Archive for September, 2012

Musings on the Costs of Social Insurance

September 19, 2012

Phrasing all behavior as potentially imposing costs on society is the methodology of some to justify imposing their comprehensive and oppressive social programs ad infinitum in order to create a network of social insurances against all potential risks.  

While establishing this framework of comprehensive risk management for society as a whole might initially sound good and beneficial, its key fault is the fact that it imposes an overall cost to society far greater than the sum of the individual costs it sought to mitigate.  It wrongly assumes that the impact of individuals defaulting on the responsibilities for their own welfare will somehow be mitigated by creating a comprehensive  insurance policy for all citizens whereby any and all potential costs persons may impose on society are helped against by a premium paid in liberty and taxes.  Yet it is ultimately doomed to failure precisely for the same reason that all things aren’t reasonably insurable unless one is willing to assume exorbitant costs for the perfect policy.  

This incessant quest for the perfect insurance policy for society as a whole inevitably devolves into a tilting at windmills as its promoters and promulgators in government create a litany of administerial mandates and ad hoc laws establishing ever new crimes against humanity.  Former law abiding citizens suddenly face modern day versions of legal “Lion’s Dens”.  Criminalizing formerly acceptable behaviors from tanning to delicacies in geese, from cell-phone usage to selling soft drinks of uncertain volumes, there are few aspects of life these perfectionists won’t refrain from micro-managing.  For the victims of such tyranny, only the ghost of King Darius stands to fast and pray their lives aren’t rent apart by these modern day lions.

Such lions feed on the notion of fostering anticipatory and preemptive law rather than reactive law.  Such debased forms of law are not amenable to becoming set in stone and are often constantly in flux precisely because they cannot anticipate everything.  Laws constructed in such an environment antithetical to the principle of the Rule of Law tend to be ad hoc and experimental.

It is also ironic that social insurance measures can  have the same side effect as some other overt safety measures in encouraging riskier behavior since it is now assumed to be “covered”.