THE RISK SOCIETY.(The Talk of the Town)

Hendrik Hertzberg on four more years

Philip Gourevitch on the search for a mandate

Nancy Franklin on Election Night coverage

George W. Bush was reelected last Tuesday not because of the job he did running the economy in his first term but in spite of it. (Voters for whom the economy was the most important issue voted for Kerry by a four-to-one margin.) Bush doesn't get to coast for the next four years, though; he's facing a host of economic problems, particularly the mounting cost of health care and the looming crisis in funding for Social Security and Medicare. Bush, of course, has a master plan: he intends to turn America into what he calls an ownership society.

That sounds unobjectionable--who's against ownership? But what the President has in mind is nothing less than a radical overhaul of America's entire system of social insurance. In place of unwieldy government programs run by busybody bureaucrats, Bush wants Americans to have more independence and more choices regarding their health care, their savings, and their retirement. Social Security would be partially privatized, with people allowed to put aside money in individual accounts. Private health-insurance plans would compete with Medicare. Tax-free retirement accounts would be expanded. And health savings accounts would let people save money for health-care expenses tax-free, as long as they agreed to sign up for plans with high deductibles. The result, Bush claimed earlier this year, would be "greater opportunity, more freedom, and more control over your own life." And with freedom, presumably, will come greater responsibility; people will be more careful as users of health care, more diligent as savers and investors.

Fair enough. All things being equal, letting people make decisions for themselves will produce smarter outcomes, collectively, than relying on government planners. It may also promote attentiveness. As the economist Lawrence Summers has said, "No one in the history of the world has ever washed a rented car."

No one in the history of the world has ever had a free lunch, either. The ownership society promises freedom, but at the price of a huge shift in risk, away from government and society and onto individual citizens. Social Security, Medicare, insurance--these are basically collective risk-sharing mechanisms. Rather than let each person run the risk of ending up destitute or sick, these programs pool the risk. Because the risk is shared, it can be managed, and people can be guaranteed a minimally acceptable outcome. In Bush's brave new world, that guarantee will be eliminated.