I just read that assertion from a Lefty, what do you guys think?
No.
The welfare state would have been created even if the Soviet Union did not exist.
The welfare state just morphs up kinda naturally over time - politicians (in good times especially) make promises to get elected to create a safety net. And at the time, the costs look downright cheap. And any opposition looks downright heartless. So it passes. Then it invariably blows up the economy and the budget a few decades later with out of control costs.
In Britain the welfare state existed before the birth of Marx and had ballooned significantly by the time of the Russian Revolution. See Chapter 7 of Hazlitt’s ‘The Conquest of Poverty’.
The welfare state would have been created even if the Soviet Union did not exist.
Welfare states, even modern ones, long predate Communism. They are an outgrowth of liberalism at war.
I heard a variation: that the EU was “welfarised” as a deal between the US and the USSR to create a middle-zone between them, consisting of both the east and west, which would be socialistic and democratic (as notable ‘middle-roaders”, Sweden and Yugoslavia, where). The idea was that, in time, the USSR too would move in that direction (indeed that was what Gorby was all about, not some Dengian free market revolution) creating a unified Social Eurasia. Now that I think of it, it would have made all the sense in the world for our dear leaders.
Welfarism has the effect of protecting the capitalist status quo against communism though. It keeps the underclasses content and therefore from staging revolutions. I think there was a serious risk that the US could have gone communist during the great depression, and welfarism prevented that.
It’s not really the ‘capitalist status quo’, because a lot of old contracts can still be enforced unless they utilize the startup cost-hiking to extend the post-crisis situation. However, in the USA some nod to Federalism has kept the USA mainly funneling money back into various State-level agencies and them creating a lot of uselessly decentralized make-work, and using various regulations and requirements to keep out of state or larger-scale competition from outcompeting them in home markets. This is one reason I don’t buy the LL notion that firms in a free market would be radically decentralized, because although the number of mass-production large vertical incorporations are only about 20% of the economy many of the advantages precisely derive from the incorporation structure and its efficiency to raise capital. They end up producing about 80% of all the products we consume, things like food, consumer electronics and firearms. Under a laissez-faire system we would probably see more incorporations and privately held firms, that does not mean they would be less common. They might make up about 30% or 40% of the market firms, but produce 95% of its products.
Still, you can see that there are often a huge number of non-incorporated firms and smaller scale firms. These mainly fill niche markets, producing specialty items or working in service-related industry. They can do this in a large part because of the efficiency, productivity and ease of contracting that an incorporated firm with non-managing shareholders represent, enabling huge amounts of personal spending and investment to be freed up for luxury production.
This makes a lot of sense. However, I doubt that American leaders really knew what was the “right” path to follow for themselves when they decided to do this.
What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all. But what does happen is that he votes his own self-interest as he sees it…which for the majority translates as ‘Bread and Circuses’
-Lazarus Long