The scandals erupting in Minnesota offer another example of how easy it is for generous U.S. welfare programs to squander billions of dollars. And while it’s important to hold accountable the individuals who figured out how to scam the system, until the system itself is changed, for every billion-dollar fraud that is uncovered, others will take their place. An endless game of whack-a-mole will continue.
However, the system can be changed, and in doing so, it will replace incentives toward corruption with incentives that reward enterprise and hard work.
America’s welfare system is justified by a moral appeal to compassion, and today that is expressed politically as social democracy, a pair of words that sound uplifting and selfless. The problem with social democracy, however, is that the incentives that fuel its application are not selfless. Across the world and throughout history, the results of too much “social democracy” are the same: people are not uplifted, the goals of compassion remain unfulfilled, and as millions of people descend into poverty and dependence, a handful of elites are enriched and empowered.
What is growing in America, from Mamdani’s New York City to Karen Bass’s City of Los Angeles, is a variant of social democracy that hasn’t yet managed to destroy the American economy and demolish the American middle class, but they’re well on their way. As Cea Weaver, Mamdani’s appointee to head the Mayor’s Office to Protect Tenants, recently said, “We’ll transition from treating property as an individual good to a collective good. Whites especially will be impacted.” How does that end well?
But is there a variant of social democracy that can uplift society?
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