Dependency Ratio Hits Wsj

EARLIER THIS week I criticized an article by Malcolm Gladwell in The New Yorker. In the article Gladwell criticized the notion of a company defined-benefit pension plan. It could never work because of the natural changes in the “dependency ratio” between workers and non-workers.

But I critiqued the notion that the dependency ratio is out of our control. The dependency ratio is only fixed because we chose to fix it, politically. When it comes to the crunch, children could work and so could older people (Disclosure: I’m 60).

Not, you understand, that I’d like to be working at 70. I’d hate it.

Today Ron Gettelfinger, president of the United Auto Workers, gets his say in the Wall Street Journal. Right on Malcolm, he writes.

[I]t makes no sense to transfer these obligations [of pensions and health insurance] to individual households. We need to... protect and develop well-funded public programs which cover every man, woman, and child in America.

Well, you can see where Ron is going. More taxes and more political control in America. But it doesn’t change the basic problem. Whatever benefits are promised or are paid, they have to come out of the present economy. And the more you “fix” things with public programs and the like, the more of a crash you’ll get when extravagant promises can’t be paid.

That is why it is a good idea to get people to declare, by their spending and savings patterns, just how much a retirement pension and health care means to them.

Everyone is in favor of a pension or health care that costs them nothing. The question is, how much are people prepared to sacrifice for future income and health care?

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures

German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate.
F.S.C. Northrop, The Meeting of East and West

Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.” —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Churches

[In the] higher Christian churches… they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital

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