Wilfrid Schreiber

Wilfrid Schreiber - Image: BKU

Wilfrid Schreiber (born September 17, 1904 in Brussels , † June 23, 1975 in Cologne ) was a German economic theorist.

He is considered the "father of dynamic pensions". In 1954 he developed a draft for the reform of the statutory pension insurance in the Federal Republic of Germany on behalf of the Federation of Catholic Entrepreneurs (BKU) , which was submitted to the Bundestag for resolution in 1957 (in a significantly modified form) as a so-called intergenerational contract . The main features of this system are the pay-as-you-go system and the automatic link between the pension level and the level of earned income. The differences between the adopted reform and Schreiber's concept are discussed in the section “Generational Contract”.

Life

Wilfrid Schreiber first studied humanities and natural sciences in Cologne, Bonn, Aachen and Munich and from 1927 worked as a writer, journalist and radio programmer. Schreiber stood out above all through his economic and social science competence. From 1949 to 1959 he was managing director and scientific advisor to the Association of Catholic Entrepreneurs. As a private lecturer at the University of Bonn, he taught economic theory, social policy and statistics since 1955. In 1962 he was appointed full professor to the chair for social policy at the University of Cologne. His institute developed into a stronghold in this discipline. Guy Kirsch is one of his doctoral students . Schreiber retired in 1972 and died in Cologne in 1975.

The historical situation

In the 1950s, a fundamental change in German social policy had become necessary. The economy was visibly improving. Its steady growth brought modest prosperity to large parts of the population. Nevertheless, there was still poverty and need to an appalling extent, especially as a result of the Second World War. 4.5 million war victims had to be cared for. At the same time, the young Federal Republic was confronted with a strong influx of refugees and immigrants. In addition, unemployment could only be reduced gradually. In 1953 there were still 1.5 million unemployed. Those killed in the war had left widows and orphans and were unable to pay social security contributions . Private savings and insurance assets had been devalued by the currency reform of 1948 at a ratio of 10: 1. The capital base of the statutory pension insurance was largely destroyed as a result - for the second time since the currency devaluation due to hyperinflation in the Weimar Republic . Statutory pensions - little more than pocket money - had to be maintained through state subsidies. In this situation pension reform meant complete renewal, in which all calculation bases had to be changed. On Schreiber's advice, a significant step was taken in the German pension policy: the departure from the existing funded procedure . In addition to the introduction of dynamic pay-as-you-go financing , pensions rose by an average of 65 percent.

The "generation contract"

The Schreiber Plan was published in 1955 as a "proposal for social reform" by the Association of Catholic Entrepreneurs under the title "Security of existence in industrial society" . This includes the idea of ​​a generation contract . Schreiber refers to the Mackenroth thesis , according to which all social expenditure cannot be financed by reserves, but only by current income. In this sense, Schreiber considered the old-age consumption of a funded reserve to be “draining the substance” that a wealthy private individual could afford, but never a dynamic, cross-generational economy.

In the economic literature it is mostly pointed out that the funding of the Bismarck pension insurance was destroyed by hyperinflation and currency reform . Schreiber's thesis, however, went far beyond that. Schreiber already considered the theoretical possibility of sufficient, macroeconomic funding to be an illusion. He regarded the idea of ​​being able to apply private insurance methods on a macro-economic scale to the statutory pension insurance as a mistake. “Apparently, a large group of our experts lack the imagination to break away from the private sector model,” said Schreiber, explaining that “actuarial cover capital has actually been and remained a pious wish since the social security system was in place, but at the latest since 1918 " (P. 17). For this reason, Schreiber proposed a complete reorientation of the statutory pension scheme, in which the funded principle should be abandoned in favor of a new pay-as-you-go system. (P. 19).

