Americans have lived with the welfare state for so long—more than 70 years—that for most, it is simply a fact of life. Asking whether it is justified would seem about as pointless as asking whether rain is justified. Furthermore, among the relatively few people who might be inclined to ponder the ethics of the welfare state, most subscribe to philosophies (for example, egalitarianism, positive-rights liberalism, and communitarianism) that find no fault with our panoply of welfare programs. Indeed, they generally favor expanding welfare.

Those of us who oppose the welfare state therefore have a Herculean task before us if we want to see voluntary programs replace coercive government ones. Fortunately, we have just gotten some help.

Professor Daniel Shapiro’s book, Is the Welfare State Justified?, makes a strong effort at persuading nonlibertarians that, based on their own philosophical principles, they ought to give up their support for government programs such as Social Security and Medicare. It is a first-rate effort that should get intellectually honest defenders of the welfare state saying, “Well, that is a good point. . . .”

Readers should understand, however, that this is a work of scholarship. If you’re simply looking for a few anti-welfare anecdotes to use against political opponents, you will have to go elsewhere. Throughout his analysis, Shapiro’s writing displays a refreshing humility; he isn’t looking for quick “gotcha!” points, but grapples earnestly with opposing perspectives.

Perhaps the reason Shapiro is so successful is that he used to be one of those liberal welfare advocates. But then he began to consider the libertarian critique. He writes, “Once I realized how free markets really worked, and how government programs that were supposed to realize their seemingly compassionate or just goals didn’t really do so, I realized that the attitude of distrust I had toward government power and the view I had about the value of individual freedom applied to economic as well as personal matters.” For quite a few years Shapiro (who teaches philosophy at West Virginia University) has been writing articles with titles like “Why Rawlsian Liberals Should Support Free Market Capitalism.” In this book he brings decades of professional thought to bear on this important project.

All right, then—is the welfare state justified? No, but a short review can’t do justice to Shapiro’s work. He covers a great array of philosophical arguments, objections to arguments, and rejoinders to objections.

Let’s briefly consider health care. Overwhelmingly, those on the political left reject free-market provision of health care, contending that everyone has a right to “adequate” medical services and concluding that we must adopt some version of a single-payer system to effectuate that claimed right. Shapiro responds that every sort of health-care system must deal with the rationing problem, then strongly argues that the free market more fairly solves that problem than any politically driven system can.

Similarly with old-age insurance and support for the indigent, Shapiro carefully shows why voluntary and market-based systems are preferable for meeting the needs of people—preferable from the standpoint of those who are inclined to believe that government does a better job.

In my view, Shapiro’s most devastating argument against all forms of government welfare is his observation that there is no such thing as a governmental welfare guarantee. Here is what he writes:

Exactly! It is merely an illusion that government can create rights to welfare. All that politicians can do is to promise that they (including future officeholders) will use their coercive powers in an effort to deliver money, medical care, or other things to certain members of the population. But political promises are completely unenforceable, unlike contracts. That’s one of the main reasons why Shapiro regards individual saving for retirement, medical care, and other needs as better than reliance on the state. With respect to money you have earned and saved, you really do have rights—contractual rights. You aren’t just a supplicant begging politicians to tax others for your benefit.

A splendid book that throws welfare state advocates on the defensive.

George Leef is book review editor of The Freeman.

In Milton Friedman: A Biography, Lanny Ebenstein presents a highly readable account of Friedman’s life and an introduction to his economics, including his advocacy of libertarian ideas and government reform. The book is based on published material and personal interviews, and it was completed shortly before Friedman’s death in late 2006. The appendix contains a “Bibliographical Essay” further elaborating on Friedman’s life, work, and influence.

The first chapters describe Friedman’s youth and early career. His family life, the TV program and book Free to Choose, his Nobel Prize, the Friedman Prize, and his work as adviser to Barry Goldwater and Presidents Nixon and Reagan are all discussed, but the book’s major focus is on Friedman’s mature career (1946–1976) at the University of Chicago. This is followed by a discussion of his life as a public figure following retirement.

Personal interviews reveal a number of interesting tidbits about him that will be new to most readers. For example, his family was apolitical and for much of his early life he was not much interested in politics.

