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Writing in the Daily Mail in October, the editor of Standpoint Daniel Johnson accurately identified Labour and Conservative plans to raise the state pension age as a "violation of contract": Britons have paid National Insurance for decades on the understanding that they will net some meagre subsistence in return at the age of 65. Thus Johnson raises the larger issue of what such "contracts" with government are worth. The simple answer is "nothing".

After all, what entity controls the very laws that make contracts real and binding? The state. To what entity do you turn when a contract is broken? The state. So total and terrifying is this power that perhaps we should think it's a glass half-full. It's truly miraculous that it's possible to sue one's own government: the police for physical abuse; the justice system for false imprisonment; or the NHS for incompetent medical care. But nothing stops Parliament from passing a law tomorrow that says, "You can't sue the government." And then you can't.

Johnson railed against politicians' assumption that "the entire national wealth is theirs to tax, spend and redistribute as they see fit". I'm sympathetic with the impotent fuming, but when the state can confiscate up to 100 per cent of your earnings — a capacity it will gladly exploit to the hilt with higher earners whenever the fiscal going gets tough, as we saw in the UK last spring — the entire national wealth is theirs. Especially since the rise of so-called "progressive" tax regimes, the big Cold War hoo-ha of pitting one economic philosophy against another turns out to have been rubbish. When the state has the power to take most or even all of your money, controlling when and how much it deigns to give back, that is communism. The "end of history" — Fukuyama's idea that capitalism has now won against its Cold War rival — misidentified the victor.

Thus this idea that our diligent citizens have been putting away money for their retirement with National Insurance contributions is a myth. In truth, these funds have simply been poured into the maw of state coffers, out of which current pensions are paid. Johnson's comparison to a Madoff-style Ponzi scheme was spot-on.

In the US, Franklin Roosevelt brought in Social Security under a similar illusion that the state would kindly reserve your funds in its safe little bank account for your retirement. Social Security is still replete with the theatre of this conceit. I'm American, so every year I'm sent an accounting of how much I've paid in. Since — for now — the system still promises to maintain some relationship
between earnings and pensions, I'm to expect more dosh at 65 the more I contribute.

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