January 21, 2005

"OWNERSHIP" MEANS SOMETHING?:

Social Security as Social Engineering: Why private accounts are all about values (Jonathan Rauch, 1/15/05, Reason)

Earlier this month, a White House aide named Peter Wehner (director of strategic initiatives) sent selected conservatives a memo making the case for Social Security reform. "We consider our Social Security reform not simply an economic challenge, but a moral goal and a moral good," he wrote. "If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever."

The emphasis was revealing. The memo had little to say about long-term growth and other economic effects of reform. It stressed moving "away from dependency on government and toward giving greater power and responsibility to individuals." At the libertarian Cato Institute, Michael Tanner, the director of the project on Social Security choice, makes the same case. "We're changing fundamentally the relationship of people to their government," he says. It would be "the biggest shift since the New Deal."

Bingo. Once you cancel the zeros on both sides of the equation, neither creating private Social Security accounts nor ratcheting down the growth of future benefits would be an economic milestone. Conservatives need to frame Social Security reform as a dollars-and-cents issue, but that is not really why they are excited. What they really hope to change is not the American economy but the American psyche.

Conservatives used to speak derisively of liberal social engineering. The attempt to create private Social Security accounts is, so to speak, conservative social counter-engineering. Government should help provide for unforeseeable contingencies: tsunamis, unemployment, open-heart surgery. But if there is one event in all of human life that is wholly foreseeable, it is the advent of old age. Why, then, shouldn't people save for their own retirement, instead of relying on welfare from the government—which is what Social Security, as currently constituted, really is?

Tanner argues that people who own assets behave differently and see their place in society in a different light. Private accounts, he says, would encourage a culture of saving and personal responsibility; they would discourage political class warfare; they may, he argues, improve work habits, and even reduce crime and other social pathologies. Create private Social Security accounts, and millions of low-income Americans will be stockholders and bondholders. Republican political activists look at the way portfolio investors vote—and salivate at the prospect of millions more of them.

The 2004 exit polls suggested, to many conservatives, that "moral values" won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.


Who'd have dreamt that the Ownership Society is about ownership?

Posted by Orrin Judd at January 21, 2005 4:32 PM
Comments

Certainly not the Democrats, so far. Long may they slumber undisturbed.

Posted by: LUCIFEROUS at January 21, 2005 5:09 PM

Somebody will own your retirement money, all right.

The question is, will it be you?

Or the reincarnation of Ken Lay?

Posted by: Harry Eagar at January 22, 2005 1:40 AM

The folks who own it now run it worse than Lay did Enron.

Posted by: oj at January 22, 2005 8:58 AM
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