Is this what we’re now confronting, both in Europe and the United States?
From The Wall Street Journal’s Review and Outlook today:
“The central contradiction in modern liberal politics is that Otto von Bismarck’s entitlement state* for cradle to grave financial security is no longer affordable. The model has reached the limit of its ability to tax private income and still allow enough economic growth to finance its transfer payments.”
This position statement raises a number of questions to which there are not yet clear answers. Hence the on-going argument between the political Left and Right.
For one, doesn’t it imply that at one time the “entitlement state” was affordable. And if so why no longer, especially given the fact that developed nations are today so much richer than they were in Bismarck’s time, nearly 150 years ago? Has the “un-affordability” of the welfare state been clearly demonstrated?
Then, doesn’t it also imply that at some point excessively high taxes will slow economic growth, resulting in less wealth out there to be taxed? Commentators on the Right assume that Europe has already reached that point, and that President Obama’s policies, if successful, will do the same for us.
It is true that those who clamor for more, for higher wages, greater benefits, especially those who work in the public sector where profitability is of little moment, act as if there were no point at which taxes become excessive.
This is especially true in France today when hardly a week goes by without a work stoppage of some sort by disgruntled employees. In France these constant strikes seem to be the rule, not the exception, probably since President Truman’s Marshall Plan in the late 40s and early 1950s put an end to the communist vision of cradle to grave security for all.
And a third and final question that this position raises — has it been somehow decided (perhaps I missed it) that it is the state’s and not the individual’s responsibility to assure that everyone is provided for? If people go without health insurance, shelter, jobs and job training (education), not to mention food and clothing, has it been decided that it is the state’s responsibility to meet this lack?
In other words do people’s rights as provided by the state extend to housing, jobs, healthcare, and all the rest? As our great depression president, FDR, would have it?**
A couple of notes:
*Actually this is probably a mis-characterization of Bismarck’s program. The socialists were threatening Bismarck’s own position in the government of Emperor William I. His social welfare policies were probably meant to take the teeth out of his opponent’s, the socialists’, proposals.
See Otto von Bismarck and German Unification.
**See The Economic or Second Bill of Rights.
