Much as I normally hate to see friends fight, it was gratifying to read Radley Balko’s rather pointed response to a post in which Matt Yglesias speculates about the motives behind libertarian organizations like Cato’s support for partial privatization of Social Security, mostly because such charges seem fairly common and because, at least with respect to Cato, they’re just way off base.
Libertarians are the ones who often get accused of their own variant on vulgar Marxism that reduces all motivations to income maximization, but the simple truth is that the guys running the show there are, in the best sense, ideologues. That is to say, they’re genuinely strongly committed to their own professed principles. That doesn’t mean they’ll utterly ignore political reality and put forward the most pure, ultra-Rothbardian, strictly libertarian proposal imaginable on any given policy issue, but none of them would regard it as in their “self interest” to deliberately push a counter-libertarian line in order to raise a few more bucks. Indeed, it would be pretty damn hard to explain lots of the positions Cato does take if that were the presumed motive. Just speculating wildly here, but I’d hazard that many of their older, wealthier donors are more pro-Bush than the think tank has been of late. And surely it’s not lining their pocketbooks any when a Regulation cover story argues that tax cuts (when not accompanied, as the recent ones haven’t been, by spending restraint) tend to further the growth of government, contra the “starve the beast” theory.
To turn to the substantive question, then: Why might a libertarian prefer Social Security “privatization” (which still involves forced saving) to a straight reduction in benefits or means testing (which would also, obviously, reduce the level of outlays)? I can think of some interrelated reasons, and I imagine Matt could’ve come up with them readily enough. For one, it at least places people in (more) control of their own money and retirement planning—it’s obviously true that there’s some coercion involved whether you insist that people save some of their wages (to be invested as they choose) or make them fund other people’s retirement, with the assurance that should they fail to provide for themselves, younger workers will be made to foot the bill. But the former seems more in line with promoting autonomy and individual responsibility, however leavened with paternalism it might be. There’s also the rather salient difference between merely shuffling funds around from younger to older workers and actually trying to generate real wealth. I don’t expect Matt to find those sorts of arguments compelling; I don’t even expect all libertarians to. But surely it’s not mysterious that a good many would.