Breed right or free-ride

Cross posted on Political Arguments.

I'm not a big fan of the current system of public pensions. My reasons are moral, not economic, since I don't know enough economics to decide whather or not there is a crisis a-brewing. But on my moral qualms I'm not alone.

Now, I think that the elderly and the infirm should have a decent standard of living, and that if they are themselves unable to secure it during their working years, they are entitled to public support. I have no illusions about private charity and find the idea of depending on a church, ethnic association, or fraternal order for my sustenance when I fall prey to illness or old age restrictive and oppressive. What if I run afoul of the church's doctrine? What if I fall in love with someone from a rival ethnic group? What if I just get can't stand my fellow Water Buffalos any more? What happens to my house, my health plan, and my savings?

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A state that doesn't much care what I think—or for that matter, a private financial institution that "give[s] the name of infidel to none but bankrupts"—seems a necessary alternative, at least to regulate private investment and subsidize a reasonable safety net. Otherwise many of the elderly would become hostages of a thousand petty prisons.

But there is one question that the current system cannot avoid. What if I want no children? Take this "Quick Fact" from the Social Security Board of Trustees (via Cato?s Project on Social Security Choice):

In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.

The solvency of the Social Security syatem depends on the continuous replenishment of the labor force in order to compensate for elderly or retired workers. Under such a system, those citizens who decide to have few or no children effectively free-ride on others who have more children than are necessary to replenish the population. What do we do about them, then?

If the solvency of the pension fund depends on keeping a high ratio of workers to retirees, then the failure to produce a good litter of strapping young lads and lassies for the Nation is a burden for the rest of the community. If those who under-reproduce are to be made equally responsible for the public pension system—a system from which they benefit not by virtue of their progeny but of their past labor and their future need—they would have to be compelled, or at least aggressively encouraged, to procreate.

Social Security, then, endangers reproductive freedom! At least it opens the door to claims that childless parents (especially mothers) are "selfish" for not breeding at a satisfactory rate. But the Catch-22 in which fertile citizens are placed—breed right or free-ride—is solely the product of the structure of the system. The ones who get are not the ones who pay, and the externalities run wild.

For a Rawlsian, especially, such a system runs afoul of the priority of liberty, the idea that a person?s civil and political liberties cannot be abridged in order to improve the social and economic condition of another. The choice of whether to have children and how many children to have is part of a person's special conception of her good, and it is entirely reasonable to give one's career or leisure priority over procreation, or to decide that one can give better care to one or two children rather than to six or seven.

A reasonable alternative is to increase immigration and thus import a young working population. But new immigrants are typically near the bottom of the earning scale; those at the top, meanwhile, are precisely the ones who are procreating the least. Unless there are dramatic shifts in the patterns of social mobility in the U.S., there will not be enough money coming into the coffers of Social Security to keep the fund in the black.

¶ And of course I haven't forgotten that Blue States, and especially the bluer areas and demographic groups in those states, have the lowest birthrates. Whether there is a causal connection between money, babies, and ideology I leave for eager researchers yet to come.

The other option is to turn to individualized accounts with some form of redistribution. There are moral hazards involved, but those will be incurred in any case unless society denies all support for retirees, no matter what their circumstances, beyound what they were able to save during their working years.