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Challenging the Neoliberal Attack on the Welfare State Indiana Law Journal Volume 78 Issue 2 Article 4 Summer 2003 Efficiency and Social Citizenship: Challenging the Neoliberal Attack on the Welfare State Martha T. McCluskey State University of New York at Buffalo Follow this and additional works at: https://www.repository.law.indiana.edu/ilj Part of the Social Welfare Law Commons Recommended Citation McCluskey, Martha T. (2003) "Efficiency and Social Citizenship: Challenging the Neoliberal Attack on the Welfare State," Indiana Law Journal: Vol. 78 : Iss. 2 , Article 4. Available at: https://www.repository.law.indiana.edu/ilj/vol78/iss2/4 This Article is brought to you for free and open access by the Law School Journals at Digital Repository @ Maurer Law. It has been accepted for inclusion in Indiana Law Journal by an authorized editor of Digital Repository @ Maurer Law. For more information, please contact [email protected]. Efficiency and Social Citizenship: Challenging the Neoliberal Attack on the Welfare Statet MARTHA T. MCCLUSKEY* I. A FD C ................................................................................................... 799 A. Reconstructing the Economics of Redistribution................. 802 1. The Rise and Fall of Keynesianism .................................................... 802 2. The Triumph of the Neoliberal Double Bind ..................................... 805 B. Neoliberal Citizenship and Welfare Reform ............................................. 807 1. A FD C as M oral H azard ...................................................................... 807 2. Double Standard of AFDC's Moral Hazard ....................................... 808 3. From Double Standard into Market Forces ........................................ 815 4. Reenvisioning Social Citizenship to Reverse Moral Hazard .............. 817 C. Communitarian Citizenship and Welfare Reform ..................................... 822 1. Resolving Moral Hazard with Moral Control ..................................... 823 2. M oral Control as M oral Subordination .............................................. 825 3. Redistributing M oral Control ............................................................. 828 D. Liberal Citizenship and Welfare Reform .................................................. 832 1. Resolving Moral Hazard with Freedom from Responsibility ............. 833 2. Freedom from Responsibility as Subordinate Citizenship .................. 835 3. Redistributing Freedom from Responsibility ...................................... 840 II. W ORKERS' COM PENSATION .............................................................................. 847 A. NeoliberalCitizenship and Workers' Compensation Reform ................... 850 1. Moral Hazard from Expanded Benefits .............................................. 850 2. Redistributing Moral Hazard Through Benefit Cuts .......................... 851 3. Reenvisioning Employers' Moral Hazard as the Beneficial Market... 854 B. Communitarian Citizenship and Workers' Compensation Reform ........... 858 1. Double Standard of Moral Responsibility .......................................... 859 2. Excusing Employers' Irresponsibility as the Market ...................... 861 C. Liberal Citizenship and Workers' Compensation ..................................... 863 1. Separating Compensation from Responsibility .................................. 864 2. Double Standard of Responsibility ..................................................... 866 3. Double Standard of Security .............................................................. 870 III. C ONCLUSIO N ................................................................................................... 872 Defenders of the welfare state are struggling to revive social citizenship, the theory articulated by British sociologist T.H. Marshall that public well-being in a democratic t Copyright 2002 Martha T. McCluskey. All rights reserved. * Professor of Law, State University of New York at Buffalo. E-mail: [email protected]. This Article benefited from comments by Carl Nightingale, as well as from participants in the Cornell Law School Feminism and Legal Theory Project, the 1999 Law and Society Association Annual Meeting, the 2000 Annual Meeting of the Society for the Advancement of Socio- Economics, and from participants in faculty workshops at Cornell Law School, the University of Denver Law School, the University of Massachusetts Political Economics Research Institute, and SUNY Buffalo Law School. INDIANA LAW JOURNAL [Vol. 78:783 society depends on rights to economic security as well as on political and civil rights.' Against this social citizenship ideal stands the powerful and pervasive neoliberal (free market) ideology 2 asserting that state