The War on Welfare

The modern history of America's welfare state, according to Michael B. Katz, is a tale of slow withdrawal in the face of an implacable ideological enemy—of gradual, dwindling retreat, interrupted now and then by an occasional full-scale rout. The bloodiest recent engagement was, of course, the one that really did "end welfare as we know it." In 1996, the Clinton Administration ended the federal government's guarantee of cash assistance to the poor, a promise of 61 years' standing. With the signing of the Personal Responsibility and Work Opportunity Reconciliation Act, Katz writes, "market models now pervaded the goals, administration, and philosophy of welfare."

And that is a terrible thing—or so The Price of Citizenship: Redefining the American Welfare State expects and requires its readers to believe. Certainly, Katz knows where he stands, and that is with the defeated battalions of social justice. He wastes no space examining his own prejudices. This frees up pages for impugning the other side's motives and urging America, even now, to mount a last defense against market triumphalism.

If you share Michael B. Katz's convictions that social justice and market capitalism are deadly enemies, then you'll have nothing but praise for his new book on the political history of American welfare. the author's convictions that social justice and market capitalism are deadly enemies, and that the issue in the end comes down to a fight between decency and greed, then you will have nothing but praise for this book. It tells the political history of American welfare, framed in that limiting perspective, about as well as it could be told. Many will fault the book for refusing to acknowledge the successes of the Clinton reforms—the spectacular fall in the welfare rolls and, more tellingly, the rise in employment among those previously on welfare. But it is right to be cautious: Promising as these early signs are, it is much too soon to be celebrating.

The real complaint about this book arises if you do not share those underlying beliefs of the author, or would at least like to see them examined and defended. If you fall into either category, Katz is going to leave you frustrated and, at times, angry.

He knows his subject, to be sure. A professor of history at the University of Pennsylvania and the author of many books on poverty and welfare, he brings 20 years of research to his undertaking. His telling of the story is comprehensive and detailed. At the same time, the expertise is carried lightly. The book is admirably terse: Katz rarely wastes words.

He covers the welfare state in all its breadth, dealing not just with federal programs, but with state and city policies, too; not just with Aid to Families with Dependent Children, but with the full range of public, semipublic, and private spending on social welfare: disability insurance, workers' compensation, unemployment benefits, medical care, Social Security, and so on. The author describes the political history that built welfare up and then tore it down. All along the way, he deploys a truly impressive wealth of relevant knowledge.

The result could easily have been one big indigestible mass. The Price of Citizenship avoids this. The material is shaped not just by Katz's ideological stance, but also by his development of three guiding themes.

The first of these is America's rejection of "dependence." Americans, Katz argues, used to believe that people have claims on society merely by virtue of being citizens. That set of beliefs has changed. Workers still have social rights, but nonworkers, the economically excluded, have come to be seen as having none.

The author's second theme is federalism—the devolution of public authority from the center to the states. And the third is the use of "market models" in designing public policy.

The facts fall into place willingly enough. Woven throughout the book, the three themes render the story not just intelligible, but involving, even absorbing. Readers who agree with Katz, not just about events and their immediate political causes but also about underlying values, will find it all compelling. Even readers with quite different beliefs will find plenty to commend—at least until the book reminds them (every page or so) that this is a story of good versus evil, and that they stand with the forces of darkness.

Katz sees American social history not mainly as a tale of broadly based material progress, but as an account of an essentially static struggle between the society's winners and losers. As a decent man, Katz looks at things from the losers' side. That is admirable, but it can be intellectually paralyzing as well.

So it proves. For Katz, it seems, no trade-off arises between social justice and prosperity. If you are blind to economic growth, and to the policies that support or retard it, then why restrain your appetite for social justice? If greater equality, and a better deal for the losers, comes at no economic cost, then only the selfishness of the winners stands in the way.

Katz could argue that America—compared with Europe, say—is so far from the point at which a better deal for the losers might jeopardize the economy that the discussion can proceed as if no such trade-off would ever arise. But he makes no serious attempt to put this view forward. Presumably, that would concede too much to the enemy, to the purveyors of "market models," to those who believe that social policy is susceptible to economic analysis.

Katz definitely has a problem with economics. You can see why. For all its faults, the discipline cannot be accused of ignoring the trade-offs, large and small, that Katz refuses to confront: the big one between growth and equality, and the countless smaller ones such as those between raising the incomes of the unemployed (good) and encouraging the unemployed to remain idle (bad), or between reducing poverty in retirement (good) and discouraging personal saving (bad). In Katz's view, interest in such questions is usually a front: Economics, in general, is a ruse to dignify the market's morally tainted allocation of spoils among winners and losers.

