February 2001 -- A nation's political trends are governed by several factors--the state of the economy, the vested interests of politicians and bureaucrats, the attitudes of the media, and many others. But the fundamental factor is moral: the beliefs people have about right and wrong, good and bad; their aspirations for their lives; the virtues they practice and vices they denounce; the responsibilities and obligations they accept; the things they feel entitled to; the standards that govern their sense of fair play; the ideals that shape their sense of what is worthy.
The impact of morality on politics is obvious for many of the issues on the political front burner today, such as sex and violence in popular entertainment, or the alleged decline of "family values." But these are just the tip of the iceberg. To understand the broader and more pervasive impact of morality, consider another issue on the front burner: Social Security reform.
On its face, the plan to privatize the government retirement system is not a moral issue but an economic one. Advocates of the plan argue that because Social Security is a "pay as you go" system, in which current benefits are paid by current taxes rather than by returns on funds invested in the past, the system is headed for financial disaster as the number of retirees increases in proportion to the number of workers supporting them. Opponents claim that the problems can be fixed by relatively minor adjustments to the retirement age, payroll tax rates, and benefit levels.
Opponents of the privatization plan also claim that investing retirement funds in the stock market is too risky a proposition for most people; too many would end up destitute in old age. Advocates of privatization argue that the market trends upward over the long-term, and that the returns people get over an extended period will far exceed what they can expect from Social Security.
So where in the debate over Social Security does morality enter the picture?
Social Security was created in 1935 as the centerpiece of President Franklin Roosevelt's New Deal. Imagine that 150 years earlier, someone had proposed to the Founding Fathers, at the Constitutional Convention where they were creating a new federal government, that the government pay for every citizen's retirement by taxing a portion of every citizen's earnings. It would have been denounced as a system of universal dependence and universal slavery, an insulting attempt to treat free men like the mob in ancient Rome. What made Social Security possible in 1935 was not economic change. It was not the Depression. There had been depressions before, and absolute standards of living were still much higher in the 1930s than in previous generations, despite the increase in relative poverty.
What made Social Security possible was the growth of collectivist thinking among intellectuals and cultural leaders during the preceding century. The ground was prepared by critics of individualism who taught that solidarity and equality are more important than freedom. As I noted in my 1998 book A Life of One's Own, thinkers like Thomas Hill Green and L.T. Hobhouse in England and John Dewey in America explicitly rejected the tenets of individualism. They attacked the pursuit of self-interest as selfish, insisting that individualists must be made to serve the public interest. They attacked the culture of self-reliance, insisting that individuals are creatures of their social environment. During the decades prior to the New Deal, advocates of the welfare state claimed that the poor are not responsible for their condition; they attacked private charity organizations for trying to teach "bourgeois" virtues to the poor. They argued that the old rights of life, liberty, and property had to be supplemented with new rights to economic security provided by the government.
Roosevelt was relying on this cultural background when he crowed that the New Deal represented "an appeal from the clamor of many private and selfish interests . . . to the ideal of the public interest," and when he spoke of "a second Bill of Rights under which a new basis of security and prosperity can be secured for all." These moral assumptions were essential to the creation of Social Security and other welfare state programs.
The same assumptions operate today. Critics of Social Security privatization appeal to the "solemn compact between the generations" (2000 Democratic National Platform, p. 5), that is, the moral ideal of solidarity. They argue that society has a moral obligation to provide for the essential needs of its members. They defend Social Security's massive transfers of wealth--from workers to retirees, from the wealthy to the poor, from men to women, from the able-bodied to the disabled-on the grounds of equality.
The Unknown Ideal
This is not to say that moral assumptions are the only relevant factors. Economists have shown the deleterious effects of the current system. The Cato Institute, the National Center for Policy Analysis, and other think tanks have worked out proposals showing in detail how a private system would work-and how to get there from here. José Piñera, architect of Chile's privatization, has been a tireless promoter of similar efforts worldwide. Without this massive evidence for the practicality of a private system, a purely moral argument would never get a hearing. The same is true for other efforts to get government out of our lives.
But without the moral argument, the practical arguments don't stand a chance, either. We have a mixed economy because we have a mixed culture. Our market society is saddled with government regulations and subsidies because our individualist culture is densely marbled with veins of altruist, egalitarian, and communitarian moral premises. Advocates of freedom have had great success in areas like deregulating the airlines and privatizing municipal services, where there is no strong moral sentiment to overcome. But we have had little success in cutting back the welfare state, which rests on an unchallenged altruist foundation. And we are losing ground in areas like civil rights and the environment, where the enemy's moral assumptions are in the ascendancy.
In economic terms, capitalism has won its century-long battle against socialism. But in moral terms, as Ayn Rand said, it remains an unknown ideal.
This article was originally published in the February 2001 issue of Navigator magazine, The Atlas Society precursor to The New Individualist.