Key Takeaways
1. Race, Not Just Liberalism, Shaped the American Welfare State
I believe that only Gunnar Myrdal has correctly identified the more important motor of change, the governing force from the nation's founding to the present: the politics of racial inequality.
A unique American dilemma. The American welfare state developed idiosyncratically, lagging behind European nations in establishing comprehensive social rights. While traditional theories point to liberal values, a weak working class, or unique democratization sequences, the author argues these interpretations pay insufficient attention to the pivotal role of race. Racial inequality has been the central dynamic, continually reshaping the nation's social, economic, and political institutions.
The dialectic of ideals. From its inception, the United States grappled with a profound contradiction: espousing ideals of liberty, justice, and equality while simultaneously practicing rigid racial discrimination. This "American creed" clashed with the reality of racial oppression, creating inherent tensions that periodically altered institutional arrangements. The "War on Poverty" in the 1960s represented a direct, albeit poorly executed, effort to resolve this fundamental contradiction.
A racial fault line. The intricate connections between race and social policy established a deep racial fault line in public policy. This divide subsequently provided the rationale for welfare state retrenchment and continues to impede the nation's ability to guarantee basic social protection to all its citizens. The struggle for social justice, particularly for African Americans, became intertwined with the very fabric of welfare state development, often leading to political backlash rather than broad solidarity.
2. The New Deal's Dual Legacy: Protection and Segregation
The New Deal not only extended social rights but also reinforced the racial divide in American democracy.
Compromise over core programs. Franklin Delano Roosevelt's New Deal initiated a floor of protection for the industrial working class but did so by reinforcing racial segregation. Southern congressmen, wielding significant committee power, ensured that agricultural workers and domestic servants—predominantly African Americans—were excluded from core Social Security programs like old-age insurance and unemployment compensation. This compromise was essential to secure Southern support for the New Deal legislation.
Legitimizing discrimination. Beyond exclusions, New Deal legislation actively legitimized racial discrimination in other critical areas. The Wagner Act of 1935, which granted workers the right to organize, allowed trade unions to discriminate against Black workers, particularly in skilled crafts. Similarly, federal housing policies, such as those implemented by the Federal Housing Administration (FHA), reinforced neighborhood racial segregation through practices like "redlining" and encouraging restrictive covenants, effectively creating and entrenching urban ghettos.
An impediment to effective government. By 1960, this unwieldy legacy of racial compromise had become a significant impediment to effective government and a national embarrassment. The New Deal's policies, while extending social rights to many, simultaneously denied the full perquisites of democracy to African Americans, setting the stage for the civil rights movement to demand a fundamental reorientation of the nation's social policy agenda.
3. War on Poverty: A Collision of Ideals and Racial Realities
What the War on Poverty represented was a well-intended but poorly executed effort to treat that malady.
Responding to a national malady. By the 1960s, racial inequality had moved from a regional embarrassment to a national malady, fueled by the mass migration of Black Americans out of the South and the demands of the Civil Rights Movement. Lyndon Baines Johnson's "War on Poverty" was conceived as a response to these demands, aiming to reconstruct the racially biased welfare state of the New Deal and eradicate, rather than reinforce, racial inequality.
A vehicle for equal opportunity. While initially conceived with vague objectives, the War on Poverty's programs—focused on education, housing, and community action—rapidly became absorbed by the Civil Rights Movement. This shift meant that the traditional objectives of social policy, such as income stability, became secondary to the grander struggle for racial justice. The welfare state, through programs like community action, was transformed into a vehicle for pursuing equal opportunity, particularly for African Americans.
Unintended consequences. This pursuit of social justice, however, came at a cost. As social programs began to actively promote equal opportunity, they aroused working-class resentment and created a political backlash. This backlash, which gave rise to the "New Right," ultimately undermined support for the welfare state and hampered efforts to fully incorporate African Americans into the national community, leaving a legacy of persistent racial segregation and an incomplete domestic agenda.
4. Community Action: Empowering Blacks, Alienating Mayors
As community action became an agent of equal political opportunity, mayors and city commissions found their authority usurped by upstart civil rights groups with massive federal resources.
