By Jonathan J. D'Oleo
Happiness, according to the American Declaration of Independence, is the only inalienable right to be pursued rather than freely given. Granted one has life and liberty, pursuing happiness using such endowments as vehicles thereto is not only fair, it is becoming unto the development of personal character and, on that basis, instrumental unto the greater good of society. In actual fact, however, whereas life is, undeniably, a perennial condition of man until his death, liberty is neither clearly defined nor perennially present in all aspects and stages of life itself.
Jean-Jacques Rousseau rightly said that “man is born free, but is everywhere in chains.” As freely given as it may be, liberty is, therefore, indisputably conditioned, for better or for worse, by a wide range of circumstantial realities. Some of these realities, such as nationality, race and gender, are inescapable. Others, arguably the great majority, are of one’s own choosing. All, nonetheless, affect the lives of men and, as a consequence, their ability to pursue happiness on leveled ground.
Government, in what has been referred to as market de-commodification and family de-familialization, seeks to emancipate its citizens from the vagaries of economic and life dynamics. By way of providing society with a platform upon which to live without the distressing prospect of being deprived of life’s basic necessities and developmental opportunities, the state aims to live up to its raison d’être which is, as defined by John Adams, the happiness of society.
In this article I argue that government implementation of certain de-commodification and de-familialization related policies as a means to the happiness of society, tackle disadvantageous circumstantial realities peripherally via entitlement programs and, in so doing, miss the core of the predicament, which is, at many levels, a matter of individual empowerment, not government entitlement.
According to Abraham Maslow, ready access to life’s basic necessities in the physiological order constitute the foundation of human development. Upon this foundation, Maslow builds a whole range of human existential demands. Vertically integrated in a hierarchical pyramidal progression of sorts, these demands feed on one another in a bottom-up fashion wherein the satisfaction of an underlying order of demands serves as the foundation for the next order of demands to be satisfied. Worthy of mention is the fact that satisfactorily meeting one order of demands is a prerequisite to move up onto the next set of needs in the pyramid.
In the segment pertaining to physiological necessities, Maslow includes the demand for basic goods such as food, water and sleep. Resting upon this category are safety concerns relating to health, employment, family and property. Finally, the top three segments of the pyramid are - in ascending order - love, esteem and self-actualization. The latter is the stage at which one achieves full potential after having met a series of underlying physiological and psychological needs. In maslovian terms, self-actualization is, ultimately, the supreme culprit of human happiness.
With the happiness of society being the chief raison d’être of government, policy makers’ top priority is to guarantee citizens access to life’s basic physiological and psychological necessities. In an effort to achieve this, governments around the world have morphed into welfare states.
Acting in this capacity, the public sector serves as a wealth redistribution machine and guarantor of basic provisions, equal opportunity and protection for all members of society. The taxing power of the state enables it to collect resources to perform these and many other public duties.
Under a progressive fiscal structure, which is the one in place in virtually all welfare states, tax collections seek to bring some degree of balance to the unequal redistribution of wealth in society. By way of imposing taxes at an increasing rate in relation to income and profits, government redistributes a portion of the collected funds to segments of the population that are in a state of indigence or have a significant risk of falling into such a condition. Given that the marginal propensity to consume decreases as income increases additional earnings yield less satisfaction unto wealthy people than they do unto individuals of scant resources[i]. Progressive taxes in themselves, therefore, help undermine societal entropy and thereby promote some degree of homeostasis in economic systems.
Tax monies are allotted to finance programs that cater to the needs of retired, disabled, poor and unemployed persons. Entitlement programs such as Social Security, Medicare and Medicaid alongside other social assistance programs like those administered by the Department of Health and Human Services in the USA, constitute the core of welfare states in their enterprise to preserve, protect and defend the well-being and well-doing of society at large.
Like almost all other government functions, these social assistance programs run inorganically. Money is the lifeblood of nearly every welfare undertaking. That being so, the operation, expansion and overall success of such programs is inextricably bound to fiscal health, which, in turn, is a function of market dynamics and economic performance.
Interestingly enough, market dynamics are what welfare states fight against. Through the process of worker commodification, individuals are forced to conform to the means of production, distribution and exchange in industrial systems. In economics such means are equivalent to the forces of supply and demand.
Given the uncertainty built into the behavior of such forces, the welfare state, through its many programs, seeks to emancipate the wellbeing of individuals from them. Providing non-market solutions, like unemployment insurance and minimum wage standards, the government effectively decommodifies individuals from the market and thereby position them to influence the means of production as opposed to being grossly commodified and subservient quietly unto them[ii].
