The old age of Prudence
Sunday, July 03, 2011
Surely one key motivation to work and save your whole life is to remain independent? Why then do Conservatives habitually bemoan the fact that those with assets are required to use them (if their cash is insufficient) to take care of themselves when elderly? Why are they so envious of the imprudent who are cared for free of charge? Envy is the defining Socialist vice and ill befits free men and women.
A more conservative approach would be to ask the practical questions as to whether our system is adequately funded (no, it isn't) and whether it creates perverse incentives to be imprudent (yes, it does). Isn't the middle-class phenomenon of SKIing (Spending the Kids' Inheritance) as much a direct result of welfarism as the idling of the underclass? Not that I am suggesting well-off people plan to throw themselves on the mercy of state care homes and/or the NHS, you understand. It's more complicated than that.
The delightful uncertainty about the precise date of one's death makes it impossible for even the most financially-astute to provide "just enough" for lifetime expenses. Absent a welfare state, people are forced to over-provide for fear of dying in poverty. The existence of the welfare state tips the balance of that fearful calculation in favour of imprudence. As witness my late grandfather's death bed advice to his driven grandson not to "overdo the work and saving up". It could only have been given by someone acclimatised to welfarism.
The present crisis over pensions and elder care has a political and an economic dimension. Politically, there are 10 million votes in it, few of them wielded by anyone who cares much about economics. Economically, the problem is that "National Insurance" is a fraud.
Welfarism was sold to our prudent ancestors as much as an antidote to irresponsibility as a scheme to take care of the indigent. If you had the money to pay the premiums you were to be forced to do so. No-one with money could irresponsibly spend the minimum amount that should be saved for old age. The State would take money from the potentially reckless and invest it for them. Hurrah! If you didn't have money even to provide for that minimum, then the surplus in the insurance scheme would be applied to you. Hurrah! Then successive governments spent the "premiums" on bribes vote-winning schemes, just as if they were general taxation. Not only was there no surplus to provide for the poor, there was no basic pot to pay out the contributors. Boo!
Thus was the most successful Ponzi scheme in history born. Success, for a Ponzi scheme, being defined by the originators escaping with the benefits without getting caught. Beveridge never went the way of Madoff.
That's how we got here. Where do we go now? 10 million elderly voters are no more ready than 6 million state employees to be told (as they would be if they same thing had happened to their private pension) that the fund managers stole the money and there's little or no pension to be had. That's where the politics comes in.
Politics is really just legitimised gangsterism. Gangsters dispense largesse to their "families" and communities and buy themselves political and judicial influence with money stolen or extorted violently from others. Nuttin personal, you understand, they just do what they gotta do. The cries for a cap on payments for care in old age (like the strike last Thursday) are really just demands from the Godfather's influential friends for more extortion from others. I was reminded of this analogy by Polly Toynbee (fading moll of the Lefty Mob) when she asserted on this week's BBC Question Time that private sector pensions are "subsidised" by Government (because of tax relief). Gangsters who "go easy" on a victim of the protection racket are likewise inclined to see it as generosity. Polly and her gangster friends simply don't care where the money comes from, only about is how it's divided up, under the (as they see it) benign influence of their guns.
If, as "Conservatives" claim, the elderly want to pass on their wealth to their families and not to be "punished" for being prudent all their lives, then fine. Let the families take care of them and there will be no need for any of their assets to be "wasted" on looking after themselves. The real question now is how to create a scheme that incentivises prudence and disincentivises irresponsibility, rather than the reverse.
It all boils down to consequences and incentives. It may not be "nice" to leave someone without a job living in a small flat without the latest footwear and gadgetry, but what's the alternative?
As much as the bureaucrats love making and refining rules, you can't write a definitive universal description of the "deserving poor". The "Friendly Societies" mentioned in The Welfare State We're In are probably the best way of ensuring that people contribute without getting ripped off, and that those who claim are assessed by those in the best position to understand them.
Posted by: Account Deleted | Monday, July 04, 2011 at 08:04 PM
Such is the law of unintended consequences that elderly people in the Netherlands, where assisted suicide is legal, now carry "anti euthanasia" cards and are reluctant to go to hospital at all.
I am afraid (as those elderly Netherlanders clearly are) that many "assisted suicides" would in truth be nothing of the sort.
Posted by: Tom | Monday, July 04, 2011 at 10:43 AM
Everyone ought to have the right to try to live forever, but nobody should expect the rest of us to pay for it.
To the extent that suicide must be assisted, I think it should be allowed, though obviously I would never wish that circumstance on anyone.
I doubt that many assisted suicides involve compulsion.
The will to live may indeed be strong, and many (perhaps one day myself included) may choose misery over death.
My only complaint is that some feel they should live in comfort, not by saved wealth, or even by charity, but by wealth confiscated by force.
Posted by: Suboptimal Planet | Sunday, July 03, 2011 at 11:12 PM
@ TP I should have known!
This was obviously a pun on Hutton's ghastly "The state we're in" it was far better and got about 1% of the media
Posted by: Single Acts of tyranny | Sunday, July 03, 2011 at 08:56 PM
Right now, no-one has the chance to live forever, but they certainly have the right to try. They also have the right to terminate their life at any time for any reason since suicide was legalised. They simply don't (and shouldn't) have the right to compel others to help.
The will to live is strong and life is far more important than "lifestyle", as poor people all over the world testify by their smiles.
Posted by: Tom | Sunday, July 03, 2011 at 07:25 PM
I did and I join you in recommending it.
Posted by: Tom | Sunday, July 03, 2011 at 07:20 PM
You really should read "The welfare state we're in" for a demolition of the whole concept of Welfarism
Posted by: Single Acts of tyranny | Sunday, July 03, 2011 at 03:36 PM
Great post, Tom.
But I can't really fault those Conservatives who resent having to pay their way while others are cared for at taxpayers' expense. Especially for those who have borne more than their share of the tax burden throughout their lives. It's not that they feel the state ought to provide for them, it's just that they want to take the opportunity to get back some of what's been taken from them.
Under a free system, it would of course be right to expect people to spend their own wealth on their care when elderly. What is 'right' under our current system of compulsory redistribution is hard to say.
Harsh as it sounds, I think a big part of the problem is the NHS, which seems determined to keep people alive no matter how miserable their lives have become, or how much their continued existence costs. I think people should be free to choose death not just when they are terminally ill, but also when they realise that they haven't set aside enough to live in the lifestyle they desire.
Nobody has a right to live forever, certainly not at taxpayers' expense. Everyone should be free to judge for themselves the tradeoff between quality of life and quantity of life.
Posted by: Suboptimal Planet | Sunday, July 03, 2011 at 01:33 PM