According to an article by Jonathan Rauch:

Earlier this month, a White House aide named Peter Wehner (director of strategic initiatives) sent selected conservatives a memo making the case for Social Security reform. … The memo had little to say about long-term growth and other economic effects of reform. It stressed moving ‘away from dependency on government and toward giving greater power and responsibility to individuals.’ At the libertarian Cato Institute, Michael Tanner, the director of the project on Social Security choice, makes the same case. ‘We’re changing fundamentally the relationship of people to their government,’ he says. It would be ‘the biggest shift since the New

Deal.’

Bingo. Once you cancel the zeros on both sides of the equation, neither creating private Social Security accounts nor ratcheting down the growth of future benefits would be an economic milestone. Conservatives need to frame Social Security reform as a dollars-and-cents issue, but that is not really why they are excited. What they really hope to change is not the American economy but the American psyche.

Many critics see this as a clever and duplicitous trick, a kind of plot to engineer lasting Republican majorities. They may feel the same way about the small-scale grants to “faith-based” organizations that the Bush Administration is now making. These are peer-reviewed, competitive grants, but they are designed to support a specific constituency (poor, mostly minority religious leaders) that could swing from Democratic to Republican if they received enough financial support from a conservative administration. (See this Times article by Jason DeParle.)

These efforts at “soulcraft” (i.e., using policies to change values) have Democratic parallels. Many liberals want Social Security to provide universal coverage, not because that makes the most economic sense, but because they want everyone to feel a sense of connection to (critics would say, “dependence on”) the federal welfare system. Liberals have long sought to fund constituencies and movements that would support liberal policies, from farmers to big city mayors.

I oppose the Bush Social Security reform because I think it’s bad policy, and because I dissent from the values that conservatives want to inculcate. However, I do not believe that they are playing foul when they try to reform social policy in order to change “the American psyche.” In order to achieve social change, you need policies that support constituencies that can demand, sustain, and help implement your ideas. Good political leadership requires strategic thinking about that whole package–not about policy by itself. Assuming that you favor a society of individual opportunity (and risk), then you should not only advocate less government, but also try to undermine those federal programs that create constituencies for federal welfare. By the same token, there is nothing wrong with liberal “social engineering” that attempts to adjust society itself so that more people will support liberal values. Every policy, no matter how moderate or ad hoc, has effects (intended and otherwise) on our political culture. We might as well be intentional about our soulcraft.

So I endorse my friend Chris Beem’s call for legislating morality through social policy, as long as we respect two cautions. First, the debate should not only be about the values we want to inculcate in the long term. Even if, for example, we endorse the idea of enhancing American individualism, that doesn’t mean that the dollar cost of Bush’s Social Security reform proposal is worth the price. Very wasteful policies cannot be justified because they would change hearts and minds. Second, the whole debate should be as open and public as possible. Citizens should realize that not only their retirement packages, but also the nation’s political culture, is at stake.

[ps: Anyone who really wants to get into the fiscal details of Social Security should check out Steve Johnson’s “social security simulator,” an amazing tool that let’s you forecast results based on various policies and various assumptions about economic growth, demographics, etc. See also the Simcivic homepage for lessons derived from this flexible model.]

There are good tactical reasons for the American left to embrace federalism, just as Republicans in the era of George W. Bush have favored the national government at the expense of the states (witness No Child Left Behind and the Patriot Act). In the nation as a whole, there is a slim majority that’s culturally conservative, yet many large states are culturally liberal. Therefore, if states make their own policies, many Americans will live in jurisdictions that provide access to abortion, stem-cell research, education that mentions Darwin, and gun control. But if the federal government dominates, all these policies will be threatened–everywhere.

Meanwhile, states are in a position to address social problems if they can innovate freely. For instance, it should be possible to cut the cost of health care almost in half while improving outcomes. After all, our government spends as much per capita on health care as European states do, and then American citizens spend thousands of dollars more on private insurance, deductibles, and fees–all the while leaving 40 million people without preventative care. A state could solve this problem, but only if it could withdraw from Medicare and Medicaid and spend the same amount of money on a single-payer system. Likewise, we spend billions on farm subsidies that drive up consumer prices, harm nature, and reduce incomes in the developing world. Many a “blue” state (predominantly urban and suburban) could opt out of the subsidy system, save money, and improve agriculture. States could also experiment with legalizing marijuana or reforming criminal sentences.

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