November 19, 2011


MODERNIZING CONSERVATISM (Steven F. Hayward, Fall 2001, Breakthrough)

Which brings us to the third major political fact of our age: the welfare state, or entitlement state, is here to stay. It is a central feature of modernity itself. We are simply not going back to a system of "rugged individualism" in a minimalist "night watchman" state; there is not even a plurality in favor of this position. A spectrum of conservative and libertarian thinkers acknowledge this, though this perception has not penetrated the activist ranks. Back in 1993, Irving Kristol called for a "conservative welfare state" on the pragmatic grounds that "the welfare state is with us, for better or worse, and that conservatives should try to make it better rather than worse." National Review's Ramesh Ponnuru noted in 2006, "there is no imaginable political coalition in America capable of sustaining a majority that takes a reduction of the scope of the federal government as one of its central tasks." William Voegeli, author of the most trenchant critique of the welfare state (Never Enough) since at least Charles Murray, concludes, "No conservative, either in the trenches or the commentariat, has yet devised a strategy for politicians to kick deep dents in the side of the middle-class entitlement programs without forfeiting a presidency or a congressional majority." And libertarian economist Tyler Cowen faces the reality squarely: "The welfare state is here to stay, whether we like it or not."

Given these realities, how must conservatism revive itself for the 21st century? For starters, we must admit that starve-the-beast has been a spectacular flop. Reagan argued, both as governor and as president, for constitutional amendments requiring a balanced budget, limiting spending to a fixed proportion of personal income, and imposing a two-thirds vote requirement to raise taxes. These reforms -- even if they could be passed through the difficult amendment process -- might have some effect, but their record on the state level suggests conservatives will be disappointed. The two-thirds vote requirement for budgets and taxes, along with the balanced budget requirement, has not kept California's welfare state from slipping into the abyss. Colorado's constitutional spending limit was breached and amended by the most conservative governor in the state's history, Bill Owens, because it proved defective in ways important to conservatives.

Requiring the American people to actually pay for all of the government they receive is, as Niskanen and others have convincingly argued, the most effective way to limit its growth. Right now the anti-tax bias of the Right results in shifting costs onto future generations who do not vote in today's elections, and enables liberals to defend against spending restraints very cheaply. Instead of starving the beast, conservatives should serve the check.

While increasing taxes will likely feel painful to many conservatives, there are innovative ways to reform the tax code that might be palatable while also increasing revenues. One area of tax policy where there is some room for maneuver would be family tax policy. While many households today -- perhaps half or more -- do not pay any federal income tax, all working households pay payroll taxes. One conservative idea that liberals ought to like well enough is to expand the current $1,500 per child tax credit to something closer to $5,000, which would wipe out a large portion of payroll tax liability and raise household after-tax income considerably. The revenue loss could be made up through broader tax reform that reduces deductions, credits, and tax breaks both for individuals and corporations. A wholesale pro-growth tax reform that incorporates both features might even allow for lower marginal rates along the lines of the 1986 Tax Reform Act. For conservatives this would be a pro-family initiative that would not involve the usual culture war issues. And this targeted tax cut should appeal to liberals as well, who generally disapprove of tax cuts that reward the rich but ought to be willing to support tax reform that would predominantly benefit working families.

Next, conservatism must learn from its success in reforming welfare that acknowledging the reality of social problems is not the same as agreeing with liberals about their solutions. Keeping the welfare state solvent as the baby boomers crash the rope line of eligibility will require tax increases far larger than Americans are likely willing to bear. One might almost say that the welfare state is the next bubble waiting to collapse. There is one obvious compromise policy mechanism for reforming and securing entitlement programs: means testing. Some conservatives, as well as the Paul Ryan plan, have embraced this in principle while others fear the premise embedded in it of recognizing the permanent legitimacy of the welfare state.

