I'm under no delusion that this post will "solve" the problem we are attempting to fix, but I do hope that it at least can bring some realistic balance to the conversation.
It's of common knowledge that most people who participate of crypto, do so out of rebellion for the status quo, and that fact is not lost to me or unimportant.
With all that said, and to make my argument from a realistic/pragmatic approach, allow me a detour, a little bit of personal experience, lessons life taught me.
I've had a lot of jobs over the years, and those who know me well, know that I worked for Samash Music and Guitar Center for most of my adult life. A common career, I guess, for musicians who are looking to stay at least near to their craft, while still being able to put bread on the table.
With the passing of time and the learning of the ropes, I gained promotions, and access, if you will, to important information regarding these companies. I learnt how to manage my own store, but also how to understand the macro picture.
I remember distinctly, as if it was yesterday, when the order came down from the upper ranks that we were to get rid of Loss Prevention altogether. A move, I should say, that on it's face makes absolutely no sense.
Not only is theft in a music store a common occurrence, it's also wildly variable, since a single stolen item, a guitar let's say, can either cost a hundred dollars or ten grand. But, my title aside, this decision was not up to me.
In the short meeting that followed, it was explained to us the numbers that the team of loss prevention was putting on the board. The amount of money they were saving us, and we were told to compare that amount to the cost of having said staff.
Even taking into account a projected spike of stolen items, the numbers pointed to an unexpected reality.
It was better for profits to not have a security team
What's important about this apparent digression is not the specifics, but the overall reasoning that lead the company to make this call.
It was not a moral stance, for example. Because nobody is going to defend theft and say it's OK. It was a calculation of cost.
Keeping this story in mind, allow me to continue.
Before the creation of these safety nets, we lived in a society that had huge economic problems. Extreme poverty was as common as dirt, and a significant part of our elderly population was literally left to die in the streets.
There's a collection of pictures from those times, some would say it doesn't get more dystopian than those years.
The point here is that the creation of safety nets was not an idealistic solution, an attempt of utopia inspired by Marxist philosophy, but a necessary remedy to a broken economic system.
Please note the absence of a moral statement being made here. Just like in my example of my music store.
Friedrich Hayek was one of the most notable Libertarian thinkers in history, and he too acknowledged that extreme poverty or desperation can destabilize a free society, potentially leading to crime, unrest, or demands for even more intrusive government intervention.
A minimal safety net could be seen as a lesser evil—preventing these outcomes while preserving broader liberties. Think of it as a "liberty-preserving compromise": a small, targeted program (basic income or emergency relief for example) to avoid bigger losses of freedom down the road.
But Hayek was not alone on here on this pragmatic approach to safety nets.
Another name comes to mind, and one that I've written about on this blog of mine a few times before: Milton Friedman. He calculated the cost of poverty and determined it was a lot more expensive than his proposed safety net, UBI.
Again, these libertarians were not attempting to make moral arguments here. You would find a really hard time putting them under the same umbrella as you would Bernie Sanders, to use a current politician.
But, even with all this said, let's address something else that seems to get lost in these discussions too.
I was just sharing with my wife a concern of mine. Yes, the word entitlement has an official definition, but its usage daily has somewhat distorted it's meaning.
We tend to hear entitlement as associate it with something unwarranted, undeserved, but that is not what the word means--It means the exact opposite.
For example: I bought my car with my own money, therefor I'm entitled to do with it as I please, and that includes leaving it dirty for weeks. (it's currently a mess).
Within current guttural political discourse however, the "my car" example would sound contradictive. Who am I to feel owed rights? Well, I am the one who purchased those rights. I have the title to the car in my hands, hence why I'm entitled to it.
When we talk about Social Security being an entitlement program, our gut reaction as people who are friendly towards Libertarian goals, is to reject it on principle. But are we basically buying the car and forgetting we own it?
Imagine-- I've paid into social security for 24 years now, but because it's an entitlement program, I'm not owed a dime. Yes, the money I paid, my money, my effort, my sweat and tears-- can't have it, I'm a lazy bum for wanting money.
What I'm trying to show here, and I hope it's clear, is not that the system is great, or that is free from abuse. No, what I'm trying to convey to you is that having a "retirement" with money I contributed with, does not make me a parasite.
It's important to dispel this notion that by default anything related to this "entitlement" safety net is morally wrong. We can hold this belief, I think, while accepting the fact that there's no perfect system, and that it needs to be cleaned up!, if you will. These notions are not mutually exclusive after all.
Hyperbolic language has it's uses. I certainly not exempt for using it, and have done so on this very blog plenty of times before. This however, doesn't mean the accusation is a nothingburger, there are obvious issues with how the safety nets are weaved. But, as I've said before, that doesn't mean we will do better without them.
Let's start out with the definition of the word. Yeah, it can be boring to do so, but since we are operating in honesty, I think its warranted.
A Ponzi scheme is an investment fraud where investors are promised high returns with little or no risk. The scheme operates by using funds from new investors to pay off earlier investors and the perpetrators of the fraud
At first glance, more so if we don't try to pick it apart, it does seems to be accurate, but there is one detail, that we have to ignore completely to call it a closed case.
A Ponzi is based on a lie, the idea that there's a grand investment, and that if you just get in, you will make amazing returns on your money.
It works because it lacks transparency, because none of the investors truly know how the money is made, and most of them don't even care to know.
The lie breaks apart when the "new investor" pool dries out, because it was their money the one being used to pay out dividends.
In contrast, Social Security is transparent with the money. You know how much you pay, you know what you are going to get, and you even know where the money comes from as well.
Any American citizen can log in and look at "their account" if you will, and see the contributions made, and how much you can expect when you retire. (calculated with your contributions)
It's also true that it needs an inflow of new blood to feed the system, and it's not immune to a liquidity crisis. If there are too many people living too long and not enough meat for the grinder, the likely outcome is that people will see their pensions reduced.
But again, if that were to be the case, we could clearly see how and why it happened, unlike a Ponzi.
There's a conversation to be had about how the social safety net is inefficient, insufficient or possibly redundant at times. I've made the point a few times on this very blog of mine that some safety net programs work more as poverty traps, but that's a conversation for another day.
We should be, and I hope I made the case for this implicitly, thinking about how we should be reforming the system, strengthening the aspects of it that are warranted, for the sake of improving society, for the sake of improving our life experience.
We can come from different angles, and arrive to a similar conclusion here. We can focus on profits (as a society) and conclude we need a social safety net. We can focus on a humane approach to politics, and believe in the need of a good safety net. It really doesn't matter to me.
But history doesn't lie, it almost never does. There's a reason why these systems evolved out of our minds.
MenO