Friedman is known worldwide now for his view that “Inflation is always and everywhere a monetary phenomenon.” His early views on inflation, however, were quite different. In congressional testimony on how to avoid inflation during the early years of World War II, he focused on taxation as a way to reduce consumer spending.

Early on he proposed the free market as the most suitable vehicle to achieve “political freedom, economic efficiency, and substantial equality of economic power,” even though he supported the welfare aspects of Roosevelt’s New Deal as a young man. At the time the conventional wisdom among the public, as well as economists, was that government could manage the economy better than the market order could.

Friedman identified the Chicago school of economics with three attributes—efficacy of free markets, skepticism of government regulation, and emphasis on quantity of money in producing inflation. He contended that the University of Chicago was never primarily free market in outlook, but only seemed so; the distinguishing characteristic of Chicago “was not the presence of market-oriented scholars at Chicago but rather the absence of them elsewhere.”

Friedman’s A Monetary History of the United States, 1867–1960, coauthored with Anna Schwartz, was a major critique of Keynesianism. That work suggested that the economic turmoil of the 1930s was not due to excesses in the market order, but Federal Reserve policy that allowed the money supply to fall, which turned what might have been an ordinary recession into the Great Depression. This book had an important effect on economists’ views on the appropriate role of government generally, but Ebenstein says little about the policy implications drawn by Friedman from the pathbreaking work in A Monetary History.

For much of his professional career Friedman was viewed as a heretic on the fringe of economics. It is hard to overstate the hostility to his policy ideas when Capitalism and Freedom—a libertarian guide to public policy—was published in 1962. It was reviewed only by the American Economic Review, even though accessible to a wide audience.

Ebenstein stresses Friedman’s philosophical debt to F. A. Hayek, a colleague at Chicago from 1950 to 1962. Friedman considered Hayek the most important intellectual figure in the worldwide movement toward freer markets. Although each favored freer markets and less government, Hayek disagreed with Friedman’s monetarism and his positivist approach to economics. Friedman, in contrast, considered his work in positive economics to be his primary intellectual contribution. Ebenstein discusses the shortcomings of the Hayekian subjectivist approach to economic analysis, but a similar discussion of the limitations of Friedman’s positivist approach would have been informative.

The book’s shortcomings mainly relate to what is omitted—discussion of Austrian, Keynesian, and other critiques of Friedman’s work. It would have been interesting, for example, if Ebenstein had queried Friedman on his response to the Austrian position that governmental control over the supply of money and credit is so dangerous to economic stability that we would be better off if we could replace the Federal Reserve with some market alternative. Friedman once said that the gold standard led to the waste of resources in mining gold, but even if that is a waste, how does it compare with the damage done by governmental manipulation of money and credit?

Friedman’s libertarian ethical view of the world was rooted in John Stuart Mill’s On Liberty. Most readers will be surprised to learn that Mill put forth the idea of school vouchers almost a century before Friedman. Friedman’s views on the financing of education evolved over time, and eventually he came to view vouchers as a means, not an end; by 2005 his ideal was government completely out of education.

Readers interested in Friedman’s ideas, work, and personal life will gain by reading this book.

E. C. Pasour, Jr. is Professor Emeritus of Agricultural and Resource Economics at North Carolina State University.

“If you’re depressed about the state of politics these days, read The Commanding Heights. . . . Step back and look at the big picture, a picture that spans the whole planet and comes into focus over decades. Look at the big picture and see that our side—the side of human freedom—is winning.” This review, written by Brink Lindsey in Reason in 1998 could be the first paragraph of his The Age of Abundance, a book that celebrates the virtues of liberty.

Lindsey, vice president for research at the Cato Institute, documents the advances in human freedom that Americans have enjoyed during the past century. He sees this age as one in which “most Americans were insulated from nature by an enormous edifice of human-created technologies and institutions.” America’s “age of abundance,” he contends, is a product of and a contributor to Western modernity, whose four key elements are: reliance on open-ended experimentation rather than received knowledge; reliance on free markets and the trust required for their functioning rather than on command and personal ties; a political system in which government (at least in principle) arises from and answers to the people rather than despotism; and a social life in which individual and group advancement challenges traditional stratification.

