Social Security and Moral Principles

1 Social Security and Moral Principles Social Security and Moral Principles Yuichi SHIONOYA* Abstract This article examines the ethical foundations of the welfare state in order to establish a normative basis for evaluating the social security system, which includes pensions, medical care, and public assistance. Moral principles rather than mere ﬁscal considerations are needed to restructure the welfare state in the developed countries. Four major principles—utilitarianism, contractarian- ism, libertarianism, and communitarianism— are discussed with regard to their capability to justify the welfare state. It is argued that John Rawls’s contractarian theory of justice, based on a veil of ignorance, supports the safety-net conception of the welfare state. From this perspective, the article analyzes the relationship between insurance and assistance principles in the practical design of the welfare system. It concludes that the commonly accepted view of distinguishing between insurance and taxes, both of which are sources of funds for social security, is untenable from a moral standpoint. Review of Population and Social Policy, No. 7, 1998, 1–14.

1.Introduction There is a growing concern about the crisis of the social security system in devel- oped countries. Owing to economic maturity and stagnation, increasing deﬁcits in government budgets, a decline in fertility, an increase in the aging population, and changes in social structures including the family, it is becoming more difﬁcult to meet the increasing demand for social security services. But the causes of the crisis in the welfare state are not purely economic. In the present-day capitalist countries, the social security system for pensions and medical and long-term care —along with the market system—constitutes an im- portant part of economic and social life. Therefore, the welfare state must depend on certain moral values that articulate and justify the body of policies, rules, and practices of social security. We must be aware of these principles so that we can legitimately control the welfare state. Of course, the moral values are not ﬁxed; the welfare state has encountered criticism from both the right and the left. The justiﬁcatory principles of the welfare state are to be forged through various critiques and discourses in the development of institutional arrangements. Unless moral principles are clariﬁed and shared among people, the welfare system is liable to succumb to political pressure. If only economic and ﬁscal criteria are applied to the management of the welfare state, it is inevitable that welfare expenditures will expand or diminish unreasonably according to the availability of funds.

If you don’t understand the material, don’t troll the thread.

There has been a serious lack of mention of this in the media....

Every single future dollar increased in “mandatory insurance premiums” for the middle class is actually a TAX INCREASE.

This needs to be stated repeatedly as the CBO came out this week with a report that stated the average insurance premium under Obamacare will be 10% to 16% higher by 2014, than if no Obamacare plan is passed into law.

Take your 2009 insurance premium, and ~10% a year to that for 4 years. That would be your premium under current law.
Now take that premium and multiply it by 10% or 16%, that is the direct tax increase felt by more than half of Americans under Obamacare.

Family of 4:
2009 premium: $15000
2014 premium under current law: 24157.65
2014 premium under Obamacare: 26573 to 28022

Direct tax increase of $2100 to 3900 a year, plus the loss of insurance premium tax deductions and loss of HSA and MSA tax reductions.

You’re right, of course.

But not one man in a hundred will appreciate what you (and Shionoya) are talking about. Most folks are already insured through their employer and do not have a clue how much their insurance really costs. They think it is approximately equal to their payroll deduction.

The self-employed with real medical insurance know full well how much it costs.

Health care insurance “reform” and cap-tax-and-trade will take the US a long way down the road to serfdom.

Speaking of the road to serfdom, Shionoya correctly notes that Hayek was concerned about liberty and individual rights (rightness). He also notes that welfare-state liberals seek to use government to achieve holistic utility (goodness) and virtue.

Unfortunately, the true nature of things is such that the welfare-state liberal cannot obtain his ends (a virtuous society) through the means he employs (a virtuous government).

Virtue and goodness are individual characteristics. No sane and virtuous person would contract out his virtue to a government. If one learns any practical thing from history, it is that no government is good or virtuous. To quote Thomas Paine, “Government, even in its best state, is but a necessary evil; in its worst state an intolerable one.” Even the most impressive of governments intentionally coerce, murder, deceive, enslave, and steal to advance their ends. Of course, governments always employ euphemisms to cover up this fact (regulation, national defense, state security, conscription, taxes, user fees, compulsory social insurance, etc.)

The sane and virtuous person may, however, find that a government is useful to protect his rights. Despite millenia of history, the hope remains that government can protect a greater portion of individual liberty than it usurps. Hayek and Friedman are correct: virtue is not the role of government. Rothbard may be even more correct: government isn’t very good at liberty either. But Thomas Paine actually says it best:

SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness POSITIVELY by uniting our affections, the latter NEGATIVELY by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries BY A GOVERNMENT, which we might expect in a country WITHOUT GOVERNMENT, our calamity is heightened by reflecting that we furnish the means by which we suffer.

If you don’t understand the comment, don’t respond. The factual content in your post and the lack of coverage of it in the media is not my issue. The paper purports to address normative issues concerning the welfare state for the purpose of preserving the welfare state. As the author puts it:
“Unless moral principles [of the welfare state] are clarified and shared among people, the welfare system is liable to succumb to political pressure.”

So, the question becomes, what does the author think about moral principles? Although he spends some time discussing Rawls, it appears that the author ultimately assumes that moral values are “socially constructed”, as can be seen in the following:

“Of course, the moral values are not fixed; the
welfare state has encountered criticism from both the right and the left. The justificatory principles of the welfare state are to be forged through various critiques
and discourses in the development of institutional arrangements....By moral principles I mean standards that are embedded in the public culture of democracy under a certain social structure.”

You are certainly right that ‘“mandatory insurance premiums” for the middle class is actually a TAX INCREASE’ But that point is obvious, and has been noted by others without the 14 pages of academic Blah, Blah, Blah.

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