He pursued the goal of introducing allocation rules for the distribution of the labor income of employed persons with the intention of dividing the individual consumption possibilities appropriately between the three life phases of childhood and adolescence, employment phase and old age. Both children and young people (before they reach the age of 20) and the elderly (after reaching the age of 65) are guaranteed a proportionate share of total earned income (p. 24). Founded in the Catholic social doctrine, he transformed the model of family solidarity from pre-industrial society, in which the parents raised the children and thereby acquired the self-evident right to be supported by the children at their age (p. 33), to the conditions of industrial society. Childless people should also acquire pension entitlements from the next generation and, in return, participate appropriately in the child's costs. Only with the introduction of both dynamic old-age pensions and dynamic childhood and youth pensions could the problem of repairing lifetime income also be fully resolved in the “unproductive” phases of old age and childhood. (P. 33)

Schreiber's plan was only partially realized by the pension reform under Adenauer in 1957. Only the working generation of employees was obliged to pay for the generation of pensioners without creating a comparable obligation to look after the generation of children. While this socialized the financing of the pensions, the financial burden of raising children in the family remained with the parents. Since the pension entitlement was not linked to childcare benefits but to employment, mothers or fathers who are not or only to a lesser extent employed because of raising children cannot acquire pension entitlements to the same extent as fully employed persons. The lawyer Eva Marie von Münch criticized: The burden of old age was collectivized, the burden of children remained a private matter. With this construction, the applicable pension law punishes the family and, within the family, especially the mother who is not or not fully employed .

Schreiber's request to collect pension insurance contributions from self-employed income was not implemented in pension insurance law.

Pay as you go

The main argument for Schreiber's pay-as-you-go system is the proportional adjustment of the pension level to the economic development of labor income. The social security of dynamic pension insurance is based on participation in the general economic performance of the present and thus follows the development of social prosperity. Schreiber, on the other hand, viewed private reserves as assets saved in the past, which are steadily reduced through old age:

In order to spread the risk as widely as possible, Schreiber sought a pension system that "includes almost the entire population". He therefore recommended the dissolution of the previously independent insurance carriers of the invalidity, salaried employees and miners' pension insurance and their merging into a unified “Pension Fund of the German People”. For Schreiber, uniform, statutory compulsory insurance was twice as superior to specific individual insurance. On the one hand by its macroeconomic foundation, on the other hand by the fact that (under normal conditions) no shrinking of its membership is to be feared, so that the "formation of cover reserves" is completely superfluous.

Schreiber saw another advantage in the stability of the pay-as-you-go system against fluctuations in the value of money . While the monetary value of the capital reserve of a private insurance company decreases at the slightest inflation and this has to be compensated for by increases, the pay-as-you-go system remains completely unaffected. With dynamic pay-as-you-go financing, no monetary value would ultimately be acquired, but future pension entitlements. For this reason, the statutory pension insurance is resistant to possible devaluations - an argument that was considered particularly important in the 1950s. Inflation and currency collapse were ultimately part of the political awareness experienced.

Schreiber saw the funded procedure as an economic method which is correct for the private insurance industry, but which turns out to be wrong in the macroeconomic perspective. In contrast to the private sector, a public-law pension institution, which includes almost the entire population, does not require funding. "The German social security system should be freed from the disaster burden [...] but especially from the erroneous obsession with having to build up reserves."

The "Schreiber Plan"

Compulsory insurance for the self-employed and higher earners

According to the Schreiber Plan, the “totality of all workers” should be included, including the “self-employed workers”, whereby the income limit of the compulsory insurance should be lifted. The statutory pension insurance should therefore be placed on the largest possible foundation "in order to ensure the consistency of its calculation bases over all possible structural changes in the economic society and its composition according to occupation and type of employment" (p. 32).

“By law, every citizen of the German Federal Republic who - as an employee or self-employed person - earns an income from work is a full member of the Pension Fund of the German People. (…) Recipients of higher incomes therefore remain compulsory members, but in these cases only four times the respective average earned income is taken as the basis. (Similar to what the employers' liability insurance association already does today.) " (P. 29)

No government grants

In contrast to current political practice, Schreiber's pay-as-you-go system is designed in such a way that state subsidies can be dispensed with entirely. Schreiber even called for the “radical suppression of state subsidies for social security” (p. 14).

