Chapter 2: Welfare
2.2 How Freedom was Lost in America
We have seen how matters of human welfare in a free society should only stem from the legal institution of the family and private insurance arrangements. And we have seen, now, how that’s the way it used to be in America, and people didn’t starve because of it. So what changed? Why the monumental change from freedom to coercion, free markets to taxation and fines, from families and parents to a paternal State? Why?
We’ve already mentioned, in our discussion of education, the rise of the secular/Unitarian belief system and with that the rise of the belief in remedial social institutions—the asylum, prison, alms house, and public school—aimed at improving the individual through experts controlling his environment. And with this, the constant cry for government power to impose these institutions as necessary; and then as they failed over and over, the constant cries for greater control and larger budgets. We talked about all of that and the anti-Christian worldview upon which it is built.
What this shows is that there was already a mentality at work among a small, self-dubbed elite who believed in using government control to “improve” mankind as a collective society. This is in America as early as the 1830s with Horace Mann and others, and it grew from there.
Two important things (among others) would eventually happen that would open the floodgates to this type of thinking among government officials. The first was the creation of the first modern social welfare state under Otto von Bismarck in Germany in 1883, and the precedent that set. While Bismarck was not necessarily a hero on American soil, the same viewpoint was systematized in America a decade later when a sociologist named Lester Frank Ward revolutionized the field with his work entitled Dynamic Sociology. This massive 1200-page work provided a completely new version of social Darwinism that demanded a paternal State, and the view eventually swept American academia and politics. And when it came time later to implement Ward’s views on a massive scale, the propagandists immediately harkened back to Bismarck as a defense of their views!
Bismarck’s Dubious Legacy
So let us first take a look at what happened in Prussia under his majesty the Chancellor, Otto von Bismarck. As I said, Bismarck’s welfare program began in 1883. In Europe, obviously, there were already many socialist and communist movements. The Communist Manifesto of Karl Marx and Friedrich Engels had already been published in the German language in 1848, and there were certainly many cells of socialist and communist thinking at the time. The irony is that Bismarck installed his systems allegedly as a defense against the growing demands of socialists and communists—all the while arguing that his system was in fact not socialism, but simply welfare, or as he put it, “practical Christianity legally demonstrated.”1 Many critics of his system pointed out the obvious—that Bismarck’s measures to impose social insurance and health insurance via State taxation (up to a third of one’s income) was itself socialism which he pretended to combat. He gave a speech in defense of his measures denying it and brandishing the label of “practical Christianity.” He used this label from then on and often. A famous professor of German history at Harvard in the early twentieth century saw the hypocrisy very clearly. He wrote that Bismarck “was the sworn enemy of the Socialist party—he attempted to destroy it, root and branch; yet through the nationalization of railways and the obligatory insurance of workmen he infused more Socialism into German legislation than any other statesman before him.”2 Eventually, Bismarck himself would refer to his “practical Christianity” as “our State Socialism”3—which, of course, everyone already knew.
And since everyone knew this, they also knew it was really no defense against the more revolutionary Socialists and Communists. Instead of stopping the trend, it put it in motion and increased it; and even worse, it turned the very people who opposed it into dependents upon it. There was no way out after that. Interestingly, one guy who saw these effects very clearly was perhaps the most famous biographer of Adolph Hitler. William Shirer in his book Rise and Fall of the Third Reich writes this,
To combat socialism Bismarck put through between 1883 and 1889 a program for social security far beyond anything known in other countries. It included compulsory insurance for workers against old age, sickness, accident and incapacity, and though organized by the State it was financed by employers and employees. It cannot be said that it stopped the rise of the Social Democrats or the trade unions, but it did have a profound influence on the working class in that it gradually made them value security over political freedom and caused them to see in the State, however conservative, a benefactor and a protector. Hitler, as we shall see, took full advantage of this state of mind. In this, as in other matters, he learned much from Bismarck. “I studied Bismarck’s socialist legislation,” Hitler remarks in Mein Kampf (p. 155), “in its intention, struggle and success.” (William L. Shirer, The Rise and Fall of the Third Reich: A History of Nazi Germany (New York: Simon and Schuster, 1960, 96.)
