Monday, November 19, 2012

Exclusive: Friedrich Hayek Applied for Social Security Payments

Last year, The Nation reported that Charles Koch, in a letter, encouraged Nobel Prize winning economist Friedrich Hayek to apply for Social Security:
Koch writes: “You may be interested in the information that we uncovered on the insurance and other benefits that would be available to you in this country. Since you have paid into the United States Social Security Program for a full forty quarters, you are entitled to Social Security payments while living anywhere in the Free World. Also, at any time you are in the United States, you are automatically entitled to hospital coverage.” 
Then, taking on the unlikely role of Social Security Administration customer service rep, Koch adds, “In order to be eligible for medical coverage you must apply during the registration period which is anytime from January 1 to March 31. For your further information, I am enclosing a pamphlet on Social Security.”
In response to a Freedom of Information Act request, the Social Security Administration has confirmed to that Hayek did apply for Social Security benefits.

The FOIA reply states:
Thank you for your Freedom Of Information Act (FOIA) request asking whether or not deceased Nobel Prize winner Dr. Friedrich Augustus von Hayek ever registered to receive benefits from the Social Security Administration. 
Our records show that Dr. von Hayek registered to receive benefits from the Social Security Administration. 
The lefties may have a field day with this news, but the idea of applying for Social Security payments is not necessarily hypocritical, as discussed before relative to Ron Paul's acceptance of SS payments and Walter Block's further discussion of Ayn Rand taking SS paymemts.

I find this comment by Prof. Block most enlightening on the subject:
May anyone properly seize state wealth in this perspective? No. Only non statists may legitimately do so. Not Halliburton nor Bechtel; not Hillary nor Rudy. They are all supporters of statism. They are all members in good standing in the ruling class (see on this here and here). But Ron, and also the average guy in the street, may do so. They have no blood on their hands. Indeed, it is a positive mitzvah for people of this sort to relieve the government of its stolen property.


  1. If people "paid into the system" (had money taken/stolen from them via a job) then they have every right to get it back. I've spent most of my life doing all I could to keep my own money away from The State, so I have no right or cause to game the system.

    There's nothing hypocritical about recovering stolen property.

    1. This has always been my thought, too. There isn't even an argument against receiving SS. If they took it from you in the first place, then you bet your ass I am sure as hell going to get it back. Here's the thing that the statist morons need to understand...Do NOT take it away in the first place.

  2. Thin arguments in favor of knowingly accepting stolen property IMO. See:

    Is Ron Paul a hypocrite? Yes - here's why:

  3. So, is it OK and ethical for anti-statist attorneys to get rich by helping just plain folk through the legal maze so they might collect their "entitlements"?

  4. I don't believe in robbing others, but I certainly believe in being able to have my stolen goods returned.

  5. What's even funnier is Hayek was in favor of social insurances like Social Security. The Nation thought they had a once over on old Hayek, but they don't actually know what he believed.

    And yeah. Everyone is right that there is nothing hypocritical about taking your property back.

  6. If you are being coerced into paying, you have every right to demand a return of what is yours. The real issue here is that the top 80% (according to the CBO and Bruce Krasting) generally do not receive what they paid in, where is the outrage???

  7. Arthur Krolman, CFANovember 19, 2012 at 8:11 PM

    It's the picking up your pen and "applying" part that I object to. Of course stolen loot is yours to receive back...but to apply to the robber for him to consider whether or not to accept your application? Sorry, doesn't pass the smell test to me. Smells like you're legitimizing the robber to me.

  8. Not sure why it would be hypocritical but I can assure you so long as I am forced to fork over my hard earned money every year into these Ponzi schemes, I intended to try to get my money back. Now, if you want to talk about paying me off now and never charging me this tax ever again in my life, I'm all ears.

  9. Good for Hayek. Guys, when you're forced into the game, you might as well play it for all it's worth, even if you hate the game and wish it didn't exist. Pretending that you live in a economically free society isn't going to help you. It's just living in a state of denial. If the state gives you money, take as much as you can and buy gold and silver. That way, when the system finally collapses, you'll be in a better position financially, and in a better position to help shape the future.

  10. No one has a right to retrieve my stolen property and keep it. What Walter Block is essentially arguing is the goodness of welfare.

