Whither Welfare?


Social Policy in the United States: Future Possibilities in Historical Perspective, by Theda Skocpol, Princeton: Princeton University Press, 312 pages, $29.95

If you want to figure out where to go, it helps to know how you got to where you are. Unfortunately, the current debate over the welfare state tends to gloss over how and why we got the welfare programs we have. The decisions made and not made by New Deal planners shape our world 60 years later. Why is Social Security, for example, considered by many Americans to be a reward for a life of hard work while Aid to Families With Dependent Children is widely reviled for subsidizing sloth and indolence? Why are welfare policies set by the federal government but paid for by the states? Why didn't the New Dealers enact national health insurance or European-style child allowances?

The people primarily interested in welfare history these days are feminists and leftists, many of whom see the history of welfare as a branch of women's history. Despite their political biases, however, the best of these historians provide valuable information. For example, University of Wisconsin historian Joan Gordon's Pitied But Not Entitled (1994) is full of useful information on the ideas and principles of early-20th-century welfare reformers, once the reader takes into account Gordon's prejudice that every champion of expanding the welfare state is a hero.

Theda Skocpol, a Harvard sociologist, is also a writer whom both friends and foes of welfare ought to read. Her 1992 book Protecting Soldiers and Mothers has already become one of the standard histories of the origins of welfare programs. And Social Policy in the United States, a collection of articles from scholarly journals, asks questions about welfare its foes ought to answer.

Skocpol is a social democrat who would prefer the United States to have welfare programs as large and intrusive as the wealthier nations of Europe. She supports a national job-listing service, withholding child support from workers' wages, and Canadian-style national health insurance. She is, however, a very good historian. Although Skocpol's dry prose is often a chore to read, Social Policy in the United States is worth reading for insights she provides into parts of the history of welfare that are undeservedly forgotten.

Her best chapter is on the history of Civil War pensions. We tend to assume, Skocpol argues, that 19th-century Americans were rugged individualists who disdained government handouts. But she shows that given the opportunity, our great-grandfathers were as eager to accept welfare as their descendants.

The growth in Civil War pensions was a consequence of the principles of the 19th-century Republican Party. Until Woodrow Wilson's election in 1912, the Republicans tended to be the big-government party, favoring high tariff barriers to help corporations. But because the federal government was very small, Republicans kept generating budget surpluses. Instead of cutting tariffs or other taxes, they thought up new things for the federal
government to do with the extra money. The Civil War pension program was one result.

Pensions were first provided to Civil War veterans injured during their service. But in 1879, Congress passed a law that authorized one-time lump-sum arrears payments to any veteran who was deemed qualified for a pension but who had not yet applied. These arrears payments were quite large; they averaged $1,000 in an era when the average annual wage was $400. So claims for the pension program swelled from 1,600 a month to over 10,000 a month. As Eugene V. Smalley trenchantly observed in an 1884 article in Century Magazine, the effect of the arrears payments was to "stir up a multitude of people to apply for pensions who had never thought of this matter before. In one year 141,466 men who had not realized they were disabled until the Government offered a premium of a thousand dollars or more for the discovery of aches and disabilities, made application." Also emerging was a class of pension attorneys who, when not receiving payments from veterans, spent their days lobbying to make payments more generous.

Neither the Democrats nor the Republicans, Skocpol argues, were eager to cut the pension program and alienate potential voters. So pension payments grew and grew until, by the early 1890s, they consumed over 45 percent of the federal budget. In the 49th Congress (1885­–1887), 40 percent of the bills passed by the House and 55 percent of those passed by the Senate were private bills adding to the pension rolls constituents who had been denied benefits. (Most of these bills were passed on Friday evenings, which quickly became known in Congress as "pension night.") The Pension Bureau, with over 2,000 employees at its height, became the biggest bureaucracy created up to that time. Only when pensioners began to die off in the late 1890s did the pension budget begin to shrink substantially, though veterans' benefits remained a major part of federal spending until the New Deal.

For Skocpol, the Civil War pension story is an example of a "precocious social spending state," since it was an important antecedent to later welfare spending. But given the wealth of detail she provides, it's easy to draw another conclusion that the Civil War pension program could have told New Deal planners that entitlement programs, however small at first, inevitably grow, generating red tape and a class of beneficiaries demanding even larger subsidies.

Skocpol's other chapters deal with 20th-century history, particularly the New Deal era. They remind the market-oriented reader that, however bad FDR's welfare plans were, they were compromises. If the Democratic Party coalition of the 1930s had not included a large number of relatively conservative Southern Democrats, the New Deal could have resulted in even larger and more intrusive social welfare programs than were ultimately created.

A paper co-written with Edwin G. Amenta compares the ideas of social planners in Britain and America during World War II. British planners, led by William Beveridge, helped lay the intellectual framework for the massive expansion of the British welfare state that followed the Labor Party's triumph in the 1945 elections. But similar expansive plans were also hatched in America. In 1940, President Roosevelt convened a National Resources Planning Board, which was asked to formulate "national social and economic policies for the postwar period."

The board's report, issued in 1943, called for nationalizing welfare and unemployment compensation programs, extending Social Security to cover the disabled, and substantially expanding the federal health budget (though the board stopped short of recommending national health insurance). New Dealers in Congress were also active; a bill introduced in 1943 by Sen. Robert Wagner (D-N.Y.) and Rep. John Dingell Sr. (D-Mich.), father of the current Michigan congressman, would have boosted the welfare budget and provided for national public-works programs to ensure a (government) job for every American.

But while British social planners achieved their planned massive welfare state, their American counterparts failed. The Democrats in the 1940s were "not a functional equivalent of the Labor Party." Conservative Southern Democrats increasingly allied with Republicans to ensure an end to some New Deal programs, such as public-works jobs programs in 1942. For the New Deal to have been expanded after 1945, Skocpol and Amenta argue, "Americans would have had to elect a left-wing Democratic president and a majority of urban Democrats to Congress." The coalition that had ensured the New Deal had permanently shattered, and was only partially reconstructed by Lyndon Johnson during the 1964­–68 era.

Skocpol also provides valuable insights into the origins of Social Security, the role women played in creating the American welfare state, and the differences between British and American labor unions. She concludes with several recent policy analyses which, because they lack historical analysis but include heavy helpings of arguments for making the welfare state fatter and more oppressive, are eminently skippable.

Still, if the American welfare state is ever to be dismantled, we need to know why it was created and what the planners of bygone eras were thinking. While Skocpol's conclusions will not persuade foes of the welfare state to change their minds, her dispassionate and thoughtful analysis of the origins of American social policy ensures that Social Policy in the United States ought to be read by anyone interested in welfare reform.

Contributing Editor Martin Morse Wooster is an associate editor of The American Enterprise and the author of Angry Classrooms, Vacant Minds (Pacific Research Institute) and The Great Philanthropists and the Problem of "Donor Intent." (Capital Research Center).