But the painful truth is that these trade-offs do exist. They are the reason that social policy is difficult. Once you start to think about them, it gets harder to see the debate over welfare simply as a clash between believers in social justice on one side and robbers and egoists on the other. Katz prefers his moral certainties cut-and-dried.

At times, the book takes its refusal to debate the economic constraints on social policy to heroic lengths. Katz correctly notes that Charles Murray's Losing Ground: American Social Policy, 1950-1980, was enormously influential during the 1980s in changing attitudes, especially toward AFDC. That book argued, you recall, that welfare policy had gone badly wrong. Extending benefits during the 1960s had encouraged the rise of single-parent families, illegitimate births, and welfare dependency. Far worse than a mere waste of money, Murray concluded, the policy was a failure on its own terms because it entrenched and aggravated the problems it was intended to solve.

You might think that Katz, in this comprehensive history of American welfare, would have a lot to say about whether Murray's claims were true. The Price of Citizenship says just this: "Although social scientists thoroughly discredited Murray's book by exposing its shoddy statistics and fallacious arguments, their writing did little, if anything, to dislodge it as a respected source among conservatives or to lessen its use by politicians."

Katz has more to say about the political influence of Losing Ground, and about the money spent by conservative think tanks to promote it. And he scatters a lot of facts and figures about Aid to Families With Dependent Children. But his only direct response to Murray's arguments is half a sentence whose main purpose is to sneer at conservatives. In a 470-page book about redefining welfare, this seems a bit too terse. And although Katz would have been right to say that some of Murray's findings, which instantly came under intense hostile scrutiny, have indeed been undermined or even disproved, Losing Ground's basic argument has not been "thoroughly discredited," as Katz says.

In any case, what Katz is really saying is that Murray's views, and others like them, are so deplorable that the only acknowledgment they deserve is contempt. Given the task the author set himself in this book, that seems extraordinary. On the other hand, it is consistent. A refusal to think about trade-offs and unintended consequences is vital to the encompassing theme of good versus evil.

An even bigger failing of the book, however, is that in reducing the battle of ideas to such a simplistic scheme, Katz squanders opportunities to advance the interests of the people he purports to champion. On welfare, three broad questions need to be kept separate. How much? Who? And by what means? The first asks about the proper ambitions of social policy: How much help for the poor is enough? The second is about the moral and political basis for eligibility: Should welfare rights be based on citizenship, or restricted according to economic status or some other standard? And the third is about the form of assistance: Depending upon the answer to "how much," in what ways, exactly, should the state try to reduce poverty, or advance its other welfare goals?

Katz's moralizing, economics-averse view of the world muddles these issues, so none gets dealt with properly. How much? Katz never asks: Presumably, in his view, you can never have too much social justice. Who? He is unclear on the rights of outsiders such as immigrants, though he certainly opposes narrow eligibility on the basis of employment; this, indeed, is one of the book's main themes. By what means? Here, Katz's implicit response is to deplore economics and any attempt to improve welfare by exploiting market forces. This, in his view, is always a cloak for social injustice.

Keeping the three questions in mind, consider an approach that Katz's reductive worldview shuts off. First, recognize the grand trade-off between equality and wealth in the aggregate, accept that there are limits to social policy, but argue nonetheless for a greater commitment of resources to help the poor: The social gains, you argue, would outweigh the economic losses.

Next, like Katz, insist that no U.S. citizen be denied social entitlement. But then, third, defy the stereotype and use market models both to improve the terms of the grand trade-off and to devise schemes that deliver more and better help per taxpayer dollar.

What kind of welfare initiatives might follow? Two possibilities are obvious. One would be to privatize Social Security, while using sufficient public resources to improve the prospects of all poor citizens substantially. Another would be to use vouchers to bring the benefits of competition to the schools, but again with public funding generous enough to transform opportunities for the poor. These policies may be politically unappealing—though no more so than the unlimited expansion of traditional welfare that Katz apparently favors. But that is not the point. The point is not even that ideas like these should be high on the progressive agenda, though they should be. The point is simply this: Such possibilities ought not to be rejected out of hand, as they are by Katz.

Market models and economics can, and should, be brought to the complex challenge of making welfare work better. They are not in themselves wicked. That seems obvious enough—but it was too difficult an idea for The Price of Citizenship to contemplate.