31 August Revised 11 September

Early superannuation and "the right to choose"

When "fiscally neutral" measures are proposed or supported by Treasury they necessarily have an ideological or political purpose.  The purpose in the case of the proposal to allow uptake of superannuation at a reduced rate from the age of 60 years is to take a step away from the principal of universality and a step in the direction of "choice".

Ideologically, the proposal falls into the same category as Kiwi Saver (personal superannuation) and ACC (Accident Compensations Scheme) where the benefits paid are attributable to the choices that people have made in their lives - the choice whether to save or not to save, whether to have a high discretionary income or not and so on.  (Don't be surprised to find that income is a matter of personal choice.  The liberal doctrine of innate equality implies that regardless of ethnicity, gender or social class every individual is capable of achieving equivalent outcomes in their lives.  Therefore provided that social institutions such as the education system function as intended, personal incomes are the consequence of personal choices made earlier in life).

Under the universalist paradigm, the concept of "fairness" depended upon the egalitarian ethos: to put it simply, universalism argued that we are all human beings and therefore we are all entitled to the same measure of sustenance.    Universalism was replaced by the paradigm of individual needs - the idea that human beings differ in terms of their personal needs, and that sustenance (in the broadest sense) should not be supplied equally to all, but in accordance with individual need.  This then became the basis of the "means tested" state benefit system.  This "individual needs" paradigm takes account of current individual circumstances regardless of  whether those circumstances are a consequence of prior individual decisions, acts or omissions.

We have now moved on from the "universalist" and "individual needs" paradigms to the current "individual choices" paradigm in which benefits are allocated on the basis of past individual decisions regardless of present individual circumstances.  The proposal for optional uptake of superannuation at an earlier or later ages falls under that "individual choices" paradigm.   It offers a practical advantage to manual workers who are worn out at the age of sixty, and to all those, who due to the unfortunate circumstances of their lives, have a shorter life expectancy.  (Incidentally it may offer even greater advantage to high wealth individuals whose income is directed through trusts and who will be able to receive state benefits from the age of 60 until they die at hopefully advanced years).   But ideologically the reform threatens the well-being of the poor, because it is based on the debateable premise that poverty and ill-health are self-inflicted conditions which should provide no entitlement to social benefits.

Neither should the presumption that choice is always a good thing go unchallenged.   Choice requires decisions.  Decisions are complicated by ignorance, and ignorance leads to imprudent decisions, or decisions which are regretted in hindsight.    Life can be simpler, more pleasant and more rewarding when there are no choices to be made.  For that reason a good computer programmer will do his or her best to restrict the number of options available to a user.   Wherever there is only one correct decision, the user will be given no choices.  Where there are a number of possible acceptable options, and a number of incorrect options, the user will only be permitted to choose one of the possibly correct options, and will be prevented from choosing an incorrect option.  Thus a good programmer endeavours to reduce the  range of options available to the user to the minimum consistent with the proper functioning of the programme.

A consumer does not want to choose one from among fifty brands of sugar.   He wants the sugar which meets basic food quality standards and offers the best value for money.  In that situation choice becomes an impediment, a waste of time, and an opportunity for error.  The consumer would prefer to have only one brand of sugar on the supermarket shelves, provided only that it was pure and cheap.

Sugar is a simple commodity, but the basic principle remains true for other more complex commodities and products.   People are being asked to make very complicated decisions with respect to investment in everything from housing loans to KiwiSaver superannuation schemes.  Some flatter themselves that they are sufficiently knowledgeable to make those decisions, but those who are more modest, and not necessarily unintelligent, know that however much they agonise over the decision, they is a good chance that they will make the wrong call.  Life was simpler when a mortgage was set at 3% for 30 years,  and the government paid a livable pension from the age of 65.   People with fewer choices to make were then able to get on with developing farms and businesses, progressing careers and raising families, and were left free to enjoy life without  having to worry about how they should manage their financial affairs for the next half century.

