The Death of Social Security
I am a longtime fan of James Glassman and also a longtime fan of replacing the Social Security system, over time, with private investment options. But my thinking has changed dramatically as I have followed the current debate, and Glassman said nothing to swing my opinion toward the Bush option. I ended up agreeing almost down the line with Tyler Cowen ("The Death of Social Security," April).
Would private accounts offer more individual freedom to invest? Not possible. More freedom means more freedom to fail as well as to succeed. And the government cannot afford to reduce safety net benefits and then give people the freedom to fail to make sound investment choices.
Its only option is to tightly control how private accounts are invested and how they can be used. So instead of taking $100 out of my paycheck and using it to send checks to nonworking individuals, the government takes $100 out of my paycheck and puts it into a "safe" account I cannot touch. I fail to see how that gives me any more freedom.
Would private accounts provide larger returns and more money for nonworkers? Not likely. These tightly controlled, safe investment accounts would follow broad economic trends but would not offer the big gains experienced by stock funds in the 1990s, when the private account arguments gained support.
There are two big winners from private accounts. First, the financial markets and money managers: Their fees will be tightly regulated, but there will still be money to be made. The second big winner is the government bureaucracy called the Social Security Administration. It will have to be a much bigger organization since it will have to monitor millions of private accounts to make sure money is withheld from paychecks and deposited. All this overhead will have to be paid for somehow, either out of general tax revenues or by decreased returns for the private accounts.
Tyler Cowen suggests that IRAs and 401ks are "(relatively) unregulated." This is not true. Both plans, particularly the latter, are highly regulated, with rules governing the nature of the investments permitted, the use of margin, the level of contributions permitted and their timing, the penalties for early withdrawal before a certain age, the penalties for failure to withdraw after a certain age, the required reporting by plan custodians to government agencies, the sometimes mandatory and sometimes prohibited contributions by employers, the permitted length and patterns of vesting schedules–you name it.
This suggests the government is inclined to overregulate everything it touches, a fact that might add weight to Cowen's argument. But it also suggests that government regulation of investment accounts does not necessarily mean nationalization–even after a couple decades pass.
Of course, the devil may be in the details of Bush's actual plan–and direct investment by government would certainly be a deal killer–but my bet is that while the regulation will be onerous, most libertarians will choose to participate, including Cowen.
If, as James Glassman notes, Social Security "is a blight on liberty," a "Ponzi scheme" that "creates a vast moral hazard," then the only legitimate question is how to terminate it.
There is a very simple way: Just raise the age to collect benefits by, say, three months each year, indefinitely. Those already retired will still collect, although any increases should be held to the cost of living. People a few years from retirement will have to work only a little longer than they expected. People farther out will want to bridge the gap with savings. Young people will know that they are going to be responsible to save and invest for their own retirements, as is proper in a free society–and they will have money to do so, as the payroll tax is phased out.
I was interested to learn in Greg Beato's article "Homeschooling Alone" (April) that on national achievement tests, homeschooled children perform as well as, or slightly better than, their public school counterparts.
In other words, public schools can absorb legions of children with low average IQs, legions of children of dysfunctional parents who cannot in any way assist in the education of their own children, pack them into "overcrowded classrooms with apathetic teachers," and still turn out students with academic parity to those students receiving full-time, one-on-one teaching from a devoted parent. Many would consider that a job well done.
Homeschooling has always been a great idea, and states should keep regulation low, but Greg Beato's article goes further, lamenting a lack of financial support for homeschooling. Funding, however, will invite more oversight. Genentech will hardly want to fund the education of students taught that evolution is "just a theory," nor will Exxon seek geologists who believe the earth is 10,000 years old. People with money will have strings attached to that money–and they should. Furthermore, if there were real economic benefit to homeschooling, either in cash or tax credits, the day would be rapidly upon us when homeschoolers were accused of "doing it for the money," for which they cannot be reasonably tarred today.
Freedom from undue regulation is a huge asset for homeschoolers, and we should be vigilant against those who might hobble the movement to make it bigger.
San Francisco, CA
Are We Just Really Smart Robots?
Kenneth Silber ("Are We Just Really Smart Robots?," April) is worried about the encroaching scientific understanding of our brains and behavior. If science shows us to be simply smart biological machines, he believes this undermines liberal democracy, human rights, moral responsibility, and self-worth; all is permitted and authoritarian regimes will flourish.
Fortunately, he argues, John Searle (in Mind: A Brief Introduction) and Jeff Hawkins (in On Intelligence) have shown the mechanistic thesis is false, so we needn't worry. Human beings, although part of nature, nevertheless have a special something that grounds our dignity and value.
The difficulty is that Silber doesn't quite specify what this special something might be. Is it consciousness? Nothing in Searle's biological naturalism or in Hawkins' account of intelligence requires that our capacity for consciousness couldn't be computable and thus a property of a machine, once we understand the functions of the neural processes subserving consciousness. Could it be free will? But even Searle admits that the experience of free will might be an illusion, perhaps an adaptive illusion at that (although it's more likely the result of not being able to see the causal workings of our own brains). Could it be personhood? Personhood rests on physically instantiated capacities for sentience and self-concern. Complex though these are, there's no reason in principle why intelligent machines might not someday have moral claims on us, were they given such capacities.
Although he doesn't establish the existence of a special human something–a soul, perhaps?–Silber needn't worry that the mechanistic thesis poses a threat. Even if it turns out that we're amazingly complex biological machines, we nevertheless remain persons, and our desire to be treated as ends in ourselves won't diminish. After all, that's "hard-wired" into the very neural architecture of our brains, as are the rest of our basic motives and desires. We'd still love and protect our families, fear death, abhor tyranny, and enjoy a good meal. Life would go on, minus the belief in the soul.
So we can relax: There's no moral or political threat stemming from science, should it unmask us as "mere" machines. Even if we are, we'll continue to defend our freedoms with all the resources nature has given us.
Thomas W. Clark, Director
Center for Naturalism