1. Privatize social security!
This is a great idea given the many problems with government run social security. The Chilean example has been so successful that it has been adapted by other Latin American governments, and is now being studied by China.
How would it work? Jose Pinera writes about it here:
Under Chile's Pension Savings Account (PSA) system, what determines a worker's pension level is the amount of money he accumulates during his working years. Neither the worker nor the employer pays a social security tax to the state. Nor does the worker collect a government-funded pension. Instead, during his working life, he automatically has 10 percent of his wages deposited by his employer each month in his own, individual PSA. This percentage applies only to the first $22,000 of annual income. Therefore, as wages go up with economic growth, the "mandatory savings'' content of the pension system goes down.
Competition, innovation, good customer service, with some minor government oversight. Is this too hard for central planners in Canada and the U.S. to understand?
2. Privatize public transit: Santiago, and Chile as a whole, has the best system of intercity and intracity buses that I have ever seen in my, admittedly limited time travelling around Canada, the U.S., Latin America, and Europe. This is, of course, before it was usurped by a vicious and inefficient government monopoly, apparently for "making too much money". Yeah, profit is evil, right? Anyhow..
Mike Munger writes:
Hundreds of different bus lines, most of them entirely privately owned, operated freely throughout the city. Some of the lines ran on surface streets parallel to the Metro, adding transport redundancy in case the Metro was having mechanical problems or was simply overcrowded. Competition among bus lines kept fares low, and drivers were paid according to the number of passengers they transported. Other bus routes delivered riders to Metro stops, not because anyone had ordered them to do so, but because that is where passengers wanted to go. And there were several classes of service, ranging from posh express buses that charged high prices down to claptrap jalopies that charged pennies and stopped every few blocks.
Chile experienced the highest rates of growth in Latin America since instituting neoliberal reforms in the mid 1980s. It was the only country in the region (other than maybe Costa Rica) to embrace export led, free market-based economic policies. The results are clear. Chile is now a “developed country” and the first Latin American member the OECD. We could learn from some of these experiments.
