Subject: Are Freedom and Social Security compatible?
I have expressed my opinion that Social Security is incompatible with the true American way of life. I have experienced heated opposition to my opinion. Since this is a discussion about values, I am countering this opposition with a definition of American values and an explanation of the historical events that have brought us here.
Below is a glossary of terms relevant to this subject. I post them here in order to allow all of us to communicate better.
Capitalism: An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market. It is also a social system based on the perception and protection of individual rights, including the right to property, private property.
Free market: The production and exchange of goods and services without interference from the government.
Private: Belonging to a particular person or persons, as opposed to the public or the government.
Property: A tangible or intangible possession. An original and unique idea or a material product or natural resource.
Laissez faire: French. Hands off.
Democracy: 1. Government by the people, exercised either directly or through elected representatives. 2. A political or social unit that has such a government. 3. The principles of social equality and respect for the individual within a community.
Republic: A political order in which the supreme power lies in a body of citizens who are entitled to vote for officers and representatives responsible to them. A nation that has such a political order.
Community: A group of people living in the same locality and under the same government. The district or locality in which such a group lives1
Social: Living together in organized groups or similar close aggregates.
Security: Freedom from risk or danger; safety.
Volunteer: A person who performs or offers to perform a service of his or her own free will. To perform or offer to perform a service of one's own free will.
What kind of a nation do we live in? We live in a democratic republic. Our founding fathers established a nation based on individual freedom. They did this for their own benefit, not ours. The fact that we benefit from their creation is a byproduct of their efforts, not the reason for them. These rational principals that were forged into law protect every individual citizen. We merely benefit from that which they created for themselves. Subsequently, one generation owes nothing to the next or the previous save for respect.
In order to protect their individual rights and their private property they devised a governmental system that is made legitimate by the consent of the governed. They assigned the government the duty of providing the security of these rights. A system compatible with the principals of this country was necessary for the citizens to engage in economic interaction. That system is Capitalism because it is the only system that operates on the principals of a laissez faire free market. In such a system the only role of the government is to ensure that the economic system is kept free. To fund the legitimate activities of such a government, citizens choose to volunteer a small portion of their capital.
Logic would lead us to conclude that Capitalism is the only system compatible with our democratic republic, individual rights and the guarantee of private property.
What are the values of Social Security? We are discussing the values of the Social Security system, words such as "compulsory" and "obligation" have been used with frequency. In a democratic republic the only obligation a citizen has, is to respect the laws of commerce and his/her fellow citizens' individual rights.
Social Security was designed as a minimum safety net for citizens that were unable or unwilling to retain enough wealth to satisfy their life needs. Numerous individuals are under the impression that this system is designed to facilitate a retirement income for all Americans. This premise has lead some to believe that they have a right to have their needs satisfied by our government. Considering the fact that our government does not produce wealth, where are the resources to satisfy these needs to come from? The answer has been the wealth generating citizens. This sequence of events leads us to believe that citizens that are productive are obligated to provide wealth to those that are no longer or never have been productive. "From each according to his ability to each according to his needs." (I am paraphrasing, I have never been able to retain such nonsense in my head). This implied obligation is incompatible with the values of a democratic republic or a Capitalist society.
Does the government have an obligation to provide a minimum safety net for the citizens of the United States of America? Certainly not. Our government is designed to secure our individual rights, in so doing it also ensures that we are guaranteed individual responsibility. We are responsible for providing for our own needs.
How can a free enterprise system be compatible with economic justice? Simple. If our government does not interfere in the market, new wealth would be created indefinitely. In a truly free market system only those that do nothing will not have a sufficient amount of wealth with which to satisfy their needs. If our society employed a completely Capitalist system all Americans would have no need for a program like OASDI.
If Capitalism is so good at generating wealth, why did we experience a Great Depression in the 1930s? The Great Depression was not created by natural market forces. The Great Depression was created by the government, which subsequently fixed it with many new deals of further intervention, including Social Security.
The Federal Reserve was created in 1913. This event placed the control of the type, cost and amount of capital and credit used to finance business, with the government. Prior to the creation of the Federal Reserve, that control rested with the natural forces of commerce in a free market. During the 1920s the government kept interest rates low and credit requirements liberal. This cheap money was funneled into numerous ventures, many of which were unsound. In a free market, this activity would progress only for a short period of time before interest rates would rise and slow down the growth, requiring more prudent choices in investing. The Federal Reserve kept the interest rates artificially low, therefore there was no slow down.
By 1929 the huge boom had grown to the point that the government actually paid attention to the dangers and raised the interest rates. It was too late. Ventures that in a normal market would never have been funded began to collapse. Word of these collapses spread and a large percentage of investors began dumping their interest, causing the market to drop at a rapid pace. Bang. The Great Depression.
Our government caused the depression by manipulating the market. In order to fix this mistake, we were told that Capitalism was a failure and more government control was needed. We were also provided with protection from Capitalism's failure in the creation of the Social Security system. Is it logical to allow the same rationale that caused a problem to be utilized to solve it? Of course not. Then why are we continuing to discuss the evils of Capitalism and the wonderful security of socialism? Capitalism which never failed when left to its own devices, and Social Security which keeps breaking down and we are continuously asked to find new ways to fix it (read: generate more wealth to be taxed).
Let us not play this game any longer. Let us end this charade now and allow our free society to be truly free. Let us engage in voluntary trade with one another under the security of our government, enforcing contract laws and guaranteeing property rights. Our economy will grow, our taxes will be reduced and we will all be able to save for a happy retirement.
Marwan Jabbour
An American letting his voice be heard, are you listening?
