Second Thoughts on Old Age Security
In 1960 the English version of Wilhelm Ropke’s ‘A Humane Economy’ was published. In that book he shared the following account to demonstrate the effect that the welfare state has on personal saving, or rather dissaving. In conversing with the manager of a local mining operation Ropke learned the following about one of the older mine workers:
“The old man had put aside a tidy sum for his and his wife’s old age, but suddenly he decided to blow it all on a luxury television set and other things. Surprised, the manager asked why he had suddenly changed his mind and was spending all his savings; the old miner replied that the welfare state was now taking care of him anyways and there was no reason why he should deny himself the immediate enjoyment of what he had set aside for his old age.”
If we consider the facts from the last 40 years or so, it seems that many in Canada have adopted the attitude of this miner living in 1960’s Germany – “why save for tomorrow when I can enjoy my earnings today…for the state will make sure I won’t be destitute in my old age.”
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