At The Atlantic, a post by Alex Tabarrok, “The Innovation Nation vs. the Warfare-Welfare State“, has been making its way around the bloggysphere, in part due to the big shout out to science, as embodied by this figure:
We like to think of ourselves as an innovation nation, but our government is a warfare/welfare state. To build an economy for the 21st century we need to increase the rate of innovation and to do that we need to put innovation at the center of our national vision.
Innovation, however, is not a priority of our massive federal government. Nearly two-thirds of the U.S. federal budget, $2.2 trillion annually, is spent on the four biggest warfare and welfare programs, Medicaid, Medicare, Defense and Social Security. In contrast, the National Institutes of Health, which funds medical research, spends $31 billion annually, and the National Science Foundation spends just $7 billion.
I’m all for cutting back on the warfare state–that senitment is as old as the biblical prophets. And spending more money on non-military research is a good thing (and while we’re on the subject, go sign this petition). Regular readers will know I agree with that. But I’m not sure what’s wrong with the so-called welfare programs.
I’m all for controlling healthcare costs and figuring out ways of delivering care more effectively (who could possibly be against these things?). It seems pretty clear that the private healthcare system, at least as it exists in the U.S., is not the way to do that. After all, Medicare and Medicaid rates of growth are lower than private insurance, even though they target more expensive populations. If anything, we should expand these programs (i.e., the public option or single payer)–which would make those bars on the graph taller. But healthcare is what we should be spending money on (albeit more efficiently). This is one of the advantages of having money: you don’t have to worry about these things (although, again, doing so more effectively is worthwhile). But neither the current system of Medicare or Medicaid or an expanded system should be called ‘welfare’–which is implicitly pejorative. It is what you’re supposed to do: take care of the indigent and the elderly.
Then there’s Social Security. This is primarily a pension fund for all Americans. It allows the elderly to retire with some modicum of dignity and keep millions of elderly out of poverty. One-third of the spending goes to the disabled, widows, and orphans. Again, helping the elderly (who mind you have set aside part of their income to partially pay for this aid) and those unable to support themselves is what a just society does.
If we were a poor country, we would have to make brutal choices between the elderly and economic growth. But we’re not a poor country (we flush toilets using infrared technology for Intelligent Designer’s sake). So, yes, our healthcare system should be more innovative (good luck with that). Cutting back on warfare* is a good thing for many reasons. Funding more research and favoring policies that stimulate innovation and manufacturing** is also a good thing. But caring for the sick, the elderly, the needy, and the disabled, this is what prosperous societies should do.
And it is not the moral or ethical equivalent of war.
An aside: For any non-regular readers who scream, “TEH DEFICITZ!!”, we can have a shortage of people, resources, or industrial capacity. But a shortage of currency in a fiat currency world (being off the gold standard) is not a problem. We can easily fix that (see here, here, here, here, here, here, and here).
*When phrased like that, you begin to realize just how ridiculous large swathes of our militarized foreign policy are.
**It’s not enough to design something, we should be manufacturing it too.