In one of the book’s many felicitous phrases, Lindsey asserts, “Despite all of the talk of raging ‘culture wars,’ most Americans are nonbelligerents.” He concludes that most Americans are libertarians, happy to enjoy the economic fruits of the market system and willing to accept, if not embrace, the social diversity that system engenders.

Lindsey acknowledges the existence and importance of the culture wars. Indeed, he states the dilemma of the libertarian majority in an unpromising fashion: “The prevailing ideologies of left and right are mirror images of one another. . . . The . . . left celebrates mass affluence’s diversity and inclusiveness, while lacking due appreciation for the institutional and moral framework that sustains and advances progressive values. The right . . . defends that framework, but does so on the basis of dogmatic beliefs that remain unreconciled to mass affluence’s cultural openness. [Politically, those in the libertarian majority must] choose which illiberal bedfellows they dislike least.”

The disproportionate influence of voices on the left and right militates against the articulation of the liberal position that Lindsey thinks those in the upwardly mobile middle class would favor.

As a result, “the modus vivendi that has emerged . . . is an unspoken and unloved compromise rather than a well-articulated and widely embraced consensus.”
Here the author might have fruitfully incorporated some insights offered by Bryan Caplan in his book, The Myth of the Rational Voter. Caplan’s analysis warns that the problem is not just lack of confidence. Rather, the average voter’s economic sophistication compares to the average flat-earther’s geographic sophistication. This endemic lack of sophistication, coupled with the strength with which statists hold on to their views, suggests that Lindsey’s admirable attempt to show the way to a truly liberal society will convince too few.

The book’s generally excellent review of history suffers from a related pair of weaknesses. His treatment of labor reads like New Deal court history. “Confrontations between capital and labor were frequently bloody,” says Lindsey. Then he cites cases that actually show that the violence was among laborers: “On May 3, 1884, labor trouble . . . sparked a confrontation between locked-out workmen and strikebreakers.” The ingrained notion that workers and capitalists are opponents is an obstacle to a more liberal society, but unfortunately Lindsey gives it some support.

A second point is that much of the advancement by minorities before 1950 is underplayed. Thomas Sowell has shown that economic progress among blacks was substantially greater prior to the Great Society programs aimed at assisting them, but he isn’t mentioned. This early progress strongly backs Lindsey’s thesis that freedom works.

Readers, libertarian or otherwise, will find The Age of Abundance a pleasure to read. Almost every page contains at least one phrase that either amuses or enlightens—sometimes both. Entertaining anecdotes and witty writing pepper the book throughout. On a single page, for example, Marilyn Monroe, Hugh Hefner, Peyton Place, Brigitte Bardot, and “Itsy Bitsy Teenie Weenie Yellow Polka Dot Bikini” appear. Lindsey also weaves together disparate and seemingly unrelated events, such as the “Human Be-In” in Berkeley and the founding of Oral Roberts University in 1967. These and other memorable illustrations add to the considerable enjoyment of this book.

J. Wilson Mixon is Dana Professor of Economics, Emeritus, Berry College.

It is a rare book that treats readers—even those who’ve never taken economics—to a comprehensive understanding of the forces and policies that ultimately determine prosperity and liberty for themselves and future generations. The Big Three in Economics by Mark Skousen accomplishes that, supplying essential historical perspective on the best-known names and evolutionary developments in economics.

This fascinating study focuses on the luminaries that have dominated economic conversations and debates since 1776. Adam Smith’s eighteenth-century Wealth of Nations inquires into and documents the causes of wealth and prosperity. Karl Marx’s nineteenth-century Das Kapital is a treatise on victimization by an economic system rooted in individual property rights and “natural liberty.” It calls for centralization of authority in government that would facilitate redistribution of income and wealth. J. M. Keynes’s twentieth-century General Theory outlines a framework to justify specific policy prescriptions for reestablishing systemic stability and maintaining economic security during business cycles.

