Public Insurance and Equality: From Redistribution to Relation

Abstract

Public insurance is commonly assimilated with redistributive tools mobilized by the welfare state in the pursuit of an egalitarian ideal. This view contains some truth, since the result of insurance, at a given moment, is the redistribution of resources from the lucky to unlucky. However, Joseph Heath (among other political theorists) considers that the principle of efficiency provides a better normative explanation and justification of public insurance than the egalitarian account. According to this view, the fact that the state is involved in the provision of specific insurance (primarily health and unemployment insurance and pensions) is explained and justified by the greater efficiency of the state, in comparison with markets, in addressing market failures such as moral hazard or adverse selection. Our argument is that while insurance, intrinsically and idealistically, may diverge from a redistributive scheme, it is nevertheless difficult to deny that insurance has nothing to do with equality. More precisely, we argue that insurance may be understood as an egalitarian tool if our understanding of equality is broadened to include relational equality. Our paper aims to briefly recap the debates surrounding public insurance as a redistributive tool, advancing the idea that public insurance may be a relational egalitarian tool. It then presents a number of relational arguments in favor of the involvement of the state in the provision of specific forms of insurance, arguments that have been overlooked given the domination of luck egalitarian approaches in these debates.

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Notes

  1. 1.

    Despite the fact that any egalitarian position might be qualified as relational (since equality is a relational concept), here we follow the general acceptation in the literature that relational egalitarianism is distinctly relational in the sense that it views equality as a norm for the evaluation of social relationships. The relational egalitarianism label is now increasingly used in the literature. See, for instance, Anderson’s recent works (Anderson 2009, 2010).

  2. 2.

    This definition overlaps more or less fully with definitions provided by other authors (Shapiro 2007, p. 11).

  3. 3.

    To be clear, we do not intend to rebut LE as a consistent doctrine of distributive justice. LE may be a perfectly sound theory of redistribution; there is no quarrel about that. Our aim is to launch discussions on the difficulties experienced by LE as it is generally understood in explaining and justifying public insurance and the welfare state.

  4. 4.

    Heath adheres to a Paretian conception of efficiency: a state of affairs is Pareto-optimal if the situation of any agent could be improved without undermining the situation of another agent.

  5. 5.

    Individuals might, however, be entitled to compensation for reasons other than justice, if we include another normative consideration as some proponents of LE aim to do. We deal with this issue later in this paper.

  6. 6.

    The reader will find numerous variations of this idea (Dworkin 2002; Knight 2009). For instance, Susan Hurley writes that ‘egalitarianism should aim to neutralize differences due to luck, for which people are not responsible… But it should not aim to neutralize differences due to choice’ (Hurley 2003, p. 141).

  7. 7.

    Pensions present a more difficult case to make on luck egalitarian grounds, so we will leave them aside for the moment.

  8. 8.

    This point is acknowledged by certain luck egalitarians (Segall 2010, p. 62).

  9. 9.

    One may argue that if LE is accurate, society should move as close as possible to the LE ideal by relaxing, for instance, the responsibility requirement in most cases involving public insurance (such as health or unemployment). This what Voigt has in mind when she argues that it is unlikely that there will be any real-world cases in which the luck egalitarian would not have to provide at least partial compensation (Voigt 2007). However, this answer relies on suspending the central feature of LE, namely the conditionality of the redistributive claim on the responsibility claim. In short, such a solution does not bring society closer to the LE ideal, but moves it further away.

  10. 10.

    We are aware that these problems have already been highlighted in the significant literature on LE and its critics (see, for example, Knight 2005; Voigt 2007). Our point here is that public insurance magnifies them.

  11. 11.

    One might object that this empirical account does not have any normative force. We nevertheless think that it does matter normatively. As explained above, we are following Heath in his suggestion that a full normative theory of the welfare state needs to provide both justificatory and explanatory ‘stories’. As Heath puts it, the empirical/historical account of the rise of public insurance offers us a ‘reconstructive’ story, in the Habermasian sense, i.e. it helps articulate implicit norms and ideals that play a structuring role in our existing practices (Heath 2011, p. 28).

  12. 12.

    Here it is worth taking a few steps back to note that by insisting on a harsh distinction between choice and circumstances, LE opens the door to the classical conservative views on insurance, according to which insurance, because of moral hazard, creates individual incentives to be lax about avoiding harms and to make irresponsible decisions. While proponents of LE, unlike conservatives, do not insist on this point about incentives to make irresponsible decisions, both nonetheless deplore compensation for them.

  13. 13.

    It could be argued that a merit of any distributive theory lies in its capacity to accommodate other goods. In other words, pluralism in the form of the integration of independent values is worthy of praise [see further Segall’s reply to the abandonment objection (Segall 2010)]. However, what is judged in these pages is the intrinsic capacity of LE to justify public insurance, not its capacity to be compatible with external reasons that could lead to such a justification.

  14. 14.

    We rely here on an account of relational egalitarianism articulated by one of the authors of this paper in a separate article (Néron 2014). The literature on this debate is growing. For recent contributions, see also Fourie (2012) Fourie et al. (2015), Garrau and Laborde (2015).

  15. 15.

    See Sunstein (1996) for a famous account of the expressive nature of institutions.

  16. 16.

    It might be argued that actuarial fairness proper to insurance jeopardizes this community. Two things should be noted. Firstly, actuarial fairness does not undermine the existence of the community of insureds, it simply bends the conditions for cooperation in a certain direction. Secondly, there may be ways to regulate insurance other than those based on actuarial fairness, while still preserving the main actuarial features (e.g. overall calculation of risks without practicing redlining or certain kinds of risk classification). For more on this question, the reader can refer to Landes (2014).

  17. 17.

    This is the distinction between telic and deontic egalitarianism (O’Neil 2008).

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Acknowledgments

Authors wish to thank for their comments and support Elizabeth Anderson, Ryoa Chung, Joseph Heath, Nils Holtug, Karsten Klint Jensen, Carl Knight, Kasper Lippert-Rasmussen, Jyri Liukko, Chris MacDonald, Martin Marchman, Morten Nielsen, Pedro Rosa Dias, Shlomi Segall, Daniel Weinstock. Xavier Landes was funded by The Danish Council for Independent Research, section humanities (FKK) [Grant 10-080448].

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Landes, X., Néron, PY. Public Insurance and Equality: From Redistribution to Relation. Res Publica 21, 137–154 (2015). https://doi.org/10.1007/s11158-015-9269-y

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Keywords

  • Luck egalitarianism
  • Public insurance
  • Redistribution
  • Welfare state
  • Relational egalitarianism