Tuesday 1 May 2007

Pic of the day: If you don't trust people to save up for their own retirement, why do you trust them to vote?

Socialism as distrust

Once again it is May 1, the high noon of socialism. And there are still people who believe socialism is a good idea, at least to some degree, at least if done right. It behooves me on this day to explain once again, patiently, from yet another perspective, why socialism is a bad idea and should be quietly left at the compost heap of history.

This year I will focus on yet another aspect of socialism, its inherent distrust in people. As you know, even the fairly moderate social democracies here in Europe don't trust people to save up money for their own retirement, for instance. Instead the State confiscates part of their wages along with the taxes, then pay them back if you are lucky enough to reach retirement. (Which admittedly most people are.)

It varies from nation to nation what the State does with the money in the meantime. On one extreme, my native Norway has a fund investing in bonds and shares abroad, led by highly professional investors and with only a part of the profits under direct political control. On the other extreme, and this is more or less the rule, most states don't really tuck the money away. It is a fund only in the accounting sense; in practice, the State is spending as it goes, so that any future pensions will have to be paid directly by the future taxpayers of the same nation. This is not good when the population is declining, as it is in much of Europe and in Japan. Declining fast, in some cases. This means that either will the next generation have to pay extreme taxes (even by European standards) or the State will have to tell the elderly: "Sorry, we took your retirement savings and used it on other things. Here, have some scraps and rags."

But can you really trust people to save up for their retirement? After all, in these days with all-night Internet banking, it is easy one Saturday night when you are drunk to take all your savings and spend it on ale and whores, or at least "invest" it in a Nigerian money-laundering scam. And even when sober, not all people feel very strongly about their retirement when they are young. The future is far away, and money is a rather abstract concept. In all fairness, I remember feeling that way myself. Surely, I thought, Jesus would return before I grew old, seeing how it was the Last Days and all. Then again, I did not have much money anyway. (For that matter I still don't, but even by comparison.)

Actually there are various safeguards that can be put in place to stop people from withdrawing their money in a fit of insanity. And people will be a lot more motivated to save when they know that they are the ones who decide whether they will spend their old age in relative luxury or in rags and roaches. As opposed to "I am paying for everyone else and everyone else is paying for me, so it doesn't really matter what I do".

If you don't trust people to care about their own retirement, it makes sense that you don't trust them much in other ways either. The education of their children? They probably don't care. They will probably drink up the money instead of giving their kids a good education. And they sure won't lay aside a reserve in case they might lose their job or hit some other snag. Well, true, they won't do that ... since a) we have already taken the money they should have used, and b) it isn't necessary, the State provides.

Actually, I agree that a lot of people are going to make bad decisions if left to make their own decisions. But freedom is such a value in itself that it is worth that risk. If we don't consider freedom the highest good, then there is no reason to limit this distrust to the financial side of life. Why trust people to vote when they cannot even be trusted with their own money? Surely they will vote for any slick liar who promises them the moon on a silver platter. Better to let us appoint the Politburo and then let the peasants vote yes after the fact. By this logic we can easily see that the "excesses" of the communist era was not something that mysteriously happened, but rather a logical result of socialist thinking. For the core of socialism is a deep distrust of people. And you cannot really trust The People without trusting people.

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This is certainly not to say that I think we should just let the poor die in the gutters and under the bridges (unless they have gone out of the way to get there despite having other alternatives). In fact, I even support transferring money from the rich to the poor. Ideally the rich should do this on their own, but I am not entirely adverse to putting some pressure on the most fortunate to save the lives of the least fortunate. And the State can do a lot of good by for instance underwriting education loans to ensure social mobility.

But at the bottom, there has to be a trust in our fellow citizens, that they can be trusted with their own lives. If not, we are essentially regarding them as less than human. There is a fundamental difference between helping people and taking control of their lives. You don't really like others doing it unto you, do you? It should be easy to find out, at least here in Norway, since the due date for our tax papers were yesterday. If you rejoiced at the thought of paying taxes, then perhaps you really are a socialist at heart. Otherwise, you should reconsider.