Not only do Skousen’s succinct examinations of the “Big Three” clarify the principles of economics for unsophisticated readers, they also furnish insights into and resonate marvelously with 2008′s election-year polemics. The entire book crystallizes basic economic issues and delivers the intellectual tools to differentiate rhetoric from reality. For example, during 2008 alone, we’ve had the spectacle of one presidential candidate labeling the oil industry’s barely average profit margins “egregious,” while the other candidate (along with Congress and various regulatory bureaucracies) fingers so-called “oil speculators” for possible criminal investigations. Thanks to Skousen’s research and dozens of prescient quotations, the curious investigator—layman or Ph.D. economist—can separate hyperbole and scapegoating from objective analysis.

Equally enlightening, Skousen surrounds Smith, Marx, and Keynes with their contemporary and historical disciples, who served to reinforce the message. An excellent example of this “reinforcement” effect, which helped Adam Smith’s economic principles win the day, is the work of Jean-Baptiste Say.

Despite its title, the book isn’t exclusively about Smith, Marx, and Keynes. It describes the influence of David Hume and the French Physiocrats on Adam Smith; the impact of Reverend Thomas Robert Malthus, David Ricardo, and Friedrich Engels on Marx; and the works of Alfred Marshall plus the English marginalist school, which provided the broad shoulders on which Keynes stood.

Skousen is at his best when he describes the lives of the three economists. For example, we learn the personal story of Marx and his life as a writer-agitator-
theorist. At one point, Skousen quotes Marx’s mother who complained: “If only Karl had made capital instead of writing about it!” Several documents from Marx’s pen are so shocking they cannot be reproduced in this review.

By acquainting us with the dichotomy between what Marx envisioned and modeled versus how he behaved, Skousen’s manuscript becomes a true guidebook. Beware hypocrisy, the author seems to say. Scrutinize those who expound elaborate economic theories and then violate them at their earliest convenience. Marx condemned stock-market trading yet indulged fully in the buying and selling of shares. While excoriating the capitalist system, he exploited the accumulated wealth of his in-laws, father, and closest associate.

An important spin-off from this three-century tour of economic thought is the growth of and respect for economics as a science. A particular strength of the book is how Skousen traces the continuity of economic challenges and problem-solving across the centuries. Readers will see how advances in economic thinking made it possible for later economists to resolve questions that befuddled Smith, Marx, and Keynes. Moreover, readers will be surprised by how many of today’s populist political campaign slogans (such as “change” and “race to the bottom”) were common parlance more than 150 years ago.

Of the many moments of delight and edification, I especially enjoyed Skousen’s elegant construction of Milton Friedman’s refutation of Keynesian theory and its so-called “revolution.” Contributions largely from Friedman’s Chicago School disciples and other Nobel laureates conclude the final chapter on a hopeful note. With overwhelming relevance to our nation’s current economic challenges, Skousen recapitulates Adam Smith’s fundamental theme underscoring the prescription for growth and material well-being of nations: “Peace, easy taxes, and a tolerable administration of justice.”

David Littmann is senior economist with the Mackinac Center for Public Policy.

What exactly constitute “economic human rights”? The KWRU website points to Articles 23, 25, and 26 of the United Nations’ Universal Declaration of Human Rights in support of “the rights due every human being.” They include food, clothing, housing, medical care, “necessary social services,” education, work, favorable conditions of work, “just and favorable remuneration,” and the like. Naturally, no one at the organization bothers to justify the grounds on which “every human being” possesses these “rights” other than by this argument from authority.

The closest the site comes to an “argument” is the assertion that the people for whom the organization speaks want things, and some other people have lots of things, so these latter people should be required to give up some of them. Never raised is the question of whether these people with lots of things acquired them honestly or, if so, on what precise grounds the KWRU is justified in demanding that these goods be violently seized from peaceful and honest people.

That so-called “welfare rights” are philosophically fraudulent can be demonstrated by imagining everyone exercising them simultaneously. Surely a right that belongs to human beings qua human beings, such as life itself, ought to be able to be exercised without difficulty by every human being at the same time. If everyone demanded the same welfare right at the same time, no one would get anything, as everyone simultaneously attempted to coerce everyone else.

