PREVENTION (Economic Problem). — In economics it is the operation by which provisions are set aside which, although subtracted from ordinary consumption, are not yet productive saving (which ensures an income), but serve to give elasticity to the personal or family budget in view of extraordinary expenses. Such expenses correspond to needs which, if they are unforeseeable individually as to kind, time and importance, nevertheless, taken together indiscriminately, possess a high degree of probability: illnesses, unemployment, family contingencies, lawsuits; or a degree of certainty, such as unproductiveness in old age, and death.
Provisions for the purpose of p. are therefore never represented by real estate or by long-term securities investments, but rather by hoardings, bank current accounts, deposits with savings banks or postal savings banks, or by gilt-edged and easily marketable securities, for the most part government bonds: as well as by the contributions paid for various forms of social insurance and insurance premiums.
The individual capacity for p., however, would in most cases be powerless to face the potentially gravest and most certain events: this is supplied by financial mechanisms that multiply the forces of individuals, causing the resources of those individuals who do not need help at the same moment to converge upon the cases that occur. Such are precisely mutual aid associations, insurance, social insurance, pension funds, cooperatives, charitable societies, etc.
The development of such forms of p. is an undoubted sign of the degree of civilization of a people: both because upon the natural instinct of self-preservation, defense and acquisition there is grafted and superimposed the sense of family and social responsibility; and because of the manifestation of the dignity of man, who does not wish to be a burden either to his family or to society; and finally because p. is, even more than instinct, the fruit of culture and moral education: the less educated and cruder classes are in fact, generally, the least provident.
A modern social achievement is the compulsory nature of social welfare and insurance (old age, unemployment, illness and accidents), with employers contributing to the related costs. This represents a demonstration of solidarity of high moral value toward workers, who would otherwise find themselves defenseless in the face of the risks inherent in their employment: and it constitutes, besides a valid supplement to wages and retirement benefits, an encouragement to providence and saving, while it prevents the social burden of incapacity for work from falling again entirely on the workers themselves who are affected by it.
In modern times there is also increasing emphasis on the work of p. against occupational diseases and accidents at work, through organizational, prophylactic and technical measures aimed at keeping the productivity of labor high, limiting absences, and postponing invalidity, reducing the social burden of assistance, welfare and pensions.
When p. goes beyond the care of the individual worker to concern itself with the working conditions and well-being of all individuals, of firms and of nations, it today takes the name of social security (v.).