Uniquely among the world’s rich countries, the United States lacks a comprehensive, universal social insurance system. This is largely due to ideological opposition by Republican Party elites. It took nearly seventy years for Democrats to achieve the expanded, still-less-than-universal coverage provided by the Affordable Care Act—against unanimous Republican opposition. Republicans have continued to sabotage the ACA, successfully blocking the extension of Medicaid coverage in nineteen states. The GOP’s primary plan for Medicare is to shift costs to the elderly. It has resisted full funding of Social Security Disability Insurance and insists that the only acceptable plan for ensuring the financial stability of Social Security is to cut benefits. Meanwhile, thirty-three states, nearly all GOP-led, have cut workers’ compensation programs since 2003, often drastically.
What accounts for this extreme hostility to social insurance? Social Security and Medicare are popular programs, even among the GOP’s base. Republican leaders, however, tend to think of social insurance as a socialist or communist scheme designed to undermine private property and free markets. Their arguments can be traced to Austrian economist Friedrich Hayek, whose 1944 book The Road to Serfdom warned that the emerging social democratic regimes of Europe were stepping onto a slippery slope to totalitarianism. Adapted into an illustrated booklet distributed widely by General Motors in the mid-1940s, The Road to Serfdom has fueled American opposition for decades now. Ronald Reagan, probably inspired by Hayek, made a recording opposing Medicare for the American Medical Association in 1961, predicting that it would lead to the state dictating to people what jobs they must perform and where they must live and work.
The ironies here are rich. Conservative criticisms of social insurance reflect profound misapprehensions of its relation to private property. Social insurance, in both theory and practice, arose in defense of private property and against communist and socialist threats. Exploring these origins is essential now because they contain important lessons that will help us strengthen social insurance to meet the challenges of post-industrial capitalism.
Thomas Paine, the great American revolutionary, proposed the world’s first realistic plan to abolish poverty. What he devised were universal social insurance and stakeholder grants, outlined in the 1797 pamphlet Agrarian Justice. (The relation of this work to later programs is not lost on the Social Security Administration, which reproduces the text on its website.)