Under the shelter of the welfare state, individuals have the possibility of engaging in the pursuit of life unshackled from the staggering winds of unexpected market swings. On maslovian grounds, the individual walking on the rope of subsistence with a safety net underneath him is more likely to get onto the next rung of the ladder that leads to self-actualization. Whereas hitching the means of subsistence to the veritable rollercoaster of market volatility is to be characterized as a suicidal and inhuman thing to do.
Capitalists would argue that the existence of safety nets incentivizes individuals to shirk from their responsibilities and/or subvert the system. In other words, social assistance programs create moral hazards that are ultimately detrimental unto the individual, the state, and greater society. Knowing that the state will intervene to make ends meet, members of society are more likely to take on greater risks as they engage in life.
Free market capitalists contend, furthermore, that although individuals take these risks, they do not assume full responsibility for the consequences of their actions, but rather transfer the burden unto the state or, more specifically, the taxpayer. With certain welfare protections in place, individuals are, thus, emancipated not only from the market, but also from responding to the negative outcomes that arise as a result of individual behavior. Consequently, individuals will also be more likely to follow the path of least resistance, drag their feet, and recurrently milk the government to its bones even as they remain, in absolute terms, stagnant in their pursuit of happiness.
Nevertheless, an overwhelming body of research continues to make the case for decommodifying individuals from the market on the grounds that free market capitalists argue strictly based on theoretical assumptions devoid of empirical groundings.
Pure markets operate under the assumption of symmetric information and perfect competition. The leading coefficient in textbook explanations of economic models is, almost unequivocally, a disclosure that says “all other things being equal.” Not surprisingly, in the real world very few things can be held constant. Thus, when economic models are brought into the fray of sociopolitical and psychological realities, its clear-cut theoretical assumptions tend to go awry.
Information asymmetry is a palpable thing in market economies. The owners of the means of production, distribution and exchange usually have more information than the general public regarding their business dealings and the economy overall. Such information can be used against the best interest of consumers as capitalists seek to maximize profits in an uneven playing field. Just as there is imperfect information in free markets, there is imperfect competition which gives rise to monopoly and monopsony power. This power can, in turn, be exercised over labor, land, capital, staple foods and other goods fundamental to the existence and development of individuals and society in general.
In economic theory these empirical shortcomings are called market failures. To address them, public sector intervention is necessary. Traditionally governments have sought to correct these inefficiencies by way of market regulations and laws. The Glass-Steagall Act is a classic example. Enacted in 1933 in response to the market failures that led to the Great Depression in the United States, this act introduced a number of measures to regulate speculation.
One of the major anti-speculation measures introduced by Glass-Steagall was the separation of commercial and investment banking. This measure was eventually repealed in 1999 by the Gramm-Leach-Billey Act which allowed, once again, the concomitant interaction of banking, securities and insurance operations all under one umbrella.
Capitalizing on the provisions of the latter Act, financial services companies acquired, merged, spun-off and coalesced to form conglomerate enterprises in the name of efficiency, effectiveness and big profits. The reintegration of financial services operations, this time aided by twenty-first century technology, led to the creation of a wide gamut of synthetic products such as CDOs, CMOs and CDSs.
Highly speculative in nature, these products ushered in a financial revolution. By the year 2005 that financial revolution was already displaying explicit bubble-like features in the mortgage industry. In the summer of 2008, the world was dealing with a huge financial bubble that would reach its popping point in October that year and create the worst economic crisis since the Great Depression.
The devastating effects of what has become known as the Global Financial Crisis has reached well beyond economic systems. Record high unemployment rates are not just figures on display in the latest jobs report on cable news; they are lives on the edge of subsistence.
Economic insecurity and uncertainty about the future put individuals under great amounts of stress as they worry about falling further down and hitting the rock bottom of Maslow’s pyramid. Or worse, people already living on the lower pyramidal levels before the crisis start engage in antisocial behavior as a means of escaping their plight.
Welfare advocates could rightly use the Global Financial Crisis as a case in point to buttress their push for expanding market decommodification policies. The drivers of the crisis, however, came from both the private financial sector and the welfare state itself.
Since the early 1990s under the Clinton administration, the United States began implementing affordable housing policies through two Government Sponsored Enterprises known as Fannie Mae and Freddie Mac. According to a number of financial and policy analysts, these agencies pressured financial services companies into lending money under sub-prime standards so that poor people could afford buying a home.
Financial services companies catered unto the request of government officials by creating the aforementioned synthetic financial products that served as the structural basis for the Global Financial Crisis. A 2011 official government report declared that Fannie & Freddie “contributed to the crisis, but were not the primary cause.” Moreover, that same report, issued by the Financial Crisis Inquiry Commission, acknowledges GSEs as “participants in the expansion of subprime and other risky mortgages” while also arguing “they followed rather than led Wall Street and other lenders into subprime lending.”