The pension fund is fundamentally prohibited from accepting or administering any assets, be they grants or contributions from legal or natural persons or foundations. (P. 29)

The reason he gave:

Obviously, it is pointless to take some of the income from the taxpayer in the form of taxes and then give them back with the gesture of the benefactor. Let's put an end to this trickery game, which only promotes the false look of state omnipotence. The state rightly demands clarity of accounts and truthfulness from us entrepreneurs . We demand, by the same right, clarity and truthfulness in national accounts. (P. 14)

Regarding the employer contribution , he said:

The employer's share of the pension insurance was a real sacrifice for employers in the year it was introduced, i.e. it was at the expense of the entrepreneur's income. But in the years that followed, the burden eased and finally disappeared entirely. The increases in nominal wages that are usually due - according to productivity gains - simply stopped or slowed down. The process of dynamic wage increases in step with the increase in macroeconomic productivity only started again after the "advance payment" of the employer's contribution to social security had been "absorbed". Today nobody doubts that employer's social security contributions are a real component of wages. (P. 12)

The childhood and youth pension

The Schreiber Plan was based on a "three generation model" with three defined life phases:

• Childhood and youth
• Working age
• Retirement

Schreiber assumed that a pay-as-you-go pension system can only function undisturbed if there is a balanced relationship between the generations. By this he did not understand that the demographics have to stay the same: “ Any deterioration in pensions due to the 'aging' of our people and the higher life expectancy of pensioners would be overcompensated within a very short time by the upward trend in wages that can be expected with certainty. “(Schreiber, p. 31, he cited the demographic disorder caused by the war as a special example.). The employable would therefore not only have to pay into the pension funds, but also raise children in order to ensure that future pensioners can be provided for by a sufficient number of contributors.

In order to reward the family achievement in bringing up children, Schreiber proposed an additional “childhood and youth pension”, with the reimbursement rates staggered according to marital status as a “ conscious element of population policy ” (p. 35). The “ institutions of old-age pensions and child benefit ” necessarily belonged together and should be seen as a unit “ because both are based on the same and uniform set of facts and the same problem. "(P. 37)

For Schreiber, educational benefits were just as much a prerequisite for claiming a later retirement pension as was paying contributions:

“Anyone who retires childless or has few children and, with the pathos of self-righteousness, demands and receives the same pension for the same contributions, is basically parasitic on the additional performance of the rich children who have compensated for their underperformance. In spite of all mockers, there is a social 'should' of the number of children, precisely those 1.2 children that every individual must have so that society remains alive and can also provide for the maintenance of its old people. " (P. 37)

The concept of the childhood and youth pension was rejected by Konrad Adenauer. “People have children anyway,” the Chancellor at the time is said to have declared. Apparently, Adenauer had other plans to support families. In 1953 he had appointed Franz-Josef Wuermeling, a family minister - and from 1955 there was child benefit - albeit independently of the statutory pension insurance. While child benefit is the same flat-rate contribution for all children, the child pension would have been paid depending on the father's income: high-earning fathers would have received more child benefits for their children, poor-earning fathers less (6–8% of income).

Double reimbursement factor for childless people aged 35 and over

Childless workers aged 35 and over should be included in the child costs unequivocally with a “double reimbursement factor”. (What is meant is the factor for reimbursement of the childhood and youth pension, which, however, was not introduced.) Schreiber makes it clear that it does not discriminate or even punish childless people:

"The unmarried 35-year-old is burdened with double the reimbursement quota (compared to the couple with two children), not to punish him for being 'celibate' - a moral evaluation of his behavior is not the subject of this treatise, which adheres to purely economic conditions. The doubling of his reimbursement factor is only a very mild compensation for the fact that he does nothing to meet his social offspring target, but can also use his individual income for himself, while the husband usually has to share it with his wife. This duplication is also fair in cases where marriage is impossible or undesirable for biological reasons. After all, no convictions are rewarded or punished, only conclusions are drawn from objective economic facts. Whether someone wants to remain celibate and how many children he wants is a separate, highly individual decision in which no state should interfere. " (P. 37f)

