WILLisms.com: Social Security: Franklin vs. Bismarck.

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Social Security: Franklin vs. Bismarck.

José Piñera (via Social Security Choice blog):

Otto von Bismarck, chancellor of Germany from 1871 to 1890, an aristocrat, a monarchist, and a Prussian nationalist, put in place the first social security system in 1889 in Germany. The U.S. Social Security Administration, on its website, traces its intellectual roots to Bismarck and to the 19th century European idea of the welfare state.
This was the Europe of Saint-Simon, Comte, and Marx, where central planning and collectivism were becoming the popular places to turn for the answers to the human condition. The folly of these ideas when taken to their logical conclusions, a process which Nobel laureate economist F.A. Hayek called the "fatal conceit," became widely appreciated after the fall of the Berlin Wall and the collapse of the Soviet Union.

On another continent, a century before Bismarck, lived Benjamin Franklin, whom historian H.W. Brands called the "The First American." This master of technology saw human potential in creative, responsible individuals living in freedom. He wrote a famous memorandum on the 13 virtues -- such as frugality and industry -- needed for personal success. The individual is not a passive data point for central planners, but the locus of initiative, creativity, and individuality.

Franklin fully understood the extraordinary power of compound interest. In his will, he left 1000 pounds sterling each to the cities of Philadelphia and Boston, carefully calculated how much these funds would yield over 200 years at 5 percent interest, and stipulated loans to young artisans to help them start their businesses.

I'll go with Franklin over Bismarck any day.

Posted by Will Franklin · 6 July 2005 02:48 PM

Comments

I am with Ben...

Posted by: Zsa Zsa at July 6, 2005 07:30 PM

Will,...Do you see any family resemblence?

Posted by: Zsa Zsa at July 6, 2005 08:39 PM

You mean ... you're the long lost Zsa Zsa Franklin? This is bigger then the Limburg baby!!
Sweet!

Posted by: Rob B. at July 7, 2005 12:09 AM

Bismarck did a better job than you might suppose.

He was pioneering without the benefit of modern capital markets, computers, accurate statistics, and a century of experience which revealed the weaknesses of socialism.

The plan was simple and stable. It worked well when life expectancy was much shorter.

Franklin had the better ideas about wealth and society. But they depended upon a lifetime of stable investment in an era when banks and all other financial activity were not regulated, auditing was creative, and total collapses were common. Only the great depression brought reforms.

And even today we have Enrons.

I favor the SS reforms. Still I don't think it fair to dis Bismarck. Most countries got much worse leaders.

Posted by: Ken at July 7, 2005 01:02 AM

Isn't Social Security basically the Government saying that it's citizens aren't able to manage their own hard earned money?... It is sort of like an imposition of government upon every individuals right to own their own funds! The government is basically saying, The people are not responsible enough to invest their own money so we will invest it and ultimately tax it as much as possible!

Posted by: Zsa Zsa at July 7, 2005 08:46 AM