| > I was referring to individual-level retirement planning. That is, does it make sense for me to invest in one or more children based on the expectation that those children will directly help me (financially and otherwise) during retirement? I understand. I was pointing out what impact our national retirement policies had on individual incentives and how that translated into group incentives. > However, as far as I know, it was always a program whose ethical justification was that you get back what you put in, plus some return. Whether or not you have children is irrelevant. That's an abstraction. It doesn't matter if you only "take out" what you "put in." At the end of that day, somebody's kids are producing what you take out. Any retired generation inherently depends on the production of the working generation, and for a generation to retire, there has to be a working generation to take their place, which means having kids. Social security versus investing versus whatever is just a way of accounting for that basic transaction. > Furthermore, if we presume that the ethical justification for social security is that one's children are going to be productive members of society, how can we adjust for unproductive children? I'm speak at the group level. It's fairly irrelevant whether one person does or does not have kids, so it's useless to try and account for that at the level of Social Security. However, Social Security as an institution reduces the incentive for everyone to have kids, because they can just depend on the production of the kids of people who did. It's a free-rider problem. > If social security is an intergenerational contract that involves a transfer of wealth from the young to the old, then it's an unjust Ponzi scheme that will collapse as soon as demographic trends are no longer able to sustain it. It's a Ponzi scheme, but what makes it unjust? It's the circle of life, man. Your parents took care of you, and at the other end of the cycle you take care of them. The really useful insight is that it's a Ponzi scheme that's unavoidable, at least with existing technology. By and large, the human life is bookended by periods in which people are not self-sufficient and not able to produce. No matter how you abstract the underlying intergenerational transaction, you can't get away from it. We're engaging in the same intergenerational transaction people did tens of thousands of years ago--we just have a different, fancier way of accounting. |
This describes retirement in general, which I have no issue with, not social security.
The unjust aspect is that you have no control over the future productivity of younger generations, which provides for your retirement. As an extreme example, how do you think China's population is going to deal with retirement once the full effect of the one-child takes effect on Chinese retirees? They didn't set that policy, but their retirement will suffer from it.
My contention is that a person's retirement should be proportional to their own life's productivity, which it is if you have built sufficient invesments and assets by your old age. I'd just prefer that governments not make promises to entire generations they can't ultimately keep.