Bismarck’s system became the model not only for Hitler later, but for Welfare States all over the world. Politicians and activists studied its laws, its methods, how it was passed, the way rhetoric and euphemisms were used to sell it to the public—for example, in this country, the taxes used to fund it have been called “contributions” from day one, by design. It’s not a “tax,” it’s a “contribution.” It’s not “socialism,” it’s “practical Christianity.” These are word games used to deceive people. But it’s common practice. When Bismarck-style programs finally got a firm foothold in America, in the 1930s under FDR’s so-called “New Deal,” it was openly admitted that Bismarck was the model. One biographer and propagandist of FDR’s administration wrote,
Social security is not a new idea. . . . Other nations of the world are far ahead of the United States in battling this important economic problem. Von Bismarck, the founder of the German Empire, nearly fifty years ago launched a plan for social security. The Iron Chancellor, who could hardly be called the precursor of radicalism, was only putting into effect sentiments that had been uttered by statesmen before him.4
This open acknowledgment remains even today on a page on the Social Security Administration’s own website.
Socialism and Social Darwinism
So that was the influence of Bismarck. Secondly, there was the influence of the new version of social Darwinism promoted by Lester Frank Ward. His magnum opus Dynamic Sociology was published in America in the same year Bismarck passed his first social insurance measures. Now up until Ward, social Darwinists had simply taken Darwin’s biological theory of natural selection and applied it to the market place and the political sphere. In particular, the idea of “survival of the fittest” was used by men like Herbert Spencer in England and William Graham Sumner in America to argue for laissez-faire markets. Competition should rule the day and there should be no artificial leveling of results. The winners win and the losers lose, period. The fittest survive and the unfittest don’t. That’s nature and we shouldn’t try to change it.
And while that philosophy will resonate in general with most lovers of free markets, it had the unfortunate quality of harshness and lack of charity that made for bad PR. Frankly, the field was ripe for some progressive to come along with a system that sounded more like it had everyone’s best interest in mind, and not just that of the fittest. This is exactly what Ward did.
Ward’s theory said that yes, society does evolve just like Darwin taught of biological life, but there was one important qualifier: with the evolution of man and his complex brain, the ability to reflect, reason, and plan has brought about a change in the nature of evolution. No more is it to be a blind natural force, but man has been endowed by evolution with the status of director and planner of evolution. So now, instead of ramming and trampling each other, man was to build institutions for governing and improving the race, and thereby to advance the species.
This theory suited the reforming elites and progressives just fine—they had always since the 1830s seen themselves as the reformers and directors of society. Now Ward provided academic justification for their actions. Ward soon dominated the field of sociology, academic curricula, and was made the first president of the American Sociological Association. His line of thinking began to produce a whole new generation of academic and political leaders who believed in progressive intervention in society via government power.
There was an immediate effect on the administration of Teddy Roosevelt, and even more so for Woodrow Wilson—especially during the War State. From that point on, the academics and activists began to pour out of the universities and into bureaucratic positions and think tanks funded by organizations like the Rockefeller Foundation. These formed a tireless army behind the scenes writing legislation and scheming ways to get it passed as soon as possible.
Harry Hopkins, a close adviser to FDR and chairman of the Works Progress Administration overseeing public works, exemplified the mentality of a ruling elite cramming legislation through in a time of crisis. He was quoted in a New York Times article in 1934:
You aren’t going to get health insurance if you expect people to do it voluntarily. I am convinced that by one bold stroke we could carry the American people along not only for health insurance but also for unemployment insurance. I think it could be done in the next eighteen months.5
FDR got his Social Security Act passed in 1935, but unlike Bismarck, FDR only got through one main piece of the social welfare—Social Security. The bureaucrats and activists, however, who drew up the law had much more in mind. They just had to wait to see it get passed. In the mean time, even the Social Security Act was being challenged as to its constitutionality.
Interestingly, the original bill as introduced actually included a mandate for lawmakers to begin working on similar measures for health insurance, but this was written out of the bill during committee. This meant that Congress expressly removed this authorization for further Congressional studies from the original Social Security Act. But this did not stop the activists. And Congress had made one important oversight: it forgot to remove three little words—“and related matters”—from a pertinent section of the bill, and the liberal activist Isidore Falk would leverage this phrase as statutory authority to conduct continuing researches and publications regarding health insurance and other forms of social control.
