The American welfare state has about four years left to live

| January 18 2013
Christopher Cook

Back in June of 2011, I came to a realization about which I wrote in Rome, America, and the Collapse of the Welfare State.

The economic system under which we live is, contrary to the opinions of many, is not some sort of proper free-market capitalism. It is a mixed-market hybrid better described as welfare state-capitalism. So, the realization was simple:

1. America’s economic system is a form of welfare state-capitalism.
2. Welfare state-capitalism is unsustainable.
3. Unsustainable things collpase.
C. Therefore, the American economic system will collapse.

Barring some sort of reform, it is inevitable.

From time to time, I take a moment to remind people of this, and to remind them that when that moment comes (assuming we don’t get reform in the meantime), the most important thing will be to prevent the left from blaming the failure of welfare-state capitalism on capitalism rather than on the welfare state, which is where the blame will belong.

In a recent piece, Michael Barone uses a method that analyzes U.S. history in 76-year chunks to suggest that indeed, the era of welfare-state capitalism is about to end . . . and soon.

The original arrangements in each 76-year period became unworkable and unraveled toward its end. Eighteenth-century Americans rejected the Colonial status quo and launched a revolution, then established a constitutional republic.

Nineteenth-century Americans went to war over expansion of slavery. Early-20th-century Americans grappled with the collapse of the private-sector economy in the Depression of the 1930s.

We are seeing something like this again today. The welfare state arrangements that once seemed solid are on the path to unsustainability.

Entitlement programs — Social Security, Medicare, Medicaid — are threatening to gobble up the whole government and much of the private sector, as well.

Lifetime employment by one big company represented by one big union is a thing of the past. People who counted on corporate or public-sector pensions are seeing them default.

Looking back, we are as far away in time today from victory in World War II in 1945 as Americans were at the time of the Dred Scott decision from the First Inaugural.

We are as far away in time today from passage of the Social Security in 1935 as Americans then were from the launching of post-Civil War Reconstruction.

Nevertheless our current president and most politicians of his party seem determined to continue the current welfare state arrangements — historian Walter Russell Mead calls this the blue-state model — into the indefinite future.

Some leaders of the other party are advancing ideas for adapting a system that worked reasonably well in an industrial age dominated by seemingly eternal big units into something that can prove workable in an information age experiencing continual change and upheaval wrought by innovations in the market economy.

The current 76-year period is nearing its end. What will come next?

As my wife might say, “EXAAAAACTLY.” Read the whole thing!

Other writing on the subject from the last 18 months or so on Western Free Press (there’s a lot more; this is just a sample):

 

Drawing by Silvia Morandotti

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