Posts Tagged ‘united states’

Once and Future King

Frank Buckley was kind enough to send me a copy of his new book, The Once and Future King: The Rise of Crown Government in America, and now seems like an appropriate time to post my review.

Buckley argues persuasively — and surprisingly — that the Founders intended to establish a semi-parliamentary form of government in Philadelphia in 1787. But the rise of democracy, especially the popular election of the president, empowered the executive and led by the 1830s to a new form of government: separation-of-powers presidentialism. Most political scientists still perceive the U.S. system as one of extreme checks and balances, but Buckley argues that we have now progressed to yet another constitutional order, marked by executive dominance, the “elective monarchy” that the Founders feared so much. The impetus for this change has been the rise of a vast regulatory apparatus: “Modernity, in the form of the regulatory state, is the enemy of the separation of powers and diffuse power, and insists on one-man rule” (p. 6).

When the Constitutional Convention met in Philadelphia, they first dealt with a “Virginia Plan” that had the president elected by Congress, the Senate chosen by the House from states’ nominees, and no executive veto. The plan was clearly parliamentary. The changes that occurred, to an electoral college process for the President, to an executive veto, and to state legislative selection of the Senate, were largely the product of compromises between states’-rights and nationalist factions at the Convention. The Framers did not anticipate direct popular election of the President, and in fact they thought that in most presidential election years, no candidate would win a majority, throwing the choice to states’ House of Representatives delegations. Some delegates claimed that a directly elected President would be a dangerous seed of demagogic monarchy.

F.H. Buckley

F.H. Buckley

In the 19th century, the progress of democracy caused the British and Canadian constitutions to cross paths with the American one. In the U.S., the electoral college became toothless, and Presidents were effectively directly elected by the people. In Britain and Canada, the monarch and the upper house lost legitimacy as nondemocratic bodies, and electoral reform in the U.K.’s House of Commons gave it democratic legitimacy and the upper hand in any battles among the branches. By the time Canada adopted its institutions under the British North America Act of 1867, they were consciously copying a fused legislative-executive, parliamentary system that had emerged in Great Britain, what Walter Bagehot referred to as “the efficient secret” of the British constitution. While the U.S. now featured strong separation of powers, Britain and Canada concentrated power in the Prime Minister.

Today, political scientists still teach that presidents are less powerful than prime ministers, because their legislative role is weak. The U.S. system has more veto players, and as a result policy change is slower.

Buckley acknowledges the logic of the traditional political science approach, but his story doesn’t end there. (more…)

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Ten days ago, the Washington Post published an op-ed of mine on whether the United States will ever see a strong secession movement like that in Scotland. I took the “yes” position and also took the opportunity to boost the Free State Project, while also making clear that it does not support secession. While it’s easy to think that current political equilibrium is stable, there are several considerations that make me think the U.S. will eventually (50 years from now, more or less) see a strong secession movement, most of which I mentioned in the piece but some of which I did not, for reasons of space: (more…)

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In my last post, I said “total net social spending” included net public spending and mandatory private social spending. In fact, it includes voluntary private social expenditures as well. The U.S. has by far the highest voluntary social expenditures in the OECD, so if you subtract those out, the U.S. net public and mandatory private social spending figure is no longer second in the OECD (and thus almost certainly the world, as poorer countries have smaller welfare states), only just about average.

But what does voluntary private social spending include? One big component is employer-provided health insurance. It seems to me that should be included in the size of the U.S. welfare state, even if it is not directly provided by the government, because the government subsidizes it (through the tax code), and because that spending is a substitute for government spending in other countries. If we exclude it for the U.S., we are not comparing like with like, since several other countries provide health insurance mainly or exclusively through the state. Put another way, if the U.S. provides so much social welfare privately, the need for the government to provide it is less. The U.S. welfare state is average-sized in spite of the fact that the private welfare system is enormous.

Now, does that mean the U.S. spends vastly more on the poor than most other OECD countries? Not necessarily. The majority of social spending in the U.S. does not go to the poor – but neither does it anywhere else. The elderly soak up a huge portion of social spending in almost all advanced industrial societies. Indeed, one way to measure how redistributive the U.S. welfare state is is to subtract the “post tax and transfer” Gini ratio from the “pre tax and transfer” Gini ratio. Of course, this is a static measure that does not take into account possibilities for mobility from one income level to another, and the extent to which “poverty traps” can contribute to lost mobility. Still, it’s a suggestive measure.

Using data from World Development Indicators Standardized World Income Inequality Database, I find that the tax and transfer system in the U.S. shaves only 0.08 points off the Gini ratio, a standard measure of income inequality (“1” means most unequal, “0” perfectly equal). In most other countries, the number is much higher. In Sweden, it is 0.20. In Italy and Germany, is 0.21. Only Switzerland showed (slightly) less progressive redistribution.

So while the U.S. has one of the very largest welfare states in the rich world, it also has one of the least progressive welfare states in the rich world. By the standards of anti-inequality preferences, that’s a terrible record of inefficiency.

Updated with correct source for my data.

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The United States has long had a larger welfare state than most other Western democracies. Surprised? You may not be aware of the new research on “net social spending.”

Net social spending includes not just government expenditures on social programs, but also tax credits for social purposes and, as a debit, government taxation of social benefits. It turns out that many of the so-called “generous” European welfare states tax social benefits at a high rate. Meanwhile, the United States uses the tax code to help the poor, through the Earned Income Tax Credit. We should also include mandatory private social payments, which are not directly paid by the government.

Using the OECD data, I have plotted total net social expenditure over time for 26 rich countries (click the image to zoom in).

the united states has a bigger welfare state than most other democracies

As of 2009, the United States had the second largest welfare state in the world, at 28.8% of GDP. Only France, at 32.1%, had a bigger one. Moreover, while all advanced industrial societies show a growth in the welfare state from 2005 to 2009, due to economic conditions, the U.S. also had a big runup in welfare spending between 1999 and 2007. In 1995, U.S. net social spending stood at just 22.7% of GDP, although even that figure was higher than those for Denmark, Canada, Italy, Norway, Australia, Ireland, and South Korea. So far as we have data, the U.S. has always had a larger-than-average welfare state.

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At Bleeding Heart Libertarians, Jason Brennan takes up the question of which country is most libertarian and lodges a complaint against global “economic freedom” indices:

This index may understate how anti-libertarian the United States is. After all, the index penalizes countries if their governments spend large amounts on social insurance. Yet classical liberals and neoclassical liberals are not in principle opposed to government social insurance. [That is, they will accept it under certain conditions.]

Thus, suppose we separate the idea of the administrative state—which tries to control, regulate, manipulate, and manage the economy—from the social insurance state—which provides tax-financed education, healthcare, or unemployment insurance. On the Index of Economic Freedom, many countries that rank lower than the US have far less extensive administrative states than the US. For instance, Denmark ranks much higher than the United States on property rights, freedom from corruption, business freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Luxembourg, the Netherlands, the United Kingdom, and many other countries beat the US on these measures as well. Thus, many other European countries might reasonably be considered more economically libertarian than the US.

Jason makes a legitimate point here: a dollar transferred to a social security recipient is less violative of freedom than a dollar spent hiring a drug enforcement agent or antitrust litigator. This is so even for those declassé Rothbardian absolutists, for whom the immorality of taxation is compounded when it is used to fund further violations of people’s rights.

However, even a bleeding-heart libertarian should see really existing welfare states as problematic for two basic reasons. First, (more…)

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