Risk and Safety Nets

David Leonhardt makes a quick summary point in his article about the history of opposition to America’s social safety net that I think is far more broad than just the issue of the recent health care law. He is discussing the competing strains in American culture and history of upholding individual freedom and up-by-your-bootstraps risk taking with our belief in social justice and the sense that all deserve to share in America’s prosperity and success.

It’s easy to look at the current debate and see an unavoidable trade-off between this country’s two economic traditions — risk-taking and security. But I don’t think that’s quite right….Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks.

A good part of the United States’ success is built on our tendency for creativity, risk taking, entrepreneurship, and innovation. While the “solitary genius in his garage” meme can be overplayed, it is true that if you look at a lot of the big breakthrough companies (Google, FedEx, etc.) in recent history you’ll find someone who struck out on her own, bucked conventional wisdom, and took a risk to create something new.

A common conservative argument is that increased government involvement in people’s lives will coddle them, make them dependent/passive, and will stifle innovation and risk taking. While there are those that will take risks no matter the cost and those who value comfort and security above all else, most balance risk and reward, potential benefits and potential costs.

This fits neatly into Maslow’s hierarchy of needs. In this paradigm, the classic ‘American Innovator’ is working in the realm of self-actualization, pursuing the goals of creativity and achievement. But Maslow’s big realization was that most people will only pursue these higher goals once their more basic needs are secured (food, water, safety).

Here is Leonhardt’s critical point, safety nets don’t prevent people taking risk, they encourage them. The knowledge that our most basic needs for survival are secure (resources when we can no longer work for ourselves, care if we become ill) gives us the freedom to strike out on our own and take the leaps that do sometimes result in breakthroughs and have helped the United States to be a leader in technology, business, the arts, and justice.

Matt Yglesias summarizes the thought nicely:

…it’s worth taking the safety net metaphor seriously. Typically when you see a safety net in place, you’re not really looking at someone who’s trying to be safe. You’re looking at someone who’s trying to do something dangerous. Because it’s dangerous, there’s a safety net in place. But the main point of the net is to facilitate risky-taking behavior not to make you safer than the average person.

One perhaps less universal, but still perceptive contention is bikesnobNYC’s maxim that “brakes make you faster”.

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