In fact, the socialists didn’t even wait for the Supreme Court ruling: they already had papers and laws written ready to go when that time came. Marjorie Shearon, who was an aid and an insider to the bureaucrats during this time (and who, by the way, later repented of what she had been a part of and defected, writing a book about it) relates that “With the validation of the Social Security Act, the bureaucratic world within the agency went wild. Expansionist plans, hidden in desk drawers and files up to that time, came out boldly into the open.”6
Immediately after the Supreme Court validated the Act in 1937, Shearon writes that her boss, who was Isidore Falk himself at the time, turned to her and said this:
I want you to study and make yourself an expert in compulsory health insurance. Old-age and unemployment insurance are now here to stay. They will be modified and expanded, but health insurance will be the great new advance in social insurance. It’s the coming thing and *we* will draft the new laws.7
In 1946, Falk published a booklet in the Congressional Record called Medical Care Insurance.8 Shearon describes that this book “must be regarded as the Mein Kampf of the nationalization of American Medicine.”9 It contained
the most comprehensive description of the plans to capture every aspect of health and medical care in this country that has ever been published. It explained the necessity for Federal control of personal health services, the unification of preventative and curative services, medical education, medical research, hospitals, health centers—everything, all under the control of one agency and, though not stated explicitly, there was the implication that one man would be the Czar of Medicine: Isidore S. Falk. ((Shearon, 150.))
The goal was a total socialized State. A lady named Jane Hoey, who was Director of the Social Security Board’s Bureau of Public Assistance, published a book called Common Human Needs in which she stated it plainly. She wrote, “Social security and public assistance programs are a basic essential for the attainment of the socialized state envisaged by democratic ideology, a way of life which so far has been realized only in slight measure.”10
From this we learn at least two things: first, the people who wrote and pushed the laws saw them plainly as measures of socialism—a “socialized state”; and second, they’re never satisfied until they’ve reached a fully socialized state. Until then, they keep working, and the end justifies the subversive, lying, elitist means.
The “Ratchet Effect”
This brings up an important factor of leftist ideology and practice of which we should all be aware: it is the “ratchet effect.” If leftists can’t get the full plan they want, they will fight for as much of it as they can get, knowing that once it’s in place, people will get addicted to the benefit, and as much as gets put in place will never be rescinded. This forms the starting point for the next piece of legislation. This is how many of them viewed their work in explicit terms. Sydney Webb, who was one of the most active and influential socialists in the Fabian group in England a century or more ago, said it openly: “No nation having once nationalized or municipalized any industry has ever retraced its steps or reversed its action.”11
This is exactly what we find in the socialized takeover of America: socialism by small creeping increments. The major encroachments, of course, came in 1935 with Social Security and then in 1965 with the Medicare expansion. But also we should include Bush’s expansion of Medicare in 2003, and then Obamacare in 2010. But even these major increments don’t tell the whole story. You originally had the welfare as part of Indian pacification (1840s already), but the slippery slope really began with Union Civil War veterans who had been wounded in battle; then widows and orphans of these veterans, then all Union veterans, then all their families, then their extended families. Pretty soon, labor unions began to see the prospect of collective agitation for welfare payments during recession. Then WWI hit and Wilson’s War State centralized everything and set a precedent for what was to come in this country. It was creeping increments, creeping increments—little here, little there—until the trap was closed. We took the cheese, and now we’re in the trap. . . .
Except, it doesn’t have to be a trap. There is still a beginning of a way out. We’ll talk about it in the next section.
- Quoted in Marjorie Shearon, Wilbur J. Cohen: The Pursuit of Power, A Bureaucratic Biography (Marjorie Shearon, 1967), 5. [↩]
- Shearon, 4. [↩]
- Moritz Busch 2:483. [↩]
- P.J. O’Brien, Forward with Roosevelt (1936), 84. [↩]
- Harry Hopkins, quoted in Shearon, 48. [↩]
- Shearon, 43. [↩]
- Isidore Falk, quoted in Shearon, 49. [↩]
- Senate Committee Print No. 5 of 1946; 79th Cong., 2d Sess. [↩]
- Shearon, 150. [↩]
- 1945, p. 34; quoted in Shearon, 34. [↩]
- Quoted in Shearon, 1. [↩]