    Not to mention, Block is making a very fallacious argument, saying that the intent of the action is more important than the action itself. As though if your heart is pure, it's ok for you to receive stolen property and keep it, but if your heart is impure, then it is surely wrong.

    What utter tripe.

    1. I definitely didn't like Block's argument that the intent of the action is more important than the action itself. However, I don't think that taking out the SS that you already paid in is stealing.

    2. Dixie, stolen property that is unidentifiable as to WHO it was stolen from is in a state of new appropriation when it is being passed out. That means that actors who have had money stolen from them, who do NOT act in the process of directly stealing this money, DO have a right to accept this money.

      Now, considering the fact that the Federal Reserve inflates the money supply, the first condition no longer applies. Because there is no true 'price level' (i.e., everyone is affected differently; some are stolen from more than others and it is impossible to tell exactly how people were affected), anyone has the right to appropriate this money (still subject to the second condition that they have not taken part in the theft themselves).

  11. This comment has been removed by the author.

  12. The problem with taking government money is that you become dependent upon government and thus have a vested interest in maintaining the status quo.

    Taking government money makes you weaker, less adept at planning, saving, and preparing for the future.

    Taking government money eats away at personal responsibility.

    Thinking that you are getting your money back is simply not the case. Your money has already been spent a long time ago. A person getting social security today is getting my money.

    None of this gross and slavish dependence upon government will end until men of principle and backbone stop taking government money.

    1. The government has NO money of it's own. The point in receiving SS is that you paid into it. It's your money.

  13. Everyone is treating SS like it is a bank vault w/ allocated "real dollar equivalents", so if you, say, pay $2000 into it in 2012, they take your money and put it in a corner and then hand it back to you decades later.

    But it doesn't work like that. It's not a bank vault, and it's not an investment scheme-- it's a Ponzi scheme.

    You may feel it is beneficial to you to take the money paid into a Ponzi scheme by someone else as a return of your contribution, but could you claim you have the RIGHT? Somehow, being forced to participate in a Ponzi gives you a RIGHT to the other forced participants' contributions?

    Block's "liberated wealth" scheme is one of the weakest, most arbitrary non sequiturs I've ever come across, by the way. The State "liberates" its own wealth all day, every single day-- holding onto the money does the State no good. It is only in spending it and thereby "liberating itself" of the money that the money has any power.

    By Block's logic (rightful ownership based on political intent), wouldn't libertarians be justified in stealing wealth from known statists in general, not just the State? Why or why not? (Serious question, not a rhetorical argument.)

  14. No truck with politics. If you truly believe the state to be an illegitimate apparition built upon a lie, accepting its spoils is unconscionable.

  15. Philosophically, I have done a lot of things in my life that I now regret. One of them was making the Military a career. Unlike Social Security taxes, it was a voluntary act. I have no compunction against accepting my lifetime military retirement benefits, however, since they were part of the contractual agreement for 20 years of service at sub-market pay rates. I believe it is totally honorable for me to accept these contractual payments.

    How could it be any less honorable to accept the return of money that was taken from me involuntarily by Social Security payroll whitholding?

    1. sjburden,

      There is no private "market" for the US Military so it is confusing as to what "sub-market pay rates" you might be comparing yourself to. Are you trying to make some point akin to the Labor Theory of Value or some other objective value-based system of reasoning about the worth of human effort in disparate social activities?

      Let's shed a few layers of abstractions here and see if your claims still sound reasonable:

      Imagine there is you, a guy named Government and me. The guy named Government taxes me to hire you as an "army soldier" for 20 years, sending you around the world in the name of defending me, which I never asked Government nor you to do. Then, upon completing your "tours of duty", you retire and demand that Government continue to extort me to provide for your retirement income.

      What contract did I sign? What makes this totally honorable to have Government rob me on behalf of your employment and retirement?

    2. Re; Sub-market pay rates. Because of the difficulty in establishing qualifications for employment skills that members of the military provide (there being only a minuscule market for mercenaries due to Government crowd-out of the skill set) most employers have come to set equivalent values. The government publishes these so as to make military service more attractive.

      In addition, I thought that it was common knowledge that the military is in general poorly paid. If for no other reason than the long hours (on average, 60-80 hours a week in peacetime was my experience) and the potentially hazardous working conditions.

