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The Ownership Society: Social Security Is Only the Beginning

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  • L. Randall Wray

Abstract

From this paper's Preface, by Dr. Dimitri B. Papadimitriou, President: As his new term begins, President Bush has been trying to focus his domestic agenda on what he calls the Òownership society,Ó a sweeping vision of an America in which more citizens would hold significant assets and be free to make their own choices about providing for their health care and retirement, and educating their children. L. Randall Wray, who has written for the Levy Institute on many topics, evaluates the premises and logic of this program in this new public policy brief. Wray points out that much of the history of the Western world since the advent of liberalism has been marked by a gradual rise in the power of those who lack property. Some of the milestones in this progression include universal suffrage, regulation of business, and progressive taxation. BushÕs ownership society proposals, according to Wray, would result in a partial reversal of the progress of the last 250 years. The reason is that, while BushÕs plans would undoubtedly increase the choices and power of those who have property, they would fail to democratize ownership. Many gains to the wealthy would come at the expense of the poor, the sick, and the elderly. Consider, for example, the condition of the nationÕs private pension system. Increasingly, firms are switching from defined-benefit to definedcontribution plans. This development would seem on its surface to favor the establishment of a new class of stockholders, empowered and holding a larger stake in the system. But, as Wray demonstrates, retirement accounts and other assets just do not add up to a substantial amount for most Americans. This means that most citizens have much to lose indeed from attacks on Social Security and the erosion of the traditional pension system. Much as the safety net for the poor has largely vanished since the Reagan years, the bread-and-butter benefits and rights of the middle class are now threatened by the ownership-society agenda. To many, the claim made by Republicans that all should take responsibility for their wellbeing rings true. But it is important to keep in mind the real alternative to public benefits for the middle class: a society in which success would depend largely upon luck, inheritances, or charity. A society that forces individuals to read their future in their Microsoft Money files inevitably creates a class of nonowners who are insecure and lack independent means. Ironically, this runs up against the aims of those who sincerely hope for a world in which more have the opportunity to become rich: moving upward often brings some setbacks along the way, which might be fatal in a world of reduced bankruptcy protection, disability and medical benefits, and educational aid.

Suggested Citation

  • L. Randall Wray, 2005. "The Ownership Society: Social Security Is Only the Beginning," Economics Public Policy Brief Archive ppb_82, Levy Economics Institute.
  • Handle: RePEc:lev:levppb:ppb_82
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    File URL: http://www.levyinstitute.org/pubs/ppb_82.pdf
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    References listed on IDEAS

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    1. Edwin M. Truman, 2001. "The International Implications of Paying Down the Debt," Policy Briefs PB01-07, Peterson Institute for International Economics.
    2. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720, March.
    3. Paul A. Samuelson, 1966. "A Summing Up," The Quarterly Journal of Economics, Oxford University Press, vol. 80(4), pages 568-583.
    4. Wynne Godley & Alex Izurieta & Gennaro Zezza, 2004. "Prospects and Policies for the U.S. Economy: Why Net Exports Must Now Be the Motor for U.S. Growth," Economics Strategic Analysis Archive 04-7, Levy Economics Institute.
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    Cited by:

    1. L. Randall Wray, 2008. "Financial Markets Meltdown: What Can We Learn from Minsky," Economics Public Policy Brief Archive ppb_94, Levy Economics Institute.
    2. Jan Toporowski, 2013. "The Elgar Companion to Hyman Minsky," Review of Political Economy, Taylor & Francis Journals, vol. 25(1), pages 175-177, January.
    3. Greg Hannsgen, 2007. "A Random Walk Down Maple Lane? A Critique of Neoclassical Consumption Theory with Reference to Housing Wealth," Review of Political Economy, Taylor & Francis Journals, pages 1-20.
    4. Dimitri B. Papadimitriou & L. Randall Wray, 2010. "Introduction: Minsky on Money, Banking and Finance," Chapters,in: The Elgar Companion to Hyman Minsky, chapter 1 Edward Elgar Publishing.
    5. Papadimitriu, Dimitri & Wray, Randall, 2016. "Hyman Minsky's "Stabilizing an unstable economy" - twenty years later," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 22-51, April.

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