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Mature Citizens
Translation of Hardy Bouillon's 28 August 2006 FAZ review of Wilfried Prewo's "Vom Mundel zum mundigen Burger" (From Welfare State to Social State). |
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Mature Citizens
Wilfried Prewo brings it right to the point. Even if one were to save the welfare state: in face of global competition it is not possible. However, Prewo thinks that at least the social state is possible via an individual consumer model. Exactly this could guarantee his proposal a broad consensus. Prewo’s basic idea is to have the current contributions, by which German employers and employees finance the social security system, paid into individual savings accounts. (27) While the insured may use his savings only for social security purposes, he should be free to choose among insurers. A minimum security is obligatory, i.e., unused savings remain on his social savings account (SSA). Hence the author does not want to abolish social benefits or mandatory social security. On the contrary: Social security should prevail and become affordable via transition to a model of private insurances only. Prewo knows how to communicate his concern by using simple metaphors and asks us to look at the social system as if it was a traffic system: We provide the road system, traffic rules and guard rails, but we leave it to the people whether they use the bus or the car. (89f.)The free choice of the means of transport corresponds to the free choice of the insurer. The author describes the change from the paternalistic social model to the individualistic consumer model for all three areas of social security (health, pensions, unemployment). Not only should the individual savings account model replace the three existing systems, it also should annul the border between these. That is to say, he who faces higher health risks while enjoying a secure job, may express this by choosing corresponding premiums and benefits, say lower contributions for his unemployment insurance and higher contributions for his health insurance. The final sentence in the book (a footnote, by the way) should suffice to demonstrate that all pay-as-you-go systems have no future, while market-systems do: Germany’s federal pension system has almost no savings at all. They do not even cover for one single month. (S. 100) However, Prewo not only worries about the social security of his fellow Germans and the displacement of the contribution-based Bismarckian welfarism. He also wants to replace the Beveridgean social security system throughout Europe, i.e. his consumer model is apt to be implemented everywhere where, until now, tax-financed pay-as-you-go systems are in power. The only difference is that in Beveridge-model countries, governments have to pay into the individual savings accounts. To reform the social state in Germany and Europe with nobody losing: that is the basic idea of Prewo. By presenting his empowerment model and the idea of social savings accounts (SSA) he has proposed an interesting and viable reform – above all one that meets the objection that reforming the social state would lead to social exclusion.  Hardy
Bouillon is Chairman of CNE's Academic Advisory Board Click here to download or to order copies of From Welfare State to Social State.
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