Social Justice, Libertarianism

What is “the welfare state?” Thoughts on Matt Zwolinski’s recent post

Matt Zwolinski recently argued that opposition to the welfare state is not an essential feature of classical liberalism or libertarianism. He did so by making a libertarian case for state aid to the poor, or state welfare. He also cited posts by Jacob Levy and Jason Brennan as buttressing his view that libertarianism need not oppose the welfare state or that there is a libertarian case for the welfare state.

In order to see whether Matt is right, we have to ask: what do we mean by the welfare state? If we are defining the welfare state in terms of its institutions, then the welfare state is often defined as consisting, at least in large part, of two kinds of programs. First, there are social insurance programs, such as government financed and administered retirement pensions, health insurance, and unemployment insurance—universal or near universal programs that are awarded regardless of the recipients’ income or wealth.[1] Second, there is state aid to the poor or less affluent, which of course is means tested and not universal. More importantly, most of the welfare state is not devoted to state aid to the poor but to social insurance programs. The budgets of virtually all welfare states are dominated by spending on retirement and health care, which is far greater than spending on means or income tested programs. In this regard, the phrase “the welfare state” may be a misnomer, since most of welfare state programs are not about welfare in the sense of redistribution from the more affluent to the less affluent. We are stuck with the term, but I suspect the use of it is making the debate about libertarianism and the welfare state less clear that it could be.

So if Matt is right that there is a solid classical liberal/libertarian case for state welfare that doesn’t mean that there is such a case for the welfare state—since state welfare is not equivalent to the welfare state, and is the less important part of it. The best way, I think, to conceptualize Matt’s argument is that there is a solid classical liberal/libertarian case for a kind of ‘welfare state’ that at present exists nowhere-one focused solely on state welfare (either as poor relief or perhaps as restitution for past injustices.) Nowhere does Matt suggest that there is a solid classical liberal/libertarian case for social insurance programs—and for good reason, for in my view, that case is nonexistent. In my Is The Welfare State Justified? (Cambridge University Press, 2007) I argued that there is no such case even within mainstream (nonlibertarian) perspectives in political philosophy.

What about Jason and Jacob’s posts? Jason makes the case that what he calls the administrative state–regulations which attempt to control, manipulate, and regulate the economy—are more of a threat to liberty than the welfare state, by arguing that (some) Nordic welfare states which are lighter on the administrative state than, e.g., the USA, score higher on the Economic Freedom Index. But that argument is also not a defense of the welfare state. It is an argument that if you have a welfare state, it’s better to have one that isn’t combined with a heavy handed administrative state. It’s not an argument, for example, that libertarians should prefer, e.g., Denmark over a society which had a lighter administrative state and market based alternatives to social insurance.

As for Jacob’s post, he argues that “in a world characterized by massive state action of all sorts, most of which does nothing to alleviate poverty and a great deal of which is actively regressive or harmful to the worst-off,” classical liberals/libertarians should not think that their main task is to argue against state aid to the poor (and he suggests one could get that impression from reading Nozick’s arguments contra Rawls). That is also not a defense of the welfare state—it’s an argument that libertarians should have more important priorities than focusing on state welfare.

So is opposition to the welfare state an essential feature of classical liberalism/libertarianism? In my view, yes, in that we have solid arguments against social insurance programs and in favor of market based alternatives. But in the context of this post, my views are not important. What is important is that nothing Matt said in his post (or that Jason or Jacob said in theirs) suggests otherwise.

[1]. One might object to calling programs like Social Security and National Health Care social ‘insurance,’ since these kind of programs differ from market insurance in three salient ways. Social insurance is compulsory, not voluntary; second, rates are not determined by actuarial considerations (beneficiaries are not charged on the basis of expected risk, the raison d’être of market insurance); third, because competition is absent or significantly restricted, consumers have little or limited choice of types of policies or benefits.

  • SentDownFromGawd

    Federal and State sponsored academic positions of philosophy professor is the Welfare State.

  • Reasonable Extremist

    As I understand it, the BHL position rests on the idea that the moral legitimacy of free market and property rights rest, in large part, on their ability to provide a better life for the poor and vulnerable. I think most libertarians think there is something to this. But much more specificity is needed. For example, say it could be shown that strictly libertarian institutional arrangements led to a society where the least well off has decent food, housing, and medical care but where they are not as well off as they’d be in a social democracy defined by extensive redistribution. Is the BHL libertarian compelled to say “Well then we need to move in that direction since our model does not produce the absolute best circumstances for the poor and vulnerable?” In other words, to what extent do free markets and property rights need to produce benefits for the least well off to meet the BHL standard?

