Today's op-ed page of the Wall Street Journal sheds more light on how conservative elites thoroughly misunderstand and misrepresent the role of government in a decent society. Arthur C. Brooks, president of the American Enterprise Institute, a conservative think tank, makes an empirical claim that government social spending lowers happiness of the recipients by making them "dependent on unearned resources." This claim is false, and easily shown to be so, yet it is also interesting for what it shows about the confused opinions of the Republican elite.
The claim is false because the countries that have the highest spending on social programs are far and away the happiest. We looked at this earlier this year in the World Happiness Report, which collected the best cross-country data on this very question. People are asked to report on their life satisfaction or what is sometimes called "subjective wellbeing." There are two kinds of questions. The first asks people to place their lives on the rungs of a ladder, from the lowest rung (0) to the top rung (10). The second asks people how satisfied they are with their life "as a whole these days," again on a scale from 0 to 10 in the case of the Gallup World Poll.
So who comes out on top: the countries with the lowest "dependency" on social programs? Just the opposite! The social democracies are far and away the happiest places on the planet. In the Gallup World Poll ladder question (Table 2.3), the happiest countries are Denmark, Finland, Norway and the Netherlands. The United States ranks 11th. In Gallup's "life satisfaction" question, the leaders are Costa Rica, Denmark, Iceland and Norway. The U.S. comes in 10th. In the World Value Survey on life happiness, the leaders are Iceland, New Zealand, Denmark and the Netherlands. The U.S. comes in 23rd.
The leading countries do the very opposite of what Brooks and his conservative colleagues advocate. The leading countries tax heavily to provide social outlays, for pre-school, health care, education, family support, school-to-work programs, elderly care, and more. They end up with economic prosperity that is broadly shared, very low poverty, low unemployment, social fairness, lower health care costs than in the United States, longer vacation times, guaranteed maternity and paternity leave, better pre-school and many more benefits that make people happy, and help them to raise happier and healthier children. In short, happier places are happier because they combine economic prosperity with social trust, a sense of equality, leisure as well as work, and good and honest governance.
It's not entirely surprising that Brooks gets things so wrong. His whole reasoning is based on two premises that are so bizarre as to be almost unbelievable. First, Brooks says that lottery winners are less happy because they did not work to earn their windfall. He then equates social spending with winning the lottery, and since they are both "unearned" in his view, he claims they are therefore both destructive of human happiness.
Brooks is right to shine a light on all of the sad cases of people who have won tens of millions of dollars in lotteries only to see their lives fall apart. This perverse outcome is indeed sociologically interesting. It tells us that contrary to the conservative mania to help the rich, being super-rich is no sure path to happiness, and huge life-changing windfalls from a lottery are probably even less sure, since one's whole life and social context are turned upside down. Yet it tells us nothing reliable about government programs for jobs, disability, health care, social security, education, or any other social program. To equate these programs with Powerball is daft if not worse.
Brooks reports that going on the welfare rolls is correlated with feeling "inconsolably sad over the past month." Well, duh. Perhaps, Mr. Brooks, their life has taken a hard turn. If the sadness were merely the result of inscribing in a welfare program, they wouldn't do it. The true sadness is that "welfare" support as an object of Brooks' concern is passé. America has almost no welfare system. The total spending on the Temporary Aid for Needy Families is 0.2 of 1% of GDP.
Second, Brooks terms social programs as unearned income. That's a pretty grotesque generalization and denigrates people who draw on these programs and their moral value. In what moral sense is Social Security, or Medicare, or unemployment insurance, "unearned"? Social security recipients have worked throughout their lives and been making payroll contributions; the same with Medicare recipients. Unemployed workers collecting UI have been on the job during a "base period," and their employers have been making contributions into the unemployment insurance system, which indirectly are a levy on wages. Whether these systems are actuarially balanced is a real issue for fiscal policy. To deem these programs to be "unearned income" is nasty, false, and demeaning.
If we were to do a serious look at whose income is unearned, we would surely start at the top, not at the bottom. CEO salaries, Wall Street bonuses, lobbyists perks, are all examples of a broken ethical system, at times little different from organized crime. Indeed, every day brings news of more crimes on Wall Street. Yet the top brass has taken home tens of billions of dollars of undeserved and ill-gotten gain. On this I'm with Brooks. Let's take this unearned income away from the super-rich through proper taxation and regulation, and to follow Brooks' logic, help make the rich happier as we close the budget deficit as well.