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.