  • j r

    You’re right to make a distinction, but in my opinion the welfare v social insurance split isn’t the right one. The distinctions need to focus less on what programs are designed to do and more on how they actually function. As I said in a comment yesterday, food stamps are ostensibly designed provide food for the poor, but are really a backdoor agricultural subsidy. Having a conversation about whether the government ought to use tax dollars to keep people from going undernourished is not the same as having a conversation about the food stamp program.

    There are programs that provide people a real and measurable benefit by redistributing wealth from those who have to those who have left. There are programs that take from those who have and create white elephants. Both types can correctly be called the welfare state, but they differ greatly in how we ought to think about them.

  • Swami Cat

    Our current welfare programs are iatrogenic and inefficient. In addition, I strongly suggest that any welfare program have some type of opt out possibility, whether via competitive choice, official opt out or simply exit options to places or institutions without said welfare program (some kind of subsidiarity).

    However, with the above caveats, I strongly support the idea of well run, efficient, mildly-voluntary social welfare programs. These include programs to support the poor, and insurance programs where people support themselves. In other words, I support better welfare programs, and I believe classical liberals would be wise to redirect their efforts from extremely impractical theoretical absolutes to actual pragmatic improvement.

    There is no effective, large scale society in the modern world without social welfare programs. Despite this, standards of living globally are at the highest point in the history of… well of history. To abandon what works on an ideological, utopian construct is foolish.

    I instead suggest we take what is working reasonably well and seek to improve it via experimentation and competition. Certainly some smaller scale experiments can be for complete anarchism. If any ever actually work (big if) then I am all for gradually scaling them. Until then, I support improving the societies we have, not wholesale abandonment of critical institutions which violate some abstract principles of libertarian philosophers. The latter path is the route to political impotence at best, and potential social collapse at the worst.


    Professor Shapiro:
    I substantially agree with your post, but I hope you will consider a few comments. First, it is true as you say, that “The budgets of virtually all welfare states are dominated by spending on retirement and health care, which is far greater than spending on means or income tested programs.” But, I believe that “spending” on the former is not exactly the same as “spending” on the latter. In the former, wages are withheld from workers, and then 40-50 years later, paid back in the form of retirement and medical benefits, even though the funds are actually collected from a younger generation of employees. Thus, in some sense, these benefits are earned (even acknowledging the redistributive aspects of these programs). In contrast, whatever their virtues, means-tested programs simply take from Peter to pay Paul.

    Second, according to Michael Tanner of Cato, our means-tested spending at the federal and state levels totaled almost $1 trillion in FY 2011, and it has surely risen substantially since then, which is not exactly chopped liver. In your excellent book you defend the superiority of what you term “conditional aid” over “unconditional aid” from all plausible moral perspectives. One advantage is that it is “reciprocal,” meaning “able-bodied or nondisabled adult recipients must, in a fairly short period of time, work or take serious efforts to join the work force.” (p.277).

    At another point in your book you argue for the superiority of private charity over state welfare (233-40). I find your arguments and evidence plausible, but if your empirical assumptions prove to be incorrect, I am wondering where this leaves you in terms of BIG and other similar universal income plans? I share your preference for conditional aid, and in Chapter 7 of my book Libertarian Philosophy in the Real World (Bloomsbury 2015), I argue that in case private charity proves insufficient we should adopt something like poverty “vouchers,” where the disadvantaged are given the right to “shop” for assistance from a roster of approved (private) secular and religious organizations. These providers would then be evaluated for performance, including their beneficiaries’ rates of employment, attainment of marketable skills, criminality, and substance abuse. Poor performers would be cut from the program.

    I know that this is a highly imperfect solution, but it preserves conditionality, and the dependency trap presented by any half-way generous universal income scheme. What do you think?

    • Reasonable Extremist

      Hi Mark,

      I should start off this post by saying that Robert Nozick got me into libertarianism so any fan of his is a friend of mine (your work of elaboration is on my reading list) so to speak but I’m rather skeptical of your claims here. From what I’ve read, Medicare recipients take out far more than they put in and the same holds true of Social Security recipients. Moreover, those programs conscript everybody into planning their medical care and retirement with the state. Food stamps, on the other hand, do not require us to shop at government grocery stores or to participate in one big state mean plan. It seems to me that from a liberty perspective, universal entitlements are considerably more invasive.

      As for your proposals, I don’t see why we ought to prefer them to Friedman’s negative income tax or a (modest) basic income. Who is going to be doing the reporting on the beneficiaries? How are you going to tell if they’re using drugs? Are we going to have universal drug tests? What happens to people who use drugs recreationally but responsibly? With all due respect, this strikes me a recipe for more statism.


        Thanks for noticing my book. First, I agree about the redistributive aspects of SS and Medicare, and acknowledged this in my comment. As discussed in my book, I would terminate them immediately for all workers not near retirement, and would wind them up in a fair and orderly way for those who are. In no way was I attempting to defend them “from a liberty perspective.” My only point about them was that an employee whose wages are involuntarily withheld (12.4% + Medicare) is, at the minimum, entitled to their return (plus interest) in the form of retirement and medical benefits. In this sense only, they are distinguishable from government run poverty-relief programs.