From a wider social perspective, choice becomes a drag on the economy.   New occupational groups spring up in real or ostensible attempts to cut through the confusion created by the increasing range of ineluctable choices imposed upon the ordinary citizen, whether these be in the area of personal conduct, product choice or financial investment.   We have  life coaches, counsellors, consumer guides, financial advisers and a vast increase in print, broadcasting, internet,  roadside billboards and  point of sale advertising.  We have a significant increase in the role of other professions, most notably the legal and medical fraternities and consultants of every description, who benefit from extensions in the range of choice available to us, and our propensity to error in those choices.   Members of these professions all tend to draw incomes well above the median level and so through them the availability of choice aggravates social inequality while acting as a drag upon the productive economy.

Then we have the operators of "indexed funds" which are a way of avoiding choice, and thus the ultimate proof that choice itself is a problem and an impediment to our existence, rather than an expression of its ultimate good.   Choice has given us "winners" and "losers"  in everything from the sharemarket to Ponzi schemes, and  accentuated inequality in ways that have little relation to how hard we work, how intelligent we might be, or how moral we are.   In fact, the growth of choice in financial investment has generally been to the disadvantage of those who are hard-working, thrifty, and trusting - exactly the sort of people who form the backbone of a decent, ordered and stable society.

In the development of human society from slavery through to the wage system the historical tendency is for individuals to be given increased rights to choose  the conditions of their own existence. This is called progress by all those, who believe, or pretend, that the right or obligation to choose is a good thing and sufficient in itself to make for a happy society.   From the beginning, wage workers have been more or less free to  decide where they will live, and for whom they will labour.   They  decide what they will eat and wear, and from whom they will purchase the necessities of life.   Those rights have been available to all workers, with the exception of those  imprisoned by the state, who revert to the status of the slave.

Yet in the twentieth century workers and citizens largely gave up the right to make their own decisions  relating to health, education and provision for old age, and significantly, this loss of the "right to choose" was generally hailed as progressive.   Why?  Because individuals were required to forgo a purely abstract right to choose how they would provide for  health, education and old age in favour of actual access to those social goods, which had previously been unaffordable for them.

It is the range of available options which are the true measure of the utility of the right to choose. A penniless wage-labourer is materially no better off than a starving slave, and is in a worse material condition than a well-fed slave. The realisation of abstract rights can only proceed by way of a more equal share of the social wealth which will in turn extend the individual's range of options as a self-actuating human being.

Citizens have been granted the right to acquire former state assets - power stations, mines, airlines, railways, telecommunications companies, banks, forests, farms, hotels, printing works, roading and construction companies and broadcasting stations.  They have an abundance of choice.   They have "won" the right to enter into homosexual relationships,  to have both husband and wife employed as wage workers and to practise contraception and abortion.  These are all things in which they may have little or no interest, or to which they may be deeply antipathetic, while their economic condition deprives them of their one real and simple desire to marry a person of the opposite sex and raise a family in their own home.

In the late twentieth and early twenty-first century the abstract "right to choose" has been extended while the realistic range of material options available to the individual is rapidly contracting. This makes sense for the ruling elite, but for the ordinary citizen it is nothing short of ludicrous.

The popular appeal of choice in superannuation grows purely and simply out of a recognition of social  inequality, but the effect of choice will be to both legitimize and aggravate that inequality.    Choice will lend substance to the retort "It was your choice to take superannuation at 60... your choice to be a coal miner inhaling dust, a sawmill worker soaking in pentachlorophenate, a data entry person crouched over a keyboard ten hours a day,  the mother of six children.. it was your choice to live in Christchurch, buy a leaky home, invest in a failed superannuation scheme ..." and so on ad infinitum.  Some will be well placed to make safe and "good" decisions.   Some will not.   Some will profit out of giving people good or bad advice as to what call they should make, and some enterprising folk will realise that there is a profit to be made from buying workers superannuation rights in return for a lump sum or annuity.   The universal law of choice will apply, and the nett result will be increased inequality.  The cunning and well-resourced will win while the trusting and indigent will lose out.

