Nobody Wants Welfare Communitarianism

Jeff Spross had an interesting piece at The Week about the illusion of self-reliance in a modern capitalist economy. As Spross points out, what we often call self-reliance in the realm of personal savings in particular is more of an ideological sheen than material reality. We don't stockpile produced goods anymore, but instead stockpile cash or take on financial positions in disparate financial assets. Stockpiling money in cash or burying it into assets generally involves all sorts of far flung financial services bureaucracies (hardly self-reliance) and, even then, such behavior is geared towards the hope that arrangements in the future will materialize such that your financial positioning allows you to grab up future products made by future workers.

More importantly, this sort of financial services jockeying is not meaningfully different, in self-reliance terms, from similar state-administered programs. What difference would it make, for instance, if tomorrow you came to find out that the Vanguard 401k/IRA you are invested in for your self-reliant retirement security was actually secretly run by the Federal Retirement Thrift Investment Board, the government agency that administers the federal government's own 401k-like plans (called TSP) for federal employees (besides the fact that TSP is more efficient than Vanguard and has a website that isn't garbage)? One is private and one is public, but what does that mean to you deep down?

Communitarianism

Modern economic institutions didn't just kill self-reliance though. They also killed communitarian reliance (to the extent that it ever existed).

A certain minority strand of conservatives often like to complain that public social insurance schemes blew up communitarianism because they helped get rid of the horrific insecurity of laissez-faire capitalism (and the social networking some people did to somewhat deal with that insecurity). In this sense, the conservatives object, not to the dread collectivism of the welfare state, but instead to the dread individualism of it. When the economic system secures your well-being as a matter of right and eliminates the risks of severe deprivation, this position maintains, it liberates you from dependency on others and guts the economic coercion at the heart of community-building.

This argument is quite a clever and refreshing change up from the usual "taxes are theft" and "the welfare state is anti-individualist enslavement." But it doesn't really work either.

In our modern society, people who have the means generally secure themselves against economic risks, not through the community, but through hyper-individualistic private insurance schemes. They buy life insurance (survivor's insurance). They buy health insurance. They buy retirement insurance products of various sorts. They get long-term disability insurance. Around half have newborn insurance through their work (paid leave). Needless to say, these are not communitarian insurance options. They are just as liberating from "dependency" on others as social insurance (if you can afford them).

All social insurance does is take the kind of individual insurance people who have money buy against economic risks and extends it to everyone. The thing that rubs out communitarianism, is not social insurance, but insurance period. If you want community dependency back, you need to make it illegal for all people to insure against the horrific risks of capitalism, not just rip that insurance away from the lower classes.

Of course, I don't think outlawing insurance (whether social or private) is a good idea. The fact that rich folks heavily buy private insurance should tell you that nobody in their right mind actually wants to use communitarian welfare for major economic risks. Rich people often seem to want others to rely on communitarian welfare (where such a change would pad the already ample pockets of the rich by cutting social insurance), but they certainly don't want it for themselves. There is much wisdom in that revealed preference.

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