God and the Welfare State

God and the Welfare State March 14, 2011

This is the title of a short and fascinating book written by Lew Daly as few years back as a criticism of the Bush administration’s faith-based initiative. Daly supports the faith-based initiative insofar as it allows a role for religious and other mediating institutions between the state and the person. This is consistent with subsidiarity and promotes the dignity of the individual. But Daly parts company with the American approach when it comes to actually paying for the welfare state. The American approach places a high premium on private charity. As Bush put it, the persistence of poverty is “more to do with troubled lives than a troubled economy”, and it can be solved solely by religious groups.

What is missing is the structural or societal roots of poverty. As Daly puts it, “poverty is created and perpetuated in defiance of God’s justice”. He discusses the covenants of the Old Law, arguing that the theological basis of the Jubilee provisions was that “God was the land’s only true owner”. A consistent objective of the old covenant was to ensure basic sustenance for all and to avoid the concentration of wealth and power in the hands of a few, which would lead to deprivation and servitude. Oppression of the poor was seen as evidence of covenental failure. And so we see Isaiah and Amos castigating those who make unjust laws to deprive the poor of their rights and the oppressed of justice. We see Micah railing against the wealthy who come up with new forms of legalized thievery, new ways to defraud the ordinary person (sound familiar?). And we all know what Jesus had to say about the poor and the least among us. Like the prophets before him, Jesus was particularly harsh toward those who hoard God’s fruits and yet demand piety from everyone else.

The basic insight, as Daly puts it, is that “direct care for the poor is required by Judeo-Christian faith”. Christians cannot ignore and cannot defend the growing gaps between rich and poor and the domination by the wealthy of the political system. And so the Bush administration’s commitment to religious autonomy contrasts in the social sphere starkly with its economic policies geared to benefit the richest. Grace and nature cannot be split into two distinct spheres. Faith is not private. Charity cannot be used to ignore the duties of society toward the poor.

So what is the solution? One idea is the social democratic model, with a large and dominant welfare state. This can work well, but it can also lead to a loss of human dignity by veering too far from solidarity. If the American system is all subsidiarity without solidarity, neither do we want a cold and faceless system of solidarity without subsidiarity. One answer is the Christian Democratic model with welfare states constructed around the principle of subsidiarity – as seen in places like Germany and the Netherlands. This is a welfare system that keeps both the state and the market in their place. In the Netherlands, the system of “pillarization” sees citizens being served from cradle to grave by s single confessional pillar. It is a welfare system funded by the state, but managed by subsidiary mediating institutions in a fully autonomous manner. The German approach is based clearly on Catholic notions of subsidiarity, with a neo-corporatist system dominated by six large umbrella organizations, or “free welfare associations” (the largest two are religious, Catholic and Protestant). These bodies are legally independent in the “targeting and execution of their functions”. It is a privately governed, but publicly financed, welfare arrangement.

The Christian Democratic vision recognizes that charity is not enough, and that charity must be backed up by a comprehensive system of social transfers. The role of the state is limited, and yet the common good of society, not the liberty of the individual, is the starting point. And it works pretty well. The United States spends 40 percent less on social spending than Christian or social democracies, and poverty and inequality rates are dramatically higher. A well-functioning welfare state should be able to cushion market outcomes, in part by reducing “post-government” poverty (after accounting for transfers and taxes). And yet the overall poverty reduction in the United States from the pre-government to the post-government stage is only about 20 percent. In Germany, it is 70 percent, and in the Netherlands, 90 percent. Of course, outcomes like this don’t come cheap.

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