Reply to Professor Levine on Rhetoric and Reality in American Welfare History

By Kern, William S. | Journal of Economic Issues, September 2001 | Go to article overview

Reply to Professor Levine on Rhetoric and Reality in American Welfare History


Kern, William S., Journal of Economic Issues


I largely agree with Professor Levine's conclusion that the impact of the application of the principles of 1834 on contemporary welfare reform is "far more potent rhetorically than it is in fact" (733) and that "the slowly expanding mild welfare state is here to stay" (741). Levine argues that this is the result of the emergence and persistence of a "New Deal consensus" regarding the responsibility of government to secure macroeconomic stability and individual security that survives from its origin in the 1930s to today. The questions that arise are why this consensus emerged when it did and why it persists.

In my paper I attempted to explain why the reemergence of the rhetoric and practice of welfare reform had occurred, and I argued that an answer could be found in ideas developed by Karl Polanyi in The Great Transformation (1944). Polanyi had argued that the logic of the self-regulating market required the denial of a right to life outside the market. This was affirmed in the passage of the New Poor Law and in the rhetoric and practices of current welfare reform. However, Polanyi's Great Transformation also provided us with an explanation of the factors which underlie the emergence of the New Deal consensus in the 1930s, the persistence of the welfare state, and the largely rhetorical impact of the principles of 1834 on current welfare reforms.

In The Great Transformation Polanyi put forth the thesis that the market system could be neither created nor sustained without government intervention. The "stark utopia" of the self-regulating market system could not survive without intervention designed to ameliorate its destructive effects (3). To demonstrate this claim Polanyi argued that the capitalist system could be characterized as operating under the influence of two separate organizing principles which he termed "the double movement" (132):

The one was the principle of economic liberalism, aiming at the establishment of a self-regulating market, relying on the support of the trading classes, and using largely laissez-faire and free trade as its methods; the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those most immediately affected by the deleterious action of the market--primarily, but not exclusively, the working and the landed classes--and using protective legislation, restrictive associations, and other instruments of intervention as its methods.

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