The Decisionist

Sovereign is he that decides...

Dec 31

The benefits and burdens of social policy

Will Wilkinson seems to think that Larry Bartels’s book Unequal Democracy is vague:

The chapters of "Unequal Democracy" that are devoted to specific policies concern the Bush tax cuts, the estate tax, and the minimum wage. But Bartels does little in those chapters to illuminate how it is exactly that increased government revenue or a bump in the minimum wage would actually help. Again, what are the mechanisms? A trillion dollars in tax revenue certainly doesn’t help disadvantaged families in Chicago and Miami when the government squanders it dropping bombs on disadvantaged families in Iraq and Afghanistan. Is the problem really that there is too little money in the system to effectively finance programs that would really help the poor, or is the problem that the money that is in the system is captured and misspent by the various interest groups that make up both parties?

With respect to the minimum wage, Bartels argues that the consensus among economists that wage floors harm the poor has eroded somewhat. (But see Neumark and Wachser.) Yet in light of the far-from-entirely-eroded professional consensus, it would have been nice to see some evidence that the minimum wage actually helps. Instead, Bartels emphasizes that the issue has considerable “symbolic importance” because the erosion of the real value of the minimum wage “stands as a dramatic example of the American political system’s unresponsiveness to public sentiment.”

Wilkinson is right that spending can’t be all that social policy is about. (To paraphrase someone, No one ever fought for spending.)

But why do the “mechanisms” that make possible the “help” that policies such as the minimum wage aim to provide matter here? Wilkinson suggests that “mechanisms” help to identify the “actual” benefits that policies confer. Taxation may in fact (usually) embolden state capture by interest groups; minimum wage laws, likewise, may (usually) really harm the poor (and, presumably, benefit only, say, unions or Democrats). Yet, such “mechanisms,” even if true descriptions of some places and times (though I can’t make out why that would be the case for wage floors), could, I think, only help to show how policies have tended to be implemented. They wouldn’t—or at least I can’t see how they would—support the conclusion Wilkinson seems to want to draw—that a certain common view of what is possible (that tax revenue could be spent on redistribution and not on war, and that a minimum wage policy could be enacted that actually redistributed) could be discredited. (Describing the second as a “possibility” in fact strains my head, as there seems little, if any, question that minimum wage laws have helped poor people—though that is a topic for another post.)

There are, admittedly, good reasons to question whether the American government uses its resources well or makes good on its own policies. (See here, for example.) But I think we need to look elsewhere than “mechanisms” (or Wilkinson’s definition of that term) if we want to give them their due.

—Felix Holt


  1. decisionist posted this