Bypassing the old guard. The Economic Opportunity Act of 1964 established Community Action Agencies (CAAs) that directly channeled federal funds to public or private non-profit organizations, bypassing the traditional local welfare offices and county officials. This autonomy allowed CAAs to become powerful agents in the struggle for political rights, particularly for African Americans who had long been excluded from local power structures.
Local battles for control:
- Mississippi: CAAs created new patronage networks, funneling federal money and power to African Americans, directly challenging the entrenched white power structure and fostering integrated community institutions.
- Newark: Radical civil rights activists seized control of local CAAs, using them to protest police brutality, lack of access to city jobs, and urban renewal plans that threatened Black communities. This led to direct confrontations with city hall and contributed to urban unrest.
- Chicago: In contrast, Mayor Richard Daley's powerful Democratic machine co-opted the CAAs, using them to augment his political power and distribute patronage, thus maintaining the racial status quo rather than empowering the poor.
The backlash and demise. The empowerment of the poor, often at the expense of white ethnic politicians, provoked a strong backlash from mayors and city commissions who saw their authority usurped. This political pressure led to amendments that diluted the "maximum feasible participation" mandate and ultimately, Nixon's abolition of the Office of Economic Opportunity (OEO) in 1973. While community action fostered the rise of Black political leaders, their newfound power was often undermined by urban decline and persistent racial segregation, limiting their ability to secure federal funds for cities.
5. Employment Opportunity: Unions' Resistance and Affirmative Action's Rise
The skilled trade unions, which already feared that job-training programs would increase the skilled labor pool and thus threaten wage rates, soon learned that job training also threatened their most sacred prerogatives—the right to run training programs and to select apprentices.
A history of exclusion. For decades, skilled trade unions, particularly in construction, had systematically discriminated against Black men, preventing them from learning and practicing trades through practices like nepotism and biased admission tests. This exclusion was tacitly allowed by the federal government since the New Deal, creating a significant barrier to economic opportunity for African Americans.
The Watts riot and job training. The Watts riot in 1965 starkly highlighted the demand for jobs in Black communities. The War on Poverty responded by expanding federal job training programs, which disproportionately served young, Black men. However, these programs, intended to make individuals more "employable," soon collided with the unions' control over apprenticeships, which they viewed as a fundamental right and a means to control labor supply and wages.
Affirmative action's contentious birth. Despite Title VII of the 1964 Civil Rights Act banning discrimination, unions largely defied the law, aided by weak enforcement and union-aligned agencies within the Department of Labor. The Nixon administration, seeking to temper civil rights criticism and divide the Democratic coalition, introduced the "Philadelphia Plan" in 1969. This affirmative action policy set minority hiring targets for federal contractors, effectively bypassing union hiring halls and directly intervening in union prerogatives. This move, while increasing minority representation in skilled trades, intensified racial cleavages within the working class and fueled a "white backlash" that shifted political support towards conservative candidates.
6. Housing Policy: Federal Reinforcement of Segregation and the Dream Deferred
The federal government is primarily responsible for building a ghetto system that has created racial alienation and tensions so explosive that the crisis in our cities now borders on catastrophe.
Federal complicity in segregation. From the New Deal through the 1960s, federal housing policy actively reinforced racial segregation. Agencies like the FHA and VA insured mortgages almost exclusively for white families in segregated suburbs, while public housing projects were built in racially segregated inner-city areas. "Urban renewal" programs often led to "Negro removal," demolishing Black homes without providing adequate alternatives, thus creating and entrenching urban ghettos.
The struggle for fair housing. As the Civil Rights Movement turned its attention North, housing segregation became a central grievance. Martin Luther King's Chicago campaign in 1966 highlighted fierce white resistance to integration. Despite the passage of the Fair Housing Act of 1968, which banned discrimination, enforcement remained weak, and local communities devised strategies like restrictive zoning to exclude low-income and minority residents.
