Should the United States Privatize Social Security?

From Alvin Hansen Symposium on Public Policy at Harvard University

Should the United States Privatize Social Security?

By Henry J. Aaron and John B. Shoven

Edited by Benjamin M. Friedman





The two papers that make up the core of this book address what is perhaps the most fundamental question in the current debate over Social Security: whether to shift, in part or even entirely, from today's pay-as-you-go system to one that is not just funded but also privatized in the sense that individuals would retain control over the investment of their funds and, therefore, personally bear the associated risk. John Shoven argues yes, Henry Aaron no. Theoretical issues such as the likely effects on saving behavior and capital formation figure importantly in this discussion. But so do a broad array of practical considerations such as the expense of fund management and accounting, questions about how the public would regard the fairness of any new system, and the impact of recent developments in the federal budget and the U.S. stock market.

The book also includes responses to both papers by four prominent economists—Robert J. Barro and David M. Cutler, of Harvard University; Alicia H. Munnell, of Boston College; and James Tobin, of Yale University—as well as Henry Aaron's and John Shoven's replies. The introductory remarks are by Benjamin M. Friedman.


$38.00 X ISBN: 9780262011747 190 pp. | 5.5 in x 8.1 in


Benjamin M. Friedman

Benjamin M. Friedman is William Joseph Maier Professor of Political Economy at Harvard University and the author of The Moral Consequences of Economic Growth.


  • This is one of the better books among the many on the current social security debate. The Aaron and Munnell pieces alone are worth the price of admission.

    Robert Ball

    Former U.S. Commissioner of Social Security and Member, 1994-1996 Advisory Councol on Social Security

  • This book is essential reading for anybody who is seriously interested in the current widespread debate about the likely long-range financial problems of the Social Security program, with one solution being to maintain the present structure of the program, with some adjustments, and the other being to downsize the program and introduce a sytsem of individual savings accounts. Aaron stalwartly and objectively sets forth the first solution, and Shoven does so for the second solution. The presentation is well rounded out by comments from four other eminent scholars and responses from the authors.

    Robert J. Myers

    Chief Actuary, Social Security Administration 1947-70; Deputy Commissioner of Social Security, 1981-82; and Professor Emeritus, Temple University

  • Here's the deal. Spend a few hours with this book, and Aaron, Shovenand the others will bring you up-to-date on the most important socialpolicy debate now going in America. Not only that, you'll enjoy theread.

    Alan S. Blinder

    Department of Economics, Princeton University