It’s Not a Welfare State- it’s a Special Interest State: The concept of ‘welfare’ has become an open, bottomless vessel into which every desire can be poured.
June 16, 2012
One of the most successful linguistic hijackings ever is the Left’s appropriation of the term “welfare state.”
No one opposes the most basic version of a welfare state, one that provides essential public facilities, cares for the destitute and unfortunate, educates children, and protects public health and safety. Indeed, as the Supreme Court said in 1881, during an era regarded by the Left as a dark-age trough, “It will not be denied by any one that these are public purposes in which the whole community have an interest.”
A democratic polity can bicker over the scope of these functions. Some think care for the unfortunate should go a long way in the direction of income redistribution and that protecting public health requires extensive regulation. Others are more cautious. But these disagreements, while sometimes acrid, are within the bounds of civil political contest.
The problem is that the concept of “welfare” has become an open, bottomless vessel into which every desire can be poured: Government takeover of the entire health and retirement systems; detailed regulation of employment; manipulation of money; subsidies for housing, education, energy, food; or anything else that strikes the fancy of some segment of the public.
The “some segment” part is crucial, because today’s welfare has ceased to be limited to that of the public generally, or to the welfare of any group that has a serious claim to special deserts. Instead, it is the welfare of some special interest that is able to capture the policy process. This may require a cover story, a fig leaf of pro bono publico justification, but these stories grow increasingly thin as the number of subsidies multiplies. They are credible only to a rationally ignorant public that is too busy tending to its own affairs to dig down even an inch. The governmental expansion created by these forces is awesome. In 1902, U.S. federal, state, and local governments spent less than 7 percent of the Gross National Product. Most (3.5 percent) occurred at the local level. States spent 0.76 percent, and the federal government controlled 2.71 percent. Now, total federal, state, and local government spending in the United States is about 42 percent. An unknown share is mandated by laws and regulations, many of which are triggered by special interests rather than by any serious public considerations. Good estimates are hard to come by, but probably at least another 15 percent of GDP goes into this maw.
As government has grown, its functions have necessarily been divided and delegated to subunits. These become juicy targets for capture, and “welfare state” also means one in which pieces of the government are parceled out among various special interests, with each then allowed to use the power of its captive to promote private agendas through spending, regulation, taxation, and law. What we have created is not really a welfare state, it is a “Big SIS,” with SIS standing for “Special Interest State.”
Capture is not limited to economic interests—would that it were! Ideology is an equal if not greater motivator, and most powerful of all are the “bootleggers and Baptists” coalitions that combine the economic power of those who profit with the ideological élan of those who believe.
The Environmental Protection Agency is a prime example. The agency and its confreres in the Department of the Interior and the Army Corps of Engineers have been captured by the True Greens. They promote their anti-industrial agenda on every front, ranging from energy production to control of the electric grid to automobile safety to land use.
The EPA is a poster child because the capture is so complete and the scope of ambition so voracious, but the phenomenon is quite general. For example, since the passage of Medicare and Medicaid, the healthcare system has been driven by government funding. Department of Health and Human Services (HHS) rules on treatment and reimbursement rates determine everything, and the agency serves as an arena for fierce struggles among all the interests involved in healthcare.
Tariffs illustrate Big SIS as small ball. Tariffs are set by complicated political infighting, and lubricated by political influence and campaign contributions. Then individual exemptions are granted, also as the outcome of political prowess. The result is a double layer of destruction. The original tariffs promote inefficiency and damage consumers, and then the exemptions destroy the value of investments made in reliance on the law and add huge uncertainty. After a few rounds, the result is a system in which only a fool invests in industrial facilities when he could invest in congressmen.
The ObamaCare and financial reform laws represent Big SIS on a grand scale—2000+ page bills, each line drafted by some ideological or economic special interest, punting on most big issues and commanding dozens of rules to be drafted according to no known standard and with no consistency. The rulemaking process then, as in HHS, becomes the cockpit for the special interest battles that determine the true outcome of the law…