        Second, if you start as Prof. Shapiro does (and I concur) with the assumption that able-bodied adults are morally obligated to accept available gainful employment or prepare for it as a condition of receiving aid, then any program that fails to enforce this requirement is suspect. I’m not sure why my proposal is anymore a recipe for greater statism than are school choice vouchers. The state’s role is essentially limited to funding and issuing the vouchers, and this is what I am proposing for assisting the needy. Private providers would compete for this “business,” and could deal with substance abuse in any way they thought compatible with the objectives set by the state, which should emphasize employment. I know this proposal is flawed, but there are no perfect ones on offer, including a modest basic income.

        • Reasonable Extremist

          Right. I absolutely agree and it always makes me laugh when people go “Ayn Rand accepted Social Security.” Well of course. I just think we need to be clear that the redistribution represented by, say, Medicare is more problematic than the redistribution represented by, say, food stamps because (a) it costs considerably more (2) the redistribution benefits people who are far from poor. And of course the violation is worse on liberty grounds as you agree.

          Here we may have different empirical assumptions but I believe that the state has systematically favoured the formation and perpetuation of hierarchical corporations and that workers would be in a much stronger position to bargain, start their own businesses, simply work less and so on and so forth absent that. It seems to me that there exists a vast range of interventions which hurt workers in this regard, not only in terms of employment but also in terms of making housing and food more expensive. Now the ideal solution

          • MARK_D_FRIEDMAN

            Thanks for the follow-up. Not sure I agree with the claim about “hierarchical corporations,” but we can agree that state interventions hurt the poor most of all. The problem is that the population that would receive the basic income is not nearly identical to those harmed by the state, and those paying it (on net), are not nearly identical to the group that benefits from its interventions. Thus, you are directing massive coercion against the innocent in favor of those not necessarily entitled to rectification. This is one of the reasons I hold that the work requirement for welfare is justified. Moreover, because of the dependency trap, the basic income proposal may harm many recipients in the long run.

          • Reasonable Extremist

            This is tough. When police or prosecutors or some other arm of the government does something terribly wrong to some innocent person and they sue and win, the population as a whole pays for the settlement even though they did nothing wrong. Still, I find it troubling and, again, the ideal thing would be just to eliminate the interventions.

            Ultimately, I understand your appeal to reciprocity and find myself sympathetic to it but I still can’t shake the sense that it is problematic to force people to chose from an artificially and unjustly constrained set of work options.

            On another note, as our resident Nozick specialist, I have a question for you: BHL, as I understand it, rests on the idea that the moral justification for libertarian institutional arrangements (broadly understood; indeed far too broadly understood for some) rests on their ability to produce welfare gains for the least well off. It seems to me that natural rights libertarians like Nozick believed in this to some degree. I’m not sure what the section of ASU is but in it Nozick says that a system of strictly enforced property rights is contingent on avoiding “catastrophic moral horror.” So people living on the streets, starving, and so on and so forth. This seems to constitute an appreciation that consequences matter but it’s not exactly the same thing at all as BHL in that BHL is saying that, to be morally valid, libertarian institutional arrangements need to consistently improve the lot of the poor over time rather than merely ensure they don’t face great suffering. So it’s a more demanding standard in this sense I gather? It seems to me both sides face serious problems. What counts as catastrophic moral horror? If the bottom 10 percent of the population is not hungry or on the streets but has zero opportunity for advancement, is utterly uneducated and so on and so forth this seems problematic. For the BHLs, how much improvement is necessary? Does libertarianism become invalid the minute it can be shown that any alternative arrangements produces a somewhat better state of affairs for the poor? I think this is theoretical as it seems to me that a more or less Nozickean system would make the poor far, far better off. But I’d be interested in hearing the Nozickean take on what counts as a basis for coercion to prevent “catastrophic moral horror” should the empirical assumptions not bear out.

          • MARK_D_FRIEDMAN

            You’re certainly asking all the right questions, and I wish I had pat answers for you. Nozick offered two distinct rationales that might justify the resort to state coercion in support of those in dire need: (i) which you already identified, the avoidance of catastrophic moral horror and (ii) the condition he attaches to the original appropriation of natural resources; that is, that the institution of private property not make others “worse off,” either at that time or in future generations.

            He has almost nothing to say about how bad things would have to be to trigger the former, and my guess is that he would say that the proper resolution would balance the seriousness of the property right infringement (a trivial tax, forced organ transplants, etc.) against the utilitarian gains to be achieved.

