The contempt for democratic politics
The contempt for democratic politics
Currently social transfer expenditures (welfare benefits, in-kind support and tax concessions) in OECD countries amount to 22 per cent of GDP; in 1974 the figure was 17.5 per cent. So, almost a quarter of all income now accrues to citizens as the result of political decisions, unrelated to individual contributions or work effort. The level has increased since the beginning of the twentieth century.
Labour and social democratic movements have always sought such a ‘decommodification’ of social provision since it insulates living standards from what people would get in unrestricted markets. It is a progressive recognition that societies are entitled to grant citizens access to amenity in accordance with their capacity to provide. Of course, the trend has long been opposed by the liberal-right as unaffordable or market-distorting.
Every decade or so, liberals internationally re-introduce major crusades purporting to show that the social welfare state has become ‘overloaded’, ‘sclerotic', or ‘bloated’ – too willing to take on liabilities it cannot (and should not) accommodate. In 1944, Frederich Hayek published The road to serfdom which insisted that governments could not fulfil the promises they made. This became a major text for the assault on the welfare state by Margaret Thatcher. However the liberals’ philosophical anti-statist, anti-welfare and anti-keynesian campaign has frequently been accompanied by populist rhetoric asserting that government in general has become dysfunctional. One instance was The Economist’s substantial (56-page) lift-out in 1997 on The future of the state. This lamented the failure of the state to shrink, but held on to expectations that the case for government was being eroded as social outcomes became less-easily secured and as ‘dead-weight’ costs of taxation rose.
The Economist’s latest attempt to re-shape opinion is The Fourth Revolution, a 300-page book by John Micklethwait and Adrian Wooldridge, the magazine’s editor-in-chief and Washington chief respectively. This time the assault is on politics itself; much of the earlier mantra is repeated –simpler taxation, fewer loopholes, less welfare dependence, less regulation, less powerful unions, stricter control of public finance and more realistic political ambitions. Like Hayek and small-government enthusiasts from the 1970s (such as Samuel Brittan who decried the ‘revolution of rising expectations’ 40 years ago), Micklethwait and Wooldridge draw on the a priori political pessimism of public choice theory. The state, they argue, unnecessarily panders to democratic pressures and the ‘vicious circle of progressive politics’ burdens government with ever-more unmeetable obligations.
Contempt for politics is much mistaken. Why are societies that are richer than they have ever been suddenly unable to afford public services they provided in the past? Why do we want to call a deliberately imposed revenue shortfall (readily corrected by increased taxation) a ‘fiscal crisis’? Why are middle-class rights (citizenship entitlements) ‘unaffordable’? Why are long-standing labour rights such as a 38 hour week, penalty rates, a living wage, union rights of entry and to a voice in policy-making suddenly too costly and ‘outdated’?
In mature economies, problems abound and they often appear to be politically intractable. There is dissatisfaction with contemporary politics. Nonetheless, we must be prepared to argue that bigger government is part of the solution, not the problem. The cynicism of the past being recycled by the right is intended to dampen our political agenda; that does not make it legitimate.
Geoff Dow is a political economist and joint author with Winton Higgins of the recent book Politics against pessimism: social democratic possibilities since Ernst Wigforss (Peter Lang Publishers 2013).