Protracted austerity measures won't solve America's problems

This "disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition…is…the great and most universal cause of the corruption of our moral sentiments." These words were written by Adam Smith, the political right's economic godhead, who regarded the likelihood that we would come to admire wealth and despise poverty, admire success and scorn failure, as the greatest risk facing us in the commercial society whose advent he predicted. It is now upon us.

The U.S, today, has a discredited state with inadequate public resources. Interestingly, they do not have disgruntled taxpayers or, at least, they are usually disgruntled for the wrong reasons. They are, rightfully, disgruntled about the extent of their government's debt problems, yet cannot seem to arrive at a consensus as to precisely what is the most rational and realistic way forward in attempting to solve these issues.

By eviscerating the state's responsibilities and capacities, America has diminished its public standing in the international community. The domestic outcome of this has been the development of "gated communities," in every sense of the word: subsections of society that fondly suppose themselves exempt from the obligations of the social contract, and functionally independent of the collectivity and its public servants. If you deal uniquely or overwhelmingly with private agencies, then over time you dilute your relationship with a public sector for which you have no apparent use. It doesn't much matter whether the private sector does the same things better or worse, at higher or lower cost. In either event, you have diminished your allegiance to the State and lost something vital to the survival of community-based infrastructure and ensuring its subsequent cohesion.

This process was well described by one of its greatest modern practitioners: Margaret Thatcher reportedly asserting that "there is no such thing as society. There are only individual men and women and families."

But if there is no such thing as society, merely individuals and the "night watchman" state-overseeing from afar activities in which it plays no part-then what will bind our societies together? In the U.S they already accept the existence of private police forces, private mail services, private agencies provisioning the state in war, and much else besides. American society has "privatized" precisely those responsibilities that the modern state laboriously took upon itself in the course of the nineteenth and early twentieth centuries.

What, then, will serve as a buffer between U.S citizens and the state now, and more importantly, into the foreseeable future? Surely not "society," hard pressed to survive the evisceration of the public domain. The state is not about to wither away. Even if you stripped it of all its service attributes, it will still be with us, if only as a force for control and repression. Between state and individuals there would then be no intermediate institutions or allegiances: nothing would remain of the spider's web of reciprocal services and obligations that bind citizens to one another via the public space they collectively occupy. All that would be left is private persons and corporations seeking competitively to hijack the state for their own advantage.

The very notion that private advantage could be multiplied to public benefit was already palpably absurd to the liberal critics of nascent industrial capitalism. In the words of John Stuart Mill, "the idea is essentially repulsive of a society only held together by the relations and feelings arising out of pecuniary interests."

In order to resolve the causes of it's fundamental problems and remain a relevant and respectable nation, in the eyes of the international community, America needs to rethink the devices it employs to define and assess 'costs': social and economic alike.

For example, it is economically cheaper to provide benevolent handouts to the poor than to guarantee them a full range of social services as of right. By "benevolent" I mean faith-based charity, private or independent initiative, income-dependent assistance in the form of food stamps, housing grants, clothing subsidies, and so on. But it is notoriously humiliating to be on the receiving end of that kind of assistance. The "means test" applied by the British authorities to victims of the 1930s depression is still recalled with distaste and even anger by an older generation.

Conversely, it is not humiliating to be on the receiving end of a right. If you are entitled to unemployment payments, pension, disability, municipal housing, or any other publicly furnished assistance as of right -without anyone investigating to determine whether you have sunk low enough to "deserve" help -then you will not be embarrassed to accept it.

To be sure, such universal rights and entitlements are expensive, but what if we treated humiliation itself as a cost, a charge to society? What if we decided to "quantify" the harm done when people are shamed by their fellow citizens before receiving the mere necessities of life? In other words, what if you factored into your estimates of productivity, efficiency, or well-being the difference between a humiliating handout and a benefit as of right?

Witness the recent social disruptions in Britain and its attendant economic and social costs and implications. As a result of thus one might be more tempted to conclude that the provision of universal social services, public health insurance, or subsidized public transportation are actually cost-effective ways to achieve common objectives. You may then ask, well, how do you quantify "humiliation"? What is the measurable cost of depriving isolated citizens of access to metropolitan resources? How much should we be willing to pay for a good society? Answers to these questions remain unclear. But unless we ask ourselves such questions, how can we hope to devise answers to them?