Monday, September 20, 2010

Many a time over the years I have heard welfare described as 'socialism.' This is very much a fallacy; welfare is an integral part of a working capitalist system.

Why is welfare not socialism? The government is giving people stuff, right?

What it is not giving them is jobs. That is socialism -- not only providing jobs for everyone but sometimes, as in Soviet nations, requiring them to take the jobs. What welfare does is pay people not to have jobs.

And that provides a necessary relief valve in a capitalist economy. There will always be, by the very nature of the market, a certain number of unemployed and they must be provided for. To do otherwise would destabilize the entire partnership between state and economy.

Make no mistake about it, there very much is such a partnership in any modern nation (as well as most past ones). We are hardly pure capitalists -- the state is always there in some form. It prints the money, after all!

At times, it has also taken a rather active role in directing the economy. That is the basis of FDR-style liberalism. Corporatism Lite, I would only half-jokingly name it. That was a system that worked rather well in the 40s and 50s -- it really peaked under a Republican president, Eisenhower. Unfortunately (or maybe not, depending on ones views), it became a less workable model for us as international corporations and free trade pulled the rug from under our economy.

I truly do not see this country becoming particularly socialist in any near future. What we cannot permit is the loss of welfare and other programs that help mitigate the sometimes unfortunate results of capitalism. Without welfare, there would be an increasing number of those willing to work for less, effectively depressing the labor market -- another step toward Third World America, as Arianna Huffington calls it.

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