The libertarian philosopher Frank van Dun recently offered a helpful example. Imagine two people on a desert island: “One can imagine what will happen if they sit there insisting on their ‘right’ of being employed by the other at a just and favorable wage, or to receive unemployment compensation high enough to allow them an existence worthy of their dignity. One can also imagine what will happen if, instead of just sitting there, they attempt to enforce their human rights against one another: their own version of Hobbes’ war of all against all.”1

It is also completely senseless to claim that human beings possess “rights” to goods that in some times and places were not available at all or could be acquired only with the most strenuous toil. Rights obviously cannot be universal or natural to man if they cannot be exercised in all times and places—the very definition of universal.

If in some cases the less fortunate may have a moral claim on the generosity of their fellows, this is a far cry from staking a legal claim to the fruits of someone else’s labor. Forcibly confiscating the justly earned goods of someone you have never met and who has done you no wrong really does require some kind of philosophical justification beyond simply, “We want free stuff!”

This is especially true when we recall the true nature of poverty in the United States. By any conceivable standard, the “poor” in America enjoy a standard of living that people in previous ages (and indeed elsewhere in the world today) could scarcely have imagined. Some 41 percent of our “poor” own their own homes, with another 75 percent owning automobiles and VCRs, and two-thirds having air conditioning and microwave ovens. Virtually all own telephones, refrigerators, and television sets, all of which were once considered luxuries. The average poor person in America has more living space and is more likely to own a car and a dishwasher than the average European. Recalling that we live in a society in which among the poor obesity is a greater problem than malnourishment further helps to put the alleged poverty problem here into perspective. 2

Job Training

It is almost charming that the KWRU can seriously propose increased spending and a federal commitment to job training as the solution to “poverty” without so much as hinting at the $5.4 trillion dollars spent on various federal, state, and local welfare programs since 1965 or the more than 60 different federal job-training programs that currently exist for welfare recipients. 3

And no wonder the activists would rather make placards demanding job training than actually discuss the programs that already exist: federal job training has been one of the most notoriously wasteful government boondoggles of the past 35 years. Consider the Job Corps, a well-known vocational training program for the unemployed that began in 1965. Early on, studies found that those who completed the program had no better success in the job market than so-called “no shows” (people who had been accepted into the Job Corps but who had never shown up), despite the fact that the program cost about the same as providing a Harvard education for every participant. Worse still, throughout the program’s first decade two-thirds of participants never even finished. 4 Is it a hate crime to suggest that perhaps we have happened upon one of the reasons they have had such difficulty finding work?

We might also recall the Boston Compact, a much smaller program in the early 1990s in which private employers guaranteed a job to anyone who graduated from high school. The dropout rate actually rose after the Compact was announced. 5 Such examples could be multiplied ad infinitum.

In many cases, perfectly respectable jobs that require only the most basic skills are easily available, but applicants lack even these. Unless agitators for “economic human rights” are prepared to argue that the poor are complete imbeciles who cannot even be expected to learn basic math, these unsuccessful job seekers can hardly be held blameless for their situation. According to Myron Magnet, the “higher skills” that a steel mill near Chicago recently needed but could not find “amounted to little more than being able to divide 100 by four and, going one step further, to understand the concept of 75 percent.” Moreover, it generally takes “only basic math for a worker to handle the statistical process control that is one of the key recent technological advances in manufacturing.”

Magnet continues: “One didn’t think of secretarial skills as being particularly elevated until recently, when corporations in big cities found that increasing numbers of applicants lacked them. Now anxious companies pay their employees bounties for bringing in qualified applicants for secretarial jobs. Anyone who wants her children . . . to escape poverty needs only to make sure they learn basic literacy, computer typing, and polite, businesslike demeanor in high school.” 6

Can that really be too much to ask?