            The discussion of the “historical shadow” cast by Nozick’s version of the Lockean proviso is much more complicated, including the selection of the appropriate baseline against which to measure the “no worse off” condition. Arguably, people in distress due to their own chronic irresponsibility would not be entitled to relief, since they would be so under any system of property. I discuss all this in much more detail in Chapter 6 of my Nozick’s Libertarian Project, which should be available through your local academic library.

          • Reasonable Extremist

            That’s all very interesting and I really must read the book! I do wonder to what extent Nozick believed that the world as it existed corresponded to the moral paradigm set forth in ASU. Do you know if he was sympathetic to the left-libertarian critique holding that most property and wealth was arrived at through disreputable, decidedly unlibertarian means? It seems to me that left-wing critics misread Nozick when they interpret ASU as a justification for the all of the inequalities we have today though I wonder if he perhaps underrestimated the extent to which the existing world was out of step with his ideas of justice, particularly justice in acquisition. There’s a pretty good argument it seems to me that a lot of very wealthy people in this country and the world got there through capitolism rather than capitalism. I say this without making reference to controversies over IP and patents and just keeping in mind things like eminent domain, corporate subsidies, special treatment through the tax code, bailouts, and other forms of government intervention that clearly have no basis in libertarian rights.

            I also thought you might find this interesting. Yglesias is pretty hostile to natural rights libertarianism but I was wondering if you knew if there was any truth to this.—too-smart-to-embrace-the-doctrine-of-anarchy-state-and-utopia/

          • MARK_D_FRIEDMAN

            Briefly, Nozick was fully aware that his account of initial acquisition was idealized and unrealistic. This is why he held that the operation of his entitlement theory of justice was conditioned on the rectification of all past institutional injustice. But there are substantial practical and ethical limitations on the scope of rectification, which may be why he never offered a fully worked out theory. Moreover, to have just title to property, it is not necessary to have a pristine claim, just one superior to all rivals. So, his entitlement theory remains highly relevant even in the face of our sordid history.

            Yglesias’s essay is pure rubbish, as he himself is more or less forced to admit at the very end. Nozick gave an interview to Julian Sanchez, near the end of his life, where he reaffirmed his commitment to libertarianism:

            On rectification, this essay by Tyler Cowan may be of interest:

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  • I agree with Shapiro here. I think there is a problem with the way Zwolinski makes his argument. His argument seems to be, “Libertarians shouldn’t oppose the welfare state because I can imagine a hypothetical version of it that is consistent with some libertarian beliefs.”

    This is consistent with the peculiar libertarian pathology of imagining a hypothetical ideal set of circumstances in which our artisanal form of libertarianism can suddenly be installed without a hitch.

    The only difference is that the ideal set of circumstances for most libertarians is “Suppose nothing about government existed; then we should build a better government as follows…” Whereas, for Zwolinski, it’s more like, “Suppose I was put in charge of rebuilding America’s welfare programs from scratch in a way that didn’t offend Leftists….”

    Either way, it’s a fantasy. The proper libertarian position is to argue for less of all the government we have, because we have too much government everywhere. If we want to talk priorities, we should start with policies that kill, then move to policies that destroy lives without killing, then move to policies that make life disproportionately difficult for some, and so on. That’s real world libertarianism IMHO.

    • Reasonable Extremist

      I wish Matt and the others on this blog who have said kind words about Rawls would clarify their position with respect to the difference principle. Because it is absurdly demanding. As I’m sure you know, Rawls say that institutional arrangements must work to the absolute maximum benefit of the least well off to be morally valid. Why would libertarians accept this as the standard? It has no basis in common sense morality (I’d like us to make our moral arguments in a way that appeals to widely shared conceptions of right and wrong) and a socialist would just have to show that a minor benefit for the least well off could be produced with a major new program and the libertarian would have to concede its legitimacy.

  • intalecshul

    I work in the offices of a township in a Midwestern State. Out here the township is a six-mile square, or so, subdivision of a county. Historically, the town or township with its distinctive democratic government, is the oldest form of government in the States. Like New England towns, we have a yearly town meeting where every citizen assumes the mantle of a legislator for the duration, and can propose and vote ordinances.
    Nowadays the twp is thought of as a rural government; they were long ago abolished within the limits of our largest cities, yet still exist in the suburbs even as most of the functions have been eclipsed by the municipal corporations with more flexible borders and powers (villages and cities). However, under State law a twp may still assume, if its citizen-legislators so elect, a broad array of functions including policing.

    But here’s where I’m getting at. The twp. is, currently, the only form of government that I currently vote and pay taxes to, that has an express Constitutional mandate to provide relief to the poor.

    Our villages and cities do not have any such mandate under the State constitution (although there is no prohibition, especially in home-rule places). Nor does the State government. And we know, there is not a hint of a breath of a whisper of such a mandate or power granted the general government in DC.

    The irony is, my township nowadays has to beg for funds from DC in order to feed and help the indigent.

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