Activists in both parties fear splitting their own constituencies. Conservatives fear agreeing to such terms will mean accepting a losing position over the long run. Michael Tanner of the Cato Institute worries:

    There is no evidence that if conservatives agree not to try to roll back the welfare state, liberals will agree to restrain its growth. More likely, conservatives will simply become involved in a bidding war, in which they will inevitably look like the less caring party.12

Liberals worry that embracing means testing for entitlements will weaken them as totem of a broader universal social contract and, by making them "poor peoples" programs, will lead to an eventual decline in public support and to their ultimate demise.

These seemingly reasonable fears of both camps are overblown. The experience of welfare reform suggests that there has been no "race to the bottom" among the states to eliminate basic assistance programs, though, to be sure, many have been severely constricted in the current fiscal crisis. But the current fiscal crisis on the state level should be seen as a harbinger of the future for the federal government if nothing is done. The force of fiscal gravity is virtually certain to compel means testing at some future date. For liberals, the means thresholds are likely to be more generous the earlier they are calculated; for conservatives, the tax increases are likely to be lower today than if postponed into the future.

Another area ripe for conservative reappraisal is the environment. Conservatives who sensibly dislike both the centralized regulation of most environmental policy and the untethered apocalypticism of much of the environmental movement have tended to respond with a non sequitur: the environment has mostly become a cause of the Left, therefore environmental problems are either phony or are not worth considering. To be sure, many environmental problems have been overestimated, and the proposed remedies are problematic from several points of view, but conservatives, with only a handful of exceptions, have ceased sustained reflection on how to assess environmental problems seriously, or how to craft non-bureaucratic and non-coercive remedies for many genuine problems that require solutions.

The tortured course that has led to the extreme polarization of environmental issues is beyond the scope of this paper, but suffice it to say that this polarization has been deleterious to both the aims of the environmental movement -- which has allowed environmentalism to become so strongly associated with the aims of the Left as to be no longer worth conservatives competing for -- and the long-term political viability of American conservatism, which has at this point almost entirely conceded areas of sustained public concern (environmental health, the provision of parks, and the protection of wildlife and scenic landscapes) to its political opponents.

There is a small subculture on the Right, known as "free market environmentalism," that offers an alternate path toward environmental protection consistent with conservative principles, including respect for property rights, a strong preference for markets, and our congenital suspicion of government and regulation. The conservative movement would be well served to take those ideas more seriously.

Finally, conservatives must rethink their sweeping rejection of public investments in public goods such as science research and useful infrastructure. Once upon a time, conservatives supported large infrastructure projects, such as dams, water projects, the interstate highway system, and the Apollo project. It is generally forgotten now that President Reagan supported both the international space station and the superconducting supercollider. In fact, over the last 30 years, federal science research spending has tended to grow faster under Republican presidents than Democratic ones. To be sure, there is no small amount of government research and technology spending, including under Republican presidents, that is caught in the maw of rent-seeking behavior and ideological favoritism. Too often a favored pork barrel spending program is called "investment," degrading the worthy name and long-standing track record of true public investment. But this is hardly reason to dismiss out of hand, as many conservatives do, investments in truly public goods -- goods the private sector cannot or will not invest in, fearing the inability to capture their benefits.

Conservatives and liberals ought to be able to join hands on basic projects that modernize the infrastructure for roads, energy, and water. Efforts are needed to explore ways of building environmentally responsible water storage and delivery projects in the parched West that would reduce the political friction and economic cost of current water constraints. New roads and water projects could integrate market mechanisms that reduce waste and promote efficiency. And investments in energy should be made with an eye to making energy cheaper and cleaner, not in subsidizing longstanding liberal technological fetishes like high-speed rail or wind and solar energy.

Put a little more bluntly, the Right doesn't care about the end of providing social welfare, but the citizenry does, while the Left doesn't like capitalism, not even as the means to provide that welfare, but the citizenry does.  This being a republic, those two wings don't get much choice in the matter then.  The citizenry will have a social welfare system and  it will be paid for via market mechanisms.  Modern Anglospheric politics is just a matter of which party is most able to accept that reality at any given moment.

Posted by at November 19, 2011 7:57 AM

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