Nixon's retreat from integration. The Department of Housing and Urban Development (HUD), created in 1966, struggled to implement its civil rights mandate due to entrenched local resistance and a lack of funds. Nixon's "open communities" policy, aimed at suburban integration, quickly faced a political backlash from his core suburban constituency. The "Blackjack case" in Missouri, where Nixon backed down from forcing integration, signaled a broader retreat from aggressive fair housing enforcement, effectively suspending civil rights laws in housing for a year and leading to a moratorium on subsidized housing programs. This left urban ghettos to decay, perpetuating racial isolation.
7. Welfare Reform: Nixon's Guaranteed Income and the Southern Backlash
There's not going to be anybody left to roll these wheelbarrows and press these shirts.
AFDC's racialized stigma. Aid to Families with Dependent Children (AFDC) became the most racially divisive social program, stigmatizing recipients, many of whom were Black women. The Welfare Rights Movement of the 1960s, demanding increased benefits and the removal of punitive rules, contributed to soaring welfare rolls and a growing backlash from working- and middle-class taxpayers.
Nixon's surprising proposal. Amidst this turmoil, conservative President Richard Nixon proposed the Family Assistance Plan (FAP) in 1969, a guaranteed annual income for both working and nonworking poor. His motivations were complex: to quell urban riots by strengthening Black families (by making men breadwinners), to reform the despised welfare system, and to build a new Republican coalition among the "forgotten middle class" and white working poor in the South.
A plan undone by its contradictions. The FAP, however, contained internal contradictions and faced formidable opposition. While it aimed to encourage work, its job training component primarily targeted men, and child care provisions were minimal. Crucially, Southern congressmen vehemently opposed the FAP, fearing it would raise low Southern wages and undermine the racial caste system that depended on cheap Black labor. Welfare mothers themselves, through the NWRO, criticized the benefits as too low and the work incentives too punitive. Faced with this broad opposition, Nixon, prioritizing his "New Majority" coalition, abandoned the FAP, losing a revolutionary opportunity to establish a universal income floor.
8. Child Care: The Politics of Motherhood and the Conservative Veto
This statement represented a concession to right-wing proponents of family values, who saw daycare as a Communist conspiracy to destroy the family.
A marginalized social right. Historically, child care in the U.S. was either a remedial service for children in crisis (Children's Bureau) or a limited support for working women (Women's Bureau). Despite a brief expansion during WWII, federal funding was cut, and child care remained a marginalized issue. The 1962 Social Security Act amendments linked child care to welfare, but meager funding and restrictive regulations limited its reach, primarily serving welfare recipients and failing to become a universal support for working mothers.
Headstart and the racialization of child care. The War on Poverty's Headstart program, providing educational enrichment for poor (disproportionately Black) children, brought child care to national attention. However, its focus on minorities, coupled with the Work Incentive Program (WIN) requiring child care for welfare mothers, further racialized the issue. This meant that federal child care became entangled with the controversial and racially charged debates surrounding welfare reform.
Nixon's veto and the rise of the New Right. In 1971, the Comprehensive Child Development Act, a bipartisan effort for universal child care, nearly passed. However, it became embroiled in political conflicts: civil rights advocates demanded local control (challenging state authority), income limits excluded the middle class, and its cost threatened Nixon's FAP. Most significantly, Nixon vetoed the bill, denouncing it as promoting "communal approaches to child-rearing against the family centered approach." This was a strategic concession to the nascent "Moral Majority," who viewed government-supported child care as a "Communist conspiracy" and a threat to traditional family values, effectively killing the prospect of a comprehensive national child care program and solidifying a conservative base for the Republican party.
9. Social Security: Universalism's Success and its Racial Blind Spots
The Catastrophic Care Act illustrates how little "political space" exists when the middle class has to pay for the poor.
A politically untouchable "sacred cow." Social Security stands as the United States' most successful social program, often referred to as a "sacred cow" due to its broad public support. Its universal nature, with eligibility linked to work history, has significantly reduced poverty among the elderly and created a powerful political lobby. Nixon's expansion of benefits and the addition of automatic cost-of-living adjustments (COLA) further cemented its popularity, appealing to the "forgotten Americans" of the middle class.
