"Rationality & Welfare: Public Discussion of Poverty and Social Insurance in the United States 1875-1935"

by Professor Theron Schlabach


On June 8, 1934, President Franklin D. Roosevelt sent a message to Congress calling for "some safeguard against misfortunes which cannot be wholly eliminated in this man-made world of ours," some "sound means which I can recommend to provide at once security against several of the great disturbing factors of life." This, he suggested, required a system of "interrelated" social insurance measures. Within the next several months Roosevelt appointed a cabinet Committee on Economic Security, and the Committee in turn set up an extensive organization of staff experts and advisers on the subject. By January 17, 1935 the Committee and its organization, after wrestling with many difficult technical and policy questions, had prepared a social security program for Roosevelt to transmit to Congress. On August 14, 1935 the program in its essential features became law--the historic Social Security Act.

The formulation of the nation's basic social security system in 1934-1935, and the criticisms and alterations of that system since 1935, are stories in themselves. But one fact is clear: 1934-1935 did not represent the complete fulfillment of the quest for a more rationalized welfare sector, nor did the quest end then. The Social Security Act perpetuated, indeed entrenched more deeply, some programs that still partook deeply of the ancient, personalized concepts of welfare. It built heavily on the method (scarcely questioned either in 1934-1935 or in the long decades of discussion previously) of treating dependents by categories--a method that seemed to be highly rational, but which perpetuated different standards for different people in need, with generally better treatment of those fortunate enough normally to be economically productive and more questionable treatment of those so affected by sociological, psychological, and other maladjustments that their usefulness to the economy is seriously impaired. With its lack of a health insurance program the Social Security Act left a gaping hole where one wing of the new security structure should have stood, a hole that fully-rationalized engineering would hardly have allowed.

Yet the Social Security-Act did establish a basic set of social insurance institutions, which were inherently more rational than the methods of welfare that preceded them. Whatever its inadequacies, it was not the false start that the Charity Organization Society movement had been. And it is interesting to observe, though it is dangerous to draw superficial conclusions from the fact, that the most popular part of the social security program has been the most highly rationalized part, old age (and survivors', disability, and health) insurance; while the most troublesome has been that part most like the older personalized welfare, aid to families with dependent children. Moreover, the failure of the Social Security Act to achieve the rational ideal is a story of the technical problems of actually planning a structure, and of the politics surrounding social security, more than one of fundamental social security concepts. Thus it was that in 1934, with social insurance actually in sight, the urge to rationalize quickly shifted to a question that had hardly been discussed throughout the years, namely that of more centralized administration, with the federal government requiring adequate standards and playing a greater administrative role. And thus it was that for many years the main discussions of social security were along the lines of centralizing, extending, and liberalizing the system. More recently, of course, with discussions of negative income tax and guaranteed income, the urge to rationalize welfare has taken a form that returns more to fundamental concepts.

The mood of the present day, with its sometimes cliche-ridden but sometimes substantive complaints of the impersonality and facelessness of our social institutions, might suggest that the goal of a more rationalized, better-structured welfare sector is not one to pursue. And certainly the fact that the urge to rationalize our institutions has been evident in the history of social welfare and other institutions by no means implies that it has been an unmitigated force for good, or even a force for good on balance. But the historical tension between the urge to rationalize and the urge toward a more personalized, relational concept of welfare might suggest that the citizen got recognition of his personhood and worth precisely as he was assured a place within a set of protective institutions. Did not an income guarantee backed by a dependable, automatically-functioning, even impersonal device respect his personality more than did discretionary treatment by people who had power over his life? And where he needed personalized services, as economically dependent persons often have, could not the human relationships have been more healthful and the services themselves more effective had they been more clearly separated from the machinery for dispensing income? Though the tension between a personalized, relational-oriented welfare and a rationalized, automatically-functioning set of welfare institutions existed in historical fact, it stemmed from what was finally a false dichotomy in welfare thought. For institutions and institutionalized relationships can, no doubt, serve to create a climate for adequate personal relationships. They can provide the framework for the individual's psychological, legal, and economic security, a framework within which he then will be free to develop personality and healthy bonds with other men.