abstention from economic protection is the foundation of a good society.3 Neoliberalism, the core of law-and-economics theory, 1.According to Marshall, civil rights include "the rights necessary for individual freedom- liberty of the person, freedom of speech, thought and faith, the right to own property and to conclude valid contracts, and the right to justice"; political rights include "the right to participate in the exercise of political power, as a member of a body invested with political authority or as an elector of the members of such a body"; and social rights "range from the right to a modicum of economic welfare and security to the right to share to the full in the social heritage and to live the life of a civilised being according to the standards prevailing in the society." T.H. MARSHALL, CITIZENSHIP AND SOCIAL CLASS 10-11 (1950). For examples of recent efforts to apply (and improve) Marshall's theory in the context of debates about the contemporary welfare state, see CITIZENSHIP TODAY: THE CONTEMPORARY RELEVANCE OFT.H. MARSHALL (Martin Bulmer & Anthony M. Rees eds., 1996) [hereinafter CITIZENSHIP TODAY]; MICHAEL B. KATZ, THE PRICE OF CITIZENSHIP: REDEFINING THE AMERICAN WELFARE STATE (2001); BRIAN S. TURNER, CITIZENSHIP AND CAPITALISM: THE DEBATEOVER REFORMISM (1986); Desmond S. King & Jeremy Waldron, Citizenship, Social Citizenship and the Defence of Welfare Provision, 18 BRIT. J. POL. SCI. 415-43 (1988); Will Kymlicka & Wayne Norman, Return of the Citizen: A Survey ofRecent Work on Citizenship Theory, 104 ETHICS 352 (1994). See also Lawrence M. Mead, Citizenship and Social Policy: T.H. Marshall and Poverty, 14 SoC. PHIL. & POL'Y 197 (1997) (amending Marshall's theory to support a change from social citizenship rights to social citizenship obligations). 2. "Neoliberalism" refers to the contemporary reincarnation of the nineteenth-century "laissez-faire" liberalism that advanced the primacy of "the market" over "government regulation." See, e.g., DANIEL YERGIN & JOSEPH STANISLAW, THE COMMANDING HEIGHTS 15-16 (1998) (favorably presenting this new "liberalism" as a reassertion of nineteenth-century ideas about the primacy of the market and the importance of property rights); Lisa Philipps, Taxing the Market Citizen: Fiscal Policy and Inequality in an Age of Privatization, 63 LAW & CONTEMP. PROBS. 111, 115 (2000) (defining "neoliberalism" and discussing its effect on Canadian tax policy). In American legal scholarship, the term has gained currency primarily to describe how this ideology has been applied to international development policy, particularly the "structural adjustment" programs imposed on Latin America by the International Monetary Fund. See, e.g., Owen M. Fiss, The Autonomy of Law, 26 YALE J.OFINT'LL. 517, 518 (2001) (describing neoliberalism as a "program for increasing the wealth of nations"); Elizabeth M. Iglesias, Human Rights in InternationalEconomic Law: Locating Latinas/os in the Linkage Debates, 28 U. MIAMI INTER-AM. L. REV. 361, 384 (1997) (explaining neoliberalism as a discourse masking and promoting political and economic subordination based on race and class). The term is more commonly used outside of the United States, perhaps in part because American scholars and policy analysts tend to present neoliberal international policies simply as "globalization" (rather than as one choice among many alternatives for structuring the global political economy) and to present neoliberal domestic policies simply as uncontested economics rather than as the product of ideology or political movement. 3. Joel Handler insightfully discusses how the recently powerful conservative economic orthodoxy provides an ideological basis for efforts to undermine social citizenship in the U.S. and Europe. Joel F. Handler, The "Third Way" or the Old Way?, 48 U. KAN. L. REV. 765,796- 800 (2000). Handler analyzes three parts of the "reigning message of. orthodox liberal capitalism": first, the theory that the efficient market is a matter of neutral, value-free laws; second, that "government" is the problem and privatization, decentralization, and deregulation are the answers; and, third, that victims of poverty are at fault for their problems, not structural 2003] EFFICIENCYAND SOCIAL CITIZENSHIP establishes economic efficiency-represented by the "free market"-as the primary route to public well-being.4 In this view, unfettered market competition produces incentives for maximizing overall resources and individual responsibility, thereby making society better off in the long run in spite of harsh short-term effects on some people.5 Supporters of social citizenship should squarely contest this neoliberal ideal at its flawed foundation. Two leading responses to neoliberal ideology, communitarianism and pro-welfare liberalism, both attempt
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