Social Security expansion merely expands tyranny

The status quo can be tyrannical when it focuses our thinking into known and familiar ways. Seeing only the absolute power of existing conditions, one is often led to dead-end solutions, producing no real change or way out of the current environment. In fact, it often takes a crisis to produce change, but the actions taken are typically drawn from those ideas that are lying around. So to break free from the tyranny of the status quo, good ideas are needed that are ready for implementation.

More than 40 years ago, Milton Friedman (1962, 182) wrote the following in Capitalism and Freedom: The 'social security' program is one of those things on which the tyranny of the status quo is beginning to work its magic. Despite the controversy that surrounded its inception, it has come to be so much taken for granted that its desirability is hardly questioned any longer. Yet it involves a large-scale invasion into the personal lives of a large fraction of the nation without, so far as I can see, any justification that is at all persuasive, not only on liberal principles, but on almost any other.

Friedman's remarks, made more than 25 years after Social Security's beginnings, still echo true. The current debate on Social Security reform, including proposals to allow for partial privatization, raise some fundamental questions about the proper role of government in administering social programs. Should government direct the collection of contributions and the financing and distribution of benefits for nearly all its citizens, regardless of their need for economic security in old age? Can one defend taxing the general population to subsidize the elderly? Should it be required that annuities be purchased only from the government? And why should the government compel individuals to use current income to purchase annuities to provide for their old age?

Milton Friedman addressed many of these questions in Capitalism and Freedom. As a result, several good ideas to break from Social Security's "tyranny" have been lying around for some time, and, in fact, a few have already been implemented in countries outside of the United States. This paper examines Friedman's thoughts on Social Security reform and why ideas on real change may finally be addressed.

In a sense, today's Social Security system is the antithesis of capitalism and freedom. While the United States has progressed rather nicely—its citizens are better fed, better clothed, better educated, better housed, better transported, better leisured, better etc.—the government has not, for the most part, been responsible for these improvements. To the contrary, the government has likely hindered the progress of individuals cooperating in our free market economy. And, as far as Social Security is concerned, less government involvement and more individual responsibility in planning for one's own old age appears to be the best way to get out of the current quagmire.

But Social Security reform will not happen until we understand why people seem to like the current program. Have they begun to take it for granted? Do they need to be educated about why the current program is unsustainable in the long run and that the usual justifications for the program are not at all persuasive? Or, far worse, do they reject the basic tenets outlined in Capitalism and Freedom?