Twenty-two years ago, Charles Murray published Losing Ground, in which he advocated abolishing all welfare payments. Even those who were attracted by its reasoning, and by Murray's always elegant writing, considered it wildly unrealistic and wholly out of line with political reality. I was among that group; as Charles reminded me at a book party for his latest offering last night, I wrote something favorable about it in the Washington Post, which I can't find on the Internet.
Now Murray has come forward with a new book, In Our Hands: A Plan to Replace the Welfare State. He summarizes his proposal in this piece in the Wall Street Journal. "This much is certain: The welfare state as we know it cannot survive," he begins. And so, "Instead of sending taxes to Washington, straining them through bureaucracies and converting what remains into a muddle of services, subsidies, in-kind support, and cash hedged with restrictions and exceptions, just collect the taxes, divide them up, and send the money back in cash grants to all American adults." He comes up with a figure of $10,000 a year.
What Murray calls the Plan resembles a proposal being bruited about in Labor Party circles in Britain, to provide a set sum for each individual at age 18. The idea in both cases is to have the state confer on every individual a certain amount of wealth. Of course, the Laborites have no intention of replacing the welfare state, while that is Murray's central purpose. Murray, a libertarian, acknowledges that his proposal isn't libertarian: It would eliminate government transfer payments but not other government programs. His aim is to encourage more self-provision, individual responsibility, and voluntary association. He dislikes the welfare state less for what it costs us in money and more for what it costs us in character.
Murray's program to replace government transfers with $10,000 annual payments will sound to readers in 2006, as his proposal to abolish welfare sounded to readers in 1984, as politically impossible. He says as much himself. Yet within a few years of the publication of Losing Ground, Gov. Tommy Thompson of Wisconsin began his rounds of welfare reform, replacing by-right welfare payments with work requirements. Governors in other states, most of them Republicans but some of them Democrats, developed similar programs. In 1996, the Republican Congress passed, for the third time, a welfare reform proposal, and Bill Clinton, facing a re-election campaign, signed it. Murray reminded me many times during these years that those welfare overhaul programs weren't anywhere near as thoroughgoing as his own. Correct.
But Losing Ground did show the way. It undermined the case that welfare was a moral obligation by showing that welfare created a moral disaster. It got people thinking that there must be another way. It inspired policy experimentation, which spawned political imitation. First in the states, and then nationally, welfare reform became one of the public policy successes of the 1990s.
Is Charles Murray showing us the way again? I haven't finished the book, and I may have more in the way of an answer when I do. I will be reading it with a view to answering this question: Can this process get started in the states? At his book party last night, Murray seemed to be saying that the answer was no. But Charles is temperamentally a pessimista cheerful pessimist but a pessimist. I don't think he believed that the United States would go nearly as far toward his recommendations in Losing Ground as it did. But we did.
Which takes me back to the first sentence of his Wall Street Journal article. "This much is certain: The welfare state as we know it cannot survive." As we go on into the 21st century, we see two major forces at work in our society. On one side is the momentum created by our vast entitlement programs and the squeeze they face from unfavorable demographics: a momentum that will result in government gobbling up an increasing share of the economy. On the other side is the powerful force of market economics and the chaotic growth and creative destruction it produces: a momentum that has tended to shove aside bureaucracy and plodding big organizations in favor of market choices and individual initiative. The lines on the graph show entitlements leading to an ever larger government share of the economy. But lines on graphs don't go on in one direction forever; at some point they bend or turn in another direction. Murray has suggested a way to change the lines on the graph. Could this be where we are headed?