Privatizing Pension Systems as the End of a Vicious Taboo of the Almighty State

Jora, Octavian Dragomir
Publication date: 
JEL codes: 
J11 - Demographic Trends, Macroeconomic Effects, and Forecasts, J14 - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination.
At the beginning of the 80’s one South American dictator had discovered economic freedom, while Europe’s democracies were refining the Bismarckian objective of intergeneration dependency. Enlightened by the economist José Piñera, an unknown figure at the time, he had realized that pensions were supposed to be responsible savings and not a discretionary right against society. Augusto Pinochet would terminate the public pension system in Chile and he would also determine the governments of the “free world” to enter serious debates. Today, more and more reports warn that Europe’s population is ageing and shrinking. The sustainability of public pension systems is becoming more vulnerable by the year. The EU already sees dark clouds approaching public finance. The solutions circulated – e.g. facilitating immigration in order to restore the balance of the labour market or parametric reform of the existing pension systems – do not tackle, though, with programmatic errors of such a mechanism in which, invariably, the guilty are always the people that do not grow old by bureaucrats calculus.