The Moral Case for Social Security Privatization

I have only begun to plumb the depths of Cato's resources on Social Security. In the process, I ran across this excellent paper, “The Moral Case for Social Security Privatization,” by Daniel Shapiro. It turns out that Danny made most of the arguments I've been trying to formulate back in 1998. It's time for this paper to get the attention it deserves.

Here's a taste:

The most important arguments for Social Security privatization are moral, not economic. Privatization would not be justifiable if it were economically beneficial but morally suspect.

However, a privatized Social Security system meets moral criteria far better than does our current, bankrupt, pay-as-you-go system. A privatized Social Security system gives individuals more freedom to run their lives, is fairer, provides more security, and creates less antagonism between generations, fostering a greater sense of community.

In fact, privatization is defensible not only from the classical 1iberal or libertarian perspective, based on maximizing individual choice and liberty, but from virtually every perspective in political philosophy. Egalitarians, who frame their arguments in terms of fairness, welfare theorists who frame their arguments in terms of economic security, communitarians who frame their arguments in terms of community, and anyone who frames an argument in terms of whether average citizens understand the institutions or programs which they are asked to support, should all support privatization.

  • Tom

    Sorry, you can keep trying, but this sort of construction will never sound natural:

    Some executives are surely complete bastards and some of them are surely upstanding women and men of virtue.

    There’s nothing “wrong” with it, per se. But the linguistic campaign of which it’s a part is not going to budge anything. The rest of the world isn’t going to start talking and writing like this, and so it will always come off clunky and self-conscious when it comes out of your keyboard. (Along with “she” as a generic pronoun, etc.)

  • Matt wrote: “we’ve lost the willingness to just say clearly that ceteris paribus greedy behavior is not virtuous behavior”.

    That seems to me to be an odd claim to make. He is not saying that we are no longer willing to say that greedy behavior is bad. His claim is that we are no longer willing to say that greedy behavior is not good (i.e. we are no longer willing to say that it is either ethically neutral or bad).

    It seems to me that the claim is probably false. How do people actually respond when asked which of these propositions they agree with: “greed is good”; “greed is bad” and “greed is not necessarily either good or bad”?

  • I should have followed Will’s link to Connor Clarke’s post before posting my comment. He makes the same point – that “not good” is not necessarily the same as “bad”.

  • winstongator

    Armed robbers are greedy. We don’t prosecute them for being greedy, but for the armed robbery part. I wonder how Adam Smith would describe the greed of English kings who took Scottish lands? Bill Gates is greedy, especially when acting as an agent of Microsoft. Where people took umbrage was with anti-competitive practices – against the law.

    This points to financial regulation. The market system cannot allow unchecked greed and theft. Madoff wasn’t even that greedy, but he wasn’t following the law. We weakened our laws and markets to the point that we made the obscene transfers possible, and possibly legal.

    As for AS & the invisible hand, there is ‘make the pie bigger’ greed which you might see at a tech company or in a physician, and there’s ‘make my piece of the pie bigger, whether the pie gets smaller or not’ greed that tends more towards finance and law. It is the government’s role to shift effort towards the first and away from the second.

  • goabroad

    The time is about to come when immigrants will have the power to swing the results of elections.