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Opting-Out of the Tilted Game

I cannot praise Dr. Higgs enough for the fantastic appearance he made on C-SPAN last weekend. His message was delightfully radical, but presented in such an even manner that I really believe he made a positive impression on many regular BookTV viewers who were not previously familiar with the ideas of liberty.

However, I do have one criticism: When asked by a caller if he would not take Social Security, he missed an opportunity to illustrate the type of principles that many libertarians hold. Although the caller was insinuating that Dr. Higgs was a hypocrite for advocating against welfare while still (hypothetically) accepting a Social Security check, this is not what I mean to imply. There is no reason for a libertarian to be masochistic, so his comment (at 1 hour into the interview) was appropriate in this regard:

"I devoutly wish I had never been made eligible for it… [I]f you put people in a position 1) where they cannot opt out and 2) where they’re made reliant on government payments, then you’ve tilted the game. You’ve put them in a position where, now, they would be in real difficulty if they were simply to give up what they’ve relied on receiving for an entire lifetime. But that’s a very different matter from saying ‘Would the world have been better off if we had never had Social Security?’ It would have been vastly better off."

Many libertarians are willing to inflict financial hardship on themselves if they feel that there is a bigger cause that is served. I’m referring to the repeal of Social Security in the form of grandfathering-out or opting-out, and my (perhaps too harsh) criticism of Dr. Higgs’ response is that he did not elaborate on this point. Here I’ll present a couple of anecdotes to illustrate that libertarians as a group are not hypocritical on the issue of Social Security.

For years, my father has said to me that he would opt out of Social Security if given the chance. Imagine that Congress decided to let people stop paying the Social Security tax in exchange for foregoing any Social Security payments when they attained the eligible age. Anyone who opted out under such a system would not get a refund for past payments – they would simply not be stripped of future income. Furthermore, they would not receive future checks for any money that was already paid into the system. So, at age 55, my dad would have been willing to stop paying after decades of being taxed for Social Security. Why? Because he knew that this would mean slightly more freedom for everyone.

Well, what about at age 65? He has now paid in for a lifetime and can choose to be on the receiving end from now on. Would my dad still opt-out? He says, "Of course!"

The game is tilted, and so some of the income that my parents had planned to rely on in their retirement would be gone if they could and did opt out now. But, they could pare down and live on what they’ve managed to save. And, they have children who would not stand by and watch them starve on the streets. There are friends, family, neighbors, and strangers who would undoubtedly step in here and there in a desperate situation. What happened to elderly Americans in the centuries before Social Security? They could more reliably plan for their own futures and family, churches, and communities could be better prepared to assist the elderly. Opting out now is financially worse than never playing the game to begin with, yet my father would do it in a heartbeat.

Another person I know, Chris (who is not really libertarian), has demonstrated a similar set of principles. He is about 40 years old and has a mother and mother-in-law who are both widowed and retired. He voted for Ron Paul in the Republican Primary in part because of the Congressman’s proposals for Social Security. He said (paraphrasing), "If Ron Paul wins and Social Security is repealed overnight, I will give my mother and mother-in-law each a monthly check equal to what they would have received from the state."

(Note that Ron Paul’s proposals were for grandfathering out Social Security, not for overnight repeal and stopping payment on those already dependent. This statement is an illustration of the depth of the principles this person held.)

So again, after decades of having his income taken, he is willing to forego his own, his mother’s, and his mother-in-law’s entitlements if it only means that he never has to pay another dime to the state in the name of Social Security. If you ask people who are younger than Chris, you will find even more non-libertarians who are willing to opt out today. Most of us don’t believe that we will ever see a dime of Social Security (in fact, there is currently a deficit, so the collapse of entitlements seems more imminent than ever), so opting out is not a very bold statement. If you ask people closer to my father’s age, they will be more likely to take the view of an earlier caller during the Dr. Higgs interview: that they need Social Security. So the older voting bloc has been an easy target for politicians – right and left – to expand government and put off reform or repeal of the system for another election cycle at a time.

If you want to find evidence of hypocrites among libertarians, you will have to look elsewhere. As long as the money is there for the taking and there is not any promise of getting rid of this vote-buying system, we will take our checks like everyone else. But, old and young libertarians alike long for a day when they can refuse that check in the name of freedom for themselves, their families, or strangers that they will never meet.

April 14, 2009

Kathryn Muratore [send her mail] is an Assistant Professor of Chemistry at American University. She holds a Ph.D. in Molecular and Cell Biology from UC Berkeley.

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