When Cultures Collide: Social Security and the Market

In his 1999 State of the Union address, President Clinton raised the possibility of investing social security funds in the equities market. In this article, two anthropologists who have studied the culture of the financial world assess the President's proposal. The analysis focuses on the vast cultural gap between the private-sector participants in the equities market and the federal bureaucrats who would inevitably manage social security investments. The authors examine similar arrangements at the state level, the cultural differences among the entities involved, and how those differences interfere with fiduciary decision-making. They conclude that the gap is simply too wide for the proposal to be workable, and as a result, the adverse consequences likely outweigh the potential benefits. Although some consequences are foreseeable, more threatening consequences can be envisioned only in the most general terms.