated plenty of capital (and I don’t just mean our assets). Subconsciously, the president and his allies seem to have decided: “Let’s go ahead and spend that capital for our own political advantage.” The country will survive. “Social justice,” meaning equality, is what they say they want. If getting there means blowing some capital, well, only heartless right-wingers will object.
Here are some recent figures published by Robert J. Samuelson of the Washington Post:
In 1955, defense spending was 62 percent of federal outlays and spending on “human resources” (the welfare state) was 22 percent. By 2012 the figures were reversed; welfare was 66 percent, defense 19 percent. Medicare, Medicaid, food stamps, Pell grants and Social Security’s disability program are all postwar creations.
The metastasis of the welfare state has been enabled by something that would have amazed Adam Smith. Earn a decent living and you will pay thousands of tax dollars into the Treasury, and have one vote. Receive food stamps, housing subsidies, and child support from the government, perhaps to the tune of tens of thousands of dollars, and you too will enjoy one vote. You probably won’t owe any income taxes either. It’s a formula for instability.
John Stuart Mill saw the danger of a system like ours as far back as 1861:
The receipt of parish relief [welfare] should be a peremptory disqualification for the franchise. He who cannot by his labor suffice for his own support has no claim to the privilege of helping himself to the money of others. By becoming dependent on the remaining members of the community for actual subsistence, he abdicates his claim to equal rights with them in other respects.
And remember, Mill was the big progressive of his time. If a politician made that comment today, it would qualify as a hate crime. Yet we keep hearing how far to the right we have moved.
Mill couldn’t have known how much worse things would get, both in Britain and in its former colonies. Consider the U.S. budget. For 51 of the last 60 years the government has spent more than it has taken in; in the latest year, $700 billion more. Total debt now exceeds $17 trillion, and unfunded liabilities (including such details as future Social Security payments) run into the hundreds of trillions. The Ponzi scheme is sustained by printing money to keep interest rates low. It is an unstable structure, to put it mildly.
For the latest round, I notice the news media have revived their beloved “grand bargain.” Translation: The GOP should accept tax increases to take effect right away. In return, the Democrats will cut spending, but the cuts will take effect in the “out-years.” By then a new Congress will quietly restore spending to its earlier levels. It’s a deception that has hoodwinked Republicans in the past.
In other ways, things are far worse; not just since J.S. Mill, but since JFK. Illegitimate childbearing, although we are not supposed to use that word anymore, has been all but normalized. In the 19th century, childbearing outside marriage was strongly discouraged by a Christian faith that was not yet under attack. Even 50 years ago illegitimacy was rare. Today, more than half of all babies to mothers under 30 are born out of wedlock. The rate for non-Hispanic whites is 29 percent, Hispanics 53 percent, blacks 72 percent. When Daniel Patrick Moynihan expressed concern about the eroding black family in 1965, the illegitimacy rate for blacks was 26 percent. So it has almost tripled since then. (The white rate was then about 3 percent.) Unsupported children soon became a government responsibility. The great problem is that turning broken families into wards of the state is seen by the Left not as a problem but as an achievement. Their main goal is the expansion of the government, and breaking up families achieves that goal.
Which brings me to our African-American brethren, many of whom are the lost souls of the welfare state. They form a discarded class—shuffled from slavery to welfare while barely passing “go.” And almost without protest. Most blacks seem not to realize how much they have been betrayed: To Democrats—including an African-American president, their own corrupt Black Caucus, and a conniving news media—as long as blacks keep on voting Democratic, all will be well in the end. The only cloud they ever see on the horizon is a GOP that might cut benefits.
Look at how the 50th anniversary of the Martin Luther King speech on the Mall was covered: a week-long festival of nostalgia interspersed with hunts for new outbreaks of racism. Did anyone suggest that marriage should precede child-bearing? If so I didn’t hear it. Such warnings are seen as belonging to a Christian morality that is now outmoded and, frankly, undesirable. The press corps and the Black Caucus see income redistribution as the remedy to all ills. Equality, not matrimony, is their goal, with plentiful abortion part of the mix.
Why is the ruling class so blind? It sees itself as superior to the lower orders and is convinced that a better system would appear if only the elites were allowed to redo everything from scratch—to build a new society. The old one was assuredly no good, and we need something more “equal.” Despite frequent appeals to diversity, they would like to stamp out the natural differences between human beings.
Something similar was already tried in the Soviet Union, but modern liberals will respond to that: “Maybe, but they didn’t have the right people in charge. Here we do.”
The underlying hostility is to the free market system itself. The Left’s objection was noted by Adam Smith, who said he had never known much good done by those who “affected to trade for the public good.” Markets eliminate the need for the vast class of middlemen who aspire to tell us who should get what and at what price. Ceaseless rebellion is their response.