What is the state for, welfare or defence? It is no longer possible to have both

While the entire world has been enthralled by the public feud between Elon Musk and Donald Trump, the world has also continued to move on. It remains incredibly difficult to separate the signal from the noise, especially when the world’s richest and the world’s most powerful man are the ones making the noise. That these two would eventually end up in conflict was inevitable, as the only things they share in common are anti-wokeness and being in relationships with several women (sometimes, apparently, even simultaneously).

Musk’s ambitions to reduce waste and increase efficiency in the US government via DOGE (the Department for Government Efficiency) were laudable and not at all a useless endeavour. The cuts at USAID, a development agency that was funding lobby groups in Washington DC, at least as much as actual development projects (why, for example, was anti-Trump activist Bill Kristol getting millions from the US government?), were both needed and justified.

That being said, the truly big-ticket items remained beyond Musk’s reach. As in Europe, reforming and cutting the welfare state components of modern governments has become almost impossible. Over 45 per cent of the federal budget is spent on Medicare, Medicaid, and Social Security. Now add about 13 per cent that goes to defence spending, and over half of the federal budget is— for political reasons—beyond any meaningful reform. People mock Musk for only having been able to create savings amounting to 1 to 2 per cent of the federal budget, but given the headwinds he encountered, this is not bad for just 160 days.

Politicians from Washington to Warsaw dread the truth that, with a shrinking population, the generational contract that sustains the welfare state cannot be maintained. As an eternal optimist, I would argue that AI and robotics will help avoid a complete disaster, but we do not know if it will happen in time. These developments also matter for Europe, where countries like Germany and the UK plan to significantly increase their defence spending from less than 2 to 5 per cent of GDP. That money will have to come from somewhere, and unless social spending is simply redefined as defence spending, it is unclear where those cuts will be made. There seems to be little awareness that you cannot just increase spending to 5 per cent for one year and then revert to half of it the next. If the goal is permanent military readiness, this has to be a permanent increase for the foreseeable future.

This is not just a bookkeeping issue, but touches on the question: “What is the state for?” Is the role of the state to be a supersized insurance and redistribution company, or is there a transcendental element as well? Most people in the West believe the former much more than the latter, which is why meaningful welfare reform is practically impossible. What we are experiencing is a reversal in attitudes that have dominated thinking about the state since the late 18th century.

At that time, you had the emergence of the first great reformers (often authoritarian in nature) like Frederick the Great in Prussia, Joseph II in Austria, or Catherine the Great (yes, there were many “greats” at the time) in Russia. These reform-oriented absolutist rulers viewed the state as the embodiment of an organic whole, and themselves as the first servants of it. No longer was political authority justified by God, but by the ruler’s obligation to achieve the best outcomes for their people.

Anyone interested in the details should read Christopher Clark’s Iron Kingdom on the history of Prussia or Pieter Judson’s The Habsburg Empire: A New History. As they show in meticulous detail, the absolutism of the 18th century was characterized by the emergence of what we now call the nation-state, and the creation of peoples tied together by a shared—and often partially invented—history. Benedict Anderson speaks of so-called “imagined communities,” created by the belief that there is such a thing as an Italian, a German, or an Austrian. Yet over time, what started out as imaginary became real: people loved, killed, and died in the name of their nations, and they created entire systems based on it. National economies, militaries, education systems, and social safety nets created a material reality out of what started as a myth.

This is still the world we live in today, but we have become uncomfortable with it. Frederick the Great would have wholeheartedly agreed with John F. Kennedy’s 1961 inaugural address, where he said, “Ask not what your country can do for you—ask what you can do for your country.” Kennedy was more a man of the 18th century than the 21st. Today, we ask almost exclusively what our country can do for us, and despite all the culture war issues, this is a point that unifies both the Left and the Right. Therefore, meaningful reform becomes almost impossible, and Musk has been playing the unlikely role of a Joseph II: An ambitious reformer who has been defeated by the dominant Zeitgeist he has been struggling against.

If you take a close look, even the Right believes that the solution to the main problems of our time must be delivered by the state. The demographic question has led to more and more family support programmes, and no one asks if maybe this is part of the problem and not the solution. While financial considerations certainly play a role, the demise of family is mostly a cultural issue. For example, religious people tend to have more children independently of their economic conditions. Observant Jews, Hindus, and Muslims might welcome state support, but they do not make it the main condition for preferring large families; they simply see it as a moral obligation.

This brings me back to the point about defence spending: putting more money into the military will not increase defence readiness if no one sees the defence of their country as a moral obligation.

A current bestseller in Germany is a book by podcaster Ole Nymoen with the title Why I Would Never Fight for My Country. Not surprisingly, the name of his podcast is Prosperity for All, ideally via state redistribution. One can sympathise with Mr. Nymoen’s point of view, especially if one perceives no moral obligations toward one’s own country. On the other hand, if you detach patriotism from any moral obligation in the same way we have done with family formation, you will soon lose your country in the same way we lost above-replacement fertility rates. If the West should ever rise again, it will be out of the ashes, not from the expansion of the welfare state. But as the Trump vs. Musk showdown has demonstrated, we are not yet ready for that conversation.