Will the Welfare State Wither Away When it Becomes Unnecessary?

Early Marxists, including Marx himself, believed that at some point after the transition from capitalism to socialism, the state would "wither away" because it would no longer be needed to maintain an egalitarian socialist society. Once the state was no longer necessary, it would disappear. Tyler Cowen advances a somewhat similar theory from a libertarian perspective:

Life without socks would be... "undignified," but no one recommends government provision or even sock vouchers. Relative to income, socks are sufficiently cheap. There is some inequality of socks, but it seems that just about everybody — even the poor — "has enough." We don't even force people to buy socks for their kids.

Might there come a time when health care and education fall under the same rubric? . . .

Of course today's poor aren't rich enough for us to remove government aid. But when will the splendid era of libertarian freedom be possible? Today's poor are much richer than the poor fifty years ago, and the poor of the future are likely to be richer yet. Won't the welfare state, at some point, simply become unnecessary?

Unlike in the case of the Marxists, it's not clear whether Tyler is making a prediction or just a normative statement about the justification of the welfare state in the future (Marx was doing both). If Tyler is predicting the demise of the welfare state as the poor become richer, I think he is wrong, and for the same reason that Marx was wrong about the withering away of the state under socialism. Government power does not disappear merely because it becomes "unnecessary." It can still be used by the politically powerful to benefit themselves at the expense of the politically weak. Orthodox Marxists learned this lesson the hard way when the establishment of a socialist government in the USSR led not to the withering away of the state, but to a vast expansion of government power and of its use to oppress the population for the benefit of a new ruling class.

We see a similar dynamic, though in much less severe form, in the history of the welfare state. Although originally intended to benefit the poor, today's welfare state has gone far beyond that. The vast majority of government-sponsored redistribution goes not to the poor, but to politically powerful interest groups such as the elderly (most of whom are not poor), large agribusinesses (which capture most of the benefits from the massive agricultural subsidies that exist in most developed nations); and of course the mostly affluent beneficiaries of various porkbarrel projects. Social Security (the vast majority of which goes to the nonpoor) alone dwarfs all means-tested programs combined. As I explained in greater detail here, the poor have little political power, and it is therefore not surprising that most programs enacted through the political process don't benefit them, and many actually cause them harm.

If Tyler is just making the normative point that the welfare state will no longer have a justification once even the poor are rich enough to provide for themselves, then I largely agree. But we don't have to wait for that to happen in order to condemn the many redistributive programs whose benefits flow to people who are not poor, and therefore can already provide basic necessities (and much else) for themselves. Even if welfare state redistribution is permissible in cases where it is necessary to aid the genuinely destitute who cannot help themselves (and I agree with Tyler that it is), that principle doesn't even begin to justify the vast majority of the welfare state redistribution that exists in the real world. As Harvard economist Jeffrey Miron points out, we can make huge cuts in the welfare state without touching even a penny of spending that goes to the poor.

UPDATE: I seem to be criticizing Tyler a lot recently (see here and here). So let me point out that I actually agree with his writings about 80 or 90% of the time. To extend the analogy to Marx, my critique of Tyler is similar to the critique of Marx by the "revisionist socialists" who basically agreed with his normative premises, but thought that some of his empirical predictions were wrong. If Tyler is the Marx of George Mason libertarianism, then I'm the Edouard Bernstein. OK, that's probably enough Marxist obscurantism for one post:).