      Do you consider the military well paid for some reason?

      You also seem to be objecting to the morality of your relationship with the government. I am not certain how that impacts my legal employment contract with the government. If you had a legal/moral problem with a private company for which I worked, I don't think that would have any direct impact on my employment contract with said company. Are you arguing that it does?

      I have to say that I paid both federal and state income taxes as well as social security/Medicare taxes my entire time in the military. Any moral objection you might have would probably also apply to me as a taxpayer.

      Mises pretty much demolished the Marxian LTV so far as I am concerned.

      Lysander Spooner in "No Treason: The Constitution of No Authority" pretty much took care of the Constitution as a social contract arguement for me.

    3. sjburden,

      I thought it was clear from my comments above that I believe anyone being paid through coercive means (taxation) for a job that doesn't exist on the free market (providing labor on behalf of people interested in asserting aggressive foreign policies against other people) would be "overpaid" at any price.

      The members of the military may be paid "small" absolute amounts of money and benefits. But they're doing jobs that no one wants done. So it is not useful or productive tasks and therefore paying any amount over $0 is too much.

      I don't really know how you could make the determination that you're "poorly paid". How much SHOULD you be paid to do jobs nobody wants done?

      As for your legal employment contract, the money comes from somewhere. It doesn't come from nowhere (leaving aside the roundabout way of government finance via inflation). So, the fact that you signed a "legal employment contract" to provide services I didn't ask you to provide, has no bearing on whether I should be forced to satisfy the contract by anteing up for the bill.

      How you maintain the belief that you "paid" taxes when you were: a.) paid w/ taxes your entire career for work no one asked you to perform and b.) complain that you were "poorly paid" the entire time anyway... is beyond me.

      If the govt paid people to dig ditches and fill them in, even for 60-80 hours a week, it would still be a "rich" job indeed.

    4. Well, I put together a much more detailed post, but it seems to have gotten lost in the 'ether-net', so I will summarize:

      Mises and Spooner have sufficiently resolved the LTV and the "Constitution as a contract" arguments for my needs.

      The military publishes equivalencies in job skills yearly. Most civilian employers use/apply them. End result is that both by this standard and common knowledge, the military is significantly (> 15%) underpaid in civilian terms.

      Your argument indicates only that you have a problem with the government method of extracting money. It says nothing about the legitimacy of my contractual claim on my retirement. It was a voluntary contract. To me, that makes it more legitimate. Social Security is an involuntary contract. Back in the Seventies, the SCOTUS gave an opinion which identified SS as simply a tax, meaning that the government was not required to repay a penny of it.

      Bottom line is that the government has never been and never will be a moral institution. The question is if it is moral to steal from a criminal organization: to demand repayment in a way that the criminal institution seems to somehow consider vital to its 'credibility' as a social 'good.'

      I have to get my salary; my retirement from the same institution. The institution that is rapidly going broke. The moral question is simple: IF both claims are legitimate (military retiree vs SS recipient) is one more legitimate than the other? If so which and why? What happens to a person which is both?

    5. Now I am in a real pickle, since I did a whole new post to summarize since I though the post that you just answered disappeared.

      But that is ok. It says the same things in a different way.

      To this post (9:53PM) You appear to believe that only you can determine what is or is not included in a 'Free Market'. So, what is the difference between your subjectively determined 'market' and the market for services that existed when I joined the military?

      Do you have some sort of moral test you give to your prospective employers? If so, you are a better man than me. Salute.

    6. Bryan Drake makes some good points below. However, I would put a finer point on the question: If the process of the ponzi scheme is going to continue, is there a moral obligation to stop one's participation? And how can that be done in a manditory system?

    7. sjburden,

      Your "legal employment contract" involves contracting with an organization you know has no resources itself, that depends upon continual theft (taxation) to satisfy your "legal employment contract". I am not sure this would qualify as a valid contract in a free market.

      You say "The government should honor the contract I made with it and pay me!!" I say, "The government should stop stealing from me, and 'honoring your contract' necessarily entails additional theft from me."

      Who has the just claim here? They're mutually exclusive. We can't both be right.

  16. There is another point of view, based on the fact that Social Security is financially structured as a Ponzi scheme. Those who have paid into Social Security were defrauded at the time that they paid their money in. There money is immediately spent by others.