As the mortgage and financial bubbles were in the making, the poorest people in society were going up Maslow’s pyramid reaching, perhaps, the level of security as it relates to property and employment. Security being a key stepping stone to reaching the maslovian level of esteem and self-actualization, one can assume that overall happiness in society had increased during that period of artificial economic bonanza. Such rise, however, was short-lived and probably led many people into happiness levels inferior to the ones they were in before the period of economic boom originally began.
In “Happiness, Lessons from a New Science”, Richard Layard argues that people are more sensitive to loss than to gain. Hence, even if an individual is still better off in absolute terms after the financial crisis as compared to his situation before the artificial bonanza began, he is very likely to be less happy today after, say, having lost a house, a car and a good paying job - all of which he did not possess, hypothetically speaking, before experiencing the bonanza.
Just as market decommodification can have unintended and counterproductive effects on society so can family defamilialization. By way of the latter, the welfare state creates an environment in which individuals can free themselves from familial burdens that could hold them back in their personal development. From providing subsidized childcare to working mothers; to giving single mothers a set of income guarantees that increases in relation to the number of children under custody, the welfare state seeks to break every possible familial roadblock that gets in the way of defamilialization.
Traditionally, women have performed a great deal of everyday domestic household chores. In today’s society, however, women have responsibilities in the professional arena that are as demanding as the ones faced by men. Despite these structural transformations, the familial burden has not diminished at all and, according to feminist literature, still rests disproportionately on the backs of women. As welfare services become ever more understanding of this reality, it provides ways and means for both men and women to manage this predicament.
Rather than strictly focalizing its efforts on aiding individuals in their quest for personal development, defamilialization policies have, perhaps unintentionally, subverted the institution of the family. Its focus on individual independence has overlooked that family, as a microcosm of greater society, is built on an interdependence of the kind where the whole is greater than the sum of its individual parts.
The wide range of defamilializing programs offered by the welfare state creates perverse incentives for individuals to act in a manner that is counter to the interdependent structure of marriage. Similar to a safety net being underneath a tight rope, defamilializing policies increase the likelihood and willingness of individuals to jump ship. Individuals enter into relationships with a territorial attitude, high levels of interest in marital benefits, but low levels of commitment to working out the relationship for long-term success.
The quintessential model of welfare policies and defamilialization is found in Scandinavia. Praised for its effectiveness in fostering equality of opportunity and a high quality of life for members of society, the Scandinavian or Nordic model is, in the eyes of many, the envy of the western world. Notwithstanding its highly sophisticated welfare states, Scandinavian countries have alarming divorce rates, depressing marriage statistics and worrying double-digit cohabitation figures. Sweden, for example, has it all in one package: the lowest marriage rate, the highest divorce rate as a percent of marriages, and the highest cohabitation rates amongst OECD countries[iii]. The other two Scandinavian countries, Norway and Finland, are in similar territory.
Divorce, as has been well documented in developmental psychology, has significant adverse effects on happiness and increases antisocial behavior. Marriage, on the other hand, is a prime driver of happiness in society. Not only does it cause happiness in itself, it also creates a chain reaction that activates other sources of happiness in life such as child bearing, child rearing, higher household income, strong relational bonds, and sexual intimacy[iv]. The sex lives of married couples are, as matter of fact, much better than the rest of the population in terms of both quantity and quality.
Whether there is a statistical correlation between the size of the welfare state and divorce rates in a given country remains to be seen. Defamiliarization policies, nonetheless, seem to pose an inadvertent threat to galvanizing interdependent linkages in marriage and other relational dynamics. Such linkages are, needless to say, essential for the success of human interaction and cooperation towards a common good.
If welfare states, in fact, put a strain on relationships, policymakers should consider reengineering government’s approach to emancipating individuals from the inescapable circumstantial realities of life. Instead of defamiliarizing individuals, the welfare state might be more effective in its goal of increasing the happiness of society by encouraging individuals to familiarize in interdependent and synergistic ways. Such approach would be reasonably more in tune with the intrinsic design of family as an institution.
Lastly, regarding decommodification, rather than fully detaching the individual from market dynamics the state should make both the market and the individual more amenable unto each other. Given that the root of the problem is, in great part, unregulated market speculation, government should implement rules and regulations that transcend political agendas and private sector special interests. Moreover, it should stand aloof from enacting policies that snuff out the fire that drives individuals in their pursuit of happiness. This must be so in order to keep alive the kind of courage G.K. Chesterton describes as a virtual “contradiction in terms” as it is “a strong desire to live taking the form of a readiness to die.”
The author is a Dominican scholar, political analyst, speaker and entrepreneur.