Before we debate if it’s a socialist program or not, we first need to learn what socialism really means and how it’s different from capitalism.
Socialism vs Capitalism
The term ‘socialism’ is fundamentally used to describe an economic and political system that is based on the collective ownership of property and the means of production. In this system, the workers co-produce services and goods and share the outcome and profits.
Contrary to socialism, capitalism refers to an economic system based on private ownership of goods in a country. In this system, private companies, industries, or individuals keep the profits and pay workers a monthly or weekly wage. When there’s a capitalist system, the economy is controlled by the market.
While the US is surely a capitalist country, its government plays a fundamental role in the country’s financial and economic affairs. A flagship example of the US’s federal system is the social security program, incepted during the Great Depression in 1935.
Who Operates the US’s Social Security System
The US’s social security program isn’t run by businesses or individuals, it’s wholly operated and controlled by the country’s government. From tracking people’s wages and benefits to operating the social security website and approving or denying people’s applications for the benefits, all the operations regarding social security are handled and managed by the US government.
It’s, however, important to note here that the US government does hire companies such as Dell, IBM, or Lockheed Martin for data storage and telecommunications services. Hiring independent contractors, however, doesn’t imply that the program’s control is distributed.
Management of Social Security Funds
The social security system was established as an intergenerational wealth transfer program in the US in which all the financial contributions made by the people go into a collective pot. Our contributions aren’t kept with our names. The SSA collects social security taxes from the current American workers to provide benefits to the current retirees.
So, Is America’s Social Security System Really a Form of Socialism?
Want to know how the US got the idea of starting a social security program?
The idea of a social security system is basically a brainchild of 19th century Germany, a capitalist government that launched a social insurance program for the elderly generation in 1889. The program was initiated upon the orders of Chancellor Otto von Bismarck to avert people’s attention from the radical socialist ideas circulating at the time.
But unlike the original social security system launched by a conservative government which proved to be an anti-social movement, the US Social Security System is a highly democratic socialist program where the government makes all the required decisions regarding the program.
With the social security program, the US government provides a safety net to the citizens to secure their future. To benefit from the program, people need to pay a portion of their income into the country’s social security system throughout their work-life.
Want to Learn More?
Lisa Douglas is an experienced social security lawyer.
In Little Rock who can help you understand the US’s social security system and make the most of your social security benefits when you retire. If you need legal support from lawyers in Little Rock, Arkansas, get in touch with The Law Offices of Lisa Douglas.
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Disclaimer: This blog is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.