Level of pension

At that time, Schreiber considered a pension level of 50% of gross income to be appropriate: “ Any deterioration in pensions due to the 'aging' of our people and the higher life expectancy of pensioners would be overcompensated within a very short time by the upward trend in labor incomes that can be expected with certainty. “(P. 31 - what is meant by the upward trend in labor income is increasing productivity.). In 1955 he assumed that a total of 22% of the pension contributions from employers and employees should be acceptable (p. 43). Schreiber justified with fairness that the pension level should remain constant - but does not have to remain. With a contribution amount of 22% and the demographics at the time, Schreiber estimated the pension amount to be 50% of earned income. Schreiber was of the opinion that a pension of 50% of the labor income is scarce, but sufficient, especially since company old-age pensions are added (p. 45). Adenauer set the pension amount 70% of gross income. (The unions demanded 75%, other experts 60% see p. 43f). In order not to lower the standard of living of employees in individual branches of the economy, Schreiber wrote: “ Depending on the branch of industry, we consider wage corrections up to four percent unavoidable. "(P. 43).

The existence of different opinions from different groups (trade unions 75%, Adenauer 70%, some experts 60%, writers 50%) shows that there can be no scientifically justifiable opinion for a certain pension amount. This is why the pension amount may rise over time due to increasing productivity.

How different pension systems can be financed is shown by the fact that 70% pay-as-you-go pensions and additional company pensions of 10% (i.e. a total of 80%) can be financed - even if the number of pensioners with such a pension is not very large. Schreiber did not say anything about the amount of an additional company pension, but the total pension of 80% could for example also consist of Schreiber's 50% and 30% additional pension. Due to the type of financing, there is no significant change for pensioners, employees or employers: instead of paying a lot of money into the company pension fund, a larger part would have had to be paid into the pay-as-you-go system.

The statistical increase in life expectancy alone was only a relatively minor problem for Schreiber. The war-related interruptions in the succession of generations, or a possible future population decline, appeared to him to be more problematic: "The calculation bases for old-age pensions clearly show that the pension provision for the elderly and No longer able to work becomes more and more problematic if the tree of the population does not constantly supplement itself from below. ” (P. 36) However, he made no statement about the necessary amount of this supplement, since he assumed a continuous growth in productivity , which would have a positive and also not quantifiable influence on the income in advance.

One development that Schreiber could not foresee is the reduction in annual working hours. Around 1960 (i.e. in Schreiber's time) the annual working time was 2163 hours , by 2004 it sank to 1445 hours (average working hours of the employees, the average working hours of the labor force even fell from 2135 hours to 1276 hours). The change in demographics was less than the change in working hours, so the percentage of hours worked to finance the pension has decreased in absolute terms (although it has increased in relative terms = increasing pension contributions). The change in demographics over the past 40 years has been greater than the demographic change expected in the future.

So Schreiber had no cause for concern. At that time, there was even a birth surplus. In addition, Schreiber was able to look forward to the foreseeable prosperity development of the economic miracle with confidence . Even if demographic fluctuations were not compensated for, pensioners would still be better off after the pension reform than before. Any deterioration in pensions due to the “aging” of our people and due to the higher life expectancy of pensioners would be overcompensated within a very short time by the upward trend in earned income that can be expected with certainty. (P. 31) Schreiber therefore had every reason to be optimistic: his “dynamic pension” was ultimately based on the “synchronization of pensions and standard of living”. The old-age pensions followed “without delay in any increase in the general standard of living” (p. 31) “Even if 50% of the labor income still appears to be a tight pension today” , says Schreiber, “in the near future this rate will be quite acceptable” (p. 45)

Contrary to Schreiber's recommendations, Chancellor Adenauer set a gross pension level of 70%. The increase was obviously strategically motivated. The trade unions and the SPD had finally demanded 75%. In the upcoming Bundestag elections of 1957, the 50% proposed by Schreiber would have been comparatively unattractive. There were reservations expressed by some scientists about the Adenauer determination. Some were expressed in terms of mathematical concerns. Years of practice have shown that these concerns were unfounded. It was only in the last few years that Schreiber's principles were no longer adhered to, so that pension insurance is now struggling with financing problems.