Staying Out of Poverty

A grand total of 3 percent of married couples who have a high school education are poor. 7 Just complete high school and get married, and you have a 97 percent chance of not being poor. (The Economist reported in 1988 that an American had a less than 1 percent chance of being poor if he simply completed high school, got and stayed married, and held a job, even a minimum-wage job, for at least a year. 8)

To be sure, we’re probably violating the “rights” of the clients of the Poor People’s Economic Human Rights Campaign by demanding anything of them; the logic of their position requires them to believe that for doing nothing at all they are entitled to food, clothing, a home, an education, comprehensive health care, and perhaps 77 other things. Still, sensible people probably don’t consider marriage and a high school education to be insuperable hurdles or a society that demands them akin to Nazi Germany. 9

The fact that a few people own yachts is not a cause of the condition of the poor, nor is it just cause for resentment. But it isn’t difficult to find things that do worsen the condition of the poor. For one thing, the various job benefits that the economic human rights advocates demand naturally make it more expensive and less desirable to hire people in the first place, and therefore create more unemployment. This is one reason that some companies have simply left the United States altogether, all too happy to leave the yelping “social justice” advocates behind. For its part, the Federal Reserve system has consistently and drastically undermined the value of the currency we use, a fact that is likely to be felt more acutely by those with less money.

The suffocating effects of federal regulation also reduce our standard of living. The 1994 Code of Federal Regulations, which lists all federal regulations currently in effect, comprised some 201 books, taking up an incredible 26 feet of shelf space. Its index alone numbers 754 pages. 10 This makes business more costly and all of us less wealthy; some businesses never get started at all because they cannot survive the regulatory regime that has been fastened on us. Social Security confiscates wealth in exchange for a pitiful return (and indeed very likely for no return at all given the way the program is going). In what way can one suggest even jokingly that such a program does anything but defraud the poor, taking money from them that they need in the present in exchange for some indeterminate but certainly minuscule return in the future?

As libertarians well know, the only way to bring about permanent increases in wages across the board is to create a business climate in which capital investment is as unhampered as possible. Increasing the amount of capital equipment at workers’ disposal increases labor productivity and hence wages. With a forklift, a worker may well be able to move enough pallets to earn $25 per hour; without it he’d be lucky to get $8. If someone’s labor is worth only $8 per hour, all the screeching, protesting, and labor organizing in the world won’t get him $25 per hour.

Advocates of economic human rights would doubtless be at a loss to explain why, when unionism was numerically negligible and federal regulation all but nonexistent, real wages in manufacturing climbed an incredible 50 percent in the United States from 1860 to 1890, and 37 percent more from 1890 to 1914, or why American workers were so much better off than their much more heavily unionized counterparts in Europe. 11 It is probably safe to say that few if any of these advocates are even aware of this fact, and probably somewhere around zero ever make mention of it.

It’s time such people learned that stomping one’s feet, shouting demands, and grabbing other people’s things isn’t really how wealth is created, or an especially dignified way for grown men and women to behave.

Notes

1. Frank van Dun, “Human Dignity: Reason or Desire? Natural Rights versus Human Rights,” Journal of Libertarian Studies, Fall 2001, p. 10.
2. For a proper perspective on rich and poor in the United States, see W. Michael Cox and Richard Alm, Myths of Rich and Poor: Why We’re Better Off Than We Think (New York: Basic Books, 2000).
3. The $5.4 trillion figure covers only through 1995 and is cited in Michael Tanner, The End of Welfare: Fighting Poverty in the Civil Society (Washington, D.C.: Cato Institute, 1996), p. 69.
4. Allen J. Matusow, The Unraveling of America: A History of Liberalism in the 1960s (New York: Harper & Row, 1984), pp. 237–39.
5. Jared Taylor, Paved with Good Intentions: The Failure of Race Relations in Contemporary America (New York: Carroll & Graf, 1992), p. 292.
6. Myron Magnet, The Dream and the Nightmare: The Sixties’ Legacy to the Underclass (San Francisco: Encounter Books, 2000 [1993]), pp. 48–49.
7. Linda J. Waite and Maggie Gallagher, The Case for Marriage (New York: Doubleday, 2000), p. 122.
8. “Politics Without Economics,” The Economist, August 6, 1988, p. 8.
9. U.S. Rep. John Lewis once claimed that those who would cut welfare payments are like Nazis. See L. Brent Bozell III, “The Obvious Politics of the Gaffe Patrol,” April 13, 1995, www.mediaresearch.org/columns/news/col19950413.html.
10. . Hans-Hermann Hoppe, Democracy: The God that Failed (New Brunswick, N.J.: Transaction, 2001), p. 62.
11. 11. George Brown Tindall and David Emory Shi, America: A Narrative History, vol. II, brief 5th ed. (New York: W.W. Norton, 2000), p. 692.

