THE VIRTUES OF INSECURITY

Social security, the ship FDR built, now appears as the Titanic, and we its nervous passengers. Once the most privileged of governmental programs, the system has fallen subject to abuse and amendment scarcely conceivable ten years ago. This radical change in status demonstrates the triumph of American conservatism. As historians, we enjoy a particular advantage in analyzing antagonism toward social security, for the roots of this hostility lie in a deep conservative tradition. For more than a century, conservatives have argued that public welfare destroys those qualities in the worker which ensure the vitality of American society. During the last decade a school of brilliant conservative economists has drawn directly on this tradition in its criticism of the social security system. A History of Retirement, William Graebner's revisionist view of the Social Security Act (SSA), provides this critical scholarship with a coherent historical framework. The essential objections of conservatives to social security have little to do with the rhetoric of "bankruptcy," supposedly to be caused by trust fund insolvency or changes in the dependency ratio. These issues, which greatly alarm the public, are politically useful and serve the fiscal goals of the Reagan administration, but they have questionable merit as arguments against social security itself. The effects of social security on incentives to save and work are more substantive questions and deserve our attention. Martin Feldstein has persuaded most economists that social security taxes reduce personal savings and hence impede capital accumulation and economic growth. This is a restatement of a venerable belief in thrift and fits the current temper against taxes. Analysis of social security's effect on the "work ethic" taps an even deeper vein: conservative and liberal economists have shown that the availability of social security benefits weakens incentives to work and induces retirement. Their findings encourage a sophisticated version of the nineteenth-century canto against the dole.' Social security saps self-reliance and insecurity has its virtues: it inspires hard work and thrift.