By Romina Boccia and Ivane Nakebia Cato of FreedomSeptember 5, 2024.
excerpt:
This article does not consider the replacement rate for the entire U.S. retirement system, including both Social Security and voluntary pensions. When considered in this broader perspective, the U.S. approach replaces more than 73% of the average worker’s pre-retirement income, substantially exceeding the replacement rate for the U.S. retirement system. OECD average 55.3 percent. This puts the United States ahead of many countries, including those with stronger government-run systems.
For example, the article notes that in France, public pensions cover 57.6% of the average worker’s pre-retirement income, while Social Security’s replacement rate is 39.1%. (As noted above, if voluntary pensions are included, the total replacement rate for the U.S. retirement system exceeds 73%.) Meanwhile, the French system only gets 57.6% due to the limited coverage of voluntary pensions, which are so limited that the OECD does not take them into account when calculating the total replacement rate. The OECD data also highlights that older Americans are much less reliant on the government for their retirement income than their French counterparts: public benefits account for 39.3% of the total income of older Americans, compared to 78.1% in France.
DRH says: This article is interesting in another way, too: It shows that Americans are pretty understanding that they can’t rely on Social Security for the majority of their retirement income.
excerpt:
According to Thomas Hazlett in a 1983 article in the Wall Street Journal, WH Hutt “may be the most important economist of the century.” Samuel Bostaph, Hutt’s colleague at the University of Dallas, predicted that Hutt may become one of the most important economists of the 21st century. Economists who know WH Hutt probably only know him because he popularized the phrase “consumer sovereignty.” This is a pity, because he has made many of his more important contributions that are worth reconsidering in the 21st century. They still have much to teach us about how a free society works and thrives.
Personal note: I attended three different week-long seminars with Mr. Hutt. The first was the 1st Austrian Economics Conference in South Royalton, Vermont in June 1974. The second was the Liberty Fund Seminar (the first seminar I attended) in June 1975 at Ohio University in Athens, Ohio. The third was shortly afterwards, and in fact Mr. Hutt, his lovely wife and I walked through the airport together to board a plane to attend that seminar. It was the 2nd Austrian Economics Conference at Hartford College in Hartford, Connecticut. I was very impressed with Mr. Hutt, but knew very little about his importance at the time.
The second of these new theories, and the latest in the race for the hearts and minds of political candidates, is a set of economic ideas and policy proposals called “industrial policy.”It has been the subject of a growing number of books and articles, has been endorsed as a concept by the AFL-CIO, its principles are incorporated into many bills currently under consideration in Congress, and is receiving a favorable hearing from many of the contenders for the 1984 Democratic presidential nomination.
The term “industrial policy” means slightly different things to different people. It does not refer to a single theory, but rather to a loose collection of similar diagnoses and propositions. The diagnoses generally boil down to two basic propositions:
DRH says: This is an old but good article. I re-read it while writing my latest Substack post.Brad DeLong’s inadequate case for industrial policy“, I am blogging to tell the differenceSeptember 8, 2024. The content is rich. I read it when I was researching industrial policy as a senior economist on President Reagan’s Council of Economic Advisers. It had two influences on my work. First, I used it as a reference when writing my first article. luck“The Myth of the Ministry of International Trade and Industry” August 8, 1983. Here is a quote from the article: hereSecond, I was one of the people who pushed hard for the chapter on industrial policy at the CEA. My side won, and we wrote it. I wrote the first draft, which was thrown in the trash for being too basic. (I eventually agreed.) But the final version had a lot of input from me. In fact, I included it in a talk I gave to students at the Naval Postgraduate School in February 1984, and that talk led to the professorship.
