Arthur J. Altmeyer


Address by Arthur J. Altmeyer,
Chairman, Social Security Board
American Labor Conference on International Affairs,
New York, June 12, 1943

The Atlantic Charter has proclaimed the "desire to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labor standards, economic advancement and social security." The specific task now is to give practical application to that objective, both nationally and internationally.

International cooperation in the field of social security has long been of interest to technicians and scholars. But now it is an interest of whole nations--indeed, of the United Nations as a whole. Broad and comprehensive plans for social security are the subject of active interest in many countries. All of you are familiar, I am sure, with the comprehensive proposals introduced into the Congress of the United States last week by Senators Wagner and Murray and Congressman Dingell. The Beveridge report in Great Britain is paralleled by the Marsh report and the proposals of the Ministry of Pensions and National Health in Canada. Mexico has just enacted a social security program and is now taking the first steps to bring the law into operation. Bolivia is engaged in transforming and extending its present compulsory savings system into a broad plan of social insurance. Chile has a comprehensive scheme to extend its health insurance provisions. National interest in social security is evident in many other countries and is a growing demand of people everywhere.

This national interest has already resulted in the establishment of an international body in the Western Hemisphere to give leadership to national aspirations for social security. The Inter-American Conference on Social Security was organized in Santiago, Chile, last September. With the participation of representatives from 21 countries of the Americas and from the Pan American Sanitary Bureau and the International Labor Office, the Conference adopted 14 resolutions which summarize general experience and the best technical study of social security problems.

The Functions of Social Security

To devise a sound basis for international cooperation, we must be clear as to the functions of social security. The term "social security" was coined in the United States, and since 1935 its usage has spread throughout the world. The phrase is new, but there is nothing new about the fundamental concepts it proclaims. In its larger sense, social security represents the universal desire of all human beings for a good life, including freedom from want, health, education, decent living conditions and, above all, regular and suitable work. In its more specific sense, it means concerted effort by citizens through their governments to assure freedom from physical want and the fear of want by the assurance of continuing income sufficient to provide food, shelter and clothing, and by the assurance of adequate health services and medical care. The methods of achieving freedom from want have necessarily changed as economic and social conditions have changed, but the goal has remained the same.

There are some people who still believe that fear of want is the greatest stimulus to individual effort, and that removing that fear will weaken the mainspring of human endeavor. Too often this argument is advanced by those who themselves have never experienced poverty or who have been fortunate in surmounting it. They would be the first to deny that their own good fortune deprived them of initiative or desire to work. The democracies of the world have staked their future on the premise that it is hope, not fear, which is the best stimulus and the strongest foundation for human happiness. Democracy itself rests upon freedom of opportunity. Years of anguish have taught us that we cannot have real freedom of opportunity unless political freedom is accompanied by economic freedom. This, I believe, is the real explanation of the demand for freedom from want and freedom from fear of want.

Freedom from want does not mean that able-bodied persons are maintained in idleness. On the contrary, it means that human resources are protected from deterioration and wastage, and that families are protected from destitution and suffering because of circumstances beyond their individual control. Measures to maintain at least a minimum income in adversity must be accompanied by measures to prevent or minimize the conditions which cause interruption or cessation of earnings.

Affirmative measures to promote good health are essential to social security. A positive health program includes not only the control of communicable diseases, the development of environmental sanitation, and other activities generally included in public health programs, but also health education and facilities for the prompt diagnosis and treatment of physical and mental ailments in their early stages. There can be no sharp distinction between public and private health. The health of individuals depends upon community conditions, and the health of the community depends on the health of its individual members. Health has long been a matter of concern to all nations as sovereign states and as neighbors--witness the growth of quarantine measures and the universal interest in preventing the spread of contagious disease. Now, the interest in health is not limited to self-protection against contagion, but extends to the national and international importance of productivity and human well-being which derive from health.

