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Behavioural politics: social insurance and mutual benefit in Robert Sugden’s The Community of Advantage

Abstract

In The Community of Advantage, Robert Sugden advocates a system of universal social insurance to ensure that all citizens enjoy the benefits of market institutions. The Community of Advantage however does not shed light on the extent of redistribution that social insurance should provide. While the criterion of mutual advantage seems to licence only a minimal level of insurance, people’s expectations and collective bargaining power are likely to lead to a much more extensive redistribution. This is not necessarily a bad thing, since a well-functioning society is more than a well-functioning market economy. An extensive social insurance protects the rich, the poor, and, above all, the cooperative attitudes without which a democratic society cannot function well.

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Notes

  1. 1.

    See, e.g. Brennan & Buchanan (1985). David Gauthier writes that “the maximizing conception of rationality is almost universally accepted and employed in the social sciences” (1985: 8). Sugden’s assessment of Gauthier’s project can be found in his “Contractarianism and Norms” (1990).

  2. 2.

    A notable exception is David Miller’s Principles of Social Justice (1999).

  3. 3.

    See, e.g. Leiser & Shemesh (2018), chapter 8.

  4. 4.

    Cf. e.g. Roth (1995), Güth & Kocher (2014).

  5. 5.

    In developing countries, the inequality in fiscal contribution is even more extreme due to poverty and to the practical difficulty of collecting taxes.

  6. 6.

    This is a familiar argument that has been used to question utilitarianism and preference-satisfaction theories of welfare: the fact that Jack’s utility from eating caviar is greater than Jill’s utility from reading a book, does not seem to justify the choice of giving caviar to Jack instead of giving a book to Jill. Amartya Sen’s well-known “battered housewife” argument has the same structure.

  7. 7.

    “To say this is not to treat rich individuals’ contributions to social insurance merely as a kind of protection money” (TCOA, p. 204).

  8. 8.

    This may be one of homo sapiens’ oldest tricks: according to some anthropologists (e.g. Boehm 1999) the egalitarian ethos of hunter-gatherers’ societies is primarily aimed at curbing the rise of would-be tyrants and bullies.

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Acknowledgements

I must thank the organizers and participants to the workshop on The Community of Advantage that took place in Rome in November 2019, where the ideas of this paper were originally presented. I would also like to take this opportunity to acknowledge my intellectual debt to Bob Sugden: when I first met him in the late 1990s, I knew him primarily as a prominent experimental economist who was interested in the methodological foundations of his discipline. At the time, I didn’t know that he was also a wonderful philosopher in the tradition of Hume. But above all, I didn’t know that I was a Human myself: Bob played a major role in this discovery, for which I will be forever grateful.

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Correspondence to Francesco Guala.

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Guala, F. Behavioural politics: social insurance and mutual benefit in Robert Sugden’s The Community of Advantage. Int Rev Econ 68, 89–100 (2021). https://doi.org/10.1007/s12232-020-00353-x

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Keywords

  • Contractarianism
  • Justice
  • Social insurance

JEL Classification

  • H1
  • D63
  • D9