Living beyond one's productive, working years is a recent development in human history. Formal programs offering "social insurance" for the elderly were only proposed when people started, in greater numbers, to live beyond their ability to work effectively.
Until the 1840s, the U.S. was primarily an agricultural society in which the majority of people lived in rural areas. Extended families took financial responsibility for older members. But over the next five decades, technology advanced and the lives of workers changed dramatically—and life spans began to rise. Machines set the pace of work. Industrial output consistently outpaced agricultural output.
With better sanitation and health care, life spans increased a full 10 years in just the three decades between 1900 and 1930. By 1920, for the first time in the nation's history, more people lived in cities than on farms, fraying the support system of the extended family. The Great Depression made older Americans' work situations even more challenging—over half of the country's elderly couldn't support themselves.
On August 14, 1935, recognizing the need for federal assistance, Franklin D. Roosevelt signed the Social Security Act into law.
-- T. Rowe Price Investor, March 2013