“No taxation without representation!” was the battle cry of the Colonial people in Boston when the Colonies were about to rebel from the English. We all learned that quote in American History class in school. But one of the things that I don’t ever remember being discussed in my history classes was what would have happened if the English had let them vote? Would that have satisfied the Bostonian’s and the rest of the Colonist? Would we not have had the Revolutionary War and still be a part of England? Or were the people really saying to the English Government, “leave us alone and let us be responsible for our own future”? I think that giving them “representation” probably would not have avoided the Revolution. I think what they really wanted was the freedom to be responsible for themselves, without undue interference – or “help” – from the government. This view is reinforced by the writers of our Constitution. While they recognized that there were a few things that they needed a central government to do, it was a limited list. They listed those in the Constitution and left everything else to the states and the people. Clearly they wanted freedom from interference from government and were willing to take the individual responsibility for themselves that went with that freedom. Alexis de Tocqueville, the French author in his two-volume work Democracy in America, was obviously impressed with American’s willingness to take individual responsibility for things that European’s expected the Government to do.
It is this culture of being personally responsible for ourselves and our community that I think has had a lot to do with the country’s success. This, I believe, was pretty strongly rooted in our culture for the first 150 years or so, but has begun to change in the 2nd half of the 20th century. How far we’ve come was brought home to me by the recent piece written by a Bloomberg columnist on the current trend of private companies converting their retirement plans from defined-benefit plans to defined-contribution plans. His problem definition was that people might not end up with the retirement they “want” because they don’t understand how to make “rational and informed decisions about their retirement”. While I would not disagree with hes problem statement, of the several options he suggested, not one involved education and training of the individual workers. All his options involved something the Federal Government could, or should, do to save us. Thus he is not suggesting that having people take “personal responsibility” for their future is even an option. The fact is that if most of us are to have the retirement we “want”, we should have been doing this all along. Social Security and many corporate defined-benefit plans were designed to be not much more than “safety nets”. They would provide income that we would need for survival – food and minimum shelter – but not necessarily the retirement that we might “want”. However being in one of those plans gave us comfort and it was easy to “assume” that it would be sufficient for what we wanted. So we should have been planning for what we wanted for retirement all along and probably doing some saving in addition to being enrolled in those plans.
Defined-benefit plans were also difficult to calculate with any precision what they were worth and they encouraged us to stay with the same company. In then day and age, most of us are inclined not to stay with the same company for 30 or 40 years. One advantage of the conversion to defined-contribution plans is that our need to plan and take an active role is more obvious and actually easier for several reasons. Also if one changes jobs, the balances are not frozen, but will continue to grow from investment earnings. (For a more complete discussion of advantages, see my previous blog post.) There needs be some education and training available for all of us. But in this day and age that should not be a major problem. There are lots of sources for that. The bigger problem may be motivation. We need to recognize that we should take personal responsibility for our own future. A hundred years ago, the bigger problem may have been education because we didn’t have many of the options that we have today. But we did have a culture of taking personal responsibility for our own future well-being. So the motivation would have been there. Today we seem to look first for someone – such as the Federal Government to “save us”. This trend probably started in the great depression when taking care of oneself was extremely difficult. In that environment, people probably needed some help and the things that the government did no doubt provided some of that. But we haven’t had a great depression in the last 80 years and we still think we need to be “saved”. This may be a little like the person taking prescription pain-pills when they need them. But after the pain is gone, they find they have an addiction. And the addiction leads to undesirable consequences.
So my question is, how do we overcome the addiction of wanting to be “saved” by something or someone? How do we give people back the desire and the motivation to help themselves? With the proper motivation, it should not be that difficult to learn what we need to learn or do what we need to do. Unfortunately I don’t have a good answer to that question. But I fear that if we don’t find a way, there will be a lot of undesirable consequences.