It appears that what Americans really have in mind when they think about socialism is not an economic system but particular economic outcomes. And their thoughts seem to focus most often on the question of what people should have. The answer they arrive at most often? More than people typically get in a system based on the pursuit of profit.
Transferism isn’t about controlling the means of production. It is about the forced redistribution of what’s produced.
Federal transfers are money the federal government gives directly to people or to state and local governments. These are not purchases. To be a transfer, the money must be given in exchange for nothing. The earned income tax credit, income assistance, and payments from various welfare programs are transfers. So, too, are Social Security benefits. While workers tend to regard Social Security benefits as returns on their Social Security taxes, legally, Social Security taxes are simply part of the government’s tax revenues. Workers are not entitled to Social Security benefits. Who says so? The Supreme Court in Flemming v. Nestor (1960). In reality, Social Security benefits are simply transfers—gifts—from the federal government to retirees.
Federal transfers to persons have risen from 11 percent of federal spending in 1953 to 53 percent today. As with persons, the federal government also sends transfers to state and local governments. Federal transfers to persons and state and local governments have risen from 17 percent of federal spending in 1953 to 69 percent today. As of today, almost 70 percent of what the federal government does involves simply taking money from one group of people and giving it to another. Less than one-third of the money Washington spends is spent in the name of actual governance.
At least at the federal level, our government has fully embraced transferism. And both parties are responsible. Among the four presidents under whom transfers were greatest, two were Democrats (Obama and Clinton) and two Republicans (G.W. Bush and Trump). Transfer payments increase steadily over time. Partisan differences are a matter of rhetoric and public perception, not a reflection of any underlying reality.
