|What Gas-Guzzling Dinosaur?||The Travails of Labor and Education|
by Christopher Chantrill
August 27, 2006 at 11:53 am
BACK IN THE late 1940s, The New Yorker wants us to know, Richard Gosser, president of a United Auto Workers local in Toledo, Ohio, wanted to set up a union pension plan for the workers. Ten cents an hour was all it would cost to give the workers a decent retirement, writes Malcolm Gladwell in (http://www.newyorker.com/fact/content/articles/060828fa_fact) The Risk Pool.
The auto companies would have none of it. Instead they offered their own defined-benefit plans, each funded by the company.
Management guru Peter Drucker saw through the whole scheme immediately. In a 1950 article in Harpers he exposed the company pension plan idea as a mirage.
Drucker simply couldnt see how the pension plans on the table at companies like G.M. could ever work. For such a plan to give real security, the financial strength of the company and its economic success must be reasonably secure for the next forty years.
And he was right. Of course, the union pension plan hasnt been much better. But we dont mention such things at The New Yorker.
The lesson to take from the defined-benefit-plan debacle, according to Gladwell, is the importance of the dependency ratio, the ratio of workers to non-workers. A healthy pension plan depends on a favorable ration of workers to beneficiaries.
It is the job of wise policy experts, he implies, to devise how to spread the risks across society to solve the imbalances caused by the overweening pride of corporate management in the late 1940s and the inevitable swings of the dependency ratio.
Just a minute! Before we sign up for another generation of expert-driven national pension policy, let us step back a moment. Let us look at the whole picture, not the tendentious detail that Malcolm Gladwell wants us to see.
In 1950 the three bigs, Big Business, Big Labor, and Big Government were all offering the American people defined-benefit Ponzi schemes, whether corporate pensions, union pensions, or Social Security.
But all these top-down plans for social welfare have now failed, and failed because of the dependency ratio. Social Security started with a dependency ration of 22-to-1. Now its three-to-one, and soon it will be two-to-one. The unfunded liability amounts to trillions of dollars.
Nobody wants to deny New Yorker readers a breathless tale of proud Big Businessmen and the mysterious dependency ratio. They pay their money and they deserve a rattling good yarn.
You might not realize it from reading The New Yorker, but there is another way. But first, let us take a look at the dependency ratio. Malcolm Gladwell presents it as a fixed, immutable law of society. But of course it isnt.
The dependency ratio is not really fixed. It is only fixed because liberals jammed it. Let us look at how liberals jammed up the works: first of all, children.
Back in the bad old days we had this institution called child labor. Poor parents sent their children out to work. The artisan class sent their children to school to get a basic education for three or four years in literacy and numeracy. Then, at twelve or thirteen, they went out to work as apprentices. The middle class, of course, sent their children to school much longer. They could afford it.
Today, the average western nation keeps its children in government schools by law. Everyone agrees that education is a Very Good Thing for everyone, and child labor a Very Bad Thing. It must be true. One thing is for sure: universal compulsory primary and secondary education certainly messes up the dependency ratio.
In real life, of course, young people start work at different ages, for a host of different reasons.
The other thing that fixes the dependency ratio is the idea of a fixed retirement age. Bureaucrats, whether corporate, labor, or governmental, like one-size-fits-all programs. It makes life so much easier. Big Business wants to shift the bed-blockers out of the way with fixed retirement ages. Big Labor wants to reward their members with 30-years-and-out of their dead-end jobs. And Big Government wants to buy votes with taxpayers money.
In real life, of course, older people retire from work at different ages, for a host of different reasons.
The dependency ratio is meaningful only when you treat people like bumps on a log, as corporate headcount, as union rank-and-file, or as government beneficiaries.
A truly compassionate and sensitive political elite would have used its power back in 1950 to help ordinary people to provide for themselves without a helpless dependence on Big Anything.
Because in real life, its dependency ratio be damned. You retire when you can afford to.
Of course, some-people-through-no-fault-of-their-own-cannot- provide-for-themselves. But that is no excuse for the rest of us.
Buy his Road to the Middle Class.
[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. Racist, sexist, homophobic, anti-choice fascists, she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican
Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism
[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050
For [the left] there is only the state and the individual, nothing in between. No family to rely on, no friend to depend on, no community to call on. No neighbourhood to grow in, no faith to share in, no charities to work in. No-one but the Minister, nowhere but Whitehall, no such thing as society - just them, and their laws, and their rules, and their arrogance.
David Cameron, Conference Speech 2008
Imagining that all order is the result of design, socialists
conclude that order must be improvable by better design of some superior mind.
F.A. Hayek, The Fatal Conceit
[Every] sacrifice is an act of impurity that pays for a prior act of greater impurity... without its participants having to suffer the full consequences incurred by its predecessor. The punishment is commuted in a process that strangely combines and finesses the deep contradiction between justice and mercy.
Frederick Turner, Beauty: The Value of Values
[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.
But the only religions that have survived are those which support property and the family.
Thus the outlook for communism, which is both anti-property and anti-family, (and also anti-religion), is not promising.
F.A. Hayek, The Fatal Conceit
[T]he way to achieve a system of determining admission to the public schools on a nonracial basis,
Brown II, 349 U. S., at 300–301, is to stop assigning students on a racial basis. The way to stop
discrimination on the basis of race is to stop discriminating on the basis of race.
Roberts, C.J., Parents Involved in Community Schools vs. Seattle School District
A writer who says that there are no truths, or that all truth is merely relative, is asking you not to believe him. So dont.
Roger Scruton, Modern Philosophy
Paul Dirac: When I was talking with Lemaître about [the expanding universe] and feeling stimulated
by the grandeur of the picture that he has given us, I told him that
I thought cosmology was the branch of science that lies closest to religion.
However [Georges] Lemaître [Catholic priest, physicist, and
inventor of the Big Bang Theory] did not agree with me. After thinking it over he
suggested psychology as lying closest to religion.
John Farrell, The Creation Myth
Within Pentecostalism the injurious hierarchies of the wider world are abrogated and replaced by a single hierarchy of faith, grace, and the empowerments of the spirit... where groups gather on rafts to take them through the turbulence of the great journey from extensive rural networks to the mega-city and the nuclear family...
David Martin, On Secularization