Constructive efforts must also be made through an adequate and comprehensive public employment service to provide conditions favorable for full employment, for the training of individuals for their jobs, for the retraining and rehabilitation of individuals to meet the new demands of changing industry, and for assuring the mobility of labor.

It is essential to realize, however, that even with full employment and with a comprehensive program of prevention, the most common causes of insecurity will still remain and the need for social security measures will persist. Human beings will still become sick or disabled, will die before their time, and will grow old. And they will still suffer from some unemployment, because this in an unavoidable characteristic of a system of free enterprise. All of these hazards, when they eventuate, result in loss of current income to workers' families. We must make certain that workers' families are protected against loss of current income to the extent necessary to prevent physical want. In so doing, a nation protects its most priceless natural resource, the moral and physical vigor of its citizens.

Thus, it is evident that social security means not only freedom from want but conservation of manpower. Human beings are both consumers and producers. As consumers they are interested in freedom from want; as producers they are interested in preserving and increasing their productive capacity. As both consumers and producers--as citizens-they recognize that full consumption is a prerequisite to full production and full production is the basis for full consumption. But it would be a mistake to assume that full production or full employment or increasing wealth in themselves mean abolition of poverty or of want. While these conditions are essential, abolition of want also depends upon effective distribution and the assurance of continuity in the distribution of the necessities of life. Social security distributes income among individual families over periods of non-earning as well as over periods of earning; it is a system to provide access to necessary services; it is a system to assure income and services. All of this is necessary in any human society in which livelihood depends principally upon employment and wages, if physical want and fear of want are to be prevented and if that human society and its economy are to be made secure.

Social security as a specific program is in essence simply a social budgeting of costs already being borne by the individual citizens of a nation. Whether they have a social security system or not, the citizens of every nation are confronted with the economic burdens of old age, premature death, physical and mental disability, sickness, and unemployment. These risks affect individual citizens unevenly and unpredictably. Apart from its preventive functions, a social security system spreads these costs more evenly among groups of people and over periods of time, thereby making bearable costs and losses which otherwise are unbearable and lead to destitution and want.

The foremost feature of any comprehensive system of social security is contributory social insurance. Under such a system prospective beneficiaries and their employers--and in many instances, Government--make contributions to a common fund during periods of earning; from this fund payments are made when an insured risk actually materializes. In principle, contributory social insurance is as simple as that. It is a method of organized thrift whereby contributors purchase protection against common hazards which otherwise would result in want. It utilizes the well-known techniques of insurance, and in so doing, as Mr. Churchill said "brings the magic of averages to the rescue of millions."

Through contributory social insurance, Government affords an opportunity to all citizens to purchase basic protection. For lack of means, facilities or other circumstances beyond their individual control, large numbers are otherwise unable to obtain insurance for themselves. Because social insurance undertakes to assure only a minimum degree of protection, private insurance, individual savings, and other measures of thrift are not discouraged or supplanted. On the contrary, all citizens have a greater incentive to strive for a higher degree of individual security because the governmental system gives basic protection irrespective of the additional protection which an individual citizen may acquire.

In order to be most effective, social insurance must protect all citizens against all major hazards causing want. Since such a system pays benefits on a pre-determined basis, related either to past contributions or earnings or both, the benefits paid may not always be sufficient to cover all actual needs. A contributory social insurance system, established as a first line of defense against want, needs a second line of defense in the form of public assistance granted on the basis of actual need of the individual. Modern public assistance differs from poor relief in that it is paid in cash which the individual is free to spend to cover his needs, instead of in the form of groceries and other supplies.

International Interest in National Programs

Each nation can and should develop its own social security system, adapted to its particular needs and its national traditions. It is not necessary for one nation, before establishing its own system, to wait until other nations act. The question may therefore be asked why it is desirable or necessary that there be international cooperation in promoting social security. The answer is very simple. Social security in any country is to the interest of all other countries, since it contributes to political stability, to economic well-being and is the embodiment of the chief moral concept which distinguishes the United Nations from the Axis powers--namely, belief in the innate dignity and worth of the common man. The development of social security is essential both to the internal security of nations and to the international security and peace of the world. Thus, any nation, no matter how well developed and effective its own system of social security, has a deep interest in the extension of social security to all other nations.

