The
South’s aversion both to taxes and to mandated government safety net
structures had a long, and somewhat surprising, pedigree. In the late
eighteenth century, popular radical writers such as Condorcet in France
and Tom Paine in England had called for the creation of comprehensive
social insurance systems based around universal pensions, child
allowances, and education for all. Neither, however, managed to
successfully alter prevailing political and moral doctrines. In France,
after the frenzy of the revolutionary years the counterrevolution of the
post-Napoleonic period put a halt to radical social experiments for
decades. And in the United Kingdom, at least partially in response to
the violence unleashed by revolutionaries in France, the early
nineteenth century saw a tide of conservative reaction. Give money to
the poor, the theory went, and you were encouraging indolence,
dependency, and ultimately societal chaos. In 1834, after the
publication of the Poor Law Report, “outdoor relief”—the giving of state
moneys to the able-bodied poor in a non-workhouse context—was banned.
For most of the rest of Queen Victoria’s near-seventy-year reign, “the
great unwashed” were either left to find their own ways through terrain
of hunger, homelessness, and disease, or were corralled into the sorts
of ghastly workhouse settings made infamous by the writings of Charles
Dickens.
In America, the South in particular took the Victorian
lesson to heart, though to a lesser degree so too did the rest of the
country. As did most of Europe. After all, Great Britain was the
dominant power of the age, its economic prescriptions as hard to avoid
as, say, the Washington consensus’s emphasis on opening up markets to
international trade, privatizing public services, and deregulation a
century and a half later. Coercive poor law politics, shaped around
workhouses, poor houses, and other near-prison-like conditions for
confining and attending to the subsistence needs of the poor was, as a
consequence, the dominant response to poverty on both sides of the
Atlantic throughout the middle decades of the nineteenth century.
A
couple generations later, however, as the rise of industrial societies
in Europe created huge economic dislocations and massive political
unrest, Europe revisited the issue. Between 1883 and 1889, Otto von
Bismarck’s Germany created a slew of social insurance programs.
In England, at about the same time, social reformers such as Arnold
Toynbee began calling for the creation of a government-funded safety
net. And in 1908, Parliament passed the Old Age Pensions Act—part of a
two-year spasm of social reform that culminated in the fabled People’s
Budget of 1909. French reformers preached voluntary mutual assistance
schemes and increasingly urged the government fund universal assistance
programs out of a general tax base. After decades of agitation, the
French Parliament enacted a state pension system in 1910.
In the
United States, though, support for such reforms remained more tenuous.
True, an array of progressive political groups supported workers’
compensation laws by the early twentieth century. And by 1917, with the
Supreme Court having upheld the constitutionality of these laws,
thirty-seven states had systems in place, most of them compulsory. In
fact, as a region, only the Deep South had completely neglected to
implement compensation schemes for at least some categories of injured
workers. But in contrast to this, enthusiasm for social insurance
systems didn’t take off prior to World War I. True, several states in
America created their own very limited pension plans during these years,
especially for widows and for teachers—who at the time were mainly
women—and several also seeded their own unemployment insurance systems.
Yet not until the New Deal did the idea of a federal system gain
traction. Before then, even the American Federation of Labor and the
left-wing Nation magazine opposed mandatory Social Security. Hence the
paradoxical fact that when, in 1912, Teddy Roosevelt’s Progressives came
out in support of social insurance, including a form of compulsory
medical insurance, an alliance of conservatives, socialists, trade
unionists, and federalists combined to defeat it. Opponents argued that
the imposition of mandates on working Americans, forcing them to pay
into a system to support the elderly and to provide medical coverage for
the sick, was foreign to the country’s founding principles. What was
happening in Europe was, they argued, too paternalistic, too coercive.
Moreover, in a land of great social mobility and endless opportunity
such systems were unnecessary. Keep them for the ossified Old World—keep
them for places where one’s station in life was determined by one’s
parentage.
Thus, while America’s peer nations across the Atlantic
were experimenting with forms of universal old age pensions and
healthcare coverage—to tackle the extremes of poverty that had driven so
many Europeans to migrate to the United States in search of higher
living standards—when it came to the creation of nationwide safety net
protections America stalled. Hobbled by the South’s antipathy to any
form of welfare, and by a broader national reluctance to corral citizens
into insurance programs against their will, advocates for the sorts of
reforms occurring in Europe ran up against a brick wall. It would take
the Great Depression, and the collapse of both the working and the
middle classes’ sense of stability and burgeoning economic possibility,
to shift public opinion behind the establishment of Social Security and
government aid in the arena of housing and employment. In fact, it
wasn’t until 1935, six years after Wall Street’s catastrophic collapse,
that Congress legislated into being Social Security, disability and
unemployment insurance, and Aid to Families with Dependent Children. And
it was not until 1937 that Congress would take the lead on funding
large-scale public housing.
