Transitioning to Capitalism: Creating the Moral Groundswell for Change
#16 in a series of Think Right or Wrong, Not Left or Right: A 21st Century Citizen Guide (2nd Expanded Edition)
Note to readers: The serial resumes this week with another section of chapter 6. As always, I’m looking forward to your comments, and if you can’t wait for the next installment, feel free to buy the book. And if you’ve already read it, a 4-star or above review of it on Amazon or Audible is always welcome. Cheers!
6.1 Creating the Moral Groundswell for Change
In 2015 the Supreme Court ruled that the fundamental right of same-sex couples to marry on the same terms and conditions as opposite-sex couples, with all the accompanying rights and responsibilities, is guaranteed by the U.S. Constitution.17
The years leading up to the ruling offer a good example of how moral views can change on an issue (whether you agree with the ruling or not). Polls immediately preceding the Supreme Court ruling showed that 60% of Americans thought same sex couples should have the same rights as opposite sex couples. That number is close to 70% today. Contrast this with 1–1.5% in 1988.18 It took some 40 years from the movement gaining momentum in the early 1970s until it achieved the desired outcome. Measured in terms of a person’s life this is a long time—it’s basically half a lifetime—but it is relatively short as moral and political sea changes come. The key to the movement’s success was a continued focus on the moral Right to equal treatment. This is what eventually created the groundswell of support leading up to the Supreme Court ruling.
The same approach is needed to create the groundswell that will turn moral views solidly for capitalism and against statism. Once we reach the tipping point, we’ll see a ketchup-bottle effect with transformative changes taking place in a short period of time.
Let’s use Social Security as an example. Since its inception in the 1930s, champions of Social Security have occupied the moral high ground with vague promises of financial security for everyone in old age. But a system that prevents you from being in control of your retirement planning is both morally and practically wrong. Let’s illustrate how we can persuade people to be morally concerned about this to the point of declaring, “This is Wrong!”
Social Security has a “trust fund” with some $3 trillion in “assets.” That doesn’t sound too bad, right? Well, the fund is not sitting on a pile of cash, only on paper claims on the U.S. Treasury (the finance department of the federal government). The 12.4% Social Security taxes collected from you and your employer are spent on today’s Social Security outlays and on other government activities. The “assets” are merely claims on future taxpayers. The system is basically “pay-as-you-go.” The contributions you and your employers have paid into the system your entire working life finance the retirement payouts to your parents’ and grand-parents’ generations.
In the private economy pyramid schemes are illegal, as none of the funds actually are invested in productive activity. Instead, “returns” for previous “investors” come entirely from new marks. Social Security is the equivalent of a pyramid scheme. The main difference is that government forces people to finance it. If you think this is morally Wrong then you have just joined the moral groundswell for retirement freedom.
Although government perpetuates the fantasy that Social Security actually invests people’s funds, in reality there is no true investment and no true assets backing the program. Hence, if you currently collect Social Security, you are de facto on welfare. The bluntness of the statement does not make it less true. You are at the mercy of the people who continue to pay into the system to fund your monthly handout. The only thing separating you from the person with the food stamps in front of you at the supermarket—and perhaps from a crushing blow to your self-esteem—is the government depositing your welfare check directly into your checking account, giving you a false sense of independence. If saddling your children and grandchildren with the cost of your retirement makes you feel morally uncomfortable you just added power to the moral groundswell. You may depend on the current “pay-as-you-go” system for the rest of your life. But you owe it to yourself to fight for reforming the system to give those coming after you the opportunity to be in control of their own savings in retirement, without being at the mercy of taxpayers and the heavy hand of government.
What if you are not yet collecting Social Security? The fact that you and your employer are paying a combined 12.4% welfare tax to finance other people’s retirement needs and not your own should make you feel morally betrayed. Absent a change you will be a welfare case just like today’s retirees—if there is any money left to dole out when your time to collect comes around. So much for a “Golden Age.” Do you think this is a moral outrage? Congratulations, you just contributed to the moral groundswell as well.
Advocates for the right to be in control of planning and saving for retirement have to claim the moral high ground just like the advocates for same-sex marriage did back in the 1970s. As long as our elected representatives don’t sense our moral outrage over the injustices of the current system, they will not lift a finger (other than to sense where the wind is blowing). This applies to Social Security, healthcare, government (public) education, and every other area where welfare statism violates our individual rights.
With the moral groundswell set in motion, let’s look at two areas that are vital for a successful transition—economic growth and lower government spending.
Good piece-pithy and clear.