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Social Security, Incentives, and Controls in the U.S. and U.S.S.R.*

Published online by Cambridge University Press:  03 June 2009

Gaston V. Rimlinger
Gaston V. Rimlinger
Affiliation:
Rice University
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Extract

One of the most important developments in the relationship between the state and the individual citizen during the present century has been the growth in the rights of the citizen to claim economic services and cash benefits from the state. Social security programs, which have appeared in nearly every country of the world, are a central feature of this development. Their main purpose has been the prevention of poverty through protection of the individual and his family against loss of income and against certain financial burdens. The growth of these rights, while greatly enriching the status of citizenship, has always been confronted with certain fundamental economic and social questions. What is likely to be the long-run effect on the work habits and productivity of the mass of the people once a nation has eliminated the fear of destitution? Will a growing sense of security increase productivity? Or is it likely that the more surely individuals can count on essential services and minimal incomes, the greater will be the danger of drifting into indifferent work habits? Such a drift would probably take the form of a subtle change in values rather than a dramatic shift in attitude. Whatever the effect may be, it must certainly depend on the nature of the rights granted, social values and attitudes, and a country's economic and socio-political order.

Type
Research Article
Information
Comparative Studies in Society and History , Volume 4 , Issue 1 , November 1961 , pp. 104 - 124
Copyright
Copyright © Society for the Comparative Study of Society and History 1961

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References

1 A note on terminology. “Social security” in this paper is used as a generic term for governmental measures designed to protect individual or family income and to provide certain services. It includes social insurance, public assistance, and social service. “Social insurance” is used to refer specifically to programs with work-related benefits which are financed at least in part by specific taxes. “Public assistance” is used for programs financed out of general revenue with benefits given on the basis of need. Most of the discussion will have reference to social insurance programs.

2 Those opposing social security programs have always stressed presumed harmful effects. Those who favor them are more interested in finding out at what point and under what conditions public income guarantees may have adverse economic effects. T. H. Marshall throws interesting light on this question in tracing the growth of citizenship rights from the acquisition of civil rights in the 18th century, to political rights in the 19th, to social rights in the 20th century. See Citizenship and Social Class (Cambridge, 1950).

3 In the U.S. public income-maintenance program expenditures rose from $9,149 billions in 1949–50 to $26,146 billions (projected) in 1959–60. The U.S.S.R. state social insurance budget rose from 17.2. billion rubles in 1950 to 70.2 billion rubles (planned) in 1960. Figures for the U.S. are from Ida Merrian, C., “Social Security Status of the American People”, Social Security Bulletin, XXIII, No. 8 (August 1960), p. 8.Google Scholar U.S.S.R. data are from “Tsentral'noe Statisticheskoe Upravlenie pri Sovete Ministrov SSSR”, Narodnoe Khoziaistvo SSSR v. 1958 Godu (Moscow, 1959), p. 906, and from Larin, A., “Leninskie Printsipy Sotsial'nogo Strakhovanii, Vottloshchaiutsia v Zhizni”, Okhrana Truda i Sotsialnoe Strakhovanie, No. 3 (March 1960), p. 9.Google Scholar

4 The broader implications of social security are stressed particularly in recent German literature. See, for instance, Achinger, H., Sozialpolitik als Gesellschaftspolitik (Hamburg, 1958),Google Scholar and Hensen, H., Die Finanzen der sozialen Sicherung itn Kreislauf der Wirtschaft (= Kieler Studien, No. 36) (Kiel, 1955).Google Scholar Myrdal also stresses the need to integrate the social security edifice in Sweden with “the whole system of public policies”. Myrdal, G., Beyond the Welfare State (New Haven, 1960), p. 66.Google Scholar

5 Allen, F. L., “Economic Security: A Look Back and A Look Ahead”, in The American Assembly, Economic Security for Americans (New York, 1959), p. 14.Google Scholar

6 The most forceful presentation of this view is probably in William Sumner, G., What Social Classes Owe to Each Other (New York, 1883).Google Scholar

7 See the President's message to Congress, June 8,1934, Congressional Record, LXXVIII, Part 10, pp. 10769–10771; and the report of the Committee on Economic Security in U.S. House of Representatives, 74th Congress, 1st Session Hearings Before the Committee on Ways and Means on H. R. 4120 (Washington, D.C., 1935), pp. 19–20.

8 “The American Philosophy of Social Insurance”, Social Service Review, XXX, No. 1 (March 1956), p. 3.Google Scholar

9 For a discussion of this idea see Bufill, C. Marti, Tratado comparado de Seguridad Social (Madrid, 1951), pp. 106 ff.Google Scholar

10 In a strict legal sense this is not quite correct since an employer's failure to pay social security taxes does not thereby deprive his employees of their right to benefits if their employment is covered by the law. For persons not eligible the American system relies on public assistance, which pays benefits on the basis of demonstrated need.

11 Marx, K., Critique of the Gotha Programme (London, 1943), p. 10.Google Scholar

12 “Leninskaia Strakhovaia Programma”, Okhrana Truda i Sotsial'noe Strakhovanie, No. 5 (November, 1958), pp. 68–72.Google Scholar

13 The program is contained in Dewar, M., Labour Policy in the UJSS.R. 1917–1928, (London, 1956), pp. 158–159.Google Scholar

14 Lenin, V. I., Sochineniia, 4th ed. (Moscow, 1948), XVII, p. 427.Google Scholar

15 Dewar, op. cit., p. 158.

16 Lenin, op. cit., p. 428.

17 See the resolutions of the Central Committee of the Russian Social Democratic Workers' Party in 1913–1914, in Nauchno-Issledovatel'skii Institut Professional'nogo Dvizheniia, VKP(b) i Profsoiuzy o Sotsial'nom Strakhovanii (Moscow, 1934), pp. 44–48.