    Likewise, any given beneficiary of Social Security who receives payments is not really getting their own money back, because their money was stolen from them years ago.

    When the trustee of Madoff's Ponzi scheme tried to sort out that mess, I believe that he first attempted to collect funds paid to beneficiaries and then went about paying back those who paid into the scheme.

    One big difference between a simple Ponzi schemes such as Madoff's and the Social Security Ponzi scheme is that Social Security is multi-generational. It is impossible to unravel. No one can get back the money that was stolen from them. The beneficiaries of the scheme have often passed away and certainly have already spent the money. Further, the most of more recent the beneficiaries were also victims because they were forced to pay in.

    Personally, I would only feel comfortable accepting Social Security in any given year to the extent that it was less than the total tax that I paid in that same year because I would feel bad about taking money from new Social Security victims.

  17. One difference between people who take SS that was stolen from them and people who willingly contribute is that the former would also vote to end the thing instantly while the latter would try to keep it going.

    Same thing with government employees and contractors who know their jobs are ridiculous. They could get real jobs if the market hadn't been so skewed and would ditch the whole bit on a dime if their positions wouldn't just be filled by the next statist-in-waiting.

  18. Is not SS a ponzi scheme? And thus, isn't it true that the money that was stolen from you has already been spent? That your present day SS payments come not from property that was stolen from you, but from property that is being stolen from current workers?

    I'm sympathetic to the idea that you can justly recover what was stolen from you. I don't see how that justifies "recovering" what was stolen from others.

    Money is fungible, so I can understand that counter-argument. But the truth is that if the current generation of SS victims were to suddenly stop paying, there would be no money there for you to "recover". So are you not simply getting a wealth redistribution from the younger generation (current SS victims)? Because you, yourself were a victim that paid off the generation before yours, does not give you just grounds to predate on the next generation.

    Since it is the state that is the thief in this case, it is the state, not the state's victims, that bares the responsibility of restitution. And as we know, the state is in constant deficit, it is not liquid. The money that was stolen from you is now missiles, planes, roads, corn (through subsidies), buildings, national parks, interest payments, etc.

    In a just society, if a thief is convicted and ordered to pay restitution, I don't think it would follow he's allowed to steal further to acquire the funds need to pay his debts. Rather, if he's unable to pay from his current cash holdings, or in actual return of non-currency theft (such as eminent domain), he must liquidate his assets to raise the funds. And then, if that is stil insufficient, a garnishment of legitimate wages (not further theft) would be in order, with the concept of a debtor's prison being a worthy consideration for extreme cases.

    Since the state has no legitimate income, and no reserves of previously stolen cash from which you can recover without further theft occurring, I don't see how a libertarian can morally make the case for SEEKING government payout.

    As to Block's distinction of intent, I agree with the spirit of what's he's getting at, but think his formulation of it is too crude. Who is "the state"? Obviously the people in DC and its branches are visible elements of the criminal organization known as the U.S.A. But there are more members than just public officials/bureaucrats/soldiers/police. I like the way Lysander Spooner refers to them as the "secret band of robberers and murderers". Among us, but not always known by us, or even by each other. It is those who knowingly use the mythology of the state as their means of predation. That can be the welfare recipient, and the arms manufacturer. The tenured professor indoctrinating statism and the housewife voting for criminalizing narcotics. The state is the organization of the "political means" and the state is those individuals who have employed these means. So yes, many people who have no directly visible ties to the state, are nonetheless members of it through their intent.

    But if our purpose includes justice (as I think is a safe assumption), then we cannot punish without proof. Speculation and accusation are not just grounds for conviction. Each individual must be tried and convicted for their own actions. So a blanket accusation and conclusion about people is certainly not a reliable method of ascertaining justice. And it certainly seems self-serving, and thus suspect, to justify one's own actions to recover wealth from "the state" while glibly rationalizing that those who are stolen from as a result (since further theft through the state must occur) were all just statists anyway and thus it wasn't further theft.

    1. Most thoughtful comment in this thread so far, well done sir.

    2. So, you think people who defraud the government via Medicare schemes should go to jail?

    3. So, you would be someone who put Robin Hood in jail.

      I think you need to reexamine your position.

      Is a person that "cheats" on their taxes a criminal? Or someone who lies about how much tobacco they grew? Or someone who buys liquor across state lines because it's 20% cheaper?