No non-insurance benefits

In the Schreiber Plan, the statutory pension insurance only had the task of forwarding the pension contributions directly to the beneficiaries. In addition, she had no caring obligations. Even "disaster burdens, which you have been burdened with in a completely illogical way", must "be fairly borne by the whole people - that is, from tax revenues." (P. 21)

Extension of working life

Schreiber had already foreseen the problem of a "deterioration in pensions due to aging". After all, the statistical increase in life expectancy was already known in the 1950s:

“The relative increase in pensioners in the years 1965–1980 is partly due to the fact that - thanks to progress, hygiene and medicine - the life expectancy of all people is increasing. If people live longer, it is perfectly reasonable and reasonable to increase the length of their working life (today: 65 years) a little. - According to a rough estimate, an increase in the statutory retirement age by just two years should also be sufficient in the critical years after 1965 to ensure that the real value of the pensions raised through the allocation does not decrease. " (P. 19)

Basically no early retirement - not even for disabled people

"If a full member voluntarily retires from working life before reaching retirement age, his pension will nevertheless only be due after reaching retirement age. The same applies to full members who are unable to work due to illness or accident. Your livelihood risk is not covered by the pension fund, but by one of the people's risk insurances (solidarity communities) to be set up independently of this. " (P. 28)

“An important concern of labor policy is to noticeably slow down the psychological pull of early disability. Early disability is relatively the heaviest burden on today's pension insurance. (...) If rehabilitation proves to be impossible, the person concerned has to accept his early retirement from working life as a hard personal fate and be content with a pension that barely covers the subsistence level. Family help must step in for what is missing - at the most, public welfare. It cannot be the task of a community of solidarity to provide the member who has become unable to perform - albeit through no fault of their own - relatively better living conditions than those who work can provide for themselves through their own efforts. " (P. 45)

Additional private retirement provision

Despite his plea for statutory pension insurance, Schreiber was not an opponent of private old-age provision. But on the contrary:

"It would be bad social policy if the compulsory contributions to social security were set so high that on the one hand the expected old-age pension makes any personal property provision superfluous and on the other hand it cuts the net income during working age so severely that there are no more marks left for personal wealth creation. Personal capital formation is still so profitable that it can be recommended to every employee as a supplement to the old-age pension from the solidarity agreement. Provision through personal property formation and old-age pensions from the solidarity contract stand side by side as equal opportunities. One should complement the other. " (P. 44f)

Problems and influencing factors of today's pension insurance

Schreiber's proposals for pension reform are still relevant today. He had foreseen the undesirable developments in the current pension system. The "dynamic pay-as-you-go financing" is a pension system that is subject to political influences. That is why the current pension insurance - contrary to Schreiber's originally self-supporting structure - is largely dependent on state subsidies.

According to experts, the most pressing and relatively serious problem of today's pension insurance is the too low employment rate . The persistent mass unemployment is particularly noticeable through dwindling and missing contributions, while the trend towards early retirement has a significant impact on the expenditure side . Added to this are the late entry into the profession, the increasingly unsteady employment histories, the falling wage share , the overload with non- insurance benefits and the still almost unanswered questions of increasing life expectancy and demographic change , which Schreiber foresaw with astonishing clarity.

For this reason, Schreiber set an increase in the retirement age by two years as early as the mid-1960s. Today - more than 40 years later - practical policy has still not been able to bring itself to any landmark decision of this kind. On the contrary: instead of adapting working life to longer life expectancy, the actual retirement age was even lowered by almost five years in the past and is now an average of 60 years. In this way, the proportions of the statutory pension scheme were out of whack in two ways. On the one hand, the number of pensioners rose by five years, and on the other hand, the number of potential contributors was reduced by those five years. The resulting disparity has led to such problems that the pay-as-you-go old-age insurance as such has come under fire. It is not easy to find a solution to these problems: Schreiber's proposal to raise the retirement age to 67 years with increasing life expectancy has now been implemented, but is still under discussion. The formal increase in the age limit is of little use if industrial companies hardly provide jobs for people over 60. However, his recommendation to start paying pensions only when the statutory retirement age is reached is unlikely to be enforced nowadays.