International Cooperation

Social security systems have demonstrated their efficacy in promoting higher standards of living. I myself have seen how the health programs of South American countries are improving the whole basis of living in those countries. A higher standard of living inevitably means a more effective demand for goods. What is equally important, so far as international relations are concerned, is that the elimination of low standards of living means the elimination of unfair competition based upon the exploitation of human beings. It is true that a nation with a high standard of living is more efficient than a nation with a low standard of living. It is also true, however, that individual producers in a nation with a higher standard of living are at a competitive disadvantage as regards the producers in a country with a low standard of living whose workers are exploited, leaving the poorer nation as a whole to suffer the consequences. Raising the standards of living where they are relatively low is essential to a durable basis for mutually profitable international trade. This is a goal to which social security will contribute greatly.

Social security thus affords a fertile field for international cooperation, since there is a real community of interest among all nations. International cooperation in the field of social security should of course include the exchange of specific information and practical experience dealing with the extent and importance of hazards causing destitution, and with specific ways and means of providing protection against them and of reducing their prevalence.

We in the United States are greatly indebted to other countries whose wealth of experience was made available to us when our Social Security Act was being planned. There is much we have learned and have yet to learn from their experience, and I believe there are some things which they can learn from our experience.

International cooperation should include the exchange of technical personnel to enable each nation to take full advantage of experience and technical skills developed in all others. International cooperation should also provide for the protection of benefit rights acquired by citizens of other cooperating nations in case of migration. Indeed, international agreements should go further and provide for the exchange of benefit rights so that a worker moving from one nation to another can have his accumulated benefit rights go with him. Fortunately, much work on this problem has already been done by the International Labor Office. As an illustration of what can be done in this field, there has already been worked out an agreement which is now in effect between the United States and Canada for the reciprocal certification of unemployment insurance benefits of individuals who go back and forth across the boundary line.

In addition to such reciprocal agreements, provision should be made for loans to nations inaugurating social security systems requiring the construction of buildings and the purchase of equipment. This is particularly important in the health field. Besides having a powerful influence upon the development of international good will, social security loans can afford opportunities for sale and useful investments of funds. Such loans can be amply secured not only by the buildings and equipment which they finance but also by the continuing income derived from the social security contributions. Moreover, in many cases such loans would be used in part for the purchase of equipment in other countries and thus stimulate international trade.

Next Steps

International cooperation in developing social security could be achieved most effectively through agreements developed and consummated in accordance with well established methods. The first step toward such multi-lateral conventions would necessarily be an international conference whose primary task might be the formulation of what in essence would be an International Charter of Social Security. In such an undertaking it would, of course, be necessary to take account of wide differences in levels of economic and social development among nations. Such a charter might therefore take form in a declaration of goals to be achieved and of principles to be observed, rather than in a code of specific provisions. Such a charter should also lay a basis for continuing cooperation among the signatory nations.

It is imperative, I believe, that we do not delay in taking all possible steps to promote social security through international cooperation. The nations of the world should be equipped to cope with the acute problems which will confront them at the close of the war. Among the nations which will be liberated from the Axis powers, the prompt reestablishment of social security institutions which have been destroyed will afford a means not only for administering relief but also for making the speediest transition from the period of international relief toward the period of national rehabilitation. The international distribution of the necessities of life and the encouragement of equitable international trade will be greatly facilitated if the population of the various nations have the means to purchase these necessities. Social security systems will help greatly in providing that purchasing power. Thus, social security must be looked upon as an instrument to promote not only individual and national welfare but also human welfare throughout the world.