In deciding whether to allow this particular opportunity for individual choice, the New Zealand state is deciding whether to adhere to the principal of universal right,  the principal of individual need, or the principal of individual choice reflecting and reinforcing social inequality.  Any society needs to strike a balance between the differing approaches to what is, and is not fair.  There is some merit to each of the "universalist", "individual needs" and "individual choices" paradigms, but those merits only apply within a particular social context.  If we were all paid equally through our working lives, there would be little harm, and quite a bit of good, from allowing "choice" and therefore difference, in matters such as accident compensation, health, education and retirement benefits.   On the other hand, it is precisely because there are such grave and inescapable  inequities  in personal incomes during our working lives that the New Zealand state attempted to offer some redress by offering a universalist approach to  health, education and retirement benefits during the brief "egalitarian" epoch of the mid-twentieth century

What we are seeing now, in this latest proposal, is evidence of New Zealand returning to its roots as an explicitly class-based society, in which a very high degree of social inequality was deemed by the European ruling class to be both necessary and desirable.   That is evidence of a ruling class which is running blind and out of control towards the social abyss.

The moral dimension to the "Right to Choose"

The "right to choose" has become the defining imperative of secular liberalism in the realm of social values as much as economics.  It has become synonymous with "freedom" and identified with "the pursuit of happiness" as the ultimate social good.  Many practices which were prohibited in a previous age, from abortion to usury are now permitted under the rubric of the individual's right to choose and to pursue his or her own personal happiness.  Western society is no longer cognisant of why a range of sexual or financial practices were prohibited in earlier times and it is conflicted over how to deal with newer socially destructive habits such as the use of the non-traditional drugs  marijuana, heroin, cocaine and methamphetamine.  Curiously, as society was in the process of removing prohibitions from long-established evils, for a while it still prohibited the new arrivals.  There are signs that this is now changing, and that all social evils may in future be subject to licensing, admonition and restriction as an alternative to prohibition, starting with the synthetic cannabis drugs.

The conventional wisdom is that prohibition, whether of alcohol, drugs, prostitution or usury, "does not work".   There is little discussion as to what it means to say that prohibition does or does not "work" or what kind of cultural environment determines whether or not it can "work".  The evidence against prohibition tends to be purely anecdotal and has become part of the popular wisdom or prejudice as the case may be. As the scope of the "right to choose" has inexorably expanded, the realm of moral prohibition has diminished in proportion and in its place society offers only an ineffectual system of admonitions and restrictions upon licensed social evils.


When a legal and traditional moral prohibition is overturned, it is commonly replaced by a system of licensing. A license is an official permission to do what one would not otherwise be allowed to do.  Thus licensing implicitly acknowledges that the activity licensed is inherently unsafe or undesirable.  Abortions must be approved by licensed medical specialists, alcohol may only be sold through licensed outlets, gambling is restricted to licensed casinos or gaming houses, brothel owners must be licensed and so on.   Licensing is often seen as a form of restriction on the licensed activity, but it also has the opposite effect.   A license give an aura of respectability and official approval to persons and activities which would otherwise be suspect  Licensing increases the profitability of immoral activities by freeing licensees from unfettered competition and at the same time gives rise to political corruption as persons or corporations vie for a limited number of state licenses to sell alcohol or tobacco, set up brothels and casinos, provide abortions and so on.


The public admonitions range from absolute dissuasion (in the case of tobacco) through moderation ("sensible" drinking or gambling) to protective measures ("safe sex").  These admonitions are often weak and generally ineffective.  Younger people who are often contemptuous or dismissive of cautionary admonitions continue to binge drink and practice "unsafe" sex.   Despite the warnings "if it sounds too good to be true, it probably is" older people are lured into usury.  Gambling addicts and alcoholics will hear the message but are generally incapable of altering their own behavior.  The deciding factor for many, perhaps for most of us, is that these activities are legal.  Society perseveres with expensive yet ineffectual public education campaigns based on pragmatic principles not so much to save the lives of the reckless young or their deeply ensnared elders, as to salve the social conscience and to burnish the reputation of those who profit from activities which would otherwise be deemed immoral.   The breweries, liquor merchants, tobacco manufacturers and retailers, TAB, the casinos and Treasury are all able to say "Look.  We are being responsible.  We are warning people of the dangers" while knowing full well that those "warnings" will not lower profits and may actually lead to increased revenues as the campaigns tacitly endorse the idea of "responsible gambling", "sensible social drinking", "safe sex", "prudent investments" and so on.


