Beware the 'Lockbox': A way into . . . yes, socialism.(Brief Article)

Are we being "lockboxed" into economic serfdom? The famous "lockbox" has acquired an exalted status unequaled by virtually any public policy in recent memory. Left and Right disagree about almost everything, but every prudent man and woman in Washington, it seems, supports the lockbox. The term itself has acquired such cachet that one might be forgiven for believing that it was invented by the Founding Fathers, if not the Biblical patriarchs.

In fact, the notion first gained political prominence very recently-in the late 1990s. It's easy to see the political appeal of the lockbox: It's really nothing more than a gentlemen's agreement to set aside certain funds for a specific purpose. If revenues are committed to a program, Democrats are pleased because a tax cut is thereby made less likely; and Republicans are happy as well, because Democrats can increase spending only if they can finance it with funds other than those designated for the lockbox. In practice, the lockbox is a rhetorical device-but the politicians have recently upped the ante. The House turned the rhetorical device into a bill, which it passed on February 13.

It's not clear that the lockbox will work; but if it does, it will be dangerous to the Republic-and Republicans will ultimately regret the day they began to support the concept. It poses a serious threat to the intellectual underpinnings of the free-market economy.

In the late 1940s, Friedrich Hayek, Milton Friedman, and the other members of the Mont Pelerin Society set out to identify the principles that gird a free society. At the time, socialism was in its heyday. Socialists pursued absolute equality through government acquisition and management of private assets, and in many places they were beginning to achieve their objectives. Every Eastern European country was socialist, and many Western European nations were moving in that direction as well. Academe preached the inevitability of socialism, but Hayek and his colleagues boldly argued that a central planning agency would never be able to aggregate information efficiently-as prices do in a free- market economy. Over time, citizens would see that their brethren in capitalist countries were more prosperous, and popular support for socialism would disappear.

Of course, history sided with Hayek, but socialism didn't disappear. Economists and philosophers began to devise a socialism that would be immune to the Hayek critique. The cleverest of these scholars is John E. Roemer, a highly gifted academic at Yale University. In his 1994 book, A Future for Socialism, Roemer envisioned a world where the government would distribute coupons that entitle individuals to an equal share of corporate profits. Workers would own the means of production, but the capitalist system would otherwise be left to its own devices. Prices would continue to serve their allocative function, and the most damning weakness of 1940s socialism would thus be eliminated. While Roemer's work has received a significant amount of criticism and subsequent refinement, it is safe to say that the frontier of socialist thinking envisions a society very much like our own-except that the ownership of firms would be distributed by the government equally to citizens.

It is not alarmist to say that we are marching toward a world reminiscent of Roemer's vision-and that the Social Security lockbox is partly to blame.

Here's why. The Social Security Administration currently takes in more in revenues than it spends. Rather than rebate the ...