18 Krasnopol'skii, A. S., Osnovnye Printsipy Sovetskogo Gosudartsvennogo SotsiaVnogo Strakhovaniia (Moscow, 1951), pp. 13–14.Google Scholar

19 Statement by N. M. Shvernik at a meeting of trade union activists, May 25, 1938, quoted in Krasnopol'skii, A. S., “On the Nature of Soviet State Social Insurance”, Current Digest of the Soviet Press, III, No. 46 (Dec. 29, 1951), 4, translated from his article in Sovetskoe Gosudarstvo i Pravo, No. 6 (June 1951), pp. 62–69.Google Scholar

20 Krasnopol'skii, Osnovnye Printsipy …, p. 54. Italics are mine.

21 It is noteworthy, however, that in 1959 both Great Britain and Sweden introduced graduated benefits on top of a flat base rate, which is a move away from the traditional income equality aim in favor of incentive considerations.

22 “On the Nature of Soviet State Social Insurance”, p. 6. It may be worth pointing out also that while in America a worker may institute a civil suit in a U.S. court to enforce his benefit claim, Soviet courts have no such jurisdiction. This does not mean that a Soviet worker can be arbitrarily deprived of his benefits, but the fact that the trade unions and administrative agencies make final decisions reflects an important difference in the conception of the worker's right. See Aleksandrov, N. G., Sovetskoe Trudovoe Pravo, 2nd ed. (Moscow, 1959), pp. 359–363.Google Scholar

23 Krasnopol'skii, “On the Nature of Soviet State Social Insurance”, p. 5.

24 V. I. Merkulova and I. M. Sakharova, Pensii po Strarosti (Moscow, 1957), p. 31.

25 On administrative developments see G. V. Rimlinger, “The Trade Union in Soviet Social Insurance: Its Historical Development and Present Function', Industrial and Labor Relations Review (April, 1961).

26 See L. la. Gintsburg, Trudovoi Stazh Rabochikh i Sluzhashchikh (Moscow, 1958), p. 74.

27 The existence of the decree does not mean that in practice self-employed persons actually received benefits. Its significance lies in its attitude toward the right to benefits.

28 The development of the service requirements is traced in Gintsburg, op. cit.

29 Ibid., p. 66.

30 For a more detailed discussion see Schwarz, S. M., Labor in the Soviet Union (New York, Praeger, 1952),Google Scholar Chap, vii; Abramson, A., “The Reorganization of Social Insurance Institutions in the U.S.S.R.”, International Labor Review XXXI, No. 3 (March 1935), 364–382;Google Scholar and “Social Insurance in the U.S.S.R.”, International Labor Review XXXVIII, No. 2 (August 1938), 226–242.Google Scholar

31 See Rimlinger, loc. cit.

32 Decree of September 10, 1933. See Spravochnik Profsoiuznogo Rabotnika (Moscow, 1958), p. 295.Google Scholar

33 Schlesinger, R., “The New Pension Law”, Soviet Studies, VIII, No. 3 (January 1957), p. 308.Google Scholar

34 For a discussion of the new law, see Schlesinger, loc. cit., and “The New State Pension Law in the U.S.S.R.”, Bulletin of the International Social Security Association, XI, No. 6 (June 1958), 220–230.

35 See Current Digest of the Soviet Press, VIII, No. 13 (May 9, 1956), 30–31.

36 See “New Principles Come into Force for the Award of Sickness Benefits”, Bulletin of the International Social Security Association, XI, No. 4–5 (April-May, 1958), 197–198.Google Scholar For a recent official collection of laws regulating sickness, maternity, and other short-term benefits see Gosudarstvennoe Sotsial'noe Strakhovanie (sbornik ofitsial'nykh materialov) (Moscow, 1959). For compact but highly useful descriptions in English see “Social Security in the Union of Soviet Socialist Republics”, Social Security Bulletin, XXII, No. 8 (August 1959), 3–7;Google Scholar and Myers, Robert J. “Economic Security in the Soviet Union”, Transaction of the Society of Actuaries, XI (November 1959) 723–745.Google Scholar

37 Up to date rules on pensions and related matters are contained in Pensionnoe Obespechenie v SSSR, 2nd enlarged ed. (Moscow, 1960).

38 For a comparison of the 1956 and 1960 decrees see ibid., 121–122 and 354–355.

39 Brown, J. Douglas, “The Role of Social Insurance in the United States”, Industrial and Labor Relations Review, XIV, No. 1 (October 1960), 108–109.Google Scholar

40 Galbraith, J. K., The Affluent Society (Cambridge, Mass., 1958), p. 113.Google Scholar

41 Ibid., p. 115.

42 See Burns, E. M., Social Security and Public Policy (New York, 1956), Chap, iii and pp. 62–63.Google Scholar

43 Witte, E. E., “What to Expect of Social Security”, American Economic Association, Papers and Proceedings, XXXIV, No. 1, Part 2 (March 1944),Google Scholar 217. A more recent statement of this position is in his article on “The Objectives of Social Security”, Review of Social Economy, XVII, No. 1 (March 1959).Google Scholar

44 On the present status of unemployment compensation financing and its economic implications, see Lester, R. A., “Financing of Unemployment Compensation”, Industrial and Labor Relations Review, XIV, No. 1 (October 1960), 52–61;CrossRefGoogle Scholar and Lester, R. A., “The Economic Significance of Unemployment Compensation, 1948–1959”, Review of Economics and Statistics, XLII, No. 4 (Nov. 1960), 349–372.CrossRefGoogle Scholar