Age restrictions are widely applied to activities which were previously deemed to be immoral.   In essence age restrictions recognise the fallibility of choice, and assume that people below a certain age are incapable of making judicious choices.  Age restrictions are undeniably arbitrary.   There is no magical age above which one is qualified to make sound choices, and below which one is prone to misjudgement.  This leads to much to-ing and fro-ing among the state authorities as they argue over whether the age of consent should be  16 or 18, or whether alcohol and tobacco should be sold to  18 or 20 year olds, and at what age people should be permitted to read books or view films which are judged to be pornographic or erotic.  There is little reason or consistency to these debates, because they are entirely predicated on the mistaken premise that there is a safe age at which to indulge in bad habits.  Age restrictions also have the perverse effect of suggesting to young people that these habits are indicative of maturity, and therefore something to aspire to and take up in the normal course of personal development.  It could be argued that age restrictions are designed not so much to protect the interests of the young as of the brewers, tobacco merchants, casinos, brothel-keepers and the state which takes a share of their profits.  If age restrictions were not an option, and one could legally sell alcohol to an eight year old girl, or have sexual relations with a seven year old boy, the reasonable presumption is that society would swiftly revert to total prohibition of alcohol and sodomy respectively.   New Zealand law prohibits boys and girls under the age of 18 years from working as prostitutes, and prohibits youths under the age of 18 from buying alcohol, but age restrictions have little effect.   Many boys and girls are working as prostitutes in New Zealand.   Once prostitution is recognised as a legitimate way of making a living, child prostitution inevitably follows.

Other restrictions applied to the "right to choose" destructive or undesirable habits are no less arbitrary.   Restrictions of time ("no alcohol sales after 6pm, 10pm, 1am etc") and place (alcohol and smoke free public spaces) have mixed effects.   Restrictions on alcohol sales and use have been progressively relaxed over the years, while those on tobacco smoking have been tightened.  Restrictions of degree also tend to be arbitrary and ultimately have little impact on social consequences.   For example restrictions on percentage of alcohol by volume which are allowed in beers, wines or pre-mixed alcoholic beverages do nothing to mitigate the problems of intoxication or addiction.  Similarly the dividing line between erotica and pornography, always and necessarily an arbitrary one, has now shifted to the point where what would once have been considered pornographic is now broadcast on free-to-air television.  The concept of pornography as a moral evil has pretty well ceased to exist, and when people are charged with viewing indecent images the sentencing judge is obliged to assert that the persons depicted in the images -  invariably children - are "victims" of the offenders' activities.   This is a tendentious argument, but it is all that the state has left now that the only limitation on the "right to choose" is where the choice involves direct and palpable harm to another individual.

The failure of licensing, restriction and admonition.

In all cases where "the right to choose" has replaced moral prohibition it is hedged with admonitions, restrictions and controls, whether real or merely ostensible, which are in place precisely because in these cases the "right to choose" benefits neither the individual nor society.

The question that needs to be asked now is whether the "right to choose" actually "works" any better than the prohibition of social evils.   In giving ourselves the right to choose we give the right to behave in ways that are destructive to ourselves, our families and our society.  We will never bring about a world in which there is no requirement and no room for personal choice, and we would not want such a world,  but there are many choices which we should not dignify as "rights".

Prohibition has its own problems.   It is not a perfect solution, it must also be arbitrary to some degree, and it will often have unintended consequences.  But all in all, it is more rational and more inclined to the public good than a system under which social evils are licensed  and controlled by the state to its own profit, subject to various forms of ineffectual admonition and contradictory restrictions.

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