Social Security made sense in the context of 1935 demographics. It’s as obsolete as those suitcase-sized portables that Sandberg-Diment was scoffing at 50 years later. But we’re stuck with it, because there’s not much evolution in political programs. Government programs don’t die.
His point, which is obvious but ignored, is that markets evolve more rapidly than government. If you think of government programs as technology, they are hopelessly behind. We regulate communications using the FCC, which is 1930s regulatory technology. We address health care for the elderly with Medicare, which is 50-year-old technology.
In the private sector, when an enterprise becomes technologically obsolete, it falls by the wayside. In government, it gets larger.
I still like the idea of re-chartering regulatory agencies every three years.
1. In what sense is the social security administration a regulatory agency?
2. Why 3 years? That level of uncertainty seems really bad for planning, talent retention, and encouraging political compromise. Why not 20 or 25?
3. What would be the mechanism for establishing and enforcing that rule?
Should the rechartering coincide with the election cycle, which ones, or why not?
Think of it this way:
Instead of “re-chartering,” replacing.
Is that not actually what is needed if things are to be kept “up to date?”
That would require continuing “review” of not just the “mission,” or the organization, or the regulations issued, but the operational effects overall. Legislators jes’ ain’t a-goin’ t’do that. It ain’t fun. It’s work and requires study and intelligence (which are not ample in the motivations for political offices).
We have seen what happens to pensions in the private markets the last 35 years. Private business tells the pensioners to pound sand and negotiate a lower amount because the business is much stronger position than the pensioners.
Also, please note the 401K programs are company enforced vendor and not free markets as well.
“markets evolve more rapidly than government”
Show me a market that does not co-evolve with government, or whose evolution is void of extra-market political determinations.
On top of that, perhaps politics and government have a lot of (necessary and naturally ambiguous) tasks to take care of that markets cannot fulfil.
Having worked in a market that is heavily self-regulated, I have seen no less “regime uncertainty” and other evils purportedly specific to government and absent in (the fiction of politics-free) markets.
The biggest advances in economic theory happen when scholars take account of the thoroughly political nature of markets. There surely is bad (as well as good) politics, but there is no such thing as a market without politics.
He who is in favour of markets ought to accept responsibility for their political nature and face up to the natural imperfection of the politico-economic nexus, rather than advertising the figment of a clear division between the two spheres.
Perhaps he will even condescend to talk about the many successful results of that nexus.
From the point of view of those who control government programs, they’re not obsolete at all. They are a very profitable monopoly that generates enormous returns.
I think you’re committing the Facebook error. Just as in the case of Facebook, to the government you’re not the customer, you’re the product.
The purpose of Social Security or Medicare is the same as the purpose of a police department speed trap: to shovel as much money as possible to the politically connected, while providing just enough service to the unconnected that they don’t scream loudly.
“I still like the idea of re-chartering regulatory agencies every three years.”
In how far does this take politics/government out of the issue?
the idea is to put politics into the issue. The objective is to put a check on the benevolent despotism of regulatory agencies
I read your reply as a confirmation of my main point: no markets without politics.
Better conditions for markets are no less dependent on politics than are worse ones.
What does not work is the libertarian formula: replace politics by markets.
There is far more politics behind markets than meets the eye. In this brief comment, I cannot go deeper into this assertion, but I will touch on it by pointing out that politics means government involvement, as the latter organises and protects the political playing field in which the input for governmental enforcement is being fought out.
That is: inviting politics, as you do, realistically, is inviting government.
The libertarian illusion of autonomous spheres of freedom or free market activities is conjured up by a selective choice of the level of abstraction on which the argument is pegged–in economic theory, for instance, the level of abstraction is high enough to make politics disappear, for good reasons.
By lowering the level of abstraction, i.e. by admitting more concrete details, every market, appearing free on higher levels of abstraction, will reveal its indispensable twinning with politics and the state.
Whether frequent re-chartering will have the desired effect, I do not know; it certainly will introduce a lot of politics into market regulation, the proposal reminding me a bit of Hayek’s curious expectation that the bicameral legislature proposed by him – to politically guarantee a free society as conceived by him – will be in the hands of people who think exactly as he does. Politics makes sure it does not.
How would a rechartering requirement be stronger than the constitutional requirement that no appropriation of money for raising armies should be longer than two years (i.e., a requirement that is completely ignored in practice?)
I think politicians would just use an omnibus “continuation” rechartering to avoid dealing with it.
I think Social Security will be uniquely difficult to roll back. This is because everyone who has earned a paycheck thinks he/she has “skin in the game.” We’ve seen the payroll tax deducted, and we’ve been given statements implying that all this goes into an account our behalf, and that we get to cash in upon retirement. Most people, I suspect, don’t realize that the payroll tax became just another stream of revenue for overall government spending, or that the so-called Social Security Trust Fund will have to be paid out by current taxes or rolling over government debt. So I think it’s politically impossible to eliminate cold-turkey. It will have to be replaced.