Thomas E. Woods Jr. holds a Ph.D. in history from Columbia University and is assistant professor of history at Suffolk Community College (SUNY) in Brentwood, New York.

David Kelley, erstwhile professor of philosophy, social commentator, and executive director of the Institute for Objectivist Studies, has written a marvelous yet slim volume exposing virtually everything that is wrong with the welfare state. Kelley’s writing is always pellucid—an academic’s word for clear—and utterly comprehensible, which no doubt explains why he left college teaching. This book is simply outstanding.

Kelley is a superb synthesist, and one could hardly do better than to purchase a copy of A Life of One’s Own to acquire an understanding of the defects of the welfare state. Here one finds elegant refutations of the key arguments that opponents of America’s tradition of individual liberty have employed to undermine our freedom. Primary among these is the notion of “welfare rights,” which he argues are spurious because they are parasitic on the efforts of other people: one person’s right to welfare payments as an unwed mother, for example, is dependent on the coerced transfer of money from its rightful owners, the taxpayers who actually earned it. In contrast, the natural rights of life, liberty, and property are not parasitic on the efforts of others, and ask of others only that they not interfere with what is mine and thine. What is fundamentally wrong with “welfare rights” is that they cannot be implemented without violating liberty rights.

Kelley is at his most instructive when he analyzes why the welfare state developed out of the Industrial Revolution. Defenders of individual liberty, free markets, and limited government often are weak on the question of why such appealing doctrines have fared so poorly in the twentieth century. Kelley provides some interesting answers. Tracing the origins of the welfare state back to Bismarck’s Germany of the 1880s—with its payroll taxes to fund unemployment, accident, health, and old-age insurance—Kelley shows how American resistance to this Prussian model broke down under the pressure of the Great Depression and the exhortations of prominent social activists and academics.

Fundamentally, these welfare state initiatives were a response to changes in the way people led their lives during the Industrial Revolution. In the new economy based on employment for a wage, the vagaries of economic cycles, chance, and bad luck played a much more significant role in people’s lives, and they desired protection against those risks. Disabling accidents in the factory, sickness of the breadwinner, old age, and unemployment were potential calamities that wage earners and their families faced. This broadened the constituency for governmental remedies beyond the narrower band of the chronically poor.

While conceding that these risks were real, Kelley shows how they were being addressed by insurance, friendly societies, and other voluntary charitable associations. In other words, he sees nothing inevitable about the development of the welfare state. For such voluntary remedies to have been usurped by state programs, a “sea change in thinking about the problems of poverty and economic risk” had to have transpired. The transformation from private to public provision of assistance could not have happened from economic causes alone, Kelley contends, but rather, resulted from a revolution in “ideas, values and philosophical outlook.”

Virulent critics of individualism set the moral stage for the welfare state’s assault on liberty. Ideas essential to liberty—such as the morality of self-interest and the efficacy of reason—were ridiculed and repudiated. The “new liberals” paved the way for the welfare state in five key ways, Kelley argues: (1) by redefining freedom into a spurious “positive freedom” to be taken care of by the state, (2) by redefining “coercion” to mean what employers do to their employees by offering them a wage, rather than the threatening of people with harm if they don’t obey, (3) by undermining individualism with the claim that we are all helpless creatures of social forces, (4) by advocating a secular variant of altruism that replaced service to God with service to society, and (5) by undermining the distinction between society and the state, and deifying the latter.

Kelley concludes his demolition of the welfare state on an optimistic note. Just as communism imploded when its myth of a workers’ paradise wrought by central planning lost its credibility, so might the welfare state collapse under the weight of its myths and nearly bankrupt programs.

Not as sanguine by nature as Kelley, I do hope that his powers of prognostication are keen. I wonder, though, whether a system based on pure evil, like communism, is more vulnerable to collapse than one grounded on smaller, subtler evils, like the welfare state. We shall see.