The False Promise of the Private Welfare State

Colin Gordon, Dead on Arrival: The Politics of Health Care in Twentieth-Century America. Princeton: Princeton University Press, 2003, 316 pp.

Jennifer Klein, For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State. Princeton: Princeton University Press, 2003, xi + 354 pp.

More than the citizens of any other industrialized nation, Americans depend on their employers for health care, retirement, and other benefits. Today, this job-based social welfare system is under massive stress as firms reduce benefits, raise premiums, or simply stop offering coverage altogether. In 2003 the state of California approved a controversial "employer mandate" bill requiring all businesses with more than fifty employees to provide health insurance for their workers. California's law reflects an abiding faith in job-based benefits even as it tries to remedy the system's shortcomings. Are workplace benefits an entering wedge to broader protections for all Americans, as some supporters of the employer mandate would have it, or are they an obstacle to achieving true security?

In the very active field of welfare policy scholarship, the "public-private" nature of the U.S. welfare state is a hot topic. After years spent noting the limits of America's stunted public welfare system, scholars now emphasize how private institutions, from philanthropies to employer benefits, have served both to supplement and to supplant government efforts. Two impressive new books by Colin Gordon and Jennifer Klein show how far historians have come in our understanding of the complicated relationship between the public and private welfare states.

The authors have two rather different goals in mind: Gordon addresses the perennial negative question "Why No National Health Insurance in the United States?" while Klein wants to know how we ended up with the system we do have. But both contend that the answers lie in exploring our national obsession with job-based benefits. This approach offers a crucial rejoinder to institutionalist scholarship that argues for the independence of government decision-making from social and economic forces. Gordon and Klein have learned a great deal from scholars of the "state autonomy" school, and it shows in their nuanced analyses of the shifting balances of power between interest groups and government. But when it comes to restoring "the centrality of economic power and economic relationships" to the story (Klein, 15), these authors pull no punches. By bringing political economy back in, they offer the most complex and satisfying explanations to date of America's exceptional trajectory toward the public-private welfare state.

Dead on Arrival's title is a gloomy but appropriate summary of the results of many decades of efforts to establish national health insurance in the United States. This famous failure has been subject to endless debate, but Gordon points out correctly that his book is the first to attempt a synthesis for the entire twentieth century. "The answer" to the classic "Why No National Health Insurance?" question, according to Gordon, "rests on the privileged status enjoyed by economic interests in American politics." Health care, far more so than any other type of social provision, has been the domain of private interests—the medical profession, hospitals, insurers, employers—with a material stake in opposing national health insurance. But, rather than telling a simple (or simplistic) story of interest-group power, Gordon sets out to show how the political exercise of private interest was shaped and tempered by ideas and institutions. "Ideas matter. . . . Institutions matter . . . [and] interests matter," he asserts; "The question is not which of these explanations is the right one, but how they relate to one another" (8-9).

This is a daunting task, and Gordon tackles it by dividing his book into thematic chapters on the private health insurance system; the idea of social insurance; political culture; race and region; the power of health interest groups; and the institutional and economic weaknesses of reformers. (Readers looking for the basic narrative of health-care...