criticism

Economics Minister Ludwig Erhard and Finance Minister Fritz Schäffer voted against the pension reform proposed by Adenauer in 1957. The FDP also rejected his pension model. At the time, there was fear of an undue increase in expenditure that would drive up wage costs . - However, these votes cannot be viewed as directed against Wilfrid Schreiber's concept of the generation contract. Schreiber's concept, in contrast to Adenauer's pension reform, provided counter-financing for old-age pensions with “childhood and youth pensions” (see above).

The expansion of the funded procedure (for example “ Riester pension ”) is currently being discussed as a solution to the pension misery; the scientific and political discussion about the advantages and disadvantages of the respective financing procedures has not yet been concluded.

In today's criticism of the pay-as-you-go system, there is often no distinction between the concept proposed by Wilfrid Schreiber, which provided for a dynamic pension for children and young people on the one hand and a dynamic old-age pension on the other, and the concept implemented by Adenauer, which was limited to the old-age pension. According to the Schreiber concept, the old-age pension would have been lower, which would have made it possible to finance the childhood and youth pension. For example, Oswald von Nell-Breuning was one of the harshest critics of Adenauer's pension reform for decades, but at the same time a proponent of the Schreiber concept.

Works

• Wilfrid Schreiber: Security of existence in the industrial society. Bachem, Cologne 1955, DNB 454466633 .

literature

• Jörg Althammer: Wilfrid Schreiber (1904–1973). In: Jürgen Aretz , Rudolf Morsey , Anton Rauscher (Eds.): Contemporary history in life pictures. Volume 12. Münster 2007, ISBN 978-3-402-06124-4 , pp. 77-85, pp. 234-235.
• Anne Dohle: Wilfrid Schreiber's doctrine of social policy on statutory health insurance and family burden equalization . Diss. University of Cologne, 1990.
• André Habisch: Social policy as a social policy - Wilfrid Schreiber as co-architect of the social market economy. Contributions to the discussion by the Ingolstadt Faculty of Business and Economics, Catholic University of Eichstätt, 1999.
• Hans Günter Hockerts:  Schreiber, Wilfrid. In: New German Biography (NDB). Volume 23, Duncker & Humblot, Berlin 2007, ISBN 978-3-428-11204-3 , p. 533 f. ( Digitized version ).
• Elmar Löckenhoff: Wilfrid Schreiber's doctrine of social policy on statutory pension insurance and wealth creation. Diss. University of Cologne, 1990.
• Winfried Schmähl: Wilfrid Schreiber: From journalist to “father of dynamic pensions” - a hidden biography and a hypothesis on the history of the pension reform. In: Quarterly for social and economic history. 98 (2011), pp. 423-441.

Web links

• Literature by and about Wilfrid Schreiber in the catalog of the German National Library
• Cabinet confused: historical background to the 1957 pension reform
• Basic truths of the Schreiber Plan (PDF file; 929 kB)
• Security of existence in an industrial society (PDF file; 125 kB)
• Wilfried Schreiber in the original sound in the online archive "Österreich am Wort" of the Austrian media library (Salzburg night studio)

supporting documents

1. ↑ "Schreiber plan" (PDF; 125 kB)
2. ↑ The page references do not refer to the original font, but to the linked reprint of the Association of Catholic Entrepreneurs, in which the pages are slightly shifted
3. ↑ Generation contract. In: Gabler Wirtschaftslexikon.
4. ^ Eva Marie von Münch In: Ernst Benda u. a. (Ed.): Handbuch des Verfassungsrechts. de Gruyter, Berlin / New York 1994, ISBN 3-11-012279-0 , p. 321.
5. ^ Oswald von Nell-Breuning: Social Security? Herder, Freiburg im Breisgau a. a. 1979, ISBN 3-451-18314-5 .