Session II: Capitalism and Social Insurance
In what Jeff Gordon describes as “the great risk shift,” large U.S. companies have responded during the last 50 years to the forces of globalization and increased pressure from investors by transferring the risks associated with product and worker obsolescence from their shareholders to their employees. Layoffs have generally meant very large, if not complete, losses of “firm-specific investments” by displaced employees. And the problem is especially troubling in the U.S., where the employees of large companies lose not only their jobs and income streams, but also often their connection to their social network, to the entire system of social welfare and insurance that tends to be provided by large companies and the workplace.
While applauding corporate retraining programs, Gordon suggests that individual company efforts are likely to be overwhelmed by the demand for such services. The solution accordingly lies in the form of government-provided social insurance—in programs that, whether orchestrated and funded at the state or federal level, provide the most cost-effective government “match” designed to ensure the preservation of human potential and lifetime earnings power of employees.