When a portion of wealth is transferred from the person who owns it without his consent and without compensation, and whether by force or by fraud—to anyone who does not own it, then I say that property is violated; that an act of plunder is committed.
—Frédéric Bastiat. The Law, 1850.
It is both immoral and illogical to tax people of their hard-earned money, which they should be saving for their retirement, in order to pay for other people’s retirement. The role of government is to provide a legal framework within which citizens can plan and save for their own retirement, not to play Robin Hood and plunder people’s property.
In the absence of government pensions, people tend to squirrel away a nest egg to prepare for their old age, to establish businesses, and to buy rental properties, whereas when the government offers pensions people tend to abdicate responsibility for their own retirement. Instead of saving, they spend every dime they have and arrive at their dotage penniless.
The Chelsea pensioner option
The Royal Hospital Chelsea is a retirement and nursing home exclusively used by former British Army soldiers. When entering the facility, residents surrender their pension in return for food, accommodation and clothing. The accommodation is in “Long Wards”; each is sixty yards long with a line of berths on the inner side. Each berth is around 2.7 by 2.7 yards and contains a bed, table, chair, wardrobe, chest of drawers, and bedside light. Residents can enjoy complete privacy by closing the berth door and shutter. Within the facility, all residents wear the hospital’s blue uniform, donning their famous scarlet coats only on official occasions. In place of old age pensions, people who find themselves destitute should be sent to this type of facility, financed by a voucher system. The funding should be minimal so that charitable organizations have an incentive to run and subsidize them. Human nature being what it is, once a culture of personal responsibility is allowed to return, these facilities will be needed only rarely.