Why We Need More, Not Less, Government

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Shifting Risks from Society to Individuals

But there is a deeper problem with the individualistic approach – one that goes beyond the inadequacies of these particular programs. The whole “ownership society” approach is actually a way of shifting economic risks from businesses and government on to the backs of individuals. It makes us responsible for dealing with all the significant financial risks that we face in an advanced capitalist society – getting sick, retiring, becoming disabled, losing our job, and so on. But in fact, individuals are usually the least able to deal with these risks – and that is why we have used government to create all sorts of “social insurance” programs (like Social Security and Medicare) to spread these risks among society as a whole and create more economic security for all of us.

Jacob Hacker has written an entire book about this topic, called The Great Risk Shift. In it, he gives an eloquent description of why we originally embraced the government-based, “social insurance” approach back in the 20th century. He explains the basic political and economic insights that led to the creation of Social Security and other collective efforts to deal with common risks:

Social insurance transformed individual misfortunes into common problems. It made the inevitable dislocations of capitalist society into risks that could be managed and distributed, rather than blows of fate that could only be feared and suffered. The ‘insurance” in social insurance came from the power of aggregation: Risks that could devastate an individual or community could be managed if they were spread across many individuals and many communities. The “social” in social insurance came from the principle of shared fate, the reassurance that “we are all in this together.” All insurance pools risks. Only social insurance pools risks on terms that enable the poor as well as the rich, the aged as well as the young, the ill as well as the healthy to afford protection. The crafters of the Social Security Act believed that insurance had to be available and within the means of those who needed insurance most.

At the heart of this belief was a simply conviction: broadly distributed threats to economic well-being – sickness, injury, disability, unemployment, penurious old age – were not the responsibility of individuals alone. They were a widespread and often unavoidable feature of an interdependent industrial society. And because they were, the cost of these risks should be distributed widely across the citizenry, not concentrated on those unlucky enough to experience them – a goal made possible by the unique power of government to compel participation and require contributions. Government could pool the risks of millions of citizens. It could guarantee that even workers of limited means are able to afford basic protections.11

 

As Hacker makes clear, social insurance programs are one of the greatest inventions of modern democratic government and they have gone a long ways toward making all of our lives much more secure. We could be doing even more with social insurance programs, as they have done in Europe, but it is this proven approach that has been directly under attack by conservatives. They want us to move from a “we are all in this together” society to a “you are on your own” society. But this individualistic, anti-government approach cannot provide the kind of economic security that most Americans need and want.

Public Support for More Government

            Many Americans are aware of the serious problems we face as a country and say they want more government involvement to help solve them. For example, over 60% of Americans say that they want the government to spend more on education and health, 69% favor more generous government aid to the poor, 77% say the government should do all it takes to protect the environment, and 83% favor raising the federal minimum wage. And with numbers like these, this is clearly not just liberals talking. There have to be a lot of moderates and even conservatives that recognize the need for more government in these areas. In fact, a 2010 poll by the Center for American Progress found that 40% of conservatives and libertarians support a larger federal government role in areas like improving public schools, reducing poverty, and developing new energy sources.12

Only More Government Will Do

To sum up, there is a great deal of evidence that strongly suggests that Americans would be better off with more – not less – government. We know from the experience of other advanced democracies that our government could be doing more to address many of the problems we face as a society. We also know that some of these problems are getting worse, and other additional serious problems are emerging. Finally, it is clear that non-governmental approaches – markets and individuals efforts – are in many cases not sufficient to deal with all of these problems.

Of course all of this does not tell us exactly what new kinds of public efforts are needed. We still need to carefully analyze proposed policies and programs to figure out which ones will be most effective in addressing these social, economic, and environmental problems. And there is also the difficult question of deciding how much we can afford to spend to alleviate these problems. As the article on the deficits makes clear, we can afford to spend a lot more on these problems than conservatives say we can. But this still leaves the question of how much we want to spend. In any case, one thing that we do know for sure at this point is that if the government does nothing more, or actually does less, our quality of life is going to suffer. In today’s world, we need a well-funded public sector that will do more to reduce the risks we face and to improve the lives of all Americans.

 


1. Derek Bok, The State of the Nation (Cambridge, MA: Harvard University Press, 1996)p. 387.

2. Timothy M. Smeeding, Lee Rainwater, and Gary Burtless, “Luxembourg Income Study working Paper No. 244: United States Poverty in a Cross-National Context,” (Differdange, Luxembourg, Luxembourg Income Study, 2000).

3. Jacob S. Hacker, “Privatizing Risk without Privatizing the Welfare State: The Hidden Politics of Social Policy Retrenchment in the United States,” American Political Science Review, Vol. 98, No.2, May 2004, p. 253.

4. American Society of Civil Engineers, "Report Card for America's Infrastructure: 2003 Progress Report," http://www.asce.org/reportcard/index.cfm

5. National Center for Public Policy and Higher Education, “Measuring Up 2006: The National Report Card on Higher Education. http://measuringup.highereducation.org.

6. The Paulson and the Cox quotes are from OBM Watch, The Bush Legacy: An Assault on Public Protections, http://www.ombwatch.org/node/3877

7. David Boaz, “Ownership Society Defined.” http://www.cato.org/special/ownership_society/boaz.html

8. Jacob Hacker, The Great Risk Shift (Oxford: Oxford University Press, 2006) p. 122.

9. Ibid.

10. Think Progress, “Health Savings Accounts Fail to Provide Savings or Address Costs.” http://thinkprogress.org/2006/01/31/sotu-health-savings-

accounts-fail-to-provide-savings-or-address-costs/

11. Hacker, The Great Risk Shift, pp. 41-42.

12. Guy Molyneux and Ruy Teixeira, with John Whaley, "Better, Not Smaller: What Americans Want from their Federal Government," July 2010. http://www.americanprogress.org/issues/2010/07/what_americans_want.html

 

 

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