Race, Money, and the American Welfare State

Race, Money, and the American Welfare State

Race, Money, and the American Welfare State

Race, Money, and the American Welfare State

Synopsis

The American welfare state is often blamed for exacerbating social problems confronting African Americans while failing to improve their economic lot. Michael K. Brown contends that our welfare system has in fact denied them the social provision it gives white citizens while stigmatizing them as recipients of government benefits for low income citizens. In his provocative history of America's "safety net" from its origins in the New Deal through much of its dismantling in the 1990s, Brown explains how the forces of fiscal conservatism and racism combined to shape a welfare state in which blacks are disproportionately excluded from mainstream programs.

Brown describes how business and middle class opposition to taxes and spending limited the scope of the Social Security Act and work relief programs of the 1930s and the Great Society in the 1960s. These decisions produced a welfare state that relies heavily on privately provided health and pension programs and cash benefits for the poor. In a society characterized by pervasive racial discrimination, this outcome, Michael Brown makes clear, has led to a racially stratified welfare system: by denying African Americans work, whites limited their access to private benefits as well as to social security and other forms of social insurance, making welfare their "main occupation." In his conclusion, Brown addresses the implications of his argument for both conservative and liberal critiques of the Great Society and for policies designed to remedy inner-city poverty.

Excerpt

[The American War on Poverty failed because it was] presented as a proNegro enterprise; it [was] not seen as a universalist problem of inequality, social injustice, exclusion. . . . How to include poor people, and especially poor coloured people, in our societies, and at the same time to channel proportionately more resources in their favour without inducing shame or stigma, remains one of the great challenges for social policy in Britain and the USA.

--RICHARD M. TITMUSS

The state lives as an economic parasite. It can withdraw from the private economy only as much as is consistent with the continued existence of . . . individual interest in every particular socio-psychological situation. In other words, the tax state must not demand from the people so much that they lose financial interest in production or at any rate cease to use their best energies for it.

--JOSEPH SCHUMPETER

In the four decades between the economic depression of the 1930s and the political malaise of the 1970s, the governments of industrialized societies used broadly inclusive social policies and full-employment economies to balance capitalist development with a measure of security and social justice. Private wages were supplemented with a social wage, the fear of an impoverished old age was banished, and the absence of adequate health care and housing was remedied for many people. The situation in the United States was no exception. Despite its reputation as a welfare state laggard, America made progress in extending social protection to its citizens, especially senior citizens and the poor. For the elderly, policymakers created a system of public social insurance based on social security pensions and Medicare that rivals the generosity of European welfare states and has eliminated extreme poverty among senior citizens. Means-tested cash payments and in-kind transfers (food and medical care) raised a substantial number of the rest of the poor above the poverty line.

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