      Taking money from the state, in any way, shape, form or fashion is ALWAYS morally justifiable. Fuck tha police!

      (yes, I know saying this publicly makes me a target of the Gestapo, but I don't care anymore. I will not be called a coward)

  19. I had the pleasure of discussing this topic with Dr. Block in person. He does not employ the argument that you have a right to take the money because you have paid into the system and it is rightfully yours. He says that "even if you came from Mars" and had never been taxed in your life, it is still okay to take "the State's money". He says you cannot steal money that has already been stolen and cites Ragnar Danneskjöld's actions in Atlas Shrugged as supporting evidence.
    I completely disagree with his analysis of this situation. If I saw someone rob my neighbor, and then I went to the thief's house and stole my neighbor's property to keep for myself, I don't think I could look my neighbor in the eye and tell him that I am now the rightful owner of his television because you can't steal from a thief. And as Taylor Conant pointed out above, the State is more than happy to redistribute this wealth. They want you to come, hat in hand, and beg for money. That's the whole point.

    1. If you went to their house and returned the stolen goods (even if they had 1,000,000 iPads and you just picked one randomly) then you think that's wrong?

    2. I do not think it is wrong to retrieve stolen goods and return them to the proper owners. I do think it is wrong to keep them for myself. Block says you can because it is impossible to steal from a thief.

      Sorry if I didn't make that clear the first time, Dale.

  20. Another great mind co-opted by, and made dependent upon, the State providing justification for continued plunder.

  21. And so cannibalism is perpetuated....

  22. I like the comment I've often heard regarding the difference between SS and Ponzi, to wit: "Ponzi never forced his victims to pay into his fraudulent scheme." However, while it's funny, it isn't true. SS does not force its victims to "contribute." I quit paying income and employment taxes, including SS, in 1971, so I know that not paying is an option. Not easy, but possible.

    OPM: sounds like opium, is equally addicting, stands for other people's money. The plundering isn't the crux of the problem. It is the dependency that bites hardest. It has the sad effect of deluding its victims-addicts into believing they're OK, even as it deprives them of personal responsibility, honesty and integrity.

  23. I understand the moral principle of the argument that since the money stolen from me for SS during my working life has already been spent on the retirement benefits of the generations ahead of me, my receipt of SS benefits constitutes accepting stolen property from the generations behind me and is not the recovery of stolen property as some here have argued. However, I think the argument can be made that in some cases accepting SS is not theft but a legitimate recovery of stolen property from the generations behind one's own. Here's why.

    The SS tax is just one of many taxes we pay. Among the most burdensome is property tax. The biggest component by far (70% where I live) of most property taxes goes to fund government schools. I have never had nor will ever have children. So everything which I have paid at gunpoint in property taxes for government schools, whether thru rent or home ownership, has gone to fund the "education" of other people's children - the two generations behind mine. Over 40 years of paying for other people's children's "schooling" has in one way or another cost me hundreds of thousands of dollars, probably enough to fund my retirement.

    True, I also went thru the government schools, but my parents paid property taxes for this until they died of old age. It's also true that children are coerced into these schools but even as adults with children of their own, the majority continue to slavishly approve of and support government schools. So, is it theft on my part if the two generations which I was forced to help put thru school are now taxed to fund my SS benefits, or is it the recovery of stolen property?

    Furthermore, those individuals who vote are legitimizing the statist quo. Few voters vote to be left alone and even fewer vote to have their taxes raised. For the most part, voters expect to live at the expense of someone else. By voting they are in effect tacitly agreeing to abide by the outcome of coerced wealth redistribution even if it doesn't go their way. By voluntarily participating in this political system, they have waived their right to complain about any harm which may come their way. Those who live by the sword...

    Therefore, as a group, are the "gimme stuff" voters really being robbed to pay for the SS benefits of those nonvoters like me who regard democracy as evil and simply want to be left alone? I think my analysis here makes it obvious that it is collectivism and socialism, not the free market which lead to what is popularly known as the law of the jungle or more precisely, a dog-eat-dog-world. None of these issues of who owes whom what, and when is it robbery and when is it really a recovery of stolen goods would arise in a society which respects private property and regards coerced wealth redistribution via the political process as a crime.