Persistent inequities within universalism. Despite its success, Social Security has perpetuated racial and gender inequalities.
- Racial Disadvantage: African Americans, with lower life expectancies, receive fewer benefits over their lifetime. They also pay a disproportionate share of taxes on earnings due to lower median incomes, while receiving lower average benefits, reflecting market inequities.
- Gender Disadvantage: The spouse benefit, which rewards women who remain in stable marriages and don't work, often pays more than a working woman's earned benefit. This effectively transfers income from women in the labor force to homemakers, and Black women are less likely to qualify for spouse benefits and more likely to be working, thus subsidizing white housewives.
The limits of universalism. The Medicare Catastrophic Coverage Act of 1988 demonstrated the limits of universalism when costs are not broadly shared. Funded solely by the elderly, with a surtax on middle- and upper-income recipients, the program faced an explosive backlash and was repealed. This showed that middle-class support for social programs hinges on shared costs and shared returns. While universal programs can enhance income security, they cannot eliminate inequality as long as universality is equated with labor force participation and market inequities persist.
10. The Hyperghetto's Legacy: Persistent Segregation and Welfare State Retreat
That blacks are the only ones to benefit from resources allocated to the ghetto—and are the only ones harmed when resources are removed—makes it difficult for them to find partners for political coalitions.
The enduring reality of segregation. Despite the War on Poverty's efforts, racial segregation remains a defining and enduring feature of urban life in America. From 1970 to 1990, rates of racial concentration in northern cities declined only slightly, leading to the creation of "hyperghettos." These extremely disadvantaged environments systematically build deprivation into the residential structure of Black communities, increasing their susceptibility to decline and fostering an oppositional culture.
The conservative narrative and budget cuts. Conservatives, led by figures like George Gilder and Charles Murray, blamed the liberal welfare state of the 1960s for inner-city decline, arguing it eroded work and family values. This narrative, despite its flaws (e.g., welfare benefits declined after 1972, while joblessness increased), resonated with the public and provided the rationale for draconian budget cuts under Ronald Reagan. These cuts devastated federal support for job training, housing, and aid to state and local governments, disproportionately harming inner cities and the poor.
Isolation and political vulnerability. The persistence of racial segregation isolates African Americans geographically, undermining political support for jobs and services in the ghetto. When resources are allocated to these areas, they are perceived as benefiting only Black residents, making it difficult to form broader political coalitions. This concentrated isolation of the poor, a direct consequence of the failure to integrate housing and the retreat from social programs, has left Black political leaders with diminished influence and the cities struggling with diminishing tax bases and decaying infrastructure.
11. Redefining American Liberalism: From Common Good to Racial Intervention
The positive liberties it extended to African Americans were viewed by the working class as infringements on their negative liberties...
The New Deal's broad appeal. The New Deal era defined liberalism as active, positive government intervention for the common good, protecting the many against the abuses of the few. Programs like Social Security garnered broad public support because they spread costs and benefits across the entire working population, creating a stable Democratic party base of northern wage workers and southern racial conservatives.
The shift to "racial liberalism." During the 1960s, liberalism was redefined. It became synonymous with government intervention for civil rights, meaning the pursuit of equal opportunity permeated nearly every social program. This shift meant that supporting social programs often implied supporting racial integration, fundamentally altering the political landscape.
Backlash and the New Right. This redefinition activated an inherent conflict between positive liberties (e.g., the right to work for African Americans) and negative liberties (e.g., the right of white trade unions to discriminate, or the right to maintain segregated neighborhoods). The resentment triggered by these perceived infringements shattered the New Deal coalition. Republicans, capitalizing on racial hostilities and linking them to conservative economic policy, forged a "New Right" coalition. This transformed the Republican party into the party of racial conservatism, while Democrats, burdened by the racial connotations of their expanded liberalism, struggled to regain broad working-class support. The anti-government ideology became most effective in undermining the welfare state when associated with racial issues.
Last updated:
