This short polemical chapter from Rothbard’s Making Economic Sense is a libertarian attack on early-1990s neoconservatism as a new phase of welfare-statism. Its scope is not social policy in general but the political mechanism by which both parties, under different rhetoric, expand federal power. Rothbard’s central thesis is that the welfare state survives failure by redefining failure as a reason for more spending, bureaucracy, taxation, deficit finance, and control.
Whatever the problem or its complexity, we all know that the Solution is always the same: a huge amount of taxpayer money to be trundled out by local, state, and especially the federal government, and spent on building up an ever-growing giant bureaucracy swarming with bureaucrats dedicated to spending their lives combating the particular problem in view.
The essay first sketches a cyclical model of welfare politics. Liberals identify social problems, attach moral urgency to them, and prescribe federal intervention. The result, Rothbard argues, is not remediation but institutional growth: agencies, regulations, budgets, debt, and constituencies dependent on continued failure. His historical contrast between Democrats and Republicans is deliberately acid. Democrats initiate “Great Leaps Forward” such as the New Deal and Great Society; Republicans complain, then conserve and extend what they inherit.
The Republicans’ function, on the other hand, has been to complain about the welfare state and then, when in power, to fasten their yoke upon the public by not only retaining the Democratic “advances” but also by expanding them.
Rothbard’s key conceptual move is to treat welfare policy not as a series of mistaken programs but as a self-reinforcing political machine. Problems become inputs; “solutions” become permanent administrative structures. Thus the test of the welfare state is not intention but institutional consequence. On his account, poverty, urban crisis, racism, education, and disease have not been solved by federal programs; instead, state capacity has expanded alongside worsening conditions.
At the same time, the government Problem Solving Machine: taxes, deficits, spending, regulations, and bureaucracy, has gotten far bigger, stronger, and hungrier for taxpayer loot.
The chapter’s specific target is the “conservative welfare state” associated with neoconservative Republicans in the Bush era. Rothbard claims this development is more dangerous than ordinary Republican moderation because it offers genuinely new expansions of state power while using conservative language to disarm conservative voters.
The bad news, however, is that the proposed “conservative welfare state”—in the words of neocon godfather Irving Kristol—is a lot worse.
Education is Rothbard’s first example. He presents the proposals of Lamar Alexander, Chester Finn, and Diane Ravitch as a federalizing project disguised as reform. For Rothbard, educational failure has already been produced by federal money and control; neoconservative reform would complete the transfer of authority from parents to the state.
The Neocon Welfare State would finish the job: expanding budgets, nationalizing teachers and curricula, and seizing total control of children on behalf of the State’s malignant educational bureaucracy.
He then turns to Jack Kemp’s urban policy, especially “enterprise zones” and “empowerment.” Rothbard argues that concepts once associated with deregulation and free enterprise had been converted into subsidies, affirmative-action-style benefits, and new forms of dependence. Even the Thatcherite idea of selling public housing to tenants becomes, in his telling, another way to expand public housing and bind urban constituencies to federal authority.
The final section follows the money. Rothbard predicts that neoconservatives will finance the new welfare state through deficits, selective tax increases, “loophole closing,” excise taxes, and possibly national sales or value-added taxes, while preserving enough supply-side symbolism to appear anti-tax. His broader point is that deficit finance and tax redesign are not technical issues but instruments of Leviathan.
Neocons are the most enthusiastic fans of the federal deficit since the Left-Keynesians of the 1930s.
The essay closes by collapsing New Deal liberalism and neoconservative innovation into a single governing logic: spend, tax, elect, and control. Its relevance lies in Rothbard’s diagnosis of bipartisan welfare-state expansion and his warning that conservative rhetoric can make state growth more politically durable, not less.
Harry Hopkins is supposed to have outlined the basic New Deal Strategy: “We shall tax and tax, spend and spend, elect and elect.” He might have added: control and control.
This work was divided into 1 sections when it entered the library's research corpus—an apparatus for search and citation, not necessarily the author's own table of contents. Each title opens its summary.
Put a question to this work; the Librarian answers from its 1 sections and cites the passage.
Ask the Librarian