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Becker on Social Security

In today’s Wall Street Journal (paid subscription required), Gary Becker says that the case for privatizing Social Security is more political than it is economic.

I don’t separate these concepts as much as Becker does – if markets are desirable, they are desirable only because they best their alternatives (especially state intervention); if state intervention is desirable, ditto.

Still, his points are exceptionally sound. They are nicely summarized in his opening paragraph.

Republicans and Democrats are arguing passionately about the future of Social Security, and the argument, at its core, is about privatization. It is true, as some critics observe, that there is no magical gain in privatizing Social Security, since all systems have to provide incomes for retired persons. By that token, however, there’s no gain in privatizing a government steel plant either, since steel still has to be produced, too. Yet there are very good reasons — with roots in political economy — to privatize steel. And as with steel (and the like), there are excellent reasons for a privatized individual-account Social Security system.