Cain, the Chilean Model, and the Individual Mandate
Cain's public lack of understanding about public policy goes beyond 9-9-9.
[Cain’s] also been fond of touting the “Chilean Model” for privatizing Social Security — pitching it as a series of free-market, private savings accounts. But in fact, whether he and his conservative fans realize it or not, Cain is in fact embracing the kind of policy prescription that they have been railing against on certain other subjects throughout this whole campaign.
In short, the “Chilean Model” so touted by Cain is the individual mandate. What “Obamneycare” is to health care, Chile’s pensions system is to Social Security, with a system of mandates, regulation and subsidies.
The basic point being: that even if one tries to introduce market elements to a universal social program (such as old age pensions) one has to have government oversight and, more dramatically, said government oversight has to include some level of coercion to guarantee said universality.
The fundamental point here is not, per se, that Cain is either being hypocritical/doesn’t understand his own policy preferences (either of which may be true), but that in general our debates about social policy, specifically of the type that has to be universal (meaning that all citizens partake of it) requires a significant amount of government involvement (which, by necessity means “a system of mandates, regulation and subsidies”). It is an unavoidable fact. It is likewise unavoidable that it cannot be a pure market solution, because a real market has to allow for failure.