PREVENTION (an economic problem). — In economics, prevention is the operation by which provisions are made, not savings that, although withdrawn from ordinary consumption, are not yet productive savings (which secure an income), but serve to give elasticity to personal or family budgets in view of extraordinary expenses. Such expenses correspond to needs which, if unpredictable in their specific nature, timing, and magnitude, nevertheless, in their indiscriminate totality, possess a high degree of probability: illnesses, unemployment, family debts, lawsuits; or a degree of certainty, such as the loss of productivity in old age and death.
The provisions made for prevention are therefore never represented by real estate or long-term financial investments, but rather by hoarding, current bank accounts, deposits in savings banks or postal savings, or by easily negotiable and low-risk securities, mostly government bonds, as well as by contributions paid for various forms of social security and insurance premiums.
Individual capacity for prevention, however, would in most cases be powerless to cope with the most serious and certain eventualities: recourse is had to financial mechanisms that multiply the resources of individuals by pooling the contributions of those who do not need assistance at the same time as those who do. Such mechanisms include mutual associations, insurance, social security, pension funds, cooperatives, and welfare organizations, among others.
The development of such forms of prevention is an unmistakable sign of a people’s level of civilization: both because the natural instinct for self-preservation, defense, and acquisition is complemented and surpassed by a sense of family and social responsibility; and because it manifests human dignity, which does not wish to be a burden either to family or to society; and finally because prevention, more than an instinct, is the fruit of culture and moral education—less educated and more uncultured classes are, in fact, generally the least provident.
A modern social achievement is the compulsory nature of social security and insurance (old age, unemployment, illness, and accidents), with employers sharing in the related costs. This represents a demonstration of high moral value in solidarity toward workers, who would otherwise be defenseless against the risks inherent in their employment; it constitutes, in addition to a valid supplement to wages and retirement benefits, an encouragement to prevention and saving, while preventing the social burden of work incapacity from falling entirely on the workers themselves who are affected by II.
In modern times, the work of prevention has also been extended to occupational diseases and work-related accidents through organizational, prophylactic, and technical measures designed to maintain high labor productivity, limit absences, and postpone disability, thereby reducing the social burden of assistance, social security, and pensions.
When prevention extends beyond the care of the individual worker to address the working and welfare conditions of all individuals, businesses, and nations, it today takes the name of social security (v.).