A Prelude to the Welfare State: the Origins of Workers' Compensation.

• Author: Whaples, Robert
• Position: Book Reviews

* A Prelude to the Welfare State: The Origins of Workers' Compensation By Price V. Fishback and Shawn Everett Kantor Chicago: University of Chicago Press, 2000. Pp. xiii, 316. $37.50.

Why has government grown so enormous? Given the colossal size of the federal government in the United States and its pervasive influence on our economic lives, it is surprising that the growth of government isn't the subject of most history books written about the twentieth century. Unfortunately, the list of good books on the subject is surprisingly short. Fortunately, Price Fishback and Shawn Kantor have written a book that can be added to that short list. Indeed, their book, with its rigorous analysis of both markets and politics, is a model for others to follow.

There are several competing theories about the rise of big government. One maintains that government has grown because of the self-serving efforts of concentrated, rent-seeking "special interests"--everything from the military-industrial complex to the labor unions. Another focuses on the role of self-serving government bureaucrats and employees. A third argues that much government growth can be traced to crises during which government expanded and after which it didn't shrink proportionately. A final explanation suggests that voters have simply desired larger government to help them deal with the complexities of modern life and to calm their insecurities. This last theory can be coupled with the extension of the franchise to cover previously excluded groups who have desired more redistribution.

My colleague Jac Heckelman and I recently surveyed economists, political scientists, and public-choice scholars and found considerable support for all five of these explanations. Our fellow economists give the highest marks to special interests, followed by bureaucrats, crises, voter desires, and franchise extension. Other groups' rankings are similar. Collectively these scholars suggest that the modern welfare state arrived in part by accident, in part by desire, and in part from a dysfunctional political system.

Before the crises of World War I and the Great Depression, the size and scope of government were comfortably small, and suggestions that government string up a welfare safety net were greeted extremely skeptically. In the first decades of the twentieth century, "progressives" called for unemployment insurance, sickness insurance, and transfers to the aged, but these proposals came to naught until...