|Peter Boettke|

In the latest issue of Foreign Affairs, Lane Kenworthy has an article "America's Social Democratic Future: The Arc of Policy is Long But It Bends Towards Justice" -- which is a teaser for his new book, Social Democratic America.

The argument in the article is neither new nor novel, though I would argue that it is wrong-headed even if poetically written --- consider the ending paragraphs:

But by filling in the gaps in the public safety net, the federal government will improve economic security, equal opportunity, and shared prosperity for most Americans in spite of these changes. A social democratic America will be a society with greater economic security and fairness. Its economy will be flexible, dynamic, and innovative. Employment will be high. Liberty will be abundant. Balancing work and family will be easier. Americans will pay higher taxes than they currently do, but the sacrifice will be worth it, because they will receive a lot in return. The United States has come a long way on the road to becoming a good society, but it still has further to travel. Happily, its history and the experiences of other rich nations show the way forward. One reason the United States is a much better country today than it was a century ago is that the federal government does more to ensure economic security, equal opportunity, and shared prosperity. In the future, it will do more still, and the country will be better for it.

The leftward shift in Amercia's future polity is due to the attractiveness of the Nordic states. But Kenworthy fails to point out that the Nordic countries faced a fiscal crisis in the early 1990s and had to adjust their policies, and that on the Economic Freedom Index, these countries often (not all) rank better than the US. Furthermore, if you look at this study by the economic historian Price Fishback on social welfare expenditures in the US and the Nordic countries. As Fishback argues, the common perception about the generiousity of the Nordic countries relative to the US does not fit the facts of the matter.

In short, the US doesn't have a social democratic future, it already is a social democracy. And, with that were are also in a fiscal mess --- as all the countries of the social democratic west are. See The Economist feature article from March 17, 2011. And this is not even doing the fiscal accounting the way that Laurence Kotlikoff suggest we should.

The situation as is, is unsustainable and thus economically precarious and the most vulnerable again will be the least advantaged in society so it is also extremely unjust in final judgement.

For those who work at the intersection of political economy and social philosophy, articles such as Kenworthy's represent an invitation to serious thinking about the institutions of governance and the relationships between, and responsibilities of, citizens in a free society. The rhetoric of the arc of policy bending toward justice which touches a cord in so many that it often results in a disregard for facts, means those who want to engage this conversation must be cognizant of the power of justice-speak. In many ways, this is the power behind John Tomasi's Free Market Fairness and the Bleeding Heart Libertarian project. But it was also the project almost 60 years ago, which James Buchanan initiated with the Thomas Jefferson Center for the Study of Political Economy: "Political economists stress the technical economic principles that one must understand in order to assess alternative arrangements for promoting peaceful cooperation and productive specialization among free men. Yet political economists go further and frankly try to bring out into the open the philosophical issues that necessarily underlie all discussions of the appropriate functions of government and all proposed policy measures. They examine philosophical values for consistency among themselves and with the ideal of human freedom."

In contrast to Kenworthy, it is my sincere hope that as we discuss the responsibilities of the state, we also have a serious conversation about the resources that the state will utilize --- the source of those funds, the impact of securing those funds on the incentives of economic actors, and the consequences of "pretend securing and payment" of those funds. The era of the 'economics of illusion' must come to an end, and once we face those cold hard facts, then we will release that the discussion will have to shift back again to the responsibilities of the state with respects to its citizens, and the responsibilities and obligations of citizens to themselves, their families, their communities. The futre of America can indeed arc toward justice, but justice entails that we live in a world of free and responsibility individuals, who have the opportunity to prosper in a dynamic and vibrant market economy, and who choose to live in, and be actively engaged with, caring communities.

Lets have a serious public conversation about what that sort of America will look like.