Traditionalism and Social Security

Matt isn’t satisfied with my response. He wants a substantive example—Social Security. Can a traditionalist support it or must they oppose it? And why?

What I’ve been trying to say (not very well apparently) is that my position is pluralist and pragmatist. I have substantive positions, and I haven’t tried to hide this fact. The fact that I draw on more than one little framework in the employ of my larger one is not cynical, it’s part of the framework which I have talked about openly. Traditionalism simply characterizes aspects of my position. The first aspect I discussed is simply meta-ethics; we’re all traditionalists in practice in that our ideas have a long history before they got to us and we could add our judgment to them. The third aspect is the one that Matt seems to chafe at; the idea that sometimes some communities are able to work things out among themselves without either the use or the threat of force.

The second aspect is the only one that’s of any use to me in answering Matt’s question about Social Security. That is a respect for what has lasted.

Ah, Matt says, but Social Security has been around since 1935! And apparently non-traditionalists believe that 79 years is a really long time for a policy to have lasted, so he thinks he’s got something here, as far as a challenging proposition for traditionalists goes. Of course, 79 years isn’t much longer than the entire life of the Soviet Union, an entirely ahistorical experiment in government that collapsed under its own weight in the end. I don’t mean to compare the two in substance, I’m simply interested in time horizons; to Matt the reformer 79 must appear an eternity.  To me, it tells me that Social Security is not as fragile as your typical American policy, but it’s still highly untested by time.

And let’s not forget that we’ve had to raise retirement age, increase taxes, and lower benefits before. The main problem that I see with Social Security is that it was designed to work for a specific demographic situation, and demographics fluctuate over time. “The test of time” is not just a cute phrase, it means that something has managed to survive a wide variety of scenarios and come out more or less intact. It’s no secret that Social Security is being increasingly squeezed by our aging population; the older our demographic distribution skews the more the math of Social Security simply does not add up.

Of course we can continue to increase taxes and lower benefits and move the retirement age for a while, but not for forever. Eventually you’ll have to be 200 years old and only get a dollar a year, in nominal future dollar terms.

Matt seems to think that the widespread popularity of Social Security binds me as a traditionalist to support it. But that’s just due to a persistent misunderstanding of his as to how I arrive at my substantive beliefs, as I explained at the beginning of this piece and in the previous piece.

I hope this post has answered Matt’s question to his satisfaction.

4 thoughts on “Traditionalism and Social Security

  1. Three points: (1) Social Security is politically venerable – and inviolable – but, I suspect, economically marginal. It’s more of a statement of intent than an income for most people. (2) As policies go, Social Security is simple. Everyone understands how it works – so it’s difficult for elites to manipulate to advantage. (3) Since medieval times, Western countries have had a tradition of tithing income for the support of the poor. Social Security fits into that mold somewhat…

  2. The wide-spread popularity of SS is thus:

    1. recipients must pay into it to get anything out.
    2. those who pay in more, get more back.
    3. it overpays to make up for it’s efficiency.

    SS is a wholly conservative approach to Safety Net, and that is WHY it is popular.

    I have no problem with SS, I just think we can craft a better one using GICYB, that uses the “overpaid” bit in #3 to keep the seniors doing work later in life for each other and other folks on GI…. as the poor tend to live amongst themselves, and Seniors do the same.

    I’m hard pressed to see anything non-traditionalist about SS. Transfer payments are fine, the question is can you do it with software and a govt staff half the size of Facebook? Yes.

  3. I don’t think of SS as welfare so much as social insurance, and there’s a huge difference between the two. The reason replacing SS with private savings accounts was a brain dead policy is it misses the problem posed by uncertainty which insurance schemes are great at solving. If I was told to plan for my retirement with only private savings I need to make a guess at how long I am going to live. A good “expected value” might be average life expectancy or when my grand parents lived to. But the first of these has large standard deviations and my grand parents are a sample of 4. The average of 80 includes people who die at 100 and people who die at 60. Social security is seen as a welfare program but really its a risk pool where the people who die below the mean age pay for people who live unexpectedly long lives.

    It might not always be framed that way, and the way its funded may make it more re-distributive in aim. But the core of SS is an actuarial calculation. The one and best argument for keeping something like SS is that a- the nation is the optimal risk pool (there might be market failures where all the people expecting to die young opt out) and b- insurance doesn’t have the same kind of calculation problems as other types of production (its actuarial science).

    I can frame this in a pseudo-traditionalist approach by noting that there are no advanced countries that don’t have something like SS that uses the same logic of social insurance. I view that in evolutionary public-economic terms to suggest its in a sense been selected for because it worked where other approaches, including private markets, failed or under performed.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s