Monday, December 7, 2009

Not-Quite Paradise Not-Yet Lost

As he is no doubt aware (cough), Tony Judt, an eminent British historian, expands brilliantly upon the ideas I attempted to lay out in "Trust and Governance":

What Is Living and What Is Dead In Social Democracy?

Judt's superb essay reminds us what the West achieved for itself during the 20th century, and he warns that with the passage of time we're losing our appreciation for the scope of that achievement. Consequently, we now collaborate in its destruction.

An exemplary quote:
The common theme and universal accomplishment of the neo-Keynesian governments of the postwar era was their remarkable success in curbing inequality. If you compare the gap separating rich and poor, whether by income or assets, in all continental European countries along with Great Britain and the US, you will see that it shrinks dramatically in the generation following 1945.
With greater equality there came other benefits. Over time, the fear of a return to extremist politics—the politics of desperation, the politics of envy, the politics of insecurity—abated. The Western industrialized world entered a halcyon era of prosperous security: a bubble, perhaps, but a comforting bubble in which most people did far better than they could ever have hoped in the past and had good reason to anticipate the future with confidence.
The paradox of the welfare state, and indeed of all the social democratic (and Christian Democratic) states of Europe, was quite simply that their success would over time undermine their appeal. The generation that remembered the 1930s was understandably the most committed to preserving institutions and systems of taxation, social service, and public provision that they saw as bulwarks against a return to the horrors of the past. But their successors—even in Sweden—began to forget why they had sought such security in the first place.
It was social democracy that bound the middle classes to liberal institutions in the wake of World War II. . . . They received in many cases the same welfare assistance and services as the poor: free education, cheap or free medical treatment, public pensions, and the like. In consequence, the European middle class found itself by the 1960s with far greater disposable incomes than ever before, with so many of life's necessities prepaid in tax. And thus the very class that had been so exposed to fear and insecurity in the interwar years was now tightly woven into the postwar democratic consensus.
During the 1950s, when the size of the middle class exploded in both Europe and North America, the top tax rate in the United States was 91%. (The history of US tax rates can be seen here.) I'm not suggesting a return to 91%. The tax rates during Reagan's first term seem like a reasonable target. But unless we're willing to tax our wealthiest citizens at a level commensurate with what society gives them, we will continue to dismantle the humane, stable, prosperous societies that we've built "as bulwarks against a return to the horrors of the past."

But raising taxes requires that we expand our idea of ourselves beyond the individual ego—an expansion that seems increasingly unlikely in a culture obsessed with money, celebrity, and race.

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