As for healthcare reform, long a holy
grail of social reformers, attempts by Franklin Roosevelt before World
War II and Harry Truman at the end of the war to create universal
healthcare foundered on the rocks of opposition from the American
Medical Association, as well as more general hostility from the same
political wellspring that had opposed Social Security’s creation.
Truman’s proposal for a 4 percent payroll tax to cover a national health
insurance system, which he proposed in a special message to Congress on
November 19, 1945, was denounced as being an attempt to “socialize
medicine.” It was a critique that would crop up repeatedly over the
decades, when Presidents Truman, Kennedy, Johnson, Nixon, Carter,
Clinton, and finally Obama proposed significant overhauls to the
country’s dysfunctional and inequitable healthcare systems. Ultimately,
it would take the upheavals of the 1960s to partially get around this
critique and pave the way for Medicaid and Medicare—though in the case
of Medicaid, Congress gave the states considerable leeway as to whom
they covered and what services they provided. And it would take the 2008
financial collapse to create just about enough momentum for President
Obama to get Congress to pass a watered-down version of universal
healthcare. Even then, the backlash was massive, the acrimonious debate
creating a climate in which the conservative Tea Party movement could
flourish.
So, too, it would take the calamity of 1930s-era
deflation, and the threat of wholesale bankruptcy for America’s millions
of farmers for the federal government, at the urging of Secretary of
Agriculture Henry Wallace, to start providing food aid to the country’s
hungry. It would take the work of Michael Harrington and others a
generation later to prod Washington to set up a national food stamps
system and then to expand vital nutritional programs such as school
breakfasts and lunches and WIC, the Women, Infants, and Children program
run by the U.S. Department of Agriculture.
At first, this food
assistance to the poor was, essentially, a way of propping up
agricultural prices by having local counties buy up surplus crops and
thus preserve market buoyancy. “We must adjust downward our surplus
supplies until domestic and foreign markets can be restored,” Wallace,
who had grown up on a farm in rural Iowa, declared in his first radio
address on March 10, 1933. The strategy worked for the farmers, and to a
degree it alleviated hunger for a portion of the indigent population.
It was, however, massively incomplete. Too few people received the aid;
too many regions and categories of poor were left unhelped.
In
1961, a generation later, newly inaugurated president John F. Kennedy
signed an executive order creating a pilot food stamp program, funded by
the federal government, in eighteen states. After Kennedy’s death,
President Johnson pushed Congress to pass a Food Stamp Act that allowed
counties across the country to choose to opt into the food stamp system,
with poor families paying a percentage of their income to access food
stamps worth considerably more—the stamps, in other words, were not free
but were heavily subsidized. In the late 1960s, the voluntary nature of
the system was replaced. Over several years leading up to 1974, all
counties would have to opt into the system. By the mid-1970s, food
assistance paid for by the feds, to the tune of billions of dollars a
year, had become the country’s single most effective intervention
against poverty; by the end of the decade, food stamps alone had
expanded to the point that the program was costing the government more
than $20 billion (in 2012 dollar values) annually.
In fact, even
while President Richard Nixon rhetorically tilted rightward—talking of a
Silent Majority enraged by lax criminal justice codes, a mollycoddling
welfare state, and the presence of a seemingly permanent underclass—in
reality he presided over significant expansions of the welfare state,
especially when it came to antihunger programs. He also sought to create
a universal healthcare system that in many of its particulars looked
strikingly like the one ultimately implemented under President Obama
nearly four decades later.
Three years after Nixon left office,
Congress eliminated the requirement that poor families had to buy into
the food stamp program; thenceforth, the cost of the food stamps was
fully borne by the federal government. “The most important
accomplishment of this period was the elimination of purchase prices as a
barrier to participation,” wrote the social scientist Dennis Roth in a
history of the food stamp program commissioned by the Economic Research
Service of the U.S. Department of Agriculture.
[The achievements
of the War on Poverty, however, rapidly came under fire.] From the 1970s
on, as misery and hardship stubbornly refused to vanish from the
national landscape, America’s commitment both to reducing income
inequality and to mitigating the effects of that inequality began to
wane. Both rhetorically and in terms of practical policies, America’s
leadership class began a long march away from redistributive liberalism.
Tax policy became more regressive. And the tax code came overwhelmingly
to benefit the wealthiest Americans, with a falloff in the progressive
nature of the tax bands and the near-complete emasculation of the estate
tax system. Huge companies such as GE found ways to avoid paying any
corporate taxes, and billionaires such as Warren Buffett, who made most
of his money from capital gains, ended up paying a smaller percentage to
the government in taxes than did their secretaries.
Cumulatively,
programs and wage protections developed over the better part of a
century came under tremendous pressure as the great unraveling of public
infrastructure picked up pace.
Excerpted from “The American Way of Poverty: How the Other Half Still Lives” by Sasha Abramsky. Reprinted with permission from Nation Books.
