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Thursday, April 16, 2009

Deep-Rooted Fear of “Freeloaders” in American Culture May Have Shaped Our Economic Safety Net Policies

When you contemplate the number of American families that have been affected by job losses in the current economic crisis, it’s staggering to consider that, at the beginning of the Great Depression, the nation had no unemployment compensation system to minimize the suffering created during the down-ticks of market cycles.

The reasons why such social policies are relatively recent developments can in part be understood in the relatively simple context of a gradually evolving enlightenment within our society of how working class people should be treated. In this view, social programs like assistance for the unemployed emerged over time for the same reasons as did other protective measures, such as child labor laws, overtime payments, occupational safety regulations, and environmental protections.

As societies shifted away from a primarily agrarian way of life to a more commercially and industrially centered culture, and as the scope of organized business and large markets expanded, awareness gradually increased of the potential harm, as well as good, that organizations and markets could do when left to their own devices. It’s fitting that Adam Smith’s metaphor for the market mechanism was “The Invisible Hand” rather than, say, “The Invisible Mind,” because the metaphor can be extended to help us understand an important fact about markets: a hand, unlike a mind, has no conscience.

So it took time for society to come to grips with “the Dickensian aspects” of the industrial revolution and realize that the impersonal machinations of the market required some prosocial checks and balances. In this view, it’s not too surprising that we were already nearly one third of the way through the 20th century before there was a federal unemployment compensation system.

However, another dimension worth considering is that, in the United States, an additional factor may be at work that has influenced why our safety nets protecting citizens from the vagaries of business cycles are arguably more limited than in some other countries: a fear of “freeloaders” that dates to our colonial origins here in “The New World.”

Many of us can recall, from our elementary school history lessons, the stories of problems in early colonial outposts like Jamestown and Plymouth with people who did not want to pull their fair share of the weight in dealing with the harsh conditions that an unforgiving climate and environment imposed on the settlers, leading to the implementation of strict “no work, no eat” policies.

Given the conditions, the mindset is entirely understandable. But, in or relatively young nation, the mindset appears to continue as a salient component of our cultural memory. Fear of freeloading remains strong even today, evidenced by continued hostility toward groups such as welfare recipients, who, at least in some demographic segments, are still demonized as the cause of a supposedly excessive tax burden, in spite of the fact that such social programs comprise a relatively small proportion of the federal budget. Hostility toward the so-called welfare state may in fact be the result of a political straw-man created during the Reagan era, but the resulting attitude persists among many people.

In “The Old World,” on the other hand, cultural memory of a life as raw and “close to the elements” as that experienced by the initial North American colonists is far more distant. Could this partially explain why, in certain European countries, for example, the social safety net is more extensive, and the reality more accepted as a “necessary evil” that a certain percentage of the population may take advantage of the system and “live off the dole,” so to speak?

The current economic crisis may call for a closer look at this issue, in keeping with the ideas of some thought leaders in economics who, like the Nobel Laureate Paul Krugman, favor markets that are as free as realistically possible while also advocating more robust social safety nets than those that currently exist in the U.S. Sphere: Related Content

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