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Wednesday, December 14, 2005

The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever

Long on Sentiment and Short on Substance

The problem with the American welfare state, according to Cass Sunstein, is that it is too small. In this book the widely respected University of Chicago law professor argues that the federal government should guarantee Americans a broad range of “economic rights.” Sunstein organizes the book around the story of Franklin Roosevelt’s 1944 State of the Union address. In that speech FDR argued for a “Second Bill of Rights” that would, he claimed, guarantee economic and social security to everyone. Roosevelt’s second bill simply declared that “[e]very American is entitled to,” among other things, a job and the “right to earn enough to provide adequate food and clothing and recreation,” “a decent home,” “adequate medical care,” and “a good education.”

Sunstein reworks Roosevelt’s second bill a bit to come up with his own fuzzy blueprint. He notes that FDR was never interested in actually trying to amend the Constitution. Neither is Sunstein. Although he spends most of two chapters flirting with judicial activism as the way to expand the welfare state, he does not actually urge American judges to take up this task. Instead, Sunstein finally takes the position, near the end of the book, that we should “treat the second bill as a set of constitutive commitments, helping define the nation’s deepest principles.”

Unfortunately, the book is long on sentiment and short on substance. As a result, Sunstein fails to deliver on the second prong of the book’s subtitle; he does not explain “why we need [a vast welfare state] more than ever.” Indeed, he proceeds as if the case for it is simply self-evident. The entire book is predicated on the idea that the welfare state has worked, or can be made to work, well. The phrase “preaching to the choir” is fully applicable here.

Two problems with the book stand out: Sunstein does not flesh out his vision of a new and expanded welfare state, and he does not take seriously the problems plaguing the welfare state we already have.

As to the first, Sunstein explains, “I do not attempt to design policy initiatives here.” Accordingly, he does not even hint at how much his new welfare state would cost, how high taxes would be raised to finance it, or what effect this would have on the private sector of the economy. Perhaps there will be a sequel in which all will be revealed. Failing that, his call for renewed enthusiasm for the welfare state seems unlikely to persuade anyone not already inclined to this point of view.

As to the second problem, Sunstein writes as if the last 60 years never happened. He has almost nothing to say about the shortcomings and negative unintended consequences of the federal government’s social engineering to date. He avoids the fact that the welfare state we already have looks increasingly unsustainable. A recent government study of Social Security and Medicare estimated the present value of these two programs’ funding shortfall to be roughly $72 trillion. No wonder many Americans—particularly younger people—today think of “social security” as an oxymoron.

The more generous welfare states of western Europe are in even worse shape than our own and are widely seen as a drag on European economic growth. Sunstein airily downplays these inconvenient facts by saying, “The experience in Europe, to the extent that it has been unsuccessful, offers a warning about means; it does not draw Roosevelt’s ends into the slightest doubt” (emphasis added).

Ignoring Public Choice theory’s inventory of the pathologies of politics and government, Sunstein asserts that “there is every reason to think that careful design [of new welfare programs] is possible.” (This is buttressed by reference to the earned income tax credit.) A better illustration of the Nirvana fallacy is difficult to imagine.

For Sunstein, America’s “so-called individualism” is “incoherent,” laissez faire is a “myth,” and arguments against a larger welfare state are “ludicrous,” “silly,” “almost comically implausible,” and “jejune.” Not surprisingly, Sunstein never considers the possibility that, because of the shortcomings of politics and government, the best way to promote economic well-being just might be by limiting government, thus indirectly promoting the growth of the private sector.

It is also no surprise that Sunstein holds to the left’s conventional history of the Depression and the New Deal, or that he ignores the recent revisionist scholarship of Robert Higgs, Jim Powell,William Shughart, Gene Smiley, and others. In spite of this, Sunstein’s rendering of Roosevelt’s bizarre views on the American economy—FDR said Americans were under the thumb of a “new industrial dictatorship,” for example—is grimly fascinating. Although certainly not Sunstein’s aim, his description of Roosevelt’s hostility toward American business may make the reader grateful that the effects of the New Deal were not broader and deeper than they have been.