Volume 1: A sound on Wall Street, Xinxiang City is busy copying books Chapter 49 Pensions
Subtitle of this chapter: Actually, it’s useless to say it
"Well said!"
Our Master Yuan's interruption actually quieted down the students present, who for a moment were confused about what this Chinese man was up to.
"I completely agree with what Mr. Baker said! But..." Yuan Yanshu said with a puzzled look: "After nationalization, will the miners no longer have to work hard in the dark mines, risking death at any time?"
"this……"
If they don't do it, why should we ask the gentlemen present here to do it?
As a petty bourgeois, Yuan Yan suddenly realized that this is the character of the petty bourgeois: they are invincible when they talk, but they are powerless when they do things, so they are just talking big.
However, Louis Baker immediately reacted and said, "Nationalization can at least allow those workers to have better working conditions, enjoy a more decent life, and get better protection after retirement and accidents. Mr. Yuan, do you object to this?"
"Mr. Baker, of course I don't object!" Yuan Yan said without hesitation, "It's just that the government can regulate this in the form of legal provisions. Why must we use a radical approach?"
Yes, what the Chinese said is right. We in the United States are governed by law, and everything must be in accordance with the law. Otherwise, lawyers from middle- and upper-class families will have nothing to do.
But "this Chinese" is a master of neoclassical liberalism. Even using laws to regulate the behavior of capitalists is a helpless expedient for him.
So our Master Yuan continued to add: "America's mining workers... No, everyone, even everyone here, can leave their pensions and social security to the free market!"
Louis Baker couldn't help but ask curiously: "Mr. Yuan, what do you mean by this?"
Yuan Yan smiled and said, "Bismarck, the Iron Chancellor of Germany, once said that social insurance is the best investment to eliminate revolution, because a person who expects a pension is the most dutiful and easiest to rule..."
At this time, a student suddenly stood up and asked loudly: "Mr. Yuan, do you want America to learn the pension insurance system of European countries?"
In fact, the modern pension insurance system was born in Germany under the leadership of the Bismarck government in 1889. Later, European countries such as Denmark, Britain, and Sweden followed Germany's example and established their own pension insurance systems in 1891, 1908, and 1913 respectively.
However, it was not until after the Great Depression that the pension insurance system was formally established in our great America.
This is because this unprecedented economic crisis completely shattered people's confidence in personal responsibility, so that Americans also strongly felt that they were facing various risks that they could not handle on their own, and more and more people had to turn to the federal government for help. Therefore, Roosevelt, the chairman of the Communist Party of the United States... well, the savior of the free world, promulgated the Social Security Act in 1935 as an important part of the "Roosevelt New Deal".
The student who stood up and interrupted was not tall, but he looked quite energetic, with a round head, round eyes, and a face full of the energy and curiosity of a young man. His name was John D. McCall, and Yuan Yanshu actually knew him. Of course, it was because Mr. McCall also had a good grandfather, known as the "romantic poet of the insurance industry", the current president of New York Life Insurance Company, Darwin P. Kingsley.
"Of course not!" Our Master Yuan categorically denied: "As we all know, the pension system implemented by European countries at this time is financed by a pay-as-you-go system, that is, the pensions of retirees are entirely funded by the contributions of workers of the same period."
"But this system has great risks. We should see that with the development of technology, our average life expectancy is getting longer and longer, while inflation can only continue but cannot be stopped. Therefore, as long as there is an economic crisis, economic growth slows down, and unemployment rises, the demand for pension insurance expenditures will increase significantly, and eventually it will be overwhelmed."
John D. McCall asked with great interest: "What approach will Mr. Yuan take? "
"Master Ball, will this generate an S value?"
"Yes and no, host, you know it yourself, it's useless even if you say it."
After hearing this, Yuan Yan suddenly felt relieved. You know, wishes are beautiful, but reality is cruel. No matter how much he talks, something like the Social Security Act will not appear in the United States unless it is absolutely necessary. Otherwise, what kind of beacon of freedom is our great America?
“We can adopt a method whereby companies and individuals jointly establish pension funds!”
He coughed, cleared his throat and said, "I wonder if you have noticed an economic phenomenon. Since 1914, the prices of all daily necessities have skyrocketed. By 1920, they have almost doubled. For example, milk has risen from 9 cents per quart to 17 cents, butter has risen from 33 cents per pound to 61 cents, and sirloin steak has risen from 27 cents per pound to 45 cents. However, the average wage of the American people has remained stagnant. I personally think this phenomenon is unsustainable..."
After he said this, the students were satisfied. Professor Chandler and Vice President Conant both showed satisfied expressions. This Chinese student was really thoughtful and down-to-earth. As an economist, of course he had to pay attention to the price changes of all the commodities around him.
"The next round of wage increases is inevitable. However, ordinary people often forget the importance of saving because of the temptations in front of them. Then we, the economic workers, should prepare for them. We should remind companies and employees that instead of spending all the increased wages, it is better to plan for the future in advance..."
"In my immature idea, there are two ways." He smiled at Louis Baker and said, "One is the pension fund, which means that companies and unions collect pensions and hand them over to professional investment funds and investors for management. Of course, this method is more risky."
"But there is another way..." He nodded to John D. McCall and said, "You can buy special insurance set up by insurance companies. Although the profit is not as high as the previous one, the risk is effectively controlled."
Our Master Yuan said very modestly: "This is just my humble opinion, for your reference only."
Although he only revealed some conceptual things, this is NYU's Stern School of Business. Not to mention Professor Chandler, these students are at least master's students in economics. How could they not understand what he meant?
In fact, the investment funds and commercial pension insurance that Yuan Yanshu mentioned are common goods, but he introduced the two concepts of "collective" and "wage", which is very different. This means that as long as the government legislation can be promoted, then in the foreseeable future, a considerable part of the rising wages will flow into Wall Street!
