Enlightenment Now: The Case for Reason, Science, Humanism, and Progress

Those who condemn modern capitalist societies for callousness toward the poor are probably unaware of how little the pre-capitalist societies of the past spent on poor relief. It’s not just that they had less to spend in absolute terms; they spent a smaller proportion of their wealth. A much smaller proportion: from the Renaissance through the early 20th century, European countries spent an average of 1.5 percent of their GDP on poor relief, education, and other social transfers. In many countries and periods, they spent nothing at all.²⁹

In another example of progress, sometimes called the Egalitarian Revolution, modern societies now devote a substantial chunk of their wealth to health, education, pensions, and income support.³⁰ Figure 9-4 shows that social spending took off in the middle decades of the 20th century (in the United States, with the New Deal in the 1930s; in other developed countries, with the rise of the welfare state after World War II). Social spending now takes up a median of 22 percent of their GDP.³¹

Figure 9-4: Social spending, OECD countries, 1880–2016

Source:Our World in Data, Ortiz-Ospina & Roser 2016b, based on data from Lindert 2004 and OECD 1985, 2014, 2017. The Organisation for Economic Co-operation and Development includes thirty-five democratic states with market economies.

The explosion in social spending has redefined the mission of government: from warring and policing to also nurturing.³² Governments underwent this transformation for several reasons. Social spending inoculates citizens against the appeal of communism and fascism. Some of the benefits, like universal education and public health, are public goods that accrue to everyone, not just the direct beneficiaries. Many of the programs indemnify citizens against misfortunes for which they can’t or won’t insure themselves (hence the euphemism “social safety net”). And assistance to the needy assuages the modern conscience, which cannot bear the thought of the Little Match Girl freezing to death, Jean Valjean imprisoned for stealing bread to save his starving sister, or the Joads burying Grampa by the side of Route 66.

Since there’s no point in everyone sending money to the government and getting it right back (minus the bureaucracy’s cut), social spending is designed to help people who have less money, with the bill footed by people who have more money. This is the principle known as redistribution, the welfare state, social democracy, or socialism (misleadingly, because free-market capitalism is compatible with any amount of social spending). Whether or not the social spending is designed to reduce inequality, that is one of its effects, and the rise in social expenditures from the 1930s through the 1970s explains part of the decline in the Gini.

Social spending demonstrates an uncanny aspect of progress that we’ll encounter again in subsequent chapters.³³ Though I am skittish about any notion of historical inevitability, cosmic forces, or mystical arcs of justice, some kinds of social change really do seem to be carried along by an inexorable tectonic force. As they proceed, certain factions oppose them hammer and tongs, but resistance turns out to be futile. Social spending is an example. The United States is famously resistant to anything smacking of redistribution. Yet it allocates 19 percent of its GDP to social services, and despite the best efforts of conservatives and libertarians the spending has continued to grow. The most recent expansions are a prescription drug benefit introduced by George W. Bush and the eponymous health insurance plan known as Obamacare introduced by his successor.

Indeed, social spending in the United States is even higher than it appears, because many Americans are forced to pay for health, retirement, and disability benefits through their employers rather than the government. When this privately administered social spending is added to the public portion, the United States vaults from twenty-fourth into second place among the thirty-five OECD countries, just behind France.³⁴

For all their protestations against big government and high taxes, people like social spending. Social Security has been called the third rail of American politics, because if politicians touch it they die. According to legend, an irate constituent at a town-hall meeting warned his representative, “Keep your government hands off my Medicare” (referring to the government health insurance program for seniors).³⁵ No sooner did Obamacare pass than the Republican Party made it a sacred cause to repeal it, but each of their assaults on it after gaining control of the presidency in 2017 was beaten back by angry citizens at town-hall meetings and legislators afraid of their ire. In Canada the top two national pastimes (after hockey) are complaining about their health care system and boasting about their health care system.