Our Competitive Entitlement Economy - The American Spectator | USA News and Politics
Our Competitive Entitlement Economy

It’s not unusual for non-Americans, and many Americans of a center-left disposition, to portray the United States as a dog-eat-dog society: one in which the poor are left to fend for themselves and where a night-watchman state doesn’t intervene, save in extreme circumstances and often not until it’s too late. It’s a mantra that’s endlessly repeated, from the academy to the pulpit, from Congress to your local council.

Judging, however, from the latest update on global social expenditure released by the Organization for Economic Cooperation and Development (OECD)—hardly a den of infamous “neoliberal” bogeymen—this portrait simply isn’t true. In fact, as the Washington Post’s Robert Samuelson notes, it turns out that America is the world’s second-biggest social spender, right after that global exemplar of fiscal rectitude and economic prudence: France.

How so? On the one hand, there is what the OECD calls “public social spending.” This includes things like old-age assistance, unemployment insurance, disability payments, government-provided healthcare, etc. What, however, needs to be added to this, the OECD states, is what’s called “private social expenditure.” This is defined as “social benefits delivered through the private sector… which involve an element of compulsion and/or inter-personal redistribution.” One example would be government subsidies to employer-provided healthcare.

By these measures, almost 30 percent of America’s annual GDP is devoted to welfare-spending of one form or another. Let me say that number again: 30 percent. How much more, we might ask, could possibly be spent, especially given the sub-optimal results? One suspects that, for most liberals and the left more generally, the sky’s the limit. But they should at least concede that America is hardly tight-fisted in such matters. Alas, I, for one, am not holding my breath.

More significantly, the sheer amount of spending on public-delivered-by-the-state-welfare and public-delivered-by-private-means-welfare should raise questions about some of the underlying dynamics driving a situation whereby one in three Americans in August 2014 were living in households receiving some form of means-tested welfare. No doubt, it owes something to the Great Recession’s lingering effects. But it’s also indicative of the emergence of what might be described as a “competitive entitlement economy” that operates alongside, and feeds off, the wealth-creating economy.

On one level, this development reflects something that can’t be emphasized enough: the power of incentives. If 30 percent of an economy is devoted to the welfare state in one form or another, no one should be surprised that large numbers of individuals and groups—aided, enabled, and encouraged by lobbyists—gravitate to making state-mandated wealth transfers the primary focus of their efforts to improve their economic circumstances.

Success in that sector of the economy depends upon your ability to compete against everyone else who’s trying to secure laws and regulations that result in wealth transfers to them or which accord them economic privileges. A small number of highly organized unions or businesses able to exert direct pressure on a key group of legislators to secure preferential treatment in the form of, for instance, subsidies for a particular industry is much more competitive in this environment than, for instance, taxpayers. By definition, taxpayers are scattered, disorganized, and can’t bring the same degree of influence to bear, despite their vastly greater numbers.

What’s further complicating matters, however, is the way in which the language of human rights is increasingly used as a rhetorical tool to enhance peoples’ competitiveness in this part of the economy.

It’s no secret that America, and the West more generally, is awash—if not drowning—in rights-claims today. That which Harvard’s Mary Ann Glendon famously described in the title of her book Rights Talk (1993) has swept aside or subsumed most other moral concepts such as obligations, duties, responsibilities, and virtues when it comes to public deliberation about political, social, legal, and economic questions. This process has been going on for decades, but the impact has been accentuated by two more recent developments.

The first is a virtual disintegration of any consensus about where rights come from. Not so long ago, people from disparate religious and political backgrounds held that rights were grounded in God, or natural law, or both. This mattered because it generated relatively tight philosophical and legal frameworks in which various rights-claims could be discussed, debated, and adjudicated with a certain degree of coherence.

The second development has followed in the wake of the gradual collapse in the public square of such frameworks. Rather than arguing that X is a right because it is grounded in some element of human flourishing, or human nature, and/or because it’s divinely ordained, rights to something are now simply asserted. The difficulty is that, without some common framework grounded in reason for deciding whether something is a right, the discernment-process becomes a matter of who is the loudest, more aggressive, or most powerful. Coherent argument is out. Assertions based on sheer will are in.

That, I’d argue, helps to explain the explosion of rights-claims in the economic sphere. We’re told, for example, that everyone has “a right to a pension.” Apparently it doesn’t matter if one person has behaved economically-prudently all their lives, while another has lived a hedonistic lifestyle but nevertheless has an expectation that he’s entitled to live off everyone else in his old age. But to even make that point amounts, some believe, to “disrespecting” the hedonist’s “right” to a pension.

Or: take the claim that people have a right to a job. Who, one may ask, has the responsibility to provide the demanded employment? What if one person is a work-shy so-and-so? Are the rest of us supposed to provide him with a salary, regardless of his disinclination to work? Are governments, to use another example, expected to implement protectionist measures to prop up one inefficient uncompetitive industry so that it continues to promote one group’s right to a job at the expense of, say, impoverished Africans who simply want the liberty to compete in a global economy?

This last example underscores that the organization usually expected to realize such rights in the economy turns out to be the government. Just watch the way in which welfare lobbyists, unions, and businesses testifying before Congress refer endlessly to rights to this or rights to that when insisting that the government must act to give them and their constituents what they’re owed as a matter of right.

That’s a recipe for the potentially endless expansion of welfare in whatever form it takes—social security, health-insurance, unemployment benefits, public sector jobs, labor-market regulations, subsidies, specific services—far, far beyond the 30 percent of the American economy it currently occupies. Remember: if you question whether a person has a right to a secure job, a right to a certain income, or a right to whatever, then you effectively leave yourself open in today’s climate to the charge of neglecting (or, worse, potentially violating) someone else’s rights. That’s not a great incentive for anyone, let alone a legislator, to say “No.”

The problem, regrettably, is not going to be addressed until we face up to the fact that, for increasing numbers of people, rights are just another weapon to be deployed in an endless competition of wills to get what you want via the state. The noble idea of human rights is of course integral to the American experiment in ordered liberty and the broader Western tradition of moral and legal reasoning. In many instances, however, rights-discourse today is now undermining many of the very protections against government overreach that rights, in their classic form, were supposed to uphold.

And